Supreme Court New South Wales Medium Neutral Citation: In the matter of H&C Investment Holdings Pty Ltd [2023] NSWSC 1387 Hearing dates: 13 November 2023 Date of orders: 14 November 2023 Decision date: 15 November 2023 Jurisdiction: Equity - Corporations List Before: Williams J Decision: See orders at [41]. Catchwords: EVIDENCE – Where second and fifth plaintiffs have made affidavits and defendants require them to attend for cross-examination – Whether witness 'not available' within the meaning of Evidence Act 1995 (NSW) s 63(1) – Where witnesses reside overseas – Where application for witnesses' evidence to be given by audio visual link dismissed on prior occasion – Whether 'all reasonable steps' taken to secure witnesses' attendance – Where witnesses are the second and fifth plaintiffs – Guojin Huang v Jinghong Wei [2022] NSWSC 222 distinguished – Plaintiffs have not taken all reasonable steps to facilitate or secure attendance of second and fifth plaintiffs – Affidavits not admissible under Evidence Act 1995 (NSW) s 63 Legislation Cited: Evidence Act 1995 (NSW), ss 63, 63(1), 63(2), 67 Evidence (Audio and Audio Visual Links) Act 1998 (NSW), s 5C Uniform Civil Procedure Rules 2005 (NSW), r 35.2 Cases Cited: Guojin Huang v Jinghong Wei [2022] NSWSC 222 Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd (2009) 258 ALR 598; [2009] NSWSC 769 Texts Cited: N/A Category: Procedural rulings Parties: Steven Huang (First Plaintiff) Chun Huang (Second Plaintiff) S&C Investment Nominees Pty Ltd (Third Plaintiff) Huafa Development Pty Ltd ABN 31 601 761 433 (Fourth Plaintiff) Qiao Sheng Huang (Fifth Plaintiff) Hosea Chan (First Defendant) Chan & Hui Investment Nominees Pty Ltd (Second Defendant) H & C Investment Holdings Pty Ltd ACN 147 329 860 (Third Defendant) Representation: Counsel: Mr M Condon SC with Mr N Kabilafkas (Plaintiffs) Mr P Reynolds (Defendants) Solicitors: Juris Cor Legal (Plaintiffs) Clayton Utz (Defendants) File Number(s): 2022/143476 Publication restriction: N/A Judgment 1. These proceedings arise out of the affairs of the third defendant, H&C Investment Holdings Pty Ltd (the Company), in which each of the plaintiffs and the other defendants were shareholders and/or directors at various times relevant to the proceedings. The Company carried on a property development business as trustee for the H&C Unit Trust (the Trust). At the core of these proceedings is a dispute about the amounts to be paid to each of the parties by way of final distribution of the profits of the Company and the Trust. 2. The first plaintiff, Mr Steven Huang, the second plaintiff Ms Chun Huang, and the fifth plaintiff Mr Qiao Sheng Huang, are siblings. The parties refer to them as "Steven", "CH", and "QSH", respectively. I shall adopt the same conventions. No disrespect is intended. The third and fourth plaintiffs are companies associated with Steven, CH, and QSH. The first defendant, Mr Hosea Chan, is the cousin of Steven, CH, and CSH. The parties refer to him as "Hosea". Again, I shall adopt the same convention, without intending any disrespect. The second defendant is company associated with Hosea and/or his uncle, Mr Chun on Hui. 3. These reasons for judgment concern an application made by the plaintiffs on the first day of the hearing to rely on two affidavits of CH affirmed on 3 November 2022 and 17 February 2023, and two affidavits of QSH affirmed on 3 November 2022 and 17 February 2023, in circumstances where the defendants require CH and QSH for cross-examination, but where they will not be attending court for cross-examination. I made orders dismissing that application at the commencement of the second day of the hearing on the basis that my reasons would be published as soon as possible. These are those reasons. 4. During their final preparation for hearing, the parties have commendably narrowed the issues in dispute. The key factual issues that remain in dispute are: 1. whether or not CH made a payment of $30,000 as a contribution to funding the operations of the Company on or about 21 January 2011; 2. whether or not Steven made a payment of $76,000 as a contribution to funding the operations of the Company on or about 22 October 2013; and 3. whether Hosea agreed with CH and QSH that Hosea would commence working full-time for the Company as a project manager from about February 2012, for which he would be paid wages, and whether Hosea was authorised to employ and pay wages to other persons, and to pay superannuation in respect of those persons, out of Company funds. 1. In her affidavit affirmed on 2 November 2022, CH has deposed to having made the $30,000 contribution in January 2011 (as part of a total contribution of $150,000 that she claims to have made at the time). CH has also deposed that she had no knowledge about the wages or superannuation payments made by Hosea to himself and others, and that she had never consented to Hosea withdrawing the Company's money to pay wages and superannuation to himself. CH has made further reference to the claimed $30,000 contribution in her affidavit affirmed on 17 February 2023. 2. In his affidavit affirmed on 3 November 2022, QSH has deposed that he had no knowledge of, and did not give any consent or agreement to, Hosea paying wages and superannuation to anyone. In his affidavit affirmed on 17 February 2023, QSH denied having a telephone conversation with Hosea in February 2012 in which QSH agreed that the Company would pay wages of $700 per week to Hosea. 3. As plaintiffs in these proceedings, and as witnesses whose first affidavits were affirmed and served on the defendants in November 2022, CH and QSH must have been aware by no later than November 2022 that they may be required for cross-examination, and that they would need to take steps to ensure that they would be able to attend Court for cross-examination if they were so required. 4. At a directions hearing in August 2023, counsel then appearing for the plaintiffs foreshadowed an application under the Evidence (Audio and Audio Visual Links) Act 1998 (NSW) (the AVL Act) for the evidence of the second and fifth plaintiffs witnesses to be given by audio visual link from the People's Republic of China. Directions were made programming the filing of any such application and supporting evidence in order to facilitate the hearing and determination of the application well in advance of the commencement of the final hearing. The plaintiffs failed to comply with those directions. The plaintiffs ultimately filed an application on 12 October 2023 for the evidence of CH and QSH to be given to this court by audio visual link from the People's Republic of China. The plaintiffs filed and served evidence in support of that application on 12 October and 16 October 2023. The application, which was opposed by the defendants, was heard on 23 October 2023. The Court made orders dismissing the application at the conclusion of the hearing, after it was effectively withdrawn by counsel for the plaintiffs. Counsel candidly (and properly) conceded that the plaintiffs had failed to adduce evidence capable of satisfying the Court that it was in the interests of the administration of justice for the evidence of CH and QSH to be given by audio visual link because, having regard to the provisions of s 5C of the AVL Act, there was a risk that the Court would impinge on the sovereignty of the People's Republic of China if it were to take the evidence by audio visual link, and the expert report tendered by the plaintiffs had not addressed that question. Counsel for the plaintiffs informed the Court that, in those circumstances, the application must be dismissed. Counsel foreshadowed at that time that the plaintiffs would make the present application at the commencement of the final hearing. 5. The present application is founded on the plaintiffs' contention that CH and QSH are "not available" to give evidence within the meaning of s 63(1) of the Evidence Act 1995 (NSW) because the plaintiffs have taken all reasonable steps to secure their attendance, but without success. The plaintiffs submit that the hearsay rule therefore does not apply to the representations contained in the affidavits of CH and QSH by reason of s 63(2) of the Evidence Act, and that the Court should therefore make an order under r 35.2 of the Uniform Civil Procedure Rules 2005 (NSW) permitting the plaintiffs to tender or read their affidavits, notwithstanding that they will not attend for cross-examination. 6. The defendants submit that the plaintiffs have failed to take all reasonable steps to secure the attendance of CH and QSH. The defendants oppose any order being made permitting the plaintiffs to rely on the affidavits of CH and QSH. 7. In support of the present application, the plaintiffs rely on an affidavit affirmed on 12 October 2023 of Ms Siyu Zhang, a solicitor employed by Juris Cor Legal, who are the solicitors on the record for the plaintiffs in these proceedings. The plaintiffs also rely on affidavits of Mr Yu Chen affirmed on 16 October 2023 and 3 November 2023. Mr Chen is the principal solicitor of Juris Cor Legal, and the solicitor on the record for the plaintiffs. 8. The defendants rely on an affidavit affirmed on 18 October 2023 by Mr Ziad Chami, who is a partner at Clayton Utz and the solicitor on the record for the defendants in these proceedings. The defendants also rely on an affidavit of Mr Andrew Thai, an employed solicitor at Clayton Utz with day to day carriage of the proceedings on behalf of the defendants under the supervision of Mr Chami. 9. In support of their contention that CH and QSH are "not available" to give evidence within the meaning of s 63(1) of the Evidence Act, the plaintiffs rely on definition of "unavailability" in cl 4(1)(f) of the Dictionary to the Evidence Act, which provides that a person is taken not to be available to give evidence if "all reasonable steps have been taken by the party seeking to prove that the person is not available to find the person or secure his or her attendance, but without success". Clause 4(2) provides that, in all cases that do not fall within cl 4(1), the person is taken to be available to give evidence. 10. No question arises about whether all reasonable steps have been taken to find CH and QSH. They are two of the five plaintiffs in these proceedings, and their whereabouts are known to the other plaintiffs. The issue in the present case is whether the plaintiffs have taken all reasonable steps to secure the physical attendance, or some other mode of attendance, of CH and QSH, so that they are in a position to evidence to the Court, including under cross-examination by the defendants: Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd (2009) 258 ALR 598; [2009] NSWSC 769 at [10]-[14], [25] (Barrett J). 11. The plaintiffs relied on Guojin Huang v Jinghong Wei [2022] NSWSC 222 at [41]-[42], in which Kunc J identified several matters that are likely to be of relevance in considering whether all reasonable steps have been taken to find a witness or secure their attendance. The matters identified by his Honour were plainly relevant to the question whether the plaintiff in that case had taken all reasonable steps to locate and secure the attendance of a person known only by the first name "Fay". It is my opinion that, subject to one exception, those matters are not relevant to the question that arises in the present case, which is whether CH and QSH have taken all reasonable steps to ensure their own attendance for cross-examination, in circumstances where they wish the Court to receive their affidavit evidence in support of their claims for relief against the defendants. The exception is that I accept the plaintiff's submission that the nature and importance of the evidence of CH and QSH in the context of the issues raised for determination in these proceedings will inform the Court's judgment about whether the steps which have been taken are sufficient to satisfy the requirement that all reasonable steps have been taken. I accept the defendant's submission that the plaintiffs bear the onus of establishing that all reasonable steps have been taken. 12. The salient aspects of the evidence adduced at the hearing of the present application, insofar as it concerns CH, may be summarised as follows. 13. CH is a citizen of the People's Republic of China, who is currently residing in Wuhan City in the Hubei Province of the People's Republic of China. In her affidavit affirmed on 12 October 2023, Ms Zhang gave evidence on information and belief from CH that she had lodged an application with the Department of Home Affairs for a visa to enter Australia before the final hearing commencing on 13 November 2023, and that her visa application was still pending approval by the Department of Home Affairs at the time Ms Zhang affirmed her affidavit. 14. Evidence tendered by the defendants in relation to the plaintiffs' application has revealed that the information provided by CH to Ms Zhang about her application for a visa to enter Australia was incorrect. 15. The defendants tendered a copy of CH's application for a visa, which was in fact submitted to the Department of Home Affairs on 20 October 2023. In answer to the question requiring the applicant to list all reasons for visiting Australia, CH's application states: "Tourism". In answer to the question requiring details of "any significant dates on which the applicant needs to be in Australia", CH's application states: "I and my husband Huang Wei plan to visit Australia from 10 November 2023 to 30 December 2023". The application later states that CH plans to stay in Australia for up to three months, which plainly casts some doubt on 30 December 2023 as her planned departure date. Neither the application form, nor CH's covering letters accompanying the application, nor the letter of invitation from Steven submitted in support of the application, make any reference to CH wishing to travel to Australia in order to give evidence in court proceedings in the Supreme Court of New South Wales in which she is one of the plaintiffs. CH's covering letter dated 19 October 2023 describes the purpose of her visit as "mainly" to "visit my elderly mother". Steven's letter in support of the application states that he has invited his sister CH to visit him in Sydney because they have not seen each other since COVID-19 restrictions were first imposed in 2020, and their mother is getting older "and we would look forward to the opportunity to reunite and spend time with my sister". 16. CH's letter and Steven's letter were submitted as part of the supporting documents for her application. The supporting evidence relating to her financial status and funding for her visit, and evidence of her current employment or self-employment, comprised bank statements and other documents in Cantonese or Mandarin. No English translations of those documents were submitted to the Department of Home Affairs. 17. In answer to the question whether the applicant had held, or currently holds, a visa to Australia or any other country, CH's application stated: "No". That is incorrect. Records produced by the Department of Home Affairs on subpoena record that CH visited Australia on ten occasions between 2010 and 2019, and that she held a visa to do so on each occasion. For each of the most recent seven visits between 2016 and 2019, CH held an "EB188S000" class of visa, which permits entry into Australia for business investment purposes. 18. On 27 October 2023, the Department of Home Affairs refused CH's application for a visa. The delegate's reasons for decision state that: "I have considered the applicant's economic circumstances and note that they have provided limited evidence of their financial standing. However, I acknowledge that the applicant has provided evidence of financial support from their inviter. While I have considered this evidence, I have attached less weight to this information as this is not in of itself sufficient evidence of a genuine visit. The onus is on the applicant themselves to provide evidence of their circumstances in China that would demonstrate that they meet the criteria. On balance, I am not satisfied that the applicant's economic circumstances demonstrate they will return to China at the end of their proposed stay. After considering the information provided, I am not satisfied that the applicant genuinely intends to stay temporarily in Australia for the purposes set out above." 1. There is no evidence explaining why CH did not disclose in her visa application that she needed to visit Australia to give evidence in these proceedings, why she did not disclose her previous visits to Australia, and why she did not disclose the visas that had been issued to her for the purpose of each of those visits. Nor is there any evidence about why CH did not submit in support of her application English translations of records that would evidence her financial status. 2. Mr Chen's affidavit affirmed on 3 November 2023 refers to the notification of refusal of CH's visa application issued by the Department of Home Affairs, and the reasons for decision referred to above. 3. Mr Chen gave evidence that there is no right of merits review for that decision. However, that is incorrect. The Department's letter to CH dated 27 October 2023 to which Mr Chen was referring clearly states that, if CH has a parent or sibling who is an Australian citizen or Australian permanent resident, that person is entitled to apply for a merits review of the decision to the Administrative Appeals Tribunal. As stated in CH's letter to the Department accompanying her application, both her mother and her brother Steven are Australian citizens. 4. Mr Chen has also given evidence that he believes that CH is unlikely to obtain any other types of visa. Mr Chen gives no evidence of having considered whether a fresh application should be made, supported by fulsome information about CH's financial status (translated into English), and information about her role as a plaintiff and prospective witness in these proceedings. In relation to CH's financial status, I note that Mr Chen's affidavit states that CH is "a housewife in China", whereas her visa application dated 20 October 2023 describes CH as being "self employed" in the role of a manager working with Wuhan Pengling Elevator Co Limited since 15 July 2005. 5. The plaintiffs' application for CH to give evidence by audio visual link having been dismissed, CH's unsuccessful application made on 27 October 2023 for a visa to enter Australia is the only step relied on by the plaintiffs as constituting all reasonable steps to secure the attendance of CH. 6. The plaintiffs have not demonstrated that they have taken all reasonable steps to secure or facilitate CH's attendance. On the contrary, CH failed to apply for a visa to enter Australia until less than four weeks before the commencement of the final hearing, CH failed to include in that application any information about her role in these proceedings in connection with the purpose of her proposed visit, and CH also failed to include any information in a form accessible to the delegate about her financial status and circumstances in China. Those categories of information would plainly have had some bearing on the delegate's assessment of whether CH genuinely intended to stay in Australia only temporarily. When the application was refused for the reasons described above, CH failed to lodge a fresh application including that relevant information. To the extent that CH considered that there was insufficient time for a fresh application to be processed before the commencement of the hearing on 13 November 2023, that is attributable solely to her failure to apply for a visa a reasonable time prior to the commencement of the final hearing, which was listed many months ago. As I have already stated [1] , CH must have been aware that she would be a witness in these proceedings from May 2022 when the proceedings were commenced or, at the latest, from November 2022 when CH's first affidavit was served on the defendants in these proceedings. 7. CH is the only witness amongst the plaintiffs who is in a position to give evidence about the disputed $30,000 contribution that she claims to have made in January 2011. As I have already explained, that is one of the key factual issues in dispute. In my opinion, the steps that I have referred to immediately above are the minimum steps that would have been required in all the circumstances of this case in order for the plaintiffs to establish that they had taken all reasonable steps to secure or facilitate the attendance of CH. 8. The salient aspects of the evidence adduced at the hearing of the present application, insofar as it concerns QSH, may be summarised as follows. 9. QSH is a citizen of the People's Republic of China, who is currently residing there and working in Shenzhen City, Guangdong Province, at the Qia Hai Wan Office of the Entry-Exit Inspection and Quarantine Bureau of Shenzhen City. In her affidavit affirmed on 12 October 2023, Ms Zhang gave evidence on information and belief from QSH that "as required by the Shenzhen government's current policy, both his Chinese passport and his Exit-Entry-Permit for travelling to and from Hong Kong and Macao (EEP) have been retained by the government". 10. In his affidavit affirmed on 3 November 2023, Mr Chen gave evidence that he had a conversation with QSH on that date, in which QSH told Mr Chen that he had asked the supervisor of his department in late September 2023 whether he could have his passport back so that he could go to Australia and attend a hearing. QSH did not disclose to Mr Chen the name of his supervisor. According to Mr Chen's evidence, QSH told Mr Chen that his supervisor had told him that "the policy about retaining the passport has not been changed" and that "before my retirement, I could not get my passport back unless overseas family member of mine is in serious illness or has died." According to Mr Chen's evidence, QSH told Mr Chen in their conversation on 3 November 2023 that this had always been his understanding of the policy, and that what QSH says his supervisor told him confirmed QSH's understanding of the policy. The evidence concerning what the supervisor told QSH was admitted subject to an order limiting its use, so that it is not evidence of the truth of the supervisor's statement about the policy. 11. On 6 November 2023, the defendants issued a notice to produce to QSH requiring him to produce, inter alia, all documents recording or evidencing communications between QSH and his employer in relation to: (a) any request or attempt to obtain his passport for the purpose of these proceedings; (b) permission to travel to Australia for the purpose of these proceedings; or (c) any policies held by his employer concerning travel overseas, including to Australia, as referred to in paragraph 8 of Mr Chen's 3 November 2023 affidavit. No documents were produced. 12. The plaintiffs have adduced no evidence that is capable of shedding any light on whether QSH's unnamed supervisor was the appropriate person to whom any request by QSH for the return of his passport for the purpose of travelling to Australia to give evidence in these proceedings should have been made. Nor have the plaintiffs adduced any evidence about whether it was open to QSH to make any application––formal or otherwise––for the return of his passport for that purpose after the conversation with his supervisor that QSH relayed to Mr Chen. Mr Chen's evidence is that QSH told him that he had told his supervisor that he wanted to "go to Australia and attend a hearing". QSH did not tell his supervisor that he was one of the moving parties in those proceedings, that he wanted to give evidence in support of his and the other plaintiffs' claims in those proceedings, or that he was required to attend court for that purpose. 13. The defendants tendered records produced on subpoena by the Department of Home Affairs which record that QSH has visited Australia on eight occasions between October 2010 and November 2022. The defendants also tendered a copy of QSH's application for the visa that was ultimately granted to him in respect of his most recent visit in November 2022. That application records that QSH is a permanent resident of Australia. 14. The defendants also tendered a "Personal Particulars for Assessment including Character Assessment" in respect of QSH dated 1 March 2014. That document was also produced on subpoena by the Department of Home Affairs. The document records that QSH has been employed by his present employer since 1987. 15. It is common ground that QSH's most recent visit to Australia in November 2022 occurred in the context of a family bereavement. However, the plaintiffs have not adduced any evidence explaining how QSH was able to visit Australia on the previous seven occasions, notwithstanding his employer's "policy" referred to in the conversations about which Mr Chen has given evidence. Senior counsel for the plaintiffs noted that QSH's most recent visit prior to November 2022 occurred in 2018, and invited the Court to infer that the "policy" of QSH's employer had changed in the period since 2018. Such an inference would be inconsistent with Yu Chen's evidence referred to at [32] above, according to which QSH told Yu Chen that his supervisor had told him that the policy had not been changed, and QSH told Yu Chen that the effect of the policy as relayed to him by his supervisor had always been QSH's understanding of the policy. 16. The plaintiffs' application for QSH to give evidence by audio visual link was dismissed in the circumstances referred to at [8] above. The only evidence relied on by the plaintiffs as demonstrating that they have taken all reasonable steps to secure QSH's attendance is Mr Chen's evidence of QSH's understanding of his employer's "policy" based on the conversation with his unnamed supervisor that QSH relayed to Mr Chen. 17. Senior counsel for the plaintiff submitted that, given QSH's understanding of the policy, it was reasonable for him to take no further steps to put himself in a position to attend court after that conversation with his supervisor. I reject that submission. Indeed, I reject the evidence of QSH's understanding of the alleged policy of his employer as inconsistent with the objective fact of his seven visits to Australia between 2010 and 2018. The plaintiffs have therefore failed to demonstrate that they have taken all reasonable steps to secure or facilitate QSH's attendance, in circumstances where he is a plaintiff in these proceedings and his evidence is important to the dispute about payment of wages. 18. Even if I had accepted QSH's evidence of his understanding of the policy, I would not have been satisfied that all reasonable steps had been taken, because there is no evidence that QSH has made any request or application for the return of his passport for the purpose attending court to give evidence in these proceedings in which he is a plaintiff. The inadequate inquiry that QSH did make with his supervisor was first made in late September 2023, at a time when it was likely to be too late for QSH to pursue the matter through appropriate channels if necessary. Without even disclosing all of the reasons for his inquiry, QSH simply accepted his supervisor's negative response to the inquiry as the end of the matter. 19. For all of those reasons, I reject the plaintiffs' contention that the affidavits of Ms Chun Huang affirmed on 3 November 2022 and 17 February 2023, and the affidavits of Mr Qiao Sheng Huang affirmed on 3 November 2022 and 17 February 2023, are admissible under s 63 of the Evidence Act. It is not necessary to consider issues concerning the plaintiffs late service of a notice under s 67 of the Evidence Act. For the same reasons, the plaintiffs' failed in their application for orders permitting them to rely on the affidavits of Chun Huang affirmed on 3 November 2022 and 17 February 2023, and on the affidavits of Qiao Sheng Huang affirmed on 3 November 2022 and 17 February 2023, without those witnesses attending for cross-examination. I made orders to that effect on 14 November 2023. ********** Endnote 1. See above at [7]. 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: 15 November 2023