Federal Court of Australia

Royal Express Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed) v Huang, in the matter of Royal Express Pty Ltd (No 3) [2021] FCA 611

ORDERS

THE COURT ORDERS THAT:

1.    Pursuant to rule 10.24 of the Federal Court Rules 2011, service by the Plaintiff of the following documents on the First Defendant may be effected by sending an email to the First Defendant at "hdhuang123@gmail.com" containing an electronic link from which the documents can be downloaded:

(a)    the Order of the Honourable Justice O'Bryan made in this proceeding on 31 May 2021;

(b)    the Order of the Honourable Justice O'Bryan made in this proceeding on 2 June 2021;

(c)    the Court’s Reasons for Judgment dated 1 June 2021 in [2021] FCA 585;

(d)    the Court’s Reasons for Judgment dated 2 June 2021 in [2021] FCA 593;

(e)    the Originating Process dated 28 May 2021;

(f)    the Interlocutory Process dated 28 May 2021;

(g)    the Interlocutory Process dated 1 June 2021;

(h)    the Affidavit of Salvatore Algeri sworn on 28 May 2021;

(i)    the Affidavit of Salvatore Algeri sworn on 1 June 2021;

(j)    the Plaintiff’s Outline of Submissions dated 31 May 2021;

(k)    the Plaintiff’s Outline of Supplementary Submissions dated 1 June 2021;

(l)    the transcript of the hearing in this proceeding on 31 May 2021;

(m)    the transcript of the hearing in this proceeding on 2 June 2021;

(n)    ASIC company search in relation to P&H Luxury Pty Ltd; and

(o)    table of company relationships prepared by the Plaintiff.

2.    Service of documents on the First Defendant pursuant to order 1 be deemed to be effected 1 day after the documents have been emailed.

3.    The Plaintiff’s costs be reserved.

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

REASONS FOR JUDGMENT

O’BRYAN J:

1    This proceeding was commenced by an originating process dated 28 May 2021 by which the plaintiff seeks relief against the defendants in respect of alleged breaches of ss 181 and 182 of the Corporations Act 2001 (Cth) and/or misappropriation of the plaintiff's assets for the benefit of the defendants.

2    The plaintiff has filed two interlocutory applications seeking freezing orders against the defendants and certain other companies which the plaintiff intends to join as defendants to the proceeding. Those applications came before me as duty judge. I made the orders sought and published reasons in Royal Express Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed) v Huang [2021] FCA 585 and Royal Express Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed) v Huang (No 2) [2021] FCA 593. The freezing orders are returnable before the Court at 2.15 pm on 7 June 2021.

3    The background to the proceeding is set out in those judgments and need not be repeated.

4    The plaintiff seeks an order for substituted service in respect of the first defendant under rule 10.24 of the Federal Court Rules 2011 (Cth). In support of the order, it relies on an affidavit of Philip Robinson sworn 4 June 2021 and an affidavit of Antonio Crupi sworn 4 June 2021.

5    Mr Robinson is an accountant employed in Deloitte's Restructuring Services business as a Director. He has been engaged to work on the receivership of the plaintiff by the Receivers, Messrs Algeri and Norman, under their supervision. Mr Robinson deposed that:

(a)    Between 8 May 2021 and 2 June 2021, the first defendant, Mr Di Huang, has had regular email correspondence with Deloitte in connection with the receivership of the plaintiff using the email address "hdhuang123@gmail.com".

(b)    An ASIC search for Mr Huang records his address as a director or secretary for several companies as Unit 110/499 St Kilda Road, Melbourne.

(c)    An ASIC search for the plaintiff records the address for Mr Huang, as director, as Unit 7/1, International Drive, Westmeadows. Mr Robinson deposed that that address appears to be a business rather than a residential address.

(d)    Land title searches for properties where "Di Huang" was recorded on title as the registered proprietor generated two results:

(i)    the property known as Unit 3 1236-1238 Old Burke Road, Kew East VIC 3102 (Volume 10464 Folio 103); and

(ii)    the property known as 4 White Lodge Court, Donvale VIC 3111 (Volume 09058 Folio 882).

6    Mr Crupi is a licensed process server. Mr Crupi deposed that:

(a)    On Wednesday, 2 June 2021 at 2:20 pm, he attempted to serve the first defendant, Di Huang, personally with the documents in this proceeding at 110/499 St Kilda Road, Melbourne. He was unable to effect service because, at the time of his attempt, he was only able to gain access to the building's lobby. Mr Crupi spoke with the Concierge on duty, who advised that Mr Huang no longer resides at the given address, but that his mother-in-law is still occupying the address.

(b)    On Wednesday, 2 June 2021 at 2:50 pm, he attempted to serve Mr Huang personally at Unit 3/1236-1238 Old Burke Road, Kew East 3102. Mr Crupi spoke with a female occupant at that address who advised that she did not know Mr. Huang, that she has been residing at the address for two years and she is renting through Ivy Real Estate.

(c)    On Wednesday, 2 June 2021 at 3:10 pm and Thursday, 3 June 2021 at 12:05 pm, Mr Crupi attempted to serve Mr Huang personally at 4 White Lodge Court, Donvale 3111. On the first occasion, the occupant was unable to come to the gate (which secured the property). On the second occasion, the occupant came to the gate and identified himself as Di Huang. The occupant looked at the documents being served and explained that he did not believe that the documents related to him. The occupant showed Mr Crupi his driver’s licence, which Mr Crupi took a photograph of. The licence details did not match the details for the first defendant (including as to date of birth).

7    Rule 10.24 provides as follows:

If it is not practicable to serve a document on a person in a way required by these Rules, a party may apply to the Court without notice for an order:

 (a)    substituting another method of service; or

(b)    specifying that, instead of being served, certain steps be taken to bring the document to the attention of the person; or

 (c)    specifying that the document is taken to have been served:

(i)    on the happening of a specified event; or

(ii)    at the end of a specified time.

8    The pre-condition for the Court to make an order under r 10.24 is that is not practicable to serve a person in a way required by the Rules, here by effecting personal service. The authorities concerning the meaning of impracticability in the context of the rules governing substituted service were considered by Katzmann J in Commissioner of Taxation v Zeitouni [2013] FCA 1011; 306 ALR 603 at [66]-[71]. The authorities establish that it is not necessary for an applicant for an order for substituted service to prove that personal service was impossible or futile. Conversely, mere inconvenience in effecting personal service will not suffice. It is relevant, though, in assessing practicability, to take account of the urgency that attends the proceeding including where, as here, there is a risk of dissipation of property.

9    The present case is one attended by considerable urgency. For the reasons discussed in Royal Express Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed) v Huang [2021] FCA 585 and Royal Express Pty Ltd (Receivers and Managers Appointed) (Administrator Appointed) v Huang (No 2) [2021] FCA 593, the evidence adduced in the proceeding to date establishes a good arguable case that Mr Huang has contravened ss 181 and 182 of the Corporations Act 2001 (Cth) involving:

(a)    the creation and issue of false invoices for the purpose of obtaining finance from National Australia Bank (NAB) pursuant to an Invoice Finance Facility;

(b)    diverting payments for services performed by the plaintiff and properly payable to the plaintiff away from the plaintiff to another company;

(c)    employees of the plaintiff being directed to format or wipe computer hard drives relating to the business operated by the plaintiff; and

(d)    the payment of large sums of money from the plaintiff to other companies for which there is no commercial explanation.

10    The evidence establishes that the plaintiff has made efforts to serve Mr Huang personally at all known residential addresses for him. Those attempts have shown that Mr Huang does not reside at any of the known residential addresses.

11    In all the circumstances of this case, I am satisfied that it is not practicable to serve Mr Huang personally.

12    The method of substituted service sought by an applicant under r 10.24 of the Rules should be one which, in all reasonable probability, if not certainty, will be effective to bring knowledge of the process to the respondent: Porter v Freudenberg [1915] 1 KB 857 at 889; Australian Competition and Consumer Commission v Yellow Page Marketing BV [2010] FCA 1218 at [35]. I am satisfied that service of documents by email to the address "hdhuang123@gmail.com" will, in all probability, bring the documents to the knowledge of Mr Huang. The email address has been regularly used by Mr Huang in recent weeks when communicating with the Receivers in respect of the affairs of the plaintiff.

13    In conclusion, I am satisfied that it is appropriate to make an order for substituted service largely in the form sought by the plaintiff.

Associate:

Dated:    4 June 2021