Advertisement

Court upholds decision to jail investor who wiped memory of electronic devices

The New South Wales Court of Appeal has upheld a decision to jail a property investor for contempt after he erased the memory of various electronic devices, including phones and a laptop, that were the subject of court-ordered search.

In Sydney last Friday, the court dismissed an appeal by Xin ‘Ethan’ He against a six-week jail term he received in September 2020 after being found to have been in contempt of court.

Supreme Court Justice Julie Ward was last year told that He, a property investor at the centre of an $80 million legal dispute, had wiped two mobile telephones and a laptop by performing “factory resets” and also dumped 8-gigabytes of data into a trash folder on his iMac after data and legal experts served him with court-approved search warrants at his Sydney home in November 2019.

The experts had been authorised to search the home by Justice Ward, who had carriage of a civil court dispute between He and his business partner, Bo ‘Michael’ Sun.

Mr Sun had claimed that He misappropriated nearly a quarter of the $80 million he had given to him to invest in Australia.

Justice Ward found He guilty of contempt and sentenced him to six weeks’ jail, but issued a stay order for his immediate imprisonment pending any appeal.

The Court of Appeal, comprising President Justice Andrew Bell and Justices Fabian Gleeson and Lucy McCallum, last week dismissed He’s appeal, dissolved Justice Ward’s stay order and issued a warrant for He’s immediate arrest and commitment to a correctional facility.

Justice Bell, in his written decision, said: “Mr He was in contempt of the Court by engaging in certain charged conducted during the execution … of a search warrant.’’

“In the underlying proceedings, the respondent, Mr Bo Sun … alleged that he provided Mr He with sums totalling some $80,113,752.04 to invest on his behalf in Australia, and that approximately $20 million of that amount had been misappropriated by Mr He.

“What emerged in the course of the filing of affidavit evidence in the underlying proceedings was a material discrepancy between the records put into evidence by each of Mr He and Mr Sun as to certain ‘WeChat’ discussions between them.

“WeChat is a messaging, social media and payment system which is popular in China. A comparison between the respective versions of the disputed WeChat conversations over the relevant period indicated that, on Mr He’s version of various conversations, there were additional messages between the two parties. Both Mr Sun and Mr He suggested … that the other had doctored their records of the relevant WeChat conversations.

“It was in this context that the search order was made on 21 November 2019 against Mr He.

“The primary judge (Justice Ward) noted that while there was some dispute as to some aspects of what occurred during the execution of the Search Order, what was not disputed was that before Mr He permitted the search party to access his premises in Warrawee (on Sydney’s upper north shore), he deliberately deleted a considerable amount of electronic material on various of his electronic devices, including his Huawei Mate Pro 20 mobile telephone, an Apple iMac computer and an Apple iPad Pro.’’

Justice Ward subsequently charged He with contempt and ruled his actions in wiping the devices as among the “most serious class” of contempt of court.

“I have concluded that the imposition of even a substantial fine is not an appropriate or available sentence,” Justice Ward said. “I feel that there is no alternative in this case other than to impose a term of imprisonment.

“To my mind, having in mind the totality of the criminality, an aggregate term of six weeks imprisonment is the least that will satisfy the need for general and specific deterrence and the need to vindicate the contempts that have occurred.”

Lawyers for He appealed the decision on the grounds the sentence was manifestly excessive and that Justice Ward had erred by not considering whether the prison term should be suspended.

Justice Bell, in a unanimous 3-0 decision, said: “Mr He has failed to establish that the sentence imposed was unreasonable or plainly unjust, or that there was some misapplication of principle, such as to justify appellate intervention.

“(The court orders) that a warrant issue for the committal of the appellant, Xin He (also known as Ethan He), to a correctional centre for a term of six weeks commencing on the date of his arrest.”

Share this article

Leave a Reply

Your email address will not be published.

Search by keyword