Huang v Liao (aka Kurz) [2022] NSWSC 141

Supreme Court New South Wales

Medium Neutral Citation: Huang v Liao (aka Kurz) [2022] NSWSC 141 Hearing dates: 14 February 2022 Date of orders: 14 February 2022 Decision date: 14 February 2022 Jurisdiction: Equity - Duty List Before: Henry J Decision: First Defendant committed to custody of Corrective Services Department pending hearing of contempt charges. Catchwords: CONTEMPT OF COURT - Practice and procedure - Arrest - Detention in custody - Power of Court to direct alleged contemnors to be held in prison pending trial of contempt charge Legislation Cited: Supreme Court Rules 1970 (NSW) Crimes (Administration of Sentences) Act 1999 (NSW) Cases Cited: Huang v Liao [2021] NSWSC 1706 ASIC v Michalik (No 2) (2004) 62 NSWLR 335; [2004] NSWSC 1260 Category: Procedural rulings Parties: Shaojun Huang – Plaintiff Jingwen Liao – First Defendant (Jingwen Kurz) Representation: Solicitors: Dixon Holmes Lawyers – Plaintiff and Applicant First Defendant (self-represented) File Number(s): 2020/00163163 Publication restriction: Nil

Judgment - EX TEMPORE (reviseD) 1. The First Defendant in these proceedings, Jingwen Liao, also known as Jingwen Kurz, was brought before the Court yesterday (a Sunday) pursuant to an arrest warrant that had been issued under Part 55 r 10 of the Supreme Court Rules 1970 (NSW) (Supreme Court Rules) for Ms Liao to answer a charge of contempt of court. Ms Liao was detained overnight, and the proceedings were listed before me today as Equity Duty Judge. 2. The issue for determination today is whether Ms Liao should continue to be detained in custody pending the hearing of the contempt charges that have been brought against her. 3. The circumstances in which Ms Liao is charged with contempt of court and an arrest warrant issued are set out by Kunc J in Huang v Liao [2021] NSWSC 1706. 4. In summary, on 14 December 2021, Kunc J granted leave to the plaintiffs to file in Court a notice of motion seeking declarations that Ms Liao is in contempt, accompanied by a statement of charge setting out the allegations in support of the conclusion that Ms Liao is in contempt of orders made on 1 June 2020 by Ward CJ in Eq restraining Ms Liao from dealing with her assets, including any dealing with a property at X XXXXX Court, Mudgeeraba, Queensland (Property), (Asset Preservation Orders) and orders made on 16 November 2021, 30 November 2021 and 3 December 2021. On that occasion, His Honour also issued the warrant for the arrest of Ms Liao under Part 55 r 10 of the Supreme Court Rules so that Ms Liao could be brought before the Court to answer the charge of contempt. 5. Kunc J's reasons record that His Honour was satisfied that it appeared that Ms Liao may abscond or otherwise withdraw herself from the jurisdiction of the court and that the evidence demonstrated a pattern of flagrant breaches leading to a very strong case of contempt, lying to the court, a motive to escape the reach of the court and personal and commercial connections to China (at [31] and [32]). 6. As I understand it, Ms Liao was in China when Kunc J made the 14 December 2021 orders and issued the arrest warrant. She was apprehended at Sydney Airport yesterday (13 February 2022) when she arrived in Sydney on her way to Brisbane and was then arrested pursuant to the warrant issued by Kunc J. 7. The arrest warrant provided that Ms Liao was to be brought before the Supreme Court of New South Wales, Equity Division, duty judge, forthwith upon her arrest, and detained if necessary in custody in the meantime, and that it had been issued for Ms Liao to answer the charge of contempt of Court set out in the Notice of Motion dated 14 December 2021. 8. When Ms Liao was brought before Parker J sitting as the duty judge yesterday, she was not legally represented and the plaintiffs did not appear. His Honour's orders note that Ms Liao had been brought to Court, the Statement of Charge had been read and the nature of the proceedings had been explained to her and that she made no application to be released from custody. His Honour ordered that she be held in remand at the Sydney Police Centre in Surry Hills pending further hearing of the proceedings and stood over the plaintiffs' Motion to 2pm today before the Equity Duty Judge. 9. At the hearing before me today, Ms Liao was present in Court but did not have legal representation. Mr Donald Junn, solicitor, appeared for the plaintiffs. 10. Ms Liao informed the Court that she attempted to obtain legal representation and had spoken to a lawyer who Ms Liao thought might be coming to Court, but she did not know where the lawyer was from and said that the "police" gave her the phone number. Representatives from the Office of the Sherriff (who were present in Court) informed me they had provided Ms Liao with the contact details of LawAccess. They also informed me that LawAccess had advised them just before coming into court that they are unable to assist Ms Liao as she is not an Australian citizen and she is also unlikely to satisfy the means test requirements. I should also record that I was informed by the representatives from the Office of the Sheriffs that, while she has been in custody since yesterday, Ms Liao made multiple calls (20 to 30) on her mobile phone. 11. I accept that Ms Liao was unable to obtain legal representation for her appearance today. For that and other reasons, such as that Ms Liao has not yet been served with the plaintiff's Notice of Motion and supporting affidavits, the hearing of the contempt charge cannot proceed today. 12. Mr Junn indicated that the plaintiffs wish to amend the statement of charge to add further changes due to new evidence that has been obtained through the subpoena process. His application is for the hearing of the contempt charges to be stood over for seven days, subject to the Court's availability. This would also give Ms Liao time to obtain legal representation and enable the amended charges to be filed. Mr Junn also objects to Ms Liao's release and submits that she should be retained in custody until the contempt charge can be heard and be required to surrender all her passports and travel documents. 13. In support of the application, Mr Junn relies on two affidavits sworn by him on 14 December 2021 and 14 February 2022. His affidavit of 14 December 2021 was the evidence on which Kunc J relied to conclude that he should make the order for the issue of a warrant for Ms Liao's arrest. 14. Mr Junn submits that the evidence indicates that the claimed contempt is of a serious nature as it demonstrates that Ms Liao has been deceitful in giving evidence before this Court and has been involved in some elaborate planning to ensure that the funds which were obtained on the sale of the Property were, in large part, out of the jurisdiction and paid out to others. 15. Ms Liao wishes to be released to her home in Brisbane on her undertaking, unsupported by any security, that she will return to Sydney and appear in Court next week. She says she needs access to Wi-Fi to make some arrangements and needs access to medicines and other possessions that she presumably has in her luggage. Ms Liao did not present any documentation as to any medical condition but asserted that she needs her Chinese medicine or she may be unable to walk. It is not possible on this application to determine the nature of her medical condition or whether her Chinese medicine is necessary for her continued health. 16. According to Ms Liao's oral submissions today and her affidavit filed on 7 December 2021, Ms Liao's husband told her to sell the Property, she did not know there was a "freezing order" on it and her husband managed the financial and legal matters in their relationship. She also suggested that she did not understand and had trouble following English. While I make no final findings of fact about those matters, I should record that the evidence adduced by Mr Junn on this application (which includes records obtained on subpoena from the conveyancing solicitors that acted for Ms Liao on the sale of the Property) raises significant doubts about Ms Liao's evidence. 17. The documents annexed to Mr Junn's 14 February 2022 affidavit include communications between Ms Liao and her conveyancing solicitors (in English and in Chinese) and indicate she had conversations with them in respect of the sale of the Property. They also indicate that the contract for sale included a special condition that required the freezing order to be removed before completion, which was not complied with. Prima facie, the evidence shows that Ms Liao knew about the Asset Preservation Orders and gave instructions for the Property to be sold despite them. 18. I accept Mr Junn's submission that the evidence shows that the claimed contempt is of a serious nature. The evidence indicates that contrary to the terms of the Asset Preservation Orders, the Property was sold on about 13 September 2021 on Ms Liao's instructions and the net proceeds of sale (in an amount of $917,620.40) were paid out at Ms Liao's direction to an account in the name of her husband (in the amount of $140,000), an account in the name of Eileen Chen (in the amount of $227,670.40) and an HSBC bank account in Hong Kong Ziwen Liao (in the amount of $600,000). 19. That evidence is also seemingly inconsistent with the affidavits filed by Ms Liao's husband on 6 December 2021, purportedly in accordance with orders made by Ward CJ in Eq that required Ms Liao to disclose the whereabouts of her assets and liabilities in which it was asserted that the sale proceeds were in an account in China. 20. It is apparent that Ms Liao is not in a position to defend the contempt change today and should be provided with a further opportunity to obtain legal representation. While Ms Liao has not been able to obtain legal representation for the purposes of this hearing, she has previously been represented by lawyers for the purposes of these proceedings and in relation to the sale of the Property. The evidence also suggests that Ms Liao is likely to have access to funds to pay for legal representation for the purposes of defending the contempt charges. 21. In ASIC v Michalik (No 2) (2004) 62 NSWLR 335; [2004] NSWSC 1260 (ASIC v Michalik (No 2)), Palmer J made orders for the continuing detention of defendants pending the hearing of the charges of contempt of court against them. His Honour observed that detention in custody of an alleged contemnor arrested under Part 55 rule 10 of the Supreme Court Rules pending a final hearing of a contempt charge is highly unusual and that the Court is very reluctant to keep in custody a person charged with contempt to await a final hearing of the charge if any other satisfactory means of ensuring his or her appearance can be found: at [28]. His Honour noted that often the judge issuing the arrest warrant would be satisfied that the risk of the alleged contemnor absconding is low enough to justify his or her release on security in a certain sum as soon as that can be arranged after arrest. In such a case, the judge would specify the amount of security required in the arrest warrant itself: at [28] 22. In this case, there was no amount of security referred to in the arrest warrant itself. In ASIC v Michalik (No 2), Palmer J considered that on its proper construction, Part 55 r 10 of the Supreme Court Rules does not require the Court in every case to deal with the question of release upon security at the same time as it issues the arrest warrant observed (at [26]). I also note that Kunc J gave consideration to that matter when he issued the arrest warrant on 14 December 2021, having come to the view that it was not appropriate for the court to prescribe what security Ms Liao might offer to avoid arrest and incarceration: at [34]. 23. Based on the material before me, I am not satisfied that it is appropriate to permit release of Ms Liao from custody in the absence of some amount of security or other condition that would justify her release at this stage, and prior to the hearing of the contempt charges brought against her. In my view, Ms Liao's release from custody should be conditioned upon her providing security in an amount of $600,000, being the amount of the funds which the evidence indicates she directed to be paid to an account in Hong Kong (and to which it seems she may have access), as well as surrendering her passports and travel documents to the court. 24. While this is not the occasion for the Court to determine the outcome of the alleged contempt charges, for the reasons already outlined, the material before me today indicates that Ms Liao was aware of the Asset Preservation Orders, was personally involved in the sale of the Property and has taken steps to divert most of the proceeds of sale beyond the reach of this Court. The serious nature of the contempt charge, the not insubstantial amount of money involved, the fact that Ms Liao had previously left the jurisdiction to travel overseas and her continuing connection to China are also factors that have persuaded me that this is a case where Ms Liao should not be released from custody unless she satisfies the conditions that I have proposed. . 25. As Palmer J observed in ASIC v Michalik (No 2), the Supreme Court Rules do not provide for what is to be done when an alleged contemnor is arrested under Part 55 r 10 and detained in custody pending final hearing of the contempt charge. His Honour explained (at [30]-[43]) that the process by which an alleged contemnor should be detained in custody is governed by Part 13 of the Crimes (Administration of Sentences) Act 1999 (NSW) (CAS Act). 26. In the present case, pending hearing of the contempt charge, Ms Liao is "a person in custody" as defined under s 249 of the CAS Act, as she is a person who is in lawful custody in accordance with a warrant of commitment or other warrant, or an order of the Court or other competent authority: CAS Act, s 249(1)(h). She may also be a person in custody as a person who is in lawful custody being brought before a Court in connection with the alleged commission of an offence or during proceedings to determine whether the person has committed an offence or whilst such proceedings are pending: CAS Act, ss 249(1)(a) and (b). This is on the basis that an alleged civil or criminal contempt may constitute an offence for the purposes of the CAS Act in circumstances where the commission of a civil or criminal contempt may render her subject to a sentence of imprisonment: Supreme Court Rules Part 55 r 13: ASIC v Michalik (No 2) at [40]. 27. As a "person in custody", Ms Liao can be dealt with under Pt 13 of the CAS Act. Section 250 deals with the "Transport and detention of persons in custody". Relevantly, a person in custody may be given into the keeping of a correctional officer who may convey the person to a correctional centre, court or other place and also detain them: CAS Act, ss 250(1) - 250(3). 28. Consistent with the approach adopted by Palmer J in ASIC v Michalik (No 2), I will make an order that Ms Liao be given into the keeping of a Correctional Officer under s 250 of the CAS Act. 29. As to other steps, as already noted, Mr Junn has indicated that the plaintiffs will be amending the Statement of Charge and proposed they do so by 21 February 2022. In my view, any amended charge should be filed and served prior to that time. As I intend to relist the matter before me at 10 am on 21 February I will direct that any amended Statement of Charge be filed by the plaintiffs and served on Ms Liao by 4pm on 16 February 2022. 30. I have also been informed that Ms Liao has not yet been served with the Statement of Charge, the plaintiffs Notice of Motion filed on 14 December 2021 and Mr Junn's affidavits sworn on 14 December 2021 and 14 February 2022, and will make directions for those documents to be served today. I note that service on Ms Liao is to be facilitated by the plaintiffs emailing copies of the documents to the Office of the Sheriff who have informed me that they will provide hard copies to Ms Liao today. 31. For these reasons I make the following orders: 1. Order pursuant to Part 55 rule 10 of the Supreme Court Rules that the First Defendant, Jingwen Liao (also known as Jingwen Kurz), be detained in custody until she is brought before the Court to answer the charges of contempt contained in the Statement of Charge dated 14 December 2021 and filed on 14 December 2021 and any amended Statement of Charge the subject of Order 6 below, unless Jingwen Liao pays into court the sum of $600,000 and surrenders all her passports and travel tickets to the Registrar of the Supreme Court of New South Wales or she is earlier released by order of Court. 2. Order, pursuant to s 250 of Crimes (Administration of Sentences) Act 1999 (NSW), that the said Jingwen Liao be given into the keeping of the Correctional Officer as defined in the Act to be detained in accordance with Order 1. 3. Direct the plaintiffs to serve on Jingwen Liao a copy of the plaintiff's Notice of Motion dated 14 December 2021, the Statement of Charge dated 14 December 2021, Affidavit of Donald Junn sworn 14 December 2022 and Exhibit DJ-1, the Arrest Warrant and orders of Kunc J of 14 December 2021, the orders of Parker J of 13 February 2022, Affidavit of Donald Junn sworn 14 February 2022 and Exhibit DJ-2 by 6.30 pm on 14 February 2022, which service shall be effected by the plaintiffs sending the documents by email to the Office of the Sherriff at email address: teams.enforcement@justice.nsw.gov.au and the Office of the Sherriff providing copies of the documents to Jingwen Liao today. 4. Direct the Office of the Sherriff to file and serve an affidavit confirming that the documents referred to in Order 3 have been served on Jingwen Liao. 5. Direct the Office of the Sherriff to transport the luggage of Jingwen Liao to the Correctional Facility that Ms Liao will be detained at pursuant to Orders 1 and 2 and for Correctional Services to store her luggage. 6. Direct the Plaintiff to file any amended Statement of Charge and serve it on Jingwen Liao by no later than 4 pm on 16 February 2022. 7. Direct Jingwen Liao to file and serve any further updating Affidavit as to her assets and liabilities on which she wishes to rely in response to the contempt changes by 5 pm on 18 February 2022. 8. Vacate the listing of the plaintiff's Notice of Motion dated 14 December 2021 before Ward CJ in Eq at 8.30 am on 15 February 2021. 9. List the proceedings before Henry J at 10 am on Monday, 21 February 2022 for directions. 10. Liberty to the parties to approach Henry J's chambers on 24 hours' notice. 11. These orders to be entered forthwith.