Zhou v Birriga Holding Pty Ltd

Supreme Court of NSW|2024-11-06|Before: Meek J

judgment Parties: Jian Zhou (Plaintiff) Birriga Holding Pty Ltd (First Defendant) Yanbing Zhang (Second Defendant) Ping Huang (Third Defendant / Applicant) Donnison Apartments Pty Ltd (Fourth Defendant) Coralyn Margaret Dunkley (Fifth Defendant) Birriga Development Pty Ltd (Sixth Defendant) Ronald Charles Dunkley (Seventh Defendant) Representation: Counsel: P Kucharski (Third Defendant / Applicant)

Solicitors: Yingke Law Firm (Third Defendant / Applicant)

Introduction

HIS HONOUR: Why would a plaintiff pay into Court $350,000 as security for costs barely three weeks prior to the commencement of a final hearing, only to then cease all other activity in preparation for the hearing and refrain from any communication with the active defendants and the Court so as to be at risk of potentially forfeiting the security?
That is a question which may be pondered in this case. No answer is forthcoming from the plaintiff. Strictly speaking, it is not necessary for the Court to decide that question. However, that conundrum has provided some context for the present applications which have sought to dismiss the plaintiff's claim.
Today is listed as the first day of the final hearing of the plaintiff's proceedings. However, two days ago (Monday, 4 November 2024), I heard a motion filed by the third defendant, Ms Huang, on 1 November 2024, seeking dismissal of the proceedings consequent upon default by the plaintiff in complying with pre-trial directions. On that day, I made orders for the dismissal of the plaintiff's claim against Ms Huang and vacated the final hearing of the proceedings in so far as it related to her.
I took the view that Ms Huang's motion, although seeking dismissal of the proceedings, strictly speaking was limited to dismissal of the plaintiff's claim against her, as opposed to the claim against the only other active defendant, being the seventh defendant, Mr Dunkley.
The hearing against Mr Dunkley remained listed for today, and he has appeared in person. The plaintiff has not attended to prosecute his claim in person or by audio-visual link, or by anyone on his behalf.
Mr Dunkley has not filed any notice of motion seeking dismissal of the proceedings. Nonetheless, he asks for the plaintiff's claim to be dismissed against him. The fact that Mr Dunkley has not foreshadowed such dismissal nor formalised it by filing and serving a notice of motion does not, in my view and in light of the prevailing circumstances, mean that I should not entertain the application. That such an application might be made would hardly be a surprise to a plaintiff who has not appeared.
I have determined to dismiss the plaintiff's claim against Mr Dunkley.
I indicated on Monday that I would give reasons for the dismissal of the proceedings as against Ms Huang. It is convenient now to give my reasons for the dismissal of the proceedings against her and, in addition, for the dismissal of the proceedings against Mr Dunkley.
Ms Huang sought dismissal of the proceedings against her pursuant to s 61(3)(a) of the Civil Procedure Act 2005 (NSW) (CPA) and/or r 12.7 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR).
Her application was supported by affidavits of (a) Ms Huang's solicitor on record, Yin Chen, affirmed 1 November 2024 and attaching Exhibit YC-2 (addressing recent events), and (b) Jiachen Fan, an employee of Mr Chen's firm, affirmed 4 November 2024 (deposing to service of the notice of motion and Mr Chen's affidavit and exhibit).
Mr Dunkley did not identify any precise basis for dismissal of the proceedings against him. However, there is power to dismiss proceedings pursuant to r 29.7(4) of the UCPR when a plaintiff does not attend on a hearing but the defendant does appear. I have proceeded on the basis that that rule provides an available and appropriate head of power under which to dismiss the plaintiff's claim against Mr Dunkley.
Mr Dunkley's application was not supported by any affidavit evidence. He has made a brief statement to the Court regarding his involvement with the development project which is the subject of the proceedings. However, the statement was not sworn or affirmed. In any event, much of the background applicable to Ms Huang's claim for dismissal which I will now recite is also applicable to Mr Dunkley's claim for dismissal and provides sufficient basis for me to determine his claim for dismissal.

Background

It is appropriate to set out some context for the applications which is uncontroversial and able to be gleaned from the pleadings, my Associate's records of proceedings and parts of the above-mentioned evidence relied upon by Ms Huang.
The proceedings were commenced by a summons filed on 30 April 2021, approximately 3.5 years ago. At that stage, there were seven named defendants to the proceedings. The summons disclosed that the plaintiff resided in Hangzhou, China and, as best I can gauge, the plaintiff has continued to reside in China during the duration of the proceedings.
The current position is that there are only two active defendants, being Ms Huang and Mr Dunkley. The plaintiff discontinued his proceedings against the remaining defendants.

The plaintiff's claims

The various parties became involved with one another as part of a proposal to develop a property in Bellevue Hill.
The plaintiff claims that in 2014, Ms Huang invited him to invest in a property development in Bellevue Hill. Subsequently, the plaintiff claims that he met Ms Huang and Mr Dunkley to discuss becoming a shareholder of a property development company for the purposes of the project.
On 24 February 2015, the sixth defendant, Birriga Development Pty Ltd (Birriga Development), was incorporated and became the registered proprietor of the property in Bellevue Hill.
Subsequently, the other defendants became shareholders in Birriga Development. Two shareholders' agreements were entered into, the first on 1 November 2015 and the second on 7 August 2018.
It was anticipated that the project would be funded by the contribution of funds from shareholders in the form of a loan, as well as bank funds to be borrowed by Birriga Development.
On 17 June 2016, the plaintiff (as purchaser) and Birriga Development (as vendor) entered into a contract for the purchase of a lot in the Bellevue Hill property for a sum of $2.4 million. There were special conditions relating to completion of the contract.
By February 2020, the plaintiff claims that he had transferred a total of $1.15 million to Birriga Development.
On 17 August 2020, an occupation certificate was provided to the plaintiff. Three days later, Birriga Development claimed that the plaintiff was required to pay a gross amount in excess of $4 million, on completion of the contract for sale.
On 28 April 2021, administrators were appointed to Birriga Development.
The contract for sale of the lot could not be completed and, by various claims brought under the Australian Consumer Law (ACL), the plaintiff seeks to recover the $1.15 million as damages, with interest.
On 28 March 2022, a mortgagee in possession sold the Bellevue Hill property, or at least the lot the subject of the plaintiff's claim.
In his claim, the plaintiff alleges against Ms Huang and Mr Dunkley that, beginning from about 2014, they made representations to him regarding the extent of the project development costs which were misleading or deceptive.

Commencement and progression of the proceedings

The summons sought relief including orders pursuant to "section 440(1)" (I infer a reference to s 440D(1)) of the Corporations Act 2001 (Cth) permitting the plaintiff leave to commence and continue proceedings against Birriga Development, declarations regarding certain aspects of the second shareholders' agreement and also declarations regarding the validity of the contract for sale.
The proceedings then proceeded by way of pleadings and, on 29 November 2021, a statement of claim was filed. The current pleadings include a further amended statement of claim filed by the plaintiff on 13 February 2024 and an amended defence filed by Ms Huang on 20 May 2024.
Mr Dunkley has informally appeared in the proceedings, but until recently (specifically, 27 September 2024) had not filed any notice of appearance. Further, he has not filed any defence to the claim nor, subject to what I am about to say, served any evidence. On the Court file there is a formal list of documents which has been verified by Mr Dunkley and was filed on 8 November 2023. Further, Mr Dunkley has informed the Court that at some stage he did prepare a document setting out his involvement in the project. It is not entirely clear whether that document was ever formally filed.
As noted above, administrators have been appointed to Birriga Development and the Bellevue Hill property, or at least the lot the subject of the plaintiff's claim, has been sold pursuant to a mortgagee's power of sale.
The sale of the lot, the financial difficulties involved in suing the various corporate entities and the plaintiff's location in China appeared to be some of a number of factors which led to the plaintiff's claim being revised so as to be limited to claims only against Ms Huang and Mr Dunkley. Proceedings against all other defendants were discontinued on 30 May 2022, pursuant to orders made by Lindsay J. On that date, his Honour also made orders for the plaintiff to provide security for Ms Huang's costs in the sum of $100,000.
On 10 July 2024, Registrar Walton listed the proceedings for hearing before me for three days, commencing today.

Recent events

On 27 September 2024, I listed the matter for pre-trial directions.
The day prior to that listing (26 September 2024), the plaintiff's then solicitors, Goodwin & Co Lawyers, had served on the plaintiff a notice of their intention to cease to act in the proceedings.
On the pre-trial directions listing, Mr Kucharski of counsel appeared for Ms Huang and raised an issue that there had been a breach, or at least an alleged breach, by the plaintiff in respect of the orders for security for costs which Ms Huang's legal representatives had only recently discovered or been able to confirm. Specifically, the plaintiff and his partner had given an undertaking to the Court on 30 May 2022 that they will not take any step whereby the balance in an identified Commonwealth Bank account falls below the sum of $250,000 without first giving notice to Ms Huang's solicitors. However, it was believed that the bank account was effectively emptied in January 2023.
I deferred making specific pre-trial directions so as to allow the issue regarding security for costs to be addressed.
Further, I was informed by Ms Chou, the plaintiff's solicitor, of her understanding that the plaintiff would physically come out to Australia to attend the hearing and give evidence.
On that occasion, I made the following orders: THE COURT: 1. Orders that, subject to the outcome of the hearing of the notice of motion proposed to be filed and heard on 10 October 2024 (as per Orders 2-4 below), the third defendant and the plaintiff may give oral evidence at the hearing in Mandarin that is interpreted into English. 2. Directs that the third defendant file and serve any notice of motion and supporting evidence seeking a dismissal of the proceedings or stay of the proceedings and/or further security for costs by 4pm on 2 October 2024. 3. Directs that the plaintiff file and serve any evidence in response to any such notice of motion by 12pm on 8 October 2024. 4. Stands the matter over for hearing of the motion before Meek J at 10am on 10 October 2024.
On 10 October 2024, I heard the contested motion for security for costs. I made a number of notations, varied the orders of Lindsay J made on 30 May 2022 and directed that the plaintiff provide security for Ms Huang's costs of the proceedings by paying an amount of $350,000 into Court by no later than 5pm on Thursday, 17 October 2024.
On 16 October 2024, Ms Chou corresponded with the Court and attached two remittances for the payments of security. The first remittance was dated 15 October 2024 and referred to a tranche in the amount of $250,000. The second remittance was dated 16 October 2024 and referred to a tranche in the sum of $100,000.
On 17 October 2024, the remittances were receipted by the Court. Ms Huang takes no issue with the plaintiff's compliance with the orders to pay security.
On 23 October 2024, one of Ms Huang's solicitors, Ms Fan, sent an email to the plaintiff's solicitors requesting the plaintiff to attend the trial in person and foreshadowing an objection to any application that he attend by audio-visual link.
On 24 October 2024, the matter was listed for pre-trial directions. I made a number of directions, including that the parties were to: 1. co-operate to prepare an agreed list of real issues by 4pm on 28 October 2024; 2. provide a list of affidavits to be relied upon by 4pm on 28 October 2024; 3. provide any objections by 4pm on 29 October 2024; 4. co-operate to prepare a court book by 4pm on 31 October 2024; 5. serve written submissions by 4pm on 1 November 2024; and 6. provide authorities by 4pm on 4 November 2024.
On 25 October 2024, Ms Chou sent an email to my Associate stating that Goodwin & Co Lawyers had filed a notice of ceasing to act that morning. The notice identified the residential or business address of the plaintiff last known to Goodwin & Co (being an address in Hangzhou City) and also the plaintiff's two email addresses last known to the firm.
Later that day, Ms Fan sent three emails to the plaintiff at his email addresses identified by Goodwin & Co. In those emails, and indeed in all email correspondence involving the plaintiff from this point on, Ms Huang's solicitors provided the content of the email in both English and Mandarin. The first email requested the plaintiff to advise whether he had any legal representative and, if so, to provide their details as soon as possible so that Ms Huang's solicitors could contact them directly. The second email requested the plaintiff to ensure that he attend the trial in person and foreshadowed an objection to any application for him to attend by audio-visual link. The third email, to which Mr Dunkley was also copied, attached Ms Huang's proposed agreed list of issues and sought a response as to whether the plaintiff and Mr Dunkley were agreeable to that list.
On 28 October 2024, Ms Huang's solicitors emailed the plaintiff a list of objections, which list was based on the affidavits which it was anticipated might be relied upon by the plaintiff.
On 29 October 2024, Ms Huang's solicitors emailed the plaintiff a proposed court book index.
By 30 October 2024, the plaintiff had not complied with any of the pre-trial directions referred to above nor otherwise responded to or acknowledged any of the email correspondence from Ms Huang's solicitors. In those circumstances, Ms Fan sent an email to my Associate at 1:54pm that day requesting to have the matter re-listed.
At my direction, my Associate sent the parties an email notifying them that the matter would be listed at 3:30pm that afternoon. The plaintiff and Mr Dunkley were also provided with an audio-visual link in case they wished to join the listing that way.
Mr Kucharski appeared at the listing, as did Mr Dunkley. The plaintiff did not. Following debate about the plaintiff's non-compliance, I made a series of notations recording the recent procedural history of the matter. I also made the following orders: THE COURT: … 2. Directs that by no later than 4:30 pm on 31 October 2024 the Plaintiff is to notify the Court by email to the Associate to Meek J and the other parties whether he is legally represented in the proceedings and, if so, identify the relevant legal practitioner(s) and also whether he intends to appear at and prosecute his claims in the proceeding [] set down for hearing on 6 November 2024. 3. Stands the matter over to before Meek J at 11:30am on Friday, 1 November 2024 for mention and review in light of the above orders. 4. Suspends the obligation of the Defendants to deliver a Court Book in accordance with Order 4 made on 24 October 2024 until 11:30am on 1 November 2024 unless the Plaintiff communicates with or otherwise engages with the defendants regarding preparation of the Court Book before then. 5. Suspends, subject to further order, the obligation of the Defendants to provide submissions in accordance with Order 5 made on 24 October 2024 until 10am on Monday, 4 November 2024.
As is my normal practice, at my direction my Associate sent to the parties an email setting out the orders made.
Later that afternoon, upon receipt of that email, Ms Fan sent an email to my Associate, which email was also copied to the plaintiff's email addresses, acknowledging receipt of the orders and, relevantly, providing a translation of the orders into Mandarin, "[f]or the benefit of the plaintiff".
On the listing at 11:30am on 1 November 2024, there was again no appearance by or on behalf of the plaintiff. On that occasion, Mr Kucharski handed up proposed short minutes of order seeking to dismiss the proceedings. However, it was my view that an application to dismiss the proceedings should be formalised by notice of motion to be filed and served on the plaintiff.
I made a number of notations, as well as the following directions: THE COURT: … 4. Directs the Third Defendant to file and serve a Notice of Motion with the orders they seek and any supporting affidavit, such motion may be returnable at 2pm on Monday, 4 November 2024. 5. Abridges the time for service of the Notice of Motion and affidavit(s) in support and directs that the Notice of Motion and supporting affidavit(s) be served by 5pm Hangzhou City China time, which will be 8pm Sydney time today 1 November 2024. 6. Directs that the Notice of Motion and supporting affidavit may be served by email [to] emails previously used in [correspondence] with the Plaintiff. 7. Suspends the obligations of the Third and Seventh Defendants to comply with Orders 4 and 5 of the orders made by Meek J on 24 October 2024. 8. Stands the matter over to before Meek J at 2pm on Monday, 4 November 2024 for the hearing of the Notice of Motion or such other relief as may be appropriate having regard to the then prevailing circumstances.

Service

On 4 November 2024, the matter was listed for the hearing of Ms Huang's motion. Prior to the listing, my Associate had sent an email to all parties, including the plaintiff, giving the plaintiff opportunity to attend the listing via audio-visual link.
Neither the plaintiff, nor anyone on his behalf, appeared by any means. As previously, Mr Kucharski appeared on behalf of Ms Huang and Mr Dunkley appeared in person.
I was satisfied by the information provided in Ms Fan's affidavit that the notice of motion and supporting affidavit and exhibit had been served by email on the plaintiff.
Service being demonstrated, Mr Kucharski on behalf of Ms Huang sought to proceed on the motion.

Legal principles

If a party fails to comply with a case management direction, the Court may do a number of things including, relevantly, dismiss the proceedings, whether generally, in relation to a particular cause of action or in relation to the whole or part of a particular claim: s 61(3)(a) CPA.
The legal principles dealing with applications under s 61(3)(a) of the CPA are addressed in a number of authorities, including Hans Pet Constructions Pty Ltd v Cassar [2009] NSWCA 230 (Hans Pet) at [36]-[41]. In that case, Allsop ACJ (Campbell and Young JJA agreeing) emphasised that, in exercising its powers under s 61(3), the Court must seek to act in accordance with the dictates of justice, which relevantly require the Court to have regard to the provisions of s 56 of the CPA (the overriding purpose of case management), s 57 of the CPA (the objects of case management) and the matters, to the extent the Court considers them relevant, set out in s 58(2) of the CPA.
Mr Kucharski directed my attention to the decision of White J (as his Honour then was) in Greywolf Resources NL v Wilkinson [2011] NSWSC 1604 (Greywolf), where his Honour dismissed the plaintiff's summons pursuant to s 61 of the CPA in circumstances where it had failed to comply with successive orders to file and serve an amended summons or statement of claim and further affidavits: Greywolf at [11], [13]-[14].
In respect of the Court's power of dismissal pursuant to r 12.7 of the UCPR, Mr Kucharski drew my attention to the decision of the Court of Appeal in Ghosh v NineMSN Pty Ltd (2015) 90 NSWLR 595; [2015] NSWCA 334. The principles applicable to an exercise of the power under r 12.7 of the UCPR were set out by Macfarlan JA at [40]-[43] as follows: 40. The discretion to dismiss proceedings that UCPR r 12.7 confers if a plaintiff does not proceed with "due despatch" is broad and should not be confined by rigid formulae (Stollznow v Calvert [1980] 2 NSWLR 749 at 751 and Micallef v ICI Australia Operations Pty Ltd [2001] NSWCA 274 at [51] in relation to the comparable power under earlier rules to dismiss for want of prosecution). As Walsh JA said in Witten v Lombard Australia Ltd [1968] 2 NSWR 529; 88 WN (Pt 1) (NSW) 405: "Everything must depend upon the circumstances disclosed in each particular case. It is, of course, proper to consider whether any explanation or excuse has been offered for the delay, and whether any explanation or excuse that has been offered is credible and satisfactory. It is proper to consider whether or not there is evidence of particular prejudice to the opposing party by reason of the delay. When all relevant factors have been taken into account, a decision is then to be reached as to the manner in which the discretionary power should be exercised" (at 412). 41. As the primary judge properly found, relevant delay in this context is not confined to that which is caused by a lack of activity, it extends to a delay arising out of a "want of constructive activity" (see [30] above). 42. Importantly, the Civil Procedure Act now also adds the overriding purpose of that Act and the rules of court in facilitating "the just, quick and cheap resolution of the real issues in the proceedings" to the matters to be considered (s 56). As well, s 57 includes the "efficient use of available judicial and administrative resources" amongst the objects to which regard is to be had in managing court proceedings, s 59 requires delay to be eliminated so far as possible and s 60 requires the court to take into account the object of "resolving the issues between the parties in such a way that the cost to the parties is proportionate to the importance and complexity of the subject-matter in dispute". 43. These considerations are of fundamental importance in determining an application for the dismissal of proceedings for want of due despatch, as they are to all other aspects of the conduct of civil litigation in this State. The primary judge had appropriate regard to these provisions in arriving at her decision to dismiss the proceedings.

Determination

In determining to dismiss the plaintiff's claim against Ms Huang, I consider that the appropriate dismissal power is that under s 61(3)(a) of the CPA.
Subject to one matter, up until approximately 26 September 2024 (when the plaintiff's solicitors filed a notice of intention of ceasing to act) the proceedings were tracking surely but relatively uneventfully towards the hearing due to commence today.
The one matter was the plaintiff's breach of his undertaking to the Court by causing the balance of the Commonwealth Bank account to fall below $250,000 without first giving Ms Huang's solicitors notice.
The significance of that breach should not be minimised. However, it should be noted that eventually, albeit at some further cost of a contested motion by Ms Huang that the existing security for costs orders be revisited, such orders were revised and the new orders were complied with by the plaintiff. Notably, this occurred while Goodwin & Co were still acting for the plaintiff.
Following the expiry of the requisite period noted in the notice of intention of ceasing to act and the filing of the notice of ceasing to act on 25 October 2024 by Goodwin & Co, there was a seismic shift in the preparatory steps taken by the plaintiff in the proceedings.
For reasons which have not been explained, the plaintiff, having complied with the order for provision of security by 17 October 2024, eight days later (coincident with Goodwin & Co ceasing to act) halted all apparent preparation for the proceedings and stopped communication with the two active defendants and the Court.
Timeliness of steps in the preparation and disposal of proceedings is a hallmark of the guiding principles in ss 56 to 59 of the CPA. However, the significance and impact of delay and non-compliance with case management orders is context-specific.
Specifically, delay or non-compliance with directions close to the time of the hearing tends to have a significant detrimental effect, both in terms of prejudice to the other parties and to the Court's efforts to facilitate a just and fair hearing for the parties.
It is self-evident, as a matter of human experience and common sense, that the time, effort and costs of parties and their legal representatives generally increases significantly in the final months or weeks prior to a hearing well beyond that of preparatory stages much earlier in the proceedings.
A period of almost three weeks had elapsed between the initial listing of the matter for pre-trial directions on 27 September 2024, the motion seeking security for costs and the provision of security on 17 October 2024.
Thus, when the matter was listed on 24 October 2024, it was clear that the timetable for specific pre-trial directions would need to be compressed. When emailing a copy of those directions to the parties subsequent to the listing, my Associate (at my direction) emphasised the need to ensure that the directions are strictly complied with, in light of the shortness of time prior to the hearing.
By 4pm on 29 October 2024, the plaintiff had failed to comply with the first three pre-trial directions. The proximity to the hearing heightened the significance of those defaults.
As noted above, I resisted the initial request of Ms Huang's representatives at the listing on 1 November 2024 to dismiss the plaintiff's claim against her for the abovementioned defaults. In doing so, I was mindful of the importance of weighing the just determination of the proceedings against the imperative for the parties to take the directed steps to facilitate the timely and efficient conduct of the hearing. I insisted that an application for dismissal at that time should not be made informally, but rather on appropriate notice to the plaintiff.
However, by the listing on 4 November 2024, the plaintiff had failed to comply with two further pre-trial directions, being (a) to co-operate in the preparation of a court book and (b) to provide written submissions.
In addition to the defaults, there had been "radio silence" from the plaintiff, with no apparent communication to the Court or the other active defendants which explained his position or intentions.
Ms Huang's representatives properly raised for my consideration the fact that the plaintiff might have some language difficulty. In his affidavit, Mr Chen relevantly stated: 6. … I understand that the plaintiff has very limited or no English capacity from the fact that affidavits he has affirmed and served in the proceeding have included an interpreter's certification in accordance with r 31.62 of the Uniform Civil Procedure Rules 2005 (NSW).
I note that, in his statement of claim filed on 29 November 2021, the plaintiff alleged that he did not read or speak English. However, that allegation had been deleted in the further amended statement of claim which the plaintiff filed on 13 February 2024.
There is no formal evidence before me demonstrating that the plaintiff is incapable of reading English and, specifically, incapable of reading or translating communications from the Court.
In any case, the plaintiff has had ample opportunity to engage lawyers or other professionals to assist him to address any deficiency he may have in understanding communications from the Court or the other parties, or communicating with the Court or the other parties.
However, as I have noted above, since the time that the plaintiff's solicitors ceased to act for him, Ms Huang's solicitors have provided their email communications to the Court and the plaintiff in both English and Mandarin for his benefit.
In considering the dictates of justice, I have had regard to the following: 1. since 10 July 2024, the plaintiff was aware that the proceedings were listed for hearing before me, for an estimate of three days, commencing on 6 November 2024; 2. since 26 September 2024, the plaintiff was aware that his solicitors, Goodwin & Co Lawyers, intended to cease to act for him and would cease to act for him after the requisite 28 day period under r 7.29(2)(a) of the UCPR; 3. at that point, having regard to the nature of the issues in the proceedings and their difficulty and complexity, in my view there was still sufficient time for the plaintiff to engage alternative representation to prepare for the hearing, should he wish to do so, or otherwise prepare for the hearing himself; 4. at the time of the listing at 2pm on Monday, the plaintiff had failed to comply with each of the first five pre-trial directions made on 24 October 2024 which required his involvement - in that respect, the plaintiff had entirely failed to fulfil his duty under s 56(3) of the CPA; 5. there was no evidence before the Court that those defaults had arisen from circumstances beyond the control of the plaintiff; 6. the plaintiff's abovementioned defaults had a correlative impact on Ms Huang and her legal representatives in preparing for the hearing of the case, with each default adding to the difficulty for them to prepare for the hearing; and 7. for whatever reason, the plaintiff has not provided the Court with any reason or excuse for his defaults.
I pondered the question which I posed at the outset of these reasons as to why the plaintiff might go to the effort of providing security for costs and then fail to take any active steps to prepare for the hearing or to communicate with the Court or the other parties regarding the matter. I raised the question with Mr Kucharski, who ventured a possible answer that the plaintiff might have wished to purge his breach of court orders. However, Mr Kucharski properly acknowledged that was in the realm of speculation. He stated: KUCHARSKI: I accept it is a curious feature of this case and as we haven't heard from the plaintiff there's an element of speculation. But, one possibility is that he was still represented at the time and your Honour may infer he was given advice that what had occurred was a potential contempt of court, and in those circumstances perhaps he paid the money into court to cure a potential contempt of court without necessarily, or perhaps already formed the view that he did not wish to take the matter to its conclusion.
Ultimately, there is no explanation, and I am not required to speculate as to the answer.
Further, it had occurred to me that the plaintiff might have some difficulty in connecting to the Court via audio-visual link from his location in China, having regard to the fact that many countries object to foreign judicial officials taking evidence from persons within their territory on the ground that such an act constitutes an invasion of their sovereignty: see e.g. M Davies, A S Bell, P L G Brereton and M Douglas, Nygh's Conflict of Laws in Australia (10th ed, 2020, LexisNexis Butterworths) at [11.25]. In particular, there are cases which address the issue of whether evidence could be taken by audio-visual link from witnesses in China: see e.g. Motorola Solutions, Inc. v Hytera Communications Corporation Ltd (Adjournment) [2020] FCA 539 at [2] per Perram J; In the matter of Sunnya Pty Ltd [2023] NSWSC 1286 at [123]-[140] per Williams J.
The proceedings in this Court are generally held in person: see e.g. Xia v Santah Pty Ltd [2003] NSWSC 807 at [9] per Palmer J (the usual requirement that evidence be given by witnesses present in Court). The Court may permit parties or witnesses to the proceedings to give evidence and make submissions by telephone, audio-visual link or other form of communication. Such a decision is a type of case management decision within the meaning of s 58 of the CPA.
However, it is not ultimately necessary for me to further explore that consideration. No application has been made by the plaintiff, either on his own part or by his solicitors while they were acting for him, to give evidence in the proceedings other than in person.
At the listing on Monday afternoon, the practical reality was that the matter was not then in a state in which it could, as against Ms Huang, properly proceed to hearing this morning.
The decision in Hans Pet is a salutary reminder that the Court's response to default by a party to proceedings in their compliance with case management directions should be proportionate, having regard to the relevant considerations addressed in ss 56 to 59 of the CPA.
In the above circumstances, having regard to the dictates of justice and the particular consideration of ensuring a just determination of the proceedings for all the parties, I determined to order that the plaintiff's claim against Ms Huang be dismissed.
In doing so, I was mindful of the fact that dismissal of the proceedings for want of compliance with directions would not estop or bar the plaintiff from bringing whatever claim might properly be brought subsequent to such dismissal. Technically, the dismissal does not follow a determination of the merits of the proceedings. Subject to whatever terms on which an order for dismissal is made, and putting aside any question of limitation periods, a dismissal does not per se affect the right of a plaintiff to bring properly constituted proceedings sometime in the future: s 91 CPA; Greywolf at [12], [16].
In some cases, a dismissal under s 61(3)(a) of the CPA might have a more potent effect of stymieing a plaintiff's prospects of re-instigating proceedings if the expiry of time allows a defendant the opportunity to plead a limitation defence.
I was mindful of the possibility that if the plaintiff sought to bring proceedings again, a limitation defence might possibly be raised by Ms Huang to any claim under the ACL. However, whether any possible limitation defence might arise is a matter of some complexity and that prospect was not debated before me. In any event, if the plaintiff had wished to avoid any such possible outcome, it was in the plaintiff's hands to take steps to mitigate such risk by appearing or making some other application to the Court.

Service

Mr Dunkley has not taken any steps to serve the plaintiff with notice of his intention to seek dismissal of the proceedings against him consequent upon the plaintiff's failure to appear at the hearing today.
However, as indicated earlier, I do not consider that is a fatal impediment to considering the application for dismissal. The plaintiff has been aware of the listing of the matter for hearing since 10 July 2024.
On Monday afternoon, my Associate emailed all of the parties with a note of the orders made, which reiterated that the hearing remained listed for today in respect of the plaintiff's claim against Mr Dunkley.
In addition, early yesterday morning my Associate sent a joint email to the plaintiff and Mr Dunkley expressly indicating that I permitted the plaintiff to appear at the hearing due to commence this morning by audio-visual link. A link and telephone number (together with an ID number) were also provided.
As I have indicated above, I am comfortably satisfied that the plaintiff was aware that the matter was listed for hearing today and, if he had so wished, he could have arranged for either himself or some representative on his behalf to appear in person or by audio-visual link.

Legal principles

Rule 29.7 of the UCPR is relevantly in the following terms: 29.7 Procedure to be followed if party is absent (1) This rule applies when a trial is called on. (2) If any party is absent, the court - (a) may proceed with the trial generally or so far as concerns any claim for relief in the proceedings, or (b) may adjourn the trial. … (4) If, in relation to any proceedings, the defendant appears, but the plaintiff does not appear, the court may dismiss the proceedings. (5) Subrules (3) and (4) do not limit the court's powers under subrule (2).
A "trial" means any hearing that is not an interlocutory hearing: s 3 CPA. The hearing of the proceedings today is a trial so defined and, accordingly, r 29.7 of the UCPR is applicable.
In Adelaide Concrete Cutting & Drilling Pty Ltd v Marino (No 2) [2024] NSWSC 499, I briefly addressed the provisions of r 29.7 of the UCPR at [61]-[63] as follows: 61. A party fails to appear, for the purpose of the present rule, if they have adequate notice of the hearing, and fail either to attend (personally or by a representative) or to provide the Court with an apparently credible explanation for their non-attendance: Ritchie's Uniform Civil Procedure NSW at [29.7.2], citing Magjarraj v Asteron Life Ltd [2009] NSWSC 1433 at [22], NSW Trustee & Guardian as Executor of the Will of Michael Robert Walsh (Deceased) v Gregory [2012] NSWSC 681; (2012) 18 BPR 35,153 (Gregory) and Hill v Dunn [2019] NSWSC 419 at [8]-[21]. 62. In Gregory, Hallen AsJ (as his Honour then was) observed that a party will not be found to be "absent" within the meaning of r 29.7 unless that party has knowledge or notice of the date of the trial: Gregory at [18]-[22]. However, in Elite Realty Development Pty Ltd v Sadek [2022] NSWSC 1333, whilst accepting that natural justice must be observed, Peden J at [16] respectfully disagreed that UCPR r 29.7 requires a plaintiff to notify a defendant of the date of the trial in order for the defendant to be "absent" and the hearing to proceed. 63. In this case, it is not necessary to embark upon that debate. Mr Marino was aware that the matter had been listed for hearing. He had been served with a subpoena and ultimately (as I note below) attended before the Court as a witness, following the issue of a warrant for his arrest pursuant to failure to comply with the subpoena.
Further, it is clear that, as with an exercise of the power under s 61(3)(a) of the CPA, it is necessary in considering to dismiss proceedings pursuant to r 29.7(4) of the UCPR for the Court to seek to act in accordance with ss 56 to 59 of the CPA.

Determination

As noted above, there is no explanation for the plaintiff's non-attendance at the hearing. The plaintiff's "radio silence" has continued unabated since around the time that the pre-trial directions were made up to and including today.
In considering the guiding principles of case management and the dictates of justice, much of what I have said above in respect of Ms Huang's dismissal claim is equally applicable in respect of Mr Dunkley's dismissal claim. Aside from the curious aspect I have noted above in respect of the plaintiff's recent payment of security for costs, he has otherwise chosen to disengage from the proceedings which he commenced. As I have detailed above, the plaintiff has had ample notice of the hearing and Ms Huang's dismissal claim. Thus, it would come as no surprise to him that, upon his non-appearance today, Mr Dunkley may similarly seek to have the proceedings against him dismissed.
The Court is not obliged to delay proceedings indefinitely because the plaintiff, although proved to be on notice of the proceedings, refuses or fails to appear: Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40 at [40] per Kirby J; Lezaja v Hannover Life Re of Australasia Ltd (No 2) [2016] NSWSC 167 (Lezaja) at [40] per Hallen J. In the circumstances, it is appropriate that the plaintiff's proceedings against Mr Dunkley be dismissed in his absence pursuant to r 29.7(4) of the UCPR.
It has been said that the effect of such judgment is the same as if it were a judgment dismissing the action on the merits: see Ritchie's Uniform Civil Procedure NSW (Ritchie's) at [29.7.15] and the authorities cited therein; In the matter of Kay Investment Holdings Pty Ltd v North East Developments Pty Ltd (in liq) [2011] NSWSC 1121 at [29] per Ward J (as her Honour then was); The Estate of Alberto Magri (No 2) [2022] NSWSC 1779 at [90] per Henry J. In that respect, r 29.7(4) of the UCPR might be distinguishable from s 61(3)(a) of the CPA, which does not involve a determination on the merits: see Ritchie's at [s 61.10]. On that view, it would appear that the plaintiff would not be able to bring fresh proceedings against Mr Dunkley claiming the same relief, due to s 91(2) of the CPA. That being said, in Lezaja Hallen J ordered that the proceedings brought by the absent plaintiff be dismissed pursuant to r 29.7(4) of the UCPR but considered that the plaintiff was not prevented from bringing fresh proceedings by virtue of s 91 of the CPA: see Lezaja at [43]; see also Commonwealth Bank of Australia v Susan Hannaford Pty Ltd (No 5) [2013] NSWSC 1175 at [21] per Campbell J.
Ultimately, however, it is unnecessary for me to express a view on that potential controversy here. On either view of the effect of a dismissal pursuant to r 29.7(4) of the UCPR, having regard to all of the circumstances, I am satisfied that the plaintiff's proceedings against Mr Dunkley ought to be dismissed.
On the question of costs, Mr Dunkley has been entirely self-represented during the proceedings and there is no suggestion that he has incurred legal costs such that there should be any costs order in his favour as a consequence of the dismissal.

Orders

The orders of the Court which I made 4 November 2024 were as follows: 1. Orders the proceedings are dismissed as against the Third Defendant pursuant to s 61(3)(a) of the Civil Procedure Act 2005 (NSW). 2. Vacates any further obligation of the Third Defendant of compliance with orders 4, 5 and 6 made by Meek J on 24 October 2024. 3. Vacates the hearing, as against the Third Defendant, set down for 6 November 2024 with an estimate of three days. 4. Orders that costs as between the Plaintiff and the Third Defendant be reserved. 5. Directs that as between the Plaintiff and the Third Defendant any proposed short minutes of order in respect of costs, submissions and supporting materials to be provided by email to the Associate to Meek J by no later than 4pm on 8 November 2024. 6. Orders that the question of costs in order 5 be dealt with in chambers unless any party requests a listing in Court, such request to be made no later than 4pm on 8 November 2024. 7. Notes as matters presently stand the matter remains listed in respect of the Plaintiff's claim against the Seventh Defendant before Meek J to commence at 10am on 6 November 2024.
The additional orders which I now make in respect of the plaintiff's claim against Mr Dunkley are as follows: 1. Orders pursuant to r 29.7(4) of the Uniform Civil Procedure Rules 2005 (NSW) the proceedings are dismissed as against the Seventh Defendant. 2. Orders that there be no order as to costs of the Plaintiff's claim against the Seventh Defendant. 3. Vacates the balance of the hearing dates, as against the Seventh Defendant, on 7 and 8 November 2024.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 November 2024

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