FEDERAL COURT OF AUSTRALIA

Huang v Aucare Dairy (Aust) Pty Ltd [2019] FCA 2030

ORDERS

THE COURT ORDERS THAT:

1.    The application for an extension of time to file a notice of appeal be dismissed.

2.    Subject to paragraph 3, the applicants pay the respondents’ costs of the application, as agreed or assessed.

3.    If either party seeks a variation of the costs order, it may notify the Court and the other party within seven days. Directions will then be made for the determination of the issue of costs on the papers.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

MOSHINSKY J:

1    The applicants, who were seven of the ten respondents to the proceeding below, seek an extension of time to appeal from the judgment of the primary judge. The judgment of the primary judge followed a trial of 21 hearing days. The first applicant to the present application, who was the first respondent below, appeared in person and with the assistance of an interpreter at trial. The other applicants were either represented at trial by the first applicant or did not participate in the trial.

2    The primary judge delivered reasons for judgment on 27 March 2019 (the Reasons) and made orders giving effect to those Reasons on 9 April 2019. The time for filing a notice of appeal, which was then 21 days, expired on 30 April 2019. The applicants did not file a notice of appeal by that date. On 28 June 2019, approximately two months later, they filed the application for an extension of time. The principal proposed ground of appeal is that the first, third and fourth applicants were not afforded procedural fairness in the hearing of the trial having regard to, among other things, the quality of the interpretation services available to them. The primary relief sought in the applicants’ draft notice of appeal is a retrial of the proceeding.

3    For the reasons that follow, in my view the application for an extension of time should be dismissed.

The proceeding below

4    The applicants at first instance were Aucare Dairy (Aust) Pty Ltd (Aucare) and Mr Yanfeng Bai (Mr Bai) (together, the Bai parties). They sought equitable and statutory relief against the following respondents:

(a)    Ms Yunling Huang (Ms Huang), the first respondent;

(b)    Mr Zhixin Guo (Mr Guo), the second respondent;

(c)    Great Vision Australia Pty Ltd (GVA), the third respondent;

(d)    Noyier Dairy Australia Pty Ltd (Noyier), the fourth respondent;

(e)    CFM Associates Pty Ltd (CFM), the fifth respondent;

(f)    Australian Green Dairy Pty Ltd (AGD), the sixth respondent;

(g)    Nutritional Choice Australia Pty Ltd (NCA), the seventh respondent; and

(h)    Ms Qiong Huang, the eighth respondent.

5    Originally, there were two additional respondents below, Macpherson + Kelley Lawyers (M+K) (the ninth respondent) and Mr Grant Guenther (the tenth respondent). The claims (and cross-claims) against those respondents were, however, resolved during the course of the trial.

6    The claims at trial arose from a joint venture between Aucare and Noyier, the latter being a company owned and controlled by Ms Huang and Mr Guo, for the construction of a factory to manufacture and export infant milk powder to China. The joint venture vehicle was Australia Pure Dairy Pty Ltd (APD), the directors of which were Mr Bai (until January 2014), Ms Haolin Bai (Ms Bai), Mr Bai’s daughter, Mr Guo (until January 2014) and Ms Huang. APD contracted with GVA to construct the factory and supply and install the necessary plant and equipment. GVA, at the time, was owned and controlled by Ms Huang. It was a term of the joint venture contract that Aucare and Noyier were each to contribute $3 million for a total investment of $6 million. In about April 2014, after most of the plant and equipment had been delivered and installed to APD’s factory premises (in Dandenong South), a dispute arose between Aucare and Noyier about their investment contributions. That dispute culminated in Ms Huang arranging for the plant and equipment that had been delivered and installed at APD’s factory premises to be removed and installed in a factory at a new location (in Carrum Downs) and for another entity, namely NCA (which was owned and controlled by Ms Huang at the time), to conduct the infant milk powder business from those factory premises.

7    At trial, Aucare and Mr Bai contended that the removal of the equipment was part of a fraudulent scheme engineered and implemented by Ms Huang with the knowing assistance of the other respondents below to deprive Aucare, Mr Bai and APD of the entire joint venture enterprise.

8    As explained in the Reasons at [2], the proceeding had a disrupted history. The trial was to commence in February 2018, but the hearing was vacated shortly beforehand and a new trial date was given for September 2018. Until June 2018, the first to eighth respondents below were all legally represented but, from June 2018 onwards, they did not have legal representation. The trial commenced in September 2018, but the hearing took much more time than anticipated and could not be finished within the available timeframe. The trial was therefore stood over until February 2019.

9    At trial: Ms Huang represented herself; there was no appearance by Mr Guo; with the leave of the Court, GVA and Noyier were represented by Ms Huang; CFM and AGD had no representation; and Ms Qiong Huang appeared for herself on day one of the hearing, but otherwise took no part in the trial. M+K and Mr Guenther were represented by lawyers until the resolution of the claims and cross-claims against them.

10    Aucare brought its claims in the proceeding below in its own capacity and as assignee of APD’s causes of action against the respondents. The claims were assigned to Aucare by the liquidators of APD (which was placed into liquidation in August 2014): see the Reasons at [6].

11    At trial, oral evidence was adduced from the following witnesses:

(a)    Mr and Ms Bai, for Aucare and Mr Bai;

(b)    Ms Huang, for herself and on behalf of GVA and Noyier; and

(c)    Mr Chu, for NCA.

12    Mr Guenther was called to give evidence on behalf of M+K, but he had not completed his evidence when the claims and cross-claims against M+K and Mr Guenther were resolved.

13    The primary judge concluded that Aucare and Mr Bai had established their claims against the respondents below: Reasons, [10]. In reaching this conclusion, the primary judge recognised that, as the allegations against the respondents below involved claims of dishonest and fraudulent conduct, the evidence of the witnesses was to be tested by reference to the principles in Briginshaw v Briginshaw (1938) 60 CLR 336 and a very high level of satisfaction should be reached in determining whether the claims had been established on the evidence. The primary judge stated that she had reached that very high level of satisfaction: Reasons, [10].

14    The primary judge set out her factual findings at [11]-[88] of the Reasons. As her Honour noted at [11], although the credit of each witness was put into issue and a great deal of evidence was led, the chronology of events and basic facts were largely not contentious.

15    In the course of the Reasons, the primary judge made a number of credit findings against Ms Huang. For example, at [57] the primary judge found that a letter of demand dated 30 May 2014, which was sent to Ms Bai on Ms Huang’s instructions, grossly misstated the actual position, and that Ms Huang knew this at the time. At [60], the primary judge found that certain evidence given by Ms Huang was “plainly untruthful”. In the same paragraph, the primary judge found that Ms Huang “was not truthful in denying that she knew that it was a false claim that APD owed Noyier $2.3 million”.

16    The primary judge’s consideration of the claims was set out at [89]-[97] of the Reasons. At [93], the primary judge made the following findings and reached the following conclusions:

In my view, the evidence overwhelmingly supports the finding, which I make, that Ms Huang and Mr Guo both acted dishonestly and fraudulently in removing the plant and equipment from the Dandenong South premises and in taking the steps they did to transfer ownership of the plant and equipment to entities which they controlled and to operate a new business to the exclusion of APD and Aucare. They also acted unconscionably. The respondents admitted in their amended defence that GVA did not retain title in respect of the Main and Auxiliary Equipment contracts. Significantly, Ms Huang and, it may reasonably be inferred, Mr Guo, knew that GVA did not have any retention of title rights over the main and auxiliary equipment. Further Ms Huang, and it may reasonably be inferred Mr Guo, also knew, because Ms Huang had been advised by M+K, that GVA’s ownership claim of the clean room equipment was “extremely flimsy at best”. I find that the removal of the plant and equipment from the Dandenong South factory premises was done with the deliberate purpose of retaining control of the factory and carrying on a factory business to the benefit of Ms Huang and Mr Guo and to the detriment of APD. With full knowledge, Ms Huang preferred her personal interests to the interests of APD and took advantage of her position as a director of GVA in order to advantage GVA to the detriment of APD. This was done on notice that Aucare objected to this and notwithstanding her undertaking to the Bais that she would not take that step pending the mediation that had been scheduled. Her actions were calculated and deliberate, actuated by self-interest in wilful disregard of the advice she had received, for the purpose of benefiting herself and Mr Guo. Ms Huang’s assertion of her belief that she was entitled to take that action, as she repeatedly maintained in her evidence, does not constitute any defence. The breach of her fiduciary duties was flagrant and unconscionable and the breach of fiduciary duty is ongoing as Ms Huang continues to conduct a business whose enterprise is the same, or substantially the same, as the enterprise that was to be carried out by APD. As Ms Huang was the controlling mind of GVA, NCA, AGD and CFM, her knowledge of her own dishonest and fraudulent design is to be imputed to those companies as the “alter ego” of Ms Huang. I also find also that Mr Guo and Qiong Huang, both of whom participated in the dishonest and fraudulent scheme, knowingly assisted Ms Huang’s breach.

17    The primary judge also stated as follows at [94], a paragraph that is relevant for one of the proposed grounds of appeal:

Ms Huang also breached her fiduciary duties to APD by allowing APD to enter into contracts with GVA for the supply of equipment without disclosing her conflict of interest as the sole director and sole shareholder of GVA to Mr Bai and Ms Bai. It was put forward by way of defence that Mr Bai and Ms Bai were aware at the relevant time that Mr Guo and Ms Huang were in a de facto and business relationship and were aware that Ms Huang, as the de facto and business partner of Mr Guo, stood to benefit personally from APD engaging GVA. The defence is misconceived and not to the point. The point is that Ms Huang did not have the Bais’ fully informed consent to her receiving a benefit from GVA’s contract with APD because she did not disclose her directorship and shareholding in GVA to the Bais.

18    The primary judge dealt with relief at [98]-[116] of the Reasons. The primary judge considered it appropriate to grant proprietary relief, for the reasons set out at [102]-[104], relying on the judgment of the High Court in Ancient Order of Foresters in Victoria Friendly Society Ltd v Lifeplan Australia Friendly Society Ltd (2018) 360 ALR 1 (Ancient Order of Foresters).

19    The primary judge set out, at [116], the declarations and orders that she proposed to make. The primary judge ordered that the matter be listed for a case management hearing on 9 April 2019. On that date, the primary judge made declarations and orders that were substantially the same as those that had been set out in the reasons for judgment. The orders made on 9 April 2019 included an additional paragraph 15a. Thus, the parties knew from 27 March 2019 (being the date of the primary judge’s judgment) the substance of the declarations and orders that the primary judge proposed to make.

The application for an extension of time

20    The application for an extension of time was filed on 28 June 2019. The applicants are Ms Huang, Mr Guo, GVA, Noyier, CFM, AGD and Ms Qiong Huang. The respondents are Aucare and Mr Bai.

21    The applicants rely on three affidavits of Ms Huang dated 28 June 2019, 11 July 2019 and 25 September 2019. They have not filed an affidavit of Mr Guo or an affidavit of Ms Qiong Huang. The respondents rely on an affidavit of Thomas Earls, the solicitor for Aucare and Mr Bai, dated 4 October 2019.

22    In addition to the affidavits, the parties rely on a number of documents from the trial, including the trial transcript.

23    A draft notice of appeal is attached to the application for an extension of time. There are three grounds of appeal set out in that document:

1.    Having regard to the following matters:

(a)    [Ms Huang] was a litigant in person who speaks limited English and has no legal training;

(b)    [Ms Huang, GVA and Noyier] were represented at trial by [Ms Huang];

(c)    [Mr Guo] is an individual who speaks almost no English and did not appear at trial;

(d)    [Ms Qiong Huang] is an individual who speaks almost no English and did not appear at trial, except on one day where she acted her herself;

(e)    [CFM and AGD] are companies of which [Ms Qiong Huang] is a director, and did not appear;

(f)    there were major difficulties with interpreters during the hearing;

(g)    there were different interpreters on many days during the hearing, so that the interpreters often had little understanding of the matter;

(h)    some of the interpreters were unable to interpret adequately;

(i)    one interpreter had had a private briefing session with the second Respondent, Mr Yanfeng Bai;

(j)    the trial was very complex. It ran for 21 sitting days, involved four sets of parties, included the cross-examination of five witnesses and had a court book of over 3000 pages in two languages;

(k)    at the trial, very serious allegations of fraud were made, including ones that the primary judge (correctly) held needed to be proved to the Briginshaw standard; and

(l)    a key issue in dispute was whether at the relevant time the [Bai parties], or either of them, had notice that [GVA] was a company of which [Ms Huang] was a director and shareholder,

[Ms Huang, GVA and Noyier] were not afforded procedural fairness in the hearing of the trial, in the following respects:

(m)    the quality of the interpretation services available to [Ms Huang, GVA and Noyier] was such that they were denied the opportunity of:

(i)    understanding the case and the evidence put against them;

(ii)    responding to the case and the evidence put against them; and

(iii)    giving evidence directed accurately at the issues;

(n)    in finding as a fact that at the relevant time the [Bai parties] did not have notice that [GVA] was a company of which [Ms Huang] was a director and shareholder,

(i)    the primary judge failed to have regard to a number of pieces of evidence to the contrary, including evidence that the [Bai parties] were aware that a contract had been signed by [Ms Huang’s] partner as representative for [GVA];

(i)    at paragraph [17] the primary judge made findings concerning Ms Huang’s credit which focussed on whether she had disclosed to [Mr Bai] that Ms Huang was a director of the Third Appellant (GVA), but her Honour failed to take into account the letter which M&K (who acted in the underlying transaction for the Appellants) had written [and] sent to HWL Ebsworth (who acted in the underlying transaction for the [Bai parties]) in which it is stated that Ms Huang was a director, and the controller, of GVA.

(ii)    the primary judge relied on admissions in the defence that were not relevant to the question (paragraphs [21.1, 21.2 and 30]); and

(iii)    the primary judge failed to have regard to a denial in the defence that was relevant to the question (paragraph [31]); and

(o)    the primary judge failed to have regard to the oral evidence of a witness, Mr Guenther, who had given evidence in chief for over half a day and was cross-examined by [Ms Huang]; and

(p)    the primary judge wrongly concluded that Mr Guenther had “only just started his evidence in chief” when the proceedings against him were dismissed and wrongly concluded that his evidence “was not subject to cross-examination”.

2.    Alternatively, in giving equitable relief to the [Bai parties], the primary judge failed to have regard to the following matters:

(a)    the effect of the relief granted was to transfer to the [Bai parties] the whole of the business that [Mr Guo] and [Aucare] had intended to run together as a joint venture;

(b)    the effect of the relief granted was to give no allowance whatsoever to the Appellants for their contribution to the business that was transferred to the [Bai parties];

(c)    the primary judge had found that [Noyier] had contributed the sum of $686,700 to the joint venture; and

   (d)    the primary judge had found that [GVA]:

(i)    contributed to the joint venture, pursuant to a contract with the joint venture company, a Cleanroom for which it had agreed to pay a third party $876,909, and main and auxiliary equipment contractually valued at $3,887,480 and which was later independently valued at $3,364,339; and

(ii)    received from [Aucare], via the joint venture company, no more than $2,423,613.90.

3.    The primary judge should have found that the relief granted to the [Bai parties] was to be conditional on the [Bai parties] paying to one or more of the Appellants the sum of $3,027,476, alternatively the sum of $2,504,334.

Although paragraph 2(a) of the draft notice of appeal refers to the business that the Second Appellant (Mr Guo) and the First Respondent (Aucare) had intended to run together, this presumably is intended to refer to the business that Noyier and Aucare had intended to run together.

24    The orders sought in the draft notice of appeal are as follows:

(a)    the appeal be allowed;

(b)    there be a retrial of the proceeding;

(c)    alternatively, the orders made by the primary judge be amended by inserting a new order 10, to the effect that Aucare and Mr Bai pay to Noyier the sum of $3,027,476, alternatively the sum of $2,504,334.

Applicable principles

25    In considering an application for an extension of time, the relevant considerations include the length of the delay, the applicant’s explanation for the delay, any prejudice to the respondent and the substantive merits of the proposed appeal: Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348-349. In Singh v Minister for Immigration and Border Protection [2017] FCAFC 195 at [20], the Full Court (Perram, Farrell and Perry JJ) said:

The principles relevant to the exercise of discretion to grant an extension of time for an appeal are well established and are underpinned by a consideration of where the best interests of justice lie. Those principles may be summarised as follows.

(1)    An extension of time will not be granted unless the Court is positively satisfied that it is proper to do so.

(2)    The length of the delay is a relevant factor.

(3)    The appellant must show an acceptable explanation for the delay and that it is fair and equitable in the circumstances to extend time.

(4)    Any prejudice to the respondent is a material factor militating against the grant of an extension, although the absence of prejudice does not, without more, suffice to justify the grant of an extension of time.

(5)    The merits of the substantive appeal, if leave were granted, are properly to be taken into account.

(See e.g. BAO15 v Minister for Immigration and Border Protection [2016] FCA 214 at [19]; Hunter Valley Developments Pty Ltd v Cohen (1984) 3 FCR 344 at 348–349.)

Consideration

26    The applicants submit that the discretion to extend time should be exercised for the following broad reasons:

(a)    there is no prejudice to Aucare and Mr Bai;

(b)    the delay was short and has a good explanation;

(c)    the prospects of success of the appeal are at least reasonable; and

(d)    the consequences of refusing leave would be catastrophic for the applicants – not only have they lost the entirety of the business they sought to establish and in which they invested significant sums, they have also been found to have acted fraudulently.

27    I will deal first with the length and explanation for the delay. I will then deal with the question of prejudice and the strength of the appeal grounds.

Length of the delay

28    As noted above, the period to lodge a notice of appeal expired on 30 April 2019 (this date is accepted in the applicants’ written submissions at [22]) and the application for an extension of time was filed on 28 June 2019. This is a period of approximately two months. I regard this as a substantial period of time.

Explanation for the delay

29    In her affidavit dated 28 June 2019, Ms Huang explains that she had difficulty in obtaining funding for legal representation and in securing legal representation. She states that, unfortunately, this took a considerable amount of time and was made even more challenging by the language barriers she faced in doing so. The following chronology of events emerges from Ms Huang’s affidavit of 28 June 2019:

(a)    The primary judge’s judgment was handed down on 27 March 2019. Ms Huang attended Court on that day and was provided with a copy of the Reasons. Ms Huang understood (correctly) that there would be a further hearing on 9 April 2019.

(b)    On 9 April 2019, Ms Huang attended the further hearing before the primary judge. The Court’s orders were emailed to Ms Huang later that day. The next day, a revised version of the orders, correcting some minor matters, was emailed to the parties.

(c)    Ms Huang states that she did not have available funds to pay for an appeal. I interpret this to be a reference to her ability to pay for legal representation for the conduct of an appeal, rather than the filing fee for a notice of appeal.

(d)    Between 27 March 2019 and 28 June 2019, Ms Huang travelled to China and Sydney approximately 14 times to seek funding for legal representation to appeal.

(e)    On 28 March 2019, Ms Huang was given contact information for a lawyer at Oakley Thompson & Co. (Oakley Thompson). On 29 March 2019, Ms Huang spoke with a lawyer at Oakley Thompson and made an appointment for a meeting. She provided the lawyer with a copy of the Reasons. On 2 April 2019, Ms Huang attended a meeting at Oakley Thompson. They provided her with a fee estimate to review documents that Ms Huang had provided.

(f)    Between 3 and 8 April 2019, Ms Huang travelled to China to meet with potential funders.

(g)    On 15 April 2019, Ms Huang attended a second meeting at Oakley Thompson.

(h)    Ms Huang states that she was unable to contact the lawyers at Oakley Thompson from Friday 19 April 2019 to Sunday 28 April 2019 due to the Easter holiday period.

(i)    On 1 May 2019, Ms Huang sent Oakley Thompson a copy of the orders made on 9 April 2019 and made an appointment to meet with them. Oakley Thompson sent an email to Ms Huang stating that they could not act for Ms Huang as they did not have enough time to take on the appeal. Despite this, Ms Huang attended another meeting at Oakley Thompson and they agreed to try and contact barristers to help. After that meeting, Ms Huang delivered the Court Book from the trial to Oakley Thompson and they said they would “aim to lodge a Notice of Appeal, but needed to confirm with a barrister first”. On 2 May 2019, Oakley Thompson informed Ms Huang by telephone that they could not act for her in relation to the appeal, because “they (and their barrister) did not have enough time to review all of the documents and prepare a Notice of Appeal”.

(j)    On 3 May 2019, Ms Huang contacted Mr Bill Lee, the managing partner of LWPG & Partners (LWPG), a firm located in Sydney. On 6 May 2019, Ms Huang attended a meeting in Sydney with Mr Lee and a barrister. The barrister stated that he could not act as he did not have sufficient experience and because he had not acted for Ms Huang in the proceeding. Mr Lee said that he would seek to contact an experienced barrister, but Ms Huang should keep looking for other lawyers at the same time.

(k)    Ms Huang states that she was concerned at this stage because “Mr Vagg of Oakley Thompson & Co had told me that a Notice of appeal should be filed by 8 May 2019”.

(l)    On 8 May 2019, Mr Lee helped Ms Huang lodge a notice of appeal. However, this was rejected by the Court. An email was sent by the Court’s Registry to Mr Lee stating:

Notice of Appeal is out of time, must file an application for extension of time, affidavit in support and draft Notice of Appeal. If the application is filed by [a] lawyer then it should be signed by you pursuant to r 2.15(1) of the FCA rules.

The affidavit material does not include a copy of the notice of appeal that Ms Huang sought to file. I infer from the way the above email is presented in Ms Huang’s affidavit that she became aware of the contents of the email on or about the day it was received.

(m)    On 9 May 2019, Ms Huang met with Logie-Smith Lanyon Lawyers. Because of communication difficulties and because of the time it would take for Logie-Smith Lawyers to review the orders and make a decision about whether they could act, Ms Huang decided not to engage this firm.

(n)    On 13 and 14 May 2019, Ms Huang attended meetings at Efron & Associates. Ms Huang was disappointed that Efron & Associates had not progressed matters by the time of the second meeting, and therefore decided not to engage them.

(o)    On 20 May 2019, Ms Huang attended the offices of King & Wood Mallesons (KWM) and met with a partner, Samantha Kinsey. On 22 May 2019, KWM advised Ms Huang that they could act for her in relation to an appeal. On the same day, Ms Huang met with Ms Kinsey, Tony Troiani and Jaqueline Bisas of KWM. On 23 May 2019, Ms Huang delivered three suitcases of materials, including a hard copy of the Court Book, to KWM.

(p)    On 5 June 2019, KWM filed a notice of acting on behalf of Ms Huang, GVA and Noyier in the proceeding at first instance. (There were still outstanding issues to be determined by the primary judge.) Between 5 June 2019 and 7 June 2019, KWM and counsel were involved in preparing for and attending a further hearing (on 7 June 2019) before the primary judge, in relation to costs. Following the hearing, Ms Huang met with Mr Troiani and he told her that she needed to provide KWM with funds to cover the legal costs of the conduct of her appeal.

(q)    Between 11 and 20 June 2019, Ms Huang travelled to China to secure further funding for the conduct of her appeal. On 21 June 2019, Ms Huang attended a meeting at the offices of KWM and informed them that she would be able to secure the funding required. On 25 June 2019, the funds were provided to KWM. Between 25 June 2019 and 28 June 2019, KWM finalised the application for an extension of time and the draft notice of appeal.

30    A critical aspect of Ms Huang’s explanation for the delay is that Mr Vagg told her that a notice of appeal “should be filed by 8 May 2019” rather than the correct date (30 April 2019). Ms Huang does not state when she was told this by Mr Vagg and does not state in terms that she believed that she had until 8 May 2019 to file a notice of appeal. The applicants have not provided an affidavit from Mr Vagg (or any other person) confirming that Mr Vagg gave Ms Huang that advice. Given the significance of this point to the present application, it would have been desirable for further detail and confirmatory evidence to be provided. Nevertheless, in circumstances where Ms Huang was not cross-examined on her affidavit, I will proceed on the basis that Ms Huang was told (at some point) and believed that she had until 8 May 2019 to file a notice of appeal.

31    In my view, Ms Huang’s explanation for the delay suffers from a number of difficulties. First, having attempted to file a notice of appeal on 8 May 2019 and having been advised on that date that she was out of time and needed to file an application for an extension of time, Ms Huang does not explain why she did not promptly do so. Although Ms Huang was not represented at this time, she had spoken already with a number of lawyers and one of them (Mr Lee) had assisted her to file a notice of appeal. She could have sought assistance from the Court’s Registry, if necessary, to prepare the relevant documents (namely, an application for an extension of time and an affidavit in support). Insofar as a draft notice of appeal was required as part of such an application, this document had already been prepared (she attempted to file a notice of appeal on 8 May 2019). Counsel appearing for the applicants on the present application submitted that, having lost the proceeding below in circumstances where she was unrepresented, it was understandable that Ms Huang considered that she needed to engage lawyers to assist her. However, there is no direct evidence from Ms Huang that this was the reason why she did not file an application for an extension of time promptly after being informed by the Court that she needed to do so. While the submission has some force as regards the conduct of the appeal, it has less force in relation to the filing of an application for an extension of time (particularly where she had attempted to file a notice of appeal).

32    Secondly, the period of time between the date when the Court rejected Ms Huang’s notice of appeal and indicated that she needed to file an application for an extension of time (8 May 2019) and the date when she filed the application (28 June 2019) is substantial – some 51 days – and not adequately explained. In particular, there is no explanation as to why an application for an extension of time was not filed shortly after KWM became involved (on or about 22 May 2019). Ms Huang’s affidavit refers to the fact that, between 5 and 7 June 2019, KWM and counsel were involved in preparing for and attending a further hearing before the primary judge. However, this does not provide an adequate explanation for the delay. To the contrary, it demonstrates that, by this stage, Ms Huang had some funds available to pay lawyers and had engaged lawyers to act for her. Ms Huang states in her affidavit that on 7 June 2019, Mr Troiani told her that she “needed to provide KWM with funds to cover the legal costs of the conduct of [her] appeal”. This refers to the legal costs for the conduct of the appeal; it does not refer to the legal costs for the filing of an application for an extension of time. The affidavit does not indicate whether or not KWM required Ms Huang to provide the legal costs for the appeal before it would prepare and file an application for an extension of time, and whether or not (assuming that KWM required the legal costs for the application only) Ms Huang was able to provide the legal costs for the application at this stage.

33    Thirdly, while Ms Huang has provided affidavit evidence in relation to the delay, neither Mr Guo nor Ms Qiong Huang have provided an affidavit explaining the delay. Thus, the Court does not have evidence on this issue from the other two individual applicants.

34    For these reasons, in my view, the applicants have not provided an adequate explanation for the delay.

Prejudice to the respondents

35    The Bai parties submit that the final orders made by the primary judge did not envisage the transfer of NCA’s business to the Bai parties until well after the period for appealing expired. In this regard, I note that the orders dated 9 April 2019 included orders to the following effect:

(a)    AGD forthwith assign its interest as tenant of the head lease of the Carrum Downs premises and landlord of the sub-lease of the Carrum Downs premises to Aucare with an effective settlement date no later than 31 May 2019;

(b)    NCA forthwith assign its interest as tenant of the sub-lease of the Carrum Downs premises to Aucare with an effective settlement date no later than 31 May 2019, and in the event of and upon assignment Aucare will be responsible for the provision of the new bank guarantee to be provided in lieu of the existing guarantee on the later of 31 May 2019 and two weeks from the date of the orders or as otherwise reasonably agreed with the landlord; and

(c)    the first to sixth and eighth respondents take all reasonable steps to ensure that the business of manufacturing and selling milk powder is transferred to Aucare or nominee.

36    The Bai parties submit that if the applicants wanted to appeal, it was incumbent upon them to appeal prior to the transfer of the business and to seek a stay of the orders (which would have been subject to undertakings and security). The Bai parties submit that: the failure to institute an appeal within time has caused serious prejudice; the orders of 9 April 2019 anticipated the transfer of the business to the Bai parties by 31 May 2019; in acquiring the business, the Bai parties made an up-front cash payment to a third party of $291,500 for a bank guarantee to secure the lease; they have also incurred rental payments and ongoing maintenance fees totalling $672,432.50 to date; those payments are ongoing, at approximately $65,000 per month.

37    The affidavit of Mr Earls provides evidentiary support for these submissions. Mr Earls states, and I accept, that: the business and leases have been transferred from NCA to Aucare; Aucare has paid the bank guarantee of $291,500 and is paying rent of $45,457.75 (plus outgoings) each month in addition to other costs. I note for completeness that in [28.2], [29] and [44] of Mr Earls’s affidavit, certain references to “APD” should be to “Aucare”. It is apparent from the context that these references are typographical errors.

38    In oral submissions, senior counsel for the applicants submitted that most of the expenses referred to in Mr Earls’s affidavit would have been incurred in any event (i.e. even if a notice of appeal had been filed in time). It was also submitted that the assignments of the leases and the transfer of the business could be reversed. In reply submissions, junior counsel for the applicants submitted that Mr Earls’s affidavit did not say that the Bai parties would have done anything differently if a notice of appeal had been filed in time. It was submitted that the only evidence of prejudice caused by a late appeal (as distinct from an appeal per se) concerned the outgoings incurred during the two month period of the delay (i.e. the outgoings of approximately $65,000 per month). It was submitted that this level of prejudice was not fatal to the application for an extension of time.

39    In my view, the Bai parties have suffered prejudice by reason of the delay between the date of expiry of the period to file a notice of appeal (30 April 2019) and the date on which the application for an extension of time was filed (28 June 2019). During that period, the Bai parties undertook substantial commitments and incurred substantial outgoings pursuant to the orders of the primary judge dated 9 April 2019, in circumstances where they were entitled to assume that the orders were not subject to appeal. Had the applicants filed a notice of appeal in time, and sought and obtained a stay of the orders dated 9 April 2019, these commitments and outgoings would not have been undertaken or incurred. Had the applicants filed a notice of appeal in time, and not sought a stay of the orders of the primary judge, the Bai parties would have had the opportunity to consider their position in relation to the orders (for example, themselves seeking a stay or other adjustment) in the context of an appeal being on foot. In these circumstances, I consider the Bai parties to have suffered prejudice by reason of the delay.

The merits of the proposed appeal

40    I will first consider ground 1 of the draft notice of appeal. I will then consider grounds 2 and 3 together. In considering these grounds, I am, of course, not hearing the appeal itself: see Jackamarra v Krakouer (1998) 195 CLR 516 at [9] per Brennan CJ and McHugh J. I am forming a view on the merits of the proposed grounds of appeal to inform my consideration of where the interests of justice lie for the purposes of determining the application for an extension of time.

Ground 1

41    Ground 1 of the draft notice of appeal raises two broad grounds of procedural fairness; one concerning the adequacy of interpreters available to the applicants during the trial; and the other concerning a failure to take into account certain evidence relevant to a factual question.

42    The applicants submit in their outline of submissions that Ms Huang “does not speak English”, but it appears that Ms Huang has, at least, some capacity to speak English. For example, Ms Huang presented her opening at trial herself, with only limited assistance from an interpreter (T139-153). Ms Huang has also prepared affidavits in English, apparently without the assistance of an interpreter. Each of the three affidavits of Ms Huang relies on in connection with this application was affirmed by her in the usual way, without a statement that it had been prepared with the assistance of an interpreter.

43    The applicants submit that: there were significant difficulties with the interpreters at the trial; there were numerous different interpreters; and on a number of occasions, the interpreter was unable to provide effective service to the applicants. The applicants submit that every litigant is entitled to competent interpretation, relying on Perera v Minister for Immigration and Multicultural Affairs (1999) 92 FCR 6 at [16]-[17], [24]-[26], [28]-[31], [34], [37] and [41] per Kenny J and Gradidge v Grace Bros Pty Ltd (1988) 93 FLR 414 at 423-424 per Kirby P. The applicants submit that it is not necessary for them to show that the primary judge made an error in dealing with interpreters; if the interpreters were not competent, there is a question whether the applicants received a fair trial at all.

44    The applicants point to three examples of interpretation difficulties in their outline of submissions. The first example arose on the second hearing day (T41-45, T50-51). In these portions of the transcript, the interpreter expressed difficulty in interpreting the words used on a number of occasions. For example, the interpreter said that she did not understand the legal terms and did “not understand all about damage caused with which party”. At another point, the interpreter stated that she could not follow and asked counsel to “go slower”. The interpreter also stated that she needed to understand the concepts being referred to because “[i]f I don’t understand you in English, I cannot translate it back to Chinese”. Shortly after this, the interpreter indicated that she did not understand the word “fiduciary”. In response, counsel said that he would use the word “duty” instead. The interpreter also referred to a problem with names (whether a company name or a person’s name). The primary judge noted that Ms Huang had “a great deal of knowledge about this case” and that “she should have a familiarity with a lot of what is being said, because she has attended many hearings … where a number of these things have been discussed”. The primary judge indicated that the interpreter should use the English word when she was unsure (this was in the context of the names of companies and individuals). The primary judge also stated that the interpreter should indicate if she needed clarification of the meaning of any words.

45    In my view, this example provides, at best, weak support for proposed ground 1. Indeed, in my view, the portion of the transcript relied upon indicates that counsel and the primary judge were alive to the interpreting issues and responded in practical and appropriate ways to the issues raised by the interpreter.

46    The second example arose on the fourth day of the hearing (T168). On this occasion, the primary judge stated that she understood through her associate that Ms Huang was having difficulties with the interpretation and in following what was being said by each of the barristers. The interpreter then said that it was quite difficult for her to follow what the solicitor had said about a relationship. Ms Huang then said that she had been “totally lost” after finishing her opening and that she could not understand what the barristers had said.

47    Once this section of the transcript is placed in context, it becomes apparent that this example also provides, at best, weak support for proposed ground 1. In the next portion of the transcript (at T168) the primary judge indicated to Ms Huang that she had the benefit of the transcript and she could read it overnight. The primary judge also stated that: Ms Huang “must speak up and tell us” if she was having difficulty following; it was difficult to know when Ms Huang understood and when she did not understand “because you are able to speak English quite well, but I also appreciate that English is your second language”. The primary judge stated that “if you sit there quietly and it’s not being interpreted then, unless you tell the court – I have been assuming that you have been following it sufficiently that you didn’t need the assistance of interpreting”. The primary judge stated that “we will slow down again and we will ask the interpreter to interpret”. The primary judge emphasised the points she had been making by stating: “If you don’t need assistance you can indicate that to the interpreter but please, if the interpreter is not interpreting and you’re not following, can you please bring it to the attention of the court?”

48    The following points can be made about this example. First, the primary judge was, again, responsive to interpreting issues and took steps to address those issues as they arose. Secondly, in circumstances where Ms Huang did have some English skills and had firsthand knowledge of the factual aspects of the matter, it was reasonable for the primary judge to assume, in the absence of any indication to the contrary, that Ms Huang had been following the submissions. Thirdly, the primary judge’s resolution of the issue would appear to be, with respect, entirely appropriate.

49    The third example arose on the fifth day of the hearing during Ms Huang’s cross-examination of Ms Bai (T239-240). The interpreter stated that, after the hearing on the previous day, she had sought to “quit” for the next day. The reason was that Ms Huang was not getting “enough interpreting support”. The interpreter said that this was the first time this had happened to her in ten years of experience as an interpreter. The interpreter explained that she had spoken to the agency, but they had said it was necessary for the Court to direct that there be a new interpreter. For this reason, the interpreter had returned the next morning. The primary judge stated that, now that the matter had been raised “we will endeavour to find another interpreter for Ms Huang”. Ms Huang indicated that she had had three interpreters up to this point and was most satisfied with the second interpreter. The primary judge indicated that “we will do what we can”. The primary judge indicated that the hearing would need to continue in the meantime. Ms Huang objected to this “because I cannot explain what I want to say properly in English, and interpreter also can’t do it”. Nevertheless, the hearing proceeded for the rest of the day without a replacement interpreter.

50    It is necessary to consider this example in the context of the next section of the transcript, comprising Ms Huang’s continued cross-examination of Ms Bai (T241-262). This portion of the transcript indicates that there was a painstaking, iterative process whereby the primary judge assisted Ms Huang to articulate the questions she wanted to ask Ms Bai. The cross-examination continued for 21 pages of transcript, including an adjournment for lunch. Thus, it appears that Ms Huang’s English skills were of a level that, with the assistance of the primary judge, she was able to continue her cross-examination of Ms Bai. In light of this, I consider that the applicants’ third example, once placed in context, does not provide strong support for proposed ground 1.

51    In addition to these examples, the applicants rely in their outline of submissions on the fact that one of the interpreters had a private briefing with Mr Bai. The applicants state that that interpreter was called to give evidence and was cross-examined by counsel for M+K. The point is not further developed in the outline of submissions and was not the subject of oral submissions. It does not appear that this point has merit.

52    In my view, the prospects of the applicants persuading a Full Court that they did not receive a fair trial because of the quality of interpreting are very low. I accept that these are only three examples of interpreting difficulties. Nevertheless, I consider it fair to proceed on the basis that the applicants have identified the best examples in support of their contention. For the reasons indicated above, the first two examples are, at best, weak, and the third example needs to be considered in the context of the next section of the transcript. The matters relied on by the applicants (both orally and in writing) do not, in my view, come close to establishing a reasonable argument that the applicants were denied a fair trial by reason of interpreting difficulties. They are difficulties that arose, and perhaps may be expected to arise, in the course of a complex and lengthy trial involving a self-represented litigant whose first language was not English; they were addressed by the primary judge in what would seem to be, with respect, an entirely appropriate way.

53    A distinct element of the applicants’ procedural fairness ground relates to the primary judge’s conclusion, at [94] of the Reasons, that Ms Huang breached her fiduciary duties to APD by allowing APD to enter into contracts with GVA for the supply of equipment without disclosing her conflict of interest as the sole director and sole shareholder of GVA to Mr Bai and Ms Bai. This reflects an earlier finding by her Honour, at [17], that Mr Bai and Ms Bai did not know that GVA was Ms Huang’s company.

54    The applicants submit that, in so finding, the primary judge failed to have regard to the fact that Mr Guo was introduced to the Bais as Ms Huang’s husband (Reasons, [13]). The applicants submit that if the Bai parties knew that either Ms Huang or Mr Guo had an interest in GVA, then that entirely changes the basis of the finding of breach of fiduciary duty. The applicants submit that if Mr Guo had a material personal interest, then it was at least likely that Ms Huang also did, if she was thought to be his wife. The applicants submit that, in reaching the conclusion that Mr Bai was not aware of Ms Huang’s interest in GVA, the primary judge failed to have regard to certain evidence, namely that set out in [49] of the applicants’ outline of submissions.

55    In my view, the prospects of the applicants establishing this aspect of the procedural fairness ground are low. The applicants do not point to any clear, objective evidence that Ms Huang disclosed to the Bais that she was the sole director and sole shareholder of GVA. Indeed, as the primary judge noted at [17], it was an admitted fact that Mr Guo did not tell Mr Bai about Ms Huang’s interest in GVA. The pieces of evidence listed in [49] of the applicants’ outline of submissions relate, in the main, to disclosure of Mr Guo’s role, rather than that of Ms Huang. Further, some of the items relied upon are merely submissions, not evidence. To the extent that the applicants submit that if Mr Guo had a material personal interest, then it was at least likely that Ms Huang also did, if she was thought to be his wife, I do not accept this submission. The primary judge, at [94] of the Reasons, dealt with a similar defence at trial. Her Honour said that the defence was misconceived and not to the point, and that the point was that “Ms Huang did not have the Bais’ fully informed consent to her receiving a benefit from GVA’s contract with APD because she did not disclose her directorship and shareholding in GVA to the Bais”. The applicants have not demonstrated any reasonably arguable error in her Honour’s approach. I note for completeness that in oral submissions, the applicants relied on a letter dated 30 May 2014 from M+K to Ms Bai (page 348 of Ex R1). The letter included the statement that GVA was an entity controlled by “YoYo” (a reference to Ms Huang). However, I was not taken to any surrounding evidence (e.g. cross-examination in relation to the letter) and it is dated after the dispute arose.

56    A further element of the procedural fairness ground is that the primary judge failed to have regard to the oral evidence of Mr Guenther. The primary judge stated, at [9], that Mr Guenther “had only just started” his evidence-in-chief when the Bai parties and the first to eighth respondents agreed to orders dismissing their claims against M+K and that, in the circumstances, it would be unfair to have regard to his oral evidence when it was not completed “and not subject to cross-examination”. The applicants submit that Mr Guenther had, in fact, given evidence-in-chief for over half a day and had been cross-examined by Ms Huang. Accordingly, it is submitted, the primary judge erred in concluding that it would be unfair to have regard to the evidence of Mr Guenther.

57    The applicants’ submissions do not accurately reflect what transpired in relation to Mr Guenther’s evidence. Mr Guenther commenced his evidence at 3.44 pm on 13 February 2019 (T1148). His evidence-in-chief continued during the morning of 14 February 2019. Over the lunch break, the Bai parties reached a compromise position with M+K and Mr Guenther, which included an agreement not to cross-examine Mr Guenther. Further, Ms Huang agreed on her own behalf and on behalf of GVA and Noyier, and NCA also agreed, to drop the cross-claim against M+K and Mr Guenther: see Mr Earls’s affidavit at [105]. As Mr Earls explains at [106] of his affidavit, Mr Guenther’s evidence (which was being led in a chronological way) had not yet reached even the period of time when the equipment had been removed (which occurred in mid-July). Mr Earls states that he would have expected Mr Guenther to have been giving evidence-in-chief for several days and that he would have been cross-examined by the Bai parties for several more days if he gave all of his evidence. Further, as part of the settlement arrangement, it was agreed that Ms Huang would have the opportunity to ask Mr Guenther some questions. Thus, when the settlement was announced to the primary judge after the luncheon adjournment, Ms Huang sought and was granted leave to re-open her case to ask Mr Guenther some questions (T1203). This then occurred (T1204-1206). Although the transcript heading refers to Ms Huang’s questions as being cross-examination, this questioning took place pursuant to the grant of leave to Ms Huang to re-open her case and lead evidence-in-chief from Mr Guenther.

58    Further, and in any event, this aspect of the procedural fairness ground does not, in my view, have any merit. Although the applicants’ proposed ground of appeal and submissions give the impression that the applicants seek to rely on Mr Guenther’s evidence generally, in fact they seek to rely on only one aspect of his evidence. It should be noted that Mr Guenther’s evidence was generally unhelpful to Ms Huang and her companies because it reinforced the Bai parties’ case that Ms Huang and her companies had acted knowingly throughout the dishonest and fraudulent scheme and against his repeated advice. The one aspect of Mr Guenther’s evidence that the applicants seek to rely on is his evidence that Ms Huang told him in May 2014 that Mr Bai knew that “she was GVA” (T1156). The applicants seek to rely on this evidence to support the proposition that the primary judge erred in finding that Mr Bai and Ms Bai did not know that GVA was Ms Huang’s company. But this evidence seems to be of negligible, if any, weight. It was merely a statement by Ms Huang to her own lawyer. In these circumstances, I consider this aspect of the procedural fairness ground to lack merit.

59    I note for completeness that in the applicants’ outline of submissions they refer to evidence given by Ms Huang during a medical episode. This point is not raised in the draft notice of appeal; it is not dealt with in the affidavits of Ms Huang; and it was not the subject of oral submissions. In the absence of evidence to support these written submissions, the point does not appear to have merit.

60    In summary, for the reasons set out above, I consider the applicants’ procedural fairness ground to have very little merit.

Grounds 2 and 3

61    The applicants note that the effect of the orders of the primary judge was that the whole of the joint venture enterprise was transferred to the Bai parties with no allowance to the applicants for their contribution to the undertaking. The applicants contend that the orders fail to do equity between the parties because they give to the Bai parties a windfall gain that they did not bargain for and make no allowance for the very significant contribution made by the applicants.

62    The applicants contend that the primary judge erred and should have taken into account the following contributions:

(a)    the amount of $686,700, which had been contributed by Noyier to the joint venture (Reasons, [49]);

(b)    the amounts of:

(i)    $876,909, being a liability incurred by GVA to Xtreme with respect to a clean room supplied by GVA to the joint venture (Reasons, [35], [37]) (the primary judge gives the GST-exclusive figure of $797,190); and

(ii)    $3,887,480 (alternatively, $3,364,339), being the value of main and auxiliary equipment supplied by GVA to the joint venture (Reasons, [82]) (the first figure represents the value under the contract; the second figure represents a later, independent valuation),

less the amount of $2,423,613.90 received by GVA from Aucare via the joint venture company.

63    On this basis, the applicants contend that the primary judge should have found that the relief granted to the Bai parties was to be conditional on the Bai parties paying to one or more of the applicants the sum of $3,027,476, alternatively the sum of $2,504,334.

64    It may be questioned whether the amounts relating to GVA are properly described as “contributions” to the joint venture, rather than the performance of contractual obligations owed by GVA to APD. However, I put this to one side for present purposes.

65    In their outline of submissions, the applicants submit that, in determining what orders to make, the primary judge made no reference to the contributions made by Noyier and GVA. However, it is clear from the Reasons that her Honour was well aware of each of the contributions set out above, as they are each referred to in the Reasons.

66    Her Honour dealt with the question of whether proprietary relief should be ordered at [101]-[115] of the Reasons, referring to the principles discussed by the High Court in Ancient Order of Foresters. Her Honour dealt specifically with the question of apportionment on the basis of skill and expertise and other expenses at [111]-[113], concluding that apportionment on these bases was not appropriate in this case. Her Honour’s reasons, in summary, were as follows:

(a)    First, to the extent that skill, expertise and costs were applied to the construction of the factory at Carrum Downs, that work almost entirely duplicated the construction that had already occurred at Dandenong South.

(b)    Secondly, while it is appropriate to take into account uncompensated losses (Ancient Order of Foresters at [94]), in moving the plant and equipment Ms Huang caused damage to the Dandenong South factory, and liabilities were incurred by APD. The primary judge set out details of these amounts. Further, the primary judge noted, substantial consequential loss had been caused by delay; whereas APD ought to have been manufacturing and producing milk powder from May 2014, the destruction of APD’s business by the removal of plant and equipment in July 2014 meant that APD had been unable to commence business activities.

67    In my view, no arguable error is shown with regard to her Honour’s reasons for not providing for apportionment on the basis of skill and expertise and other expenses. In relation to her Honour’s second reason, the applicants submit that: her Honour did not consider whether the orders giving the whole of the joint venture business to the Bai parties already compensated them for the losses identified; and it seems likely that they would have, given that the Bai parties never intended to have more than a 50% share in the joint venture. The applicants’ outline of submissions does not, however, contain any calculations to make good this proposition. The primary judge was well aware of the amounts involved, as they had been set out earlier in the Reasons, and the matter under discussion was whether or not there should be an apportionment. In these circumstances, I do not consider there to be any merit in the submission that the primary judge did not consider whether the order giving the whole of the business to the Bai parties already compensated them for the identified losses.

68    For these reasons, in my view, grounds 2 and 3 have very little merit.

Conclusion

69    Having regard to each of the matters discussed above, I consider that the application for an extension of time should be dismissed. Each of the considerations discussed above points in this direction. In particular, for the reasons discussed above, in my view, the proposed grounds of appeal have very little merit. In these circumstances, the interests of justice favour dismissal of the application.

70    In relation to costs, it would appear to be appropriate for costs to follow the event. I will make an order to this effect, but will also provide a short period of time for the parties to indicate if they seek a different costs order.

Associate:

Dated:    4 December 2019

SCHEDULE OF PARTIES