Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Ren v Jiang [2014] NSWCA 1 Hearing dates: On the papers Decision date: 21 January 2014 Before: Leeming JA Decision: 1. Application for leave for Mr Guo to be cross-examined refused. 2. First and second respondents to pay the applicants' costs of this application. 3. Relist the proceedings for further directions on 4 February 2014 at 9.30am. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.] Catchwords: PRACTICE AND PROCEDURE - interlocutory applications - application for leave to cross-examine Chinese national in support of claimed abuse of process - application refused Legislation Cited: Civil Procedure Act 2005 (NSW), s 56 Corporations Act 2001 (Cth), s 471B Cases Cited: Dale v Clayton Utz (a firm) [2012] VSC 577 Freehill Hollingdale & Page v Bandwill Pty Ltd [2000] WASCA 150 Goodrich Aerospace Pty Ltd v Arsic [2006] NSWCA 187; 66 NSWLR 186 Markisic v Commonwealth of Australia [2010] NSWCA 273 Matthews v SPI Electricity Pty Ltd (No 6) [2013] VSC 422 Ren v Jiang [2013] NSWCA 194 Tonari v R [2013] NSWCCA 232 Williams v Spautz (1992) 174 CLR 509 Wu v Avin Operations Pty Ltd (No 3) [2006] FCA 1321 Category: Interlocutory applications Parties: Ke Qin Ren (first applicant) Pei Xu (second applicant) Yi Cheng Jiang (third applicant) Gloconnect Pty Ltd ACN 106 027 730 (fourth applicant) Hong Jiang (first respondent) Yongan Xie (second respondent) Wan Ze Property Development (Aust) Pty Ltd (in liquidation) ACN 131 642 147 (third respondent) Representation: Counsel: MR Ellicott (applicants) DA Smallbone (first and second respondents) DC Eardley (third respondent) Solicitors: James Lee Solicitors (applicants) Austin Haworth & Lexon Legal (Sydney) (first and second respondent) Downeys Lawyers (third respondent) File Number(s): 2012/240805 Decision under appeal Jurisdiction: 9111 Citation: [2012] NSWSC 821 Date of Decision: 2012-07-19 00:00:00 Before: Black J File Number(s): 2011/51745 Judgment 1LEEMING JA: The essential question presently before me is whether a non-English speaking Chinese resident, Mr Wen Qi Guo, whose affidavit has been served by the applicants, should be required to attend for cross-examination on the hearing of the first and second respondents' motion that the proceedings be stayed as an abuse of process. The factual and procedural background is moderately complex and is only reproduced below to the extent needed to explain why I have concluded that Mr Guo is not required to attend. 2There are two applications for leave to appeal from judgments of Black J in the Equity Division by the applicants in this Court ("the Ren parties"). The substance of the application made by the first and second respondents in this Court ("the Jiang parties") is for the proceedings to be stayed as an abuse of process at least unless substantial security is provided. Orders were made, substantially by consent, on 17 June 2013, premised upon the provision of security by the first applicant, funded from an amount of $500,000 to be paid to him by Mr Guo by 5 August 2013. In the event that the security was not provided, the motion was to be relisted: Ren v Jiang [2013] NSWCA 194. Those orders also made provision for the payment into Court of $16,000 by way of a first tranche of security for costs. 3It is common ground that the $16,000 has been paid into Court, but the $500,000 has not been provided. Instead, the Ren parties filed an explanatory affidavit made by Mr Guo. Mr Guo is a national and resident of China and, I have been told, does not speak English. His affidavit is short, and is in Mandarin with an accompanying English translation. He deposes to conversations with Mr Sheen (the Jiang parties' solicitor) which are disputed, and to matters in relation to the payment of funds to Mr Ren. The short point for resolution by me is that the Jiang parties wish to cross-examine Mr Guo, on his credit, through an interpreter, and in the flesh, when their application for a stay is heard. The Ren parties submit that that should not occur. They say that the Court would not be assisted by cross-examination as to credit which would necessarily be lengthy, would unduly delay and prolong the hearing of the motion, and would be an unnecessary waste of Court time and resources, and they refer to the expense and inconvenience to Mr Guo. The third respondent ("the liquidator") takes a neutral position and neither opposes nor consents to the orders sought. The parties agreed, sensibly, that the question should be determined as a preliminary matter, and were content for that to occur on the papers. 4The proceedings were referred by the President for case management by me. At a directions hearing on 11 October 2013 I directed that the parties file "submissions as to whether and if so on what terms Mr Guo should be made available for cross-examination at the hearing of [the stay] application". At that directions hearing, all parties joined in what amounted to a relatively leisurely timetable; they explained that a hearing in the Federal Court scheduled for six days between most of the same parties was shortly to occur. The Jiang parties' submissions record that in fact that hearing lasted ten days. At the joint request of the active parties, on 20 November 2013 I extended the time for submissions to 6 December 2013, advising that if there were further delay, it might not be possible to determine the matter by the end of term. No party complied with the extended timetable. Short submissions were supplied by the Ren parties on 9 December 2013 and elaborate submissions were supplied by the Jiang parties on 12 December 2013. Although maintaining his neutral position, the liquidator supplied short submissions dated 13 December 2013 but only filed and emailed to my chambers on 20 December 2013. 5The Jiang parties contend that the Ren parties' proceedings are an abuse of process, at least in circumstances where they are being conducted with (so it is said) no meaningful assets in Australia. The Jiang parties will invite the Court to find that Mr Guo's affidavit evidence is false. Their written submissions assert that the issues affected by his evidence cannot fairly be resolved unless tested by cross-examination. Those submissions are replete with strong conclusionary and pejorative assertions, which may or may not turn out to be well founded. For example, the submissions complain (paragraphs 2, 21 and 25): "There is judgment against the 1st & 2nd appellants for $2.374 million. They have neither paid the judgment, nor obtained or sought a stay of execution. They have frustrated bankruptcy notices by extensions since September, 2012. They have been using the court system oppressively and at great expense, by not complying with court orders, multiplying applications, running the same issues in multiple proceedings, running them again after being unsuccessful, and failing to bring issues forward on the first occasion. Further, they have dissipated the assets of their company the 4th appellant. The 1st & 2nd appellants are insolvent. They are evidently intent upon a 'scorched earth up to the Urals' defence, with the major asset held in reserve and out of reach. ... [In relation to two explanations given by Mr Guo for the non-payment of $500,000] Explanation (a) is preposterous. As to (b), quite why Mr Guo has the solicitous concern that Mr Ren's money should not go to the Australian government is not explained by Mr Guo. In any event, no such second conversation took place and Mr Sheen has put on a further affidavit to that effect, affirmed 23 August, 2013. The second conversation is a complete fabrication from beginning to end. Mr Guo has not produced any telephone account record to support his allegation that this second conversation took place. ... Mr Guo is put forward by the appellants as a vital witness to prove or corroborate these matters. He is a liar. ..." 6Both at the directions hearing, and expressly within the terms of the order for submissions, the Jiang parties were invited to make submissions as to any terms they proposed on which Mr Guo should be made available (for example, by videolink, or subject to time and subject matter limitations for his cross-examination). The Jiang parties have made no submissions at all on those topics. (The liquidator raised in his submissions the possibility of cross-examination using teleconferencing or videoconferencing facilities, but made it plain that he neither opposed nor consented to the application.) It is plain that the Jiang parties' position is that if Mr Guo's affidavit is read, they should be entitled to conduct a free-ranging cross-examination, in the flesh, with a view to his being found to be a liar. 7The Jiang parties' submissions complain extensively about the cost and delay and prejudice to which they have been subjected (for example, "[t]he respondents have been dragged from Court to Court" (paragraph 6) and the procedural history identified in paragraphs 29-52). Against this recurring complaint, three things must be noted. First, it is the Jiang parties who have applied for a stay of proceedings regularly invoking this Court's jurisdiction. The gravamen of the submissions is not that they should be stayed in the absence of the provision of security, but that they should be stayed because of the ongoing abuse by the Ren parties. It is no small thing to stay proceedings as an abuse of process. The onus upon the Jiang parties is "a heavy one" and the power to grant a permanent stay is to be exercised only in the most exceptional circumstances: Williams v Spautz (1992) 174 CLR 509 at 529. 8Secondly, it is the Jiang parties who have applied for Mr Guo to be made available for cross-examination in person, thereby delaying the determination of their application. 9Thirdly, most of the most recent delay is attributable either jointly to the parties (who agreed to a lengthy timetable for the exchange of submissions, and to its extension) or to the Jiang parties (whose failure to comply with that extended timetable was greater than that of the Ren parties). 10If the Jiang parties wish as quickly and efficiently as is possible to resolve the appeals sought to be brought against their success at first instance on their merits, it has always been (and remains) open to them to take a date rather than making interlocutory applications. Moreover, if as the Jiang parties strenuously submit they are dealing with parties who will take every available litigious step against them, then even if they obtain complete success and a Judge of Appeal stays the proceedings, the Ren parties would be entitled to seek review of his or her decision. There can be no doubt that the quickest way to obtain legal certainty is for the summonses for leave to be heard and determined; every week that passes while the matters are being case managed without the allocation of a date for hearing is an additional week of delay. 11But to return to the ultimate question, the issue is whether, in the event that Mr Guo's affidavit be read, I grant leave for him to be cross-examined. Cross-examination in support of an interlocutory application is not as of right but requires leave (contrary to the submissions which were initially made to me at the directions hearing), which leave is granted "cautiously" and normally "somewhat sparingly": see the decisions collected and applied by Kenny J in Wu v Avin Operations Pty Ltd (No 3) [2006] FCA 1321 at [18]. It is common practice not to permit cross-examination at all in interlocutory matters; see, for example, Markisic v Commonwealth of Australia [2010] NSWCA 273 at [31] (Beazley and Young JJA). 12Freehill Hollingdale & Page v Bandwill Pty Ltd [2000] WASCA 150 bears some resemblance to the application before me. There the primary judge refused an application to cross-examine on affidavits served in support of a stay for an abuse of process. No appeal was brought from that decision, but Owen, Steytler and Miller JJ confirmed that "the discretion to permit cross-examination in interlocutory applications will be sparingly exercised": at [29] (an appeal was allowed from the primary judge's refusal to permit the stay application to be heard in advance of the trial). The different position in the United Kingdom may be seen in the authorities considered in Matthews v SPI Electricity Pty Ltd (No 6) [2013] VSC 422 at [25]-[26]. 13I am not persuaded that this is an appropriate case to permit the Jiang parties to cross-examine in the manner they desire. First, there is the certainty of delay and cost and inconvenience which is the principal reason for the discretion being one which is sparingly exercised. Secondly, the application has been advanced on the basis that cross-examination is required because the Jiang parties seek a wholesale rejection of Mr Guo's evidence, and not because of some misunderstanding or failure in recollection or error of translation, but because "[h]e is a liar". There are large obstacles standing in the way of reaching that conclusion. The assessment of cross-examination on credit through an interpreter is often especially difficult: Goodrich Aerospace Pty Ltd v Arsic [2006] NSWCA 187; 66 NSWLR 186 at [21]-[22]; Tonari v R [2013] NSWCCA 232 at [194], although the issues raised in the present case seem to be moderately clear-cut and thus less likely to be affected by inevitable shifts in meaning when questions and answers are translated and retranslated. Thirdly, the Jiang parties may or may not be correct in their contention that the maintenance of the proceedings is an abuse of process. However, it would be remarkable if in order to succeed it was necessary to demonstrate that Mr Guo was deliberately telling untruths. That is exactly the sort of issue that is normally determined at a final hearing. It is to be recalled that the Jiang parties bear the onus of establishing an abuse of process, and the effect of doing so is to prevent a determination on the merits of proceedings which regularly invoke this Court's jurisdiction. The Jiang parties' submissions, notwithstanding their length, point to no comparable decision where what they seek has previously been sanctioned. 14Those considerations to my mind substantially outweigh any benefits of what I infer is apt to be a relatively extensive cross-examination in an interlocutory application intended to support the conclusion that the Ren parties are engaged in an abuse of the Court's processes. 15Fourthly, although their submissions accuse the Ren parties of a "scorched earth up to the Urals" approach where every point is taken, what I have seen of the conduct of these proceedings to date leads me to conclude that the Jiang parties have been no less enthusiastic than their opponents in taking all available points. The obligations imposed upon the Court, as well as upon the parties, by s 56 of the Civil Procedure Act 2005 (NSW) confirm my view that this is not an appropriate case to give leave for Mr Guo to be cross-examined. Whether or not Mr Guo is telling the truth about two aspects of a consensual regime for the payment of security (namely, the payment of funds to Mr Ren and his conversations with Mr Sheen), is not one of the "real issues" in the proceedings. To the contrary, the focus which has been given to his evidence since August 2013 has detracted from the just, quick and cheap resolution of the issues that s 56 requires me as well as the parties to facilitate. 16Although it is implicit in the foregoing, it is best to record expressly that I reject the Jiang parties' submission that their motion to stay the proceedings as an abuse of process cannot be determined in a way that is procedurally fair without requiring Mr Guo to fly to Australia and be cross-examined, relatively extensively, through an interpreter, with a view to his evidence being rejected. 17Having regard to the way the application is made, I do not think it is appropriate for me to attempt to impose restrictions as to the manner or timing of any cross-examination; cf Dale v Clayton Utz (a firm) [2012] VSC 577 at [92]-[98]. To do so in the absence of any submissions on the issue would be apt to produce unfairness to all parties and would be unlikely to lead to a more efficient hearing. 18Finally, there are undetermined applications for leave to proceed under s 471B of the Corporations Act 2001 (Cth), and at some points in their written submissions the Jiang parties say they will need to cross-examine Mr Guo in the event that his affidavit is read when those applications are heard. To be sure, this is not at the forefront of any party's submission (it is not mentioned by the liquidator at all), and it seems to be common ground that Mr Guo's affidavit is principally directed to the application for a stay. (The order in which the parties' various motions will be heard has not yet been determined.) But to the extent that this application extends to the reading of Mr Guo's affidavit in support of the s 471B applications, for substantially similar reasons to the first, second and fourth matters contained in paragraphs 13 and 15 above, I am not disposed to grant leave to cross-examine Mr Guo. 19Accordingly, I refuse the Jiang parties' application. The costs attributable to the single issue I have determined are substantially severable from the balance of the proceedings. In my view, the Jiang parties should pay the Ren parties' costs of the application for leave for Mr Guo to be made available for cross-examination. I make no order in relation to the liquidator's costs. The proceedings will be relisted, for further directions as to the determination of the outstanding motions, on 4 February 2014 at 9.30am before me. ********** 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: 21 January 2014