De Rucci International Pty Ltd v Zhu and others [2021] NSWSC 1108

Supreme Court New South Wales

Medium Neutral Citation: De Rucci International Pty Ltd v Zhu and others [2021] NSWSC 1108 Hearing dates: 15 June 2021 Date of orders: 15 June 2021 Decision date: 15 June 2021 Jurisdiction: Common Law Before: Wilson J Decision: 1 Motion dismissed. Catchwords: CIVIL PROCEDURE — stay of enforcement judgment — where judgment pending appeal — where question of stay already heard – lack of evidence to support application Cases Cited: Bajramovic v Calubaquib [2015] NSWCA 139 De Rucci International Pty Ltd v Zhu [2020] NSWSC 1927 Category: Principal judgment Parties: De Rucci International Pty Ltd (Plaintiff) Lucy Xiaoping Zhu (First Defendant) HQ Living Pty Ltd (Second Defendant) Singways (Moore Park) Pty Ltd (Third Defendant) HQ Living (Moore Park) Pty Ltd (Fourth Defendant) HQ Bedding Pty Ltd (Fifth Defendant) Representation: Counsel: G Gee (Plaintiff / Respondent) M Fantin (Defendant / Applicant)

Solicitors: Auyeung Hencent & Day Lawyers (Plaintiff/ Respondent) Gary Cassim & Associates (Defendants / Applicants) File Number(s): 2019/00293452 Publication restriction: Nil

EX TEMPORE Judgment – DUTY LIST 1. HER HONOUR: On 2 December 2020 Rothman J gave judgment in the matter of De Rucci International and Zhu and others. Judgment was given in favour of the plaintiff, De Rucci, a judgment which has now been made the subject of an appeal to the Court of Appeal. 2. On 30 December 2020, the defendants made an application for a stay of enforcement of the judgment and that application was dealt with by Cavanagh J. His Honour dismissed the motion with costs against the first defendant: De Rucci International Pty Ltd v Zhu [2020] NSWSC 1927. 3. An amended notice of motion was filed on 26 May 2021 which, again, seeks a stay of the judgment of Rothman J. The orders sought in the amended notice of motion are for a stay of that judgment until a verdict in the defendants' appeal is delivered by the Court of Appeal; and further, an order for a stay of the execution of the writ for levy of property which was issued on 22 April 2021 until such time as the Court of Appeal determines the defendants' appeal; together with some ancillary orders. Orders 1 and 2, of course, are the substantive orders. 4. In related proceedings, the Court of Appeal on 28 May 2021 delivered judgment in an application filed by the plaintiff for security for costs as against the appeal. 5. This motion needs to be assessed against that background and particularly against the earlier orders of Cavanagh J in this Court and those made by Macfarlan JA in the Court of Appeal. 6. The other feature of the background to the matter which is of some relevance is that the defendants were previously unrepresented. On 27 May 2021, instructions were given to a firm of solicitors and counsel has been briefed to appear for the defendants this morning. 7. At the outset it should be observed that the application seems somewhat unprepared with evidence being filed as late as 7pm last night and an affidavit sought to be read this morning, which was sworn today, and of which the plaintiff had no notice. The Court Books were not adequately prepared and the evidence that the Court is asked to have regard to is lacking in many areas such that it is difficult to feel fully informed of all the relevant issues in making this judgment. 8. The defendants, the applicant on the motion, rely upon the affidavit of Ms Zhu of 21 May 2021 and an affidavit of the same deponent of 14 June 2021 in reply. The final paragraph of that affidavit was struck out during the course of the hearing of the motion, it raising information that was not information in reply. 9. The respondents to the motion, the plaintiffs in the substantive action that came before Rothman J, rely upon the affidavit of Simon Li of 15 June 2021, the affidavit of Vincent Zhi-Qing of 7 June 2021, and an affidavit of Jia Fu of 19 April 2021. 10. When the matter came before Cavanagh J, the applicant, by the first defendant Ms Zhu, was self-represented. His Honour then considered the affidavit evidence, the judgment of Rothman J, and the arguments advanced by Ms Zhu as to the basis of her application. 11. His Honour noted at paragraph 18 of his judgment that the first defendant's evidence was, to a degree, inadequate. She had not adduced evidence to establish that, if a stay of enforcement was not granted, her appeal would be futile. There was no evidence relating to the financial position of the plaintiff and whether the appeal would be rendered nugatory. In that sense the position has changed a little in the proceedings before the Court today. 12. That judgment from Cavanagh J represents the first hurdle that the applicant on the motion must pass if the matter is to be further considered in terms of a grant of a stay. 13. Ordinarily an interlocutory decision of the Court will only be reconsidered where there is some good reason in the interests of justice to review the initial decision and revisit it. That's a matter of common sense, if nothing else. It cannot be the position that a party seeking a particular order can simply re-litigate it again and again. The Court has been referred to a number of decisions on that point. Taking one of them as a summary of the relevant principles: in Bajramovic v Calubaquib [2015] NSWCA 139, the Court of Appeal noted that it would be conducive to injustice as well as an enormous waste of judicial time and resources if there were no limits imposed on the entitlement of a party to re-litigate at will in its application for interlocutory relief. 14. The Court did note that there would be circumstances in which it would nevertheless be appropriate to reconsider an interlocutory decision including but not limited to circumstances where there has been a material change or where evidence has become available that was not available at the time the matter was originally before the Court. 15. The overriding principle, according to the Court of Appeal in that decision, is that the Court must do whatever the interests of justice require in the particular circumstances of the case. The interests of justice plainly have to prevail. 16. The defendants submit that if the Court considers the ordinary principles that apply to consideration of granting a stay, the weight of the evidence and the interests of justice fall on the defendants' side. 17. With respect to the first question, that is whether the appeal which the defendants have mounted in the Court of Appeal is reasonably arguable, with serious questions to be tried, there is no real issue between the parties. The plaintiff does not take issue with the fact that, bearing in mind the very low threshold of the relevant test, there is an argument to be made for the defendants. 18. The defendants submit that, with respect to the second question that the Court should ask itself, that is whether there is a risk that the appeal will be rendered nugatory because there is no reasonable probability of retrieving the damages paid in satisfaction of the first instance judgment, that the defendants would face real difficulties in seeking to recover the sum paid should their appeal be successful. 19. The evidence for that proposition is, however, singularly lacking. There is only an assertion in the material before the Court that the plaintiff is a multi-national company, inferentially with vast resources, and that the plaintiff company is one which is based in China and beyond the reach of the Australian courts. 20. The plaintiff, the respondent to the motion, points to its status as a proprietary company limited in Australia to substantiate the submission that, were the appeal to be successful, the defendants would experience no difficulty in recovering the damages paid. 21. The third question that the Court is to consider is the balance of convenience or the balance of prejudice. 22. There is perhaps more substance to that claim, although again the evidence before the Court is singularly lacking to fully determine the issue in an informed way. 23. There is an assertion as to the consequences for the defendants if the Court does not grant the stay but it is little more than an assertion without any real evidence to substantiate the claim. That is despite the fact that this is the second attempt at having this Court stay the enforcement of Rothman J's judgment. The Court is still in a position where it has really nothing more than Ms Zhu's affidavit to suggest that if the stay is not granted, her present business will not be able to survive. 24. It is particularly difficult to assess that claim in circumstances where it seems that Ms Zhu, the first defendant and the applicant in these proceedings with the co-defendants, seems to be in control of a company operating the same sort of business from the same premises with many of the same office holders involved, a company that has been referred to in her submissions as "the innocent third party", who will be the victim in essence of action by the Sheriff to recover property in satisfaction of the judgment. 25. The conclusion that the Court reaches on the basis of the limited evidence available and the lack of any substantiating information is simply that there is insufficient evidence to conclude in the defendants' favour that the balance of convenience is in favour of the defendants. Ordinarily the successful party in litigation before a Court is entitled to enforce judgment and is entitled to recover the moneys which a Court has ordered that it is entitled to. The information to halt that usual process is too slight and too unpersuasive for the Court to regard the balance of convenience as favouring of defendants. 26. That is particularly so given that the question of a stay was not raised when these proceedings were in the Court of Appeal. Given that there was already a decision from Cavanagh J and action before the Court of Appeal with respect to security for costs, I think it is reasonable to conclude that, if in fact the issues were as urgent and as potentially devastating as the defendants claim, some action would have been placed before Macfarlan JA when the Court of Appeal heard the related issue. That would have been the most appropriate time and jurisdiction in my view, to determine the question. That it was not raised there is a feature of some significance. 27. The final question is the amount and significance of the judgment. The judgment that was ordered to be paid is a little over a quarter of a million dollars. That is a very large sum of money and no one would say contrary to that. However, it is also a large sum to the plaintiff and a sum to which the plaintiff is entitled and no doubt needs in the operation of its ordinary business. It is a question of balancing the two issues and balancing the significance of the judgment sum to the plaintiff and that to the defendants. 28. Again, the question of the insufficiency of evidence is a relevant consideration. The defendants' position is very unclear on the evidence. Ms Zhu, through her legal representatives sought to characterise herself as unconnected with "the innocent third party" against whom the Sheriff is proceeding but also relied upon evidence which seems to establish a very significant degree of involvement with that innocent third party, to the point where one would have to wonder, although be unable to conclude in the absence of evidence, whether in fact they are effectively the same entities with simply a name change. 29. In any event, when one balances the interests of the plaintiff in recovering the judgment that the Court has awarded in its favour as against the assertion from the defendants, the evidence in my view is not persuasive in favour of a stay being made. 30. Whilst I accept that the defendants were hampered in their initial preparation of this matter by virtue of the lack of legal representation, that has not been the position now for a number of weeks and although such a period is a relatively short one in terms of preparing a matter of this nature, I would have expected had there been evidence to support some of the claims made on behalf of the defendants that that evidence would have been placed before the Court in an admissible form within the time frame ordered by the Court. 31. On the evidence that is presently available, I have reached the same conclusion as did Cavanagh J and that is it is not appropriate to order a stay of execution in this matter. Having reached that conclusion, I do not propose to make either of the orders sought in the amended notice of motion and the motion is dismissed.