In the matter of Teppanyakki Pty Ltd [2012] NSWSC 672

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Teppanyakki Pty Ltd [2012] NSWSC 672 Hearing dates: 5 June 2012 Decision date: 05 June 2012 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Hearing date vacated. Second Defendant ordered to produce relevant documents. Balance of relief sought by Interlocutory Process stood over to the Motions List before the Corporations List Judge on 25 June 2012 at 9.45am. Catchwords: PRACTICE AND PROCEDURE - Vacation of hearing date - Application by Plaintiff to vacate hearing date in circumstances where relevant documents have not been produced - Civil Procedure Act 2005 (NSW) s 68 - Application by Plaintiff for order for production of relevant documents and for attendance of Second Defendant for examination. Legislation Cited: - Civil Procedure Act 2005 (NSW) s 68 - Corporations Act 2001 (Cth) s 290 - Uniform Civil Procedure Rules 2005 (NSW) r 36.17 Category: Interlocutory applications Parties: Wei Wei (Plaintiff/Applicant) Teppanyakki Pty Ltd (First Defendant/First Respondent) Chun Man Chan (Second Defendant/Second Respondent) Representation: Counsel: J. Baxter (Plaintiff/Applicant) No appearance (First Defendant/First Respondent) Solicitors: Pancific Legal (Plaintiff/Applicant) No appearance (Second Defendant/Second Respondent) File Number(s): 11/413619

Judgment - EX TEMPORE 1In this matter the Plaintiff, Wei Wei, seeks several orders by Interlocutory Process filed on 31 May 2012. 2The matter has been called, but there has been no appearance on behalf of the First Defendant Teppanyakki Pty Limited, or the Second Defendant Chun Man Chan. There is no appearance for the Defendants on the Court file and the matter has been mentioned before the Court on several previous occasions, and there has been no appearance by them on those occasions. 3The Plaintiff seeks an order that the hearing date of 8 June 2012 be vacated on two grounds. The first of those grounds is that there has been a delay in the preparation of the Plaintiff's evidence as a result of his absence in China for family reasons; and the second is that there have been difficulties, to which I will refer, in obtaining production of relevant documents, which are relevant to orders for the buy-out of the Second Defendant's interest in the First Defendant which are sought by the Plaintiff. 4The first of those matters may or may not have warranted a vacation of a hearing date in circumstances where it was a matter within the Plaintiff's control, although I note that the family reasons to which reference is made would have had weight. 5The second of those matters is, in my view, sufficient to warrant an order to vacate the hearing date. It is clear that the Plaintiff would be disadvantaged in being required to proceed to a hearing without access to documents which would be relevant to his case in circumstances that those documents have not been made available in breach of orders previously made by Hammerschlag J requiring their production by the First Defendant. There would be no warrant for requiring the Plaintiff to proceed to a hearing in a position of that disadvantage. Accordingly, I will make an order that the hearing date of 8 June 2012 be vacated. 6The second matter which I need to address is the position where, notwithstanding orders made by Hammerschlag J for the production of documents, the First Defendant has not produced those documents. There is evidence before me which suggests that this position may arise because the Second Defendant cannot "be bothered" to deal with the issues in the proceedings, notwithstanding that he is a director of the First Defendant. This position is plainly unsatisfactory and the evidence before me indicates that the Plaintiff's solicitors have taken proper steps to draw the importance of compliance with orders of the Court to the attention of the First and Second Defendants. 7The Plaintiff seeks two orders to address this question. The first is an order under s 68 of the Civil Procedure Act 2005 (NSW) requiring the Second Defendant on behalf of the First Defendant to produce specified documents to the court. The second is an order that the Second Defendant attend for examination as to the production of the relevant documents. Section 68 of the Civil Procedure Act provides that, subject to the rules of Court, the Court may, by subpoena or otherwise, order any person to attend Court to be examined as a witness, or to produce any document or thing to the Court. That power provides the source, for example, of the Court's power to order production of documents in accordance with examinations conducted under the provisions of the Corporations Act 2001. 8I note that the orders previously made by Hammerschlag J were directed to the First Defendant and were made in accordance with s 290 of the Corporations Act. Although this matter has proceeded in the absence of the Defendants, and I have therefore not had the opportunity to hear submissions from the Defendants, I consider that the Court's power under s 68 of the Civil Procedure Act can be used to require a party to the proceedings, namely the Second Defendant, to take steps to produce documents which would be within his control as a director of the First Defendant in circumstances where orders have been made and not complied with requiring the First Defendant to produce those documents. 9Accordingly I will, subject to granting leave to the Defendants to apply, make orders under s 68 of the Civil Procedure Act requiring the Second Defendant, on behalf of the First Defendant, to produce the relevant documents. 10The Plaintiff also sought evidence for an examination of the Second Defendant in respect of the non-production of documents under the orders previously made by the Court. I am not satisfied that those orders should be made at this point, for two reasons. First, there is a possibility that the orders which have been made under s 68 of the Civil Procedure Act, or subpoenas which have been issued by the Plaintiff to third parties, will lead to production of sufficient documents for the Plaintiff to make out his case, obviating the necessity or utility of such an examination. Second, it may be that an examination would be premature, pending compliance or non-compliance with the orders made by the Court for the production of documents by the Second Defendant. Third, if there is systematic non-compliance with the Court's orders, then an order for examination may have no utility and the preferable course may be for the Plaintiff to consider the possibility of seeking summary judgment by reason of the history of non-compliance with the Court's orders made to date. 11In any event, the choice between those options is best made in circumstances that it is known whether the Second Defendant has complied with the orders for production which will now be made by the Court and whether the production of documents on subpoena has obviated the need for further production of documents by the First Defendant. 12Ms Baxter, who appears for the Plaintiff, seeks to have paragraphs 3-4 of the Interlocutory Process stood over to 25 June 2012. I order that those paragraphs and the balance of the Interlocutory Process which I have not determined be stood over to the motions list at 9.45 am on that date. I should, however, repeat that I have reservations as to the utility of orders for examination in this manner and the Plaintiff may wish to give thought to the alternative of an application for summary judgment or other orders in respect of the defaults which have occurred in this matter, should the Defendants remain in non-compliance with Court orders at that time. 13I have also noted in the course of submissions that there may be a real question as to the utility of a buy-out order in circumstances where there has been non-compliance with the Court's directions given that the practicalities of transfer of ownership of a restaurant may require more than an order for the transfer of shares in the relevant corporate entity, and that is a matter to which the Plaintiff may wish to give further attention between now and the date on which the matter is next listed. 14In these circumstances, I make orders (as further amended by orders made in Chambers on 5 June 2012 pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 36.17) that: 1. The hearing date of 8 June 2012 be vacated. 2. Pursuant to section 68 of the Civil Procedure Act 2005 (NSW), that the Second Defendant on behalf of the First Defendant be ordered to produce to the Registry, Supreme Court of New South Wales, Level 14, Supreme Court of NSW, Law Courts Building, 184 Phillip Street Sydney NSW 2000 by 4 pm on 18 June 2012 the following documents for the period 15 March 2010 - 20 May 2012: 2.1. The financial records for the First Defendant including invoices, receipts, cheques, documents of prime entry and working papers and other documents needed to explain the method by which the First Defendant's financial statements are made up; 2.2. The financial statements, including any balance sheet, profit and loss statements and cash flow statements for the First Defendant; 2.3 Any tax returns prepared for the First Defendant including any tax returns that may not yet have been submitted to the Australian Tax Office; and 2.4. Any business activity statements (BAS) prepared for the First Defendant including any BAS that have or has not yet been submitted to the Australian Taxation Office. 3. The Defendants have liberty to apply on 48 hours notice. 4. Costs of today [4 June 2012] are reserved. 5. Leave to have these orders entered forthwith. 6. The Plaintiff's Interlocutory Process filed 31 May 2012 as to the relief sought at paragraphs 3 and 4 of the Interlocutory Process is stood over to the motions list of the Corporations List Judge on 25 June 2012 at 9.45am. 7. The Plaintiff notify the Defendants of the orders made on 4 June 2012.