In the matter of Sunnya Pty Ltd

I delivered judgment in these proceedings on all questions other than quantum on 19 April 2024. [1]

The plaintiff (Sunnya), the first and second defendants (Mr He and Ms Lu), and the eighth, ninth and tenth defendants (Supermega, Megadairy and NZFDA – collectively, the NZ Parties) appealed from different aspects of that judgment. The Court of Appeal delivered judgment in those appeals on 24 April 2025. [2]

As described in more detail below, the outcome of the proceedings (including the appeals) is that the defendants have been found to have engaged in certain conduct which contravened ss 181 and 182 of the Corporations Act 2001 (Cth) (or to have been involved in such contraventions within the meaning of s 79 of the Corporations Act) and/or which constituted a breach of fiduciary duties owed by Mr He and Ms Lu to Sunnya (or to have knowingly assisted such breaches of duty). In respect of many of those breaches (and involvement and knowing assistance in the breaches), the defendants have been ordered to pay statutory or equitable compensation to Sunnya, or to account for their profits derived from the breaches (or knowing assistance), at Sunnya’s election.

It remains for Sunnya to elect between the inconsistent remedies of compensation or an account of profits for each of its claims in respect of which it has succeeded in establishing liability, and for the Court to determine questions of quantum.

A plaintiff should not be required to make that election unless and until it is able to make an informed choice. The Court may make discovery and other orders designed to give the plaintiff the information it needs in order to assess its potential entitlement under the alternative remedies in respect of each of its claims that have been upheld before electing between those remedies. Consistently with s 56 of the Civil Procedure Act 2005 (NSW), r 21.2 of the Uniform Civil Procedure Rules 2005 (NSW), and Practice Note SC Eq 11, any orders for discovery must be limited to those documents that are both relevant to the election to be made by the plaintiff and necessary for the plaintiff to make an informed election, and any classes of documents ordered to be discovered must not be specified in more general terms than the Court considers to be just in the circumstances. [3]

These reasons relate to Sunnya’s notice of motion filed on 18 November 2025 seeking orders for discovery of 24 categories of documents by Mr He and Ms Lu, 42 categories of documents by the third defendant (GABT), 40 categories of documents by the fourth defendant (GNT), 16 categories of documents by Supermega and Megadairy, and 28 categories of documents by the fifth defendant (Sunlife). The proposed discovery categories are reproduced in the Schedule to these reasons. Sunnya’s solicitor, Mr Vincent Zhu, affirmed an affidavit on 18 November 2025 in support of the notice of motion in which he set out a very high-level summary of the broad nature of the documents in the proposed categories of discovery and asserted that the whole of those documents were necessary for Sunnya to determine the profits derived by each defendant and to allow Sunnya to make an informed election.

In circumstances where the trial that resulted in the judgment delivered on 19 April 2024 (and the subsequent appeals) did not include questions of quantum, I accept that there has been no occasion to date for Sunnya to gather evidence or seek production or discovery of documents relevant to any profits that the defendants may have made from their respective breaches of duty, involvement and knowing assistance. Accordingly, while Sunnya must be in a position to form an opinion about the likely quantum of any loss suffered as a consequence of the defendants’ conduct, I accept that it does not yet have sufficient information about the defendants’ profits to make an informed election between the inconsistent remedies of compensation and an account of profits.

On 24 November 2025, I made orders requiring those defendants to notify Sunnya whether they consented to or opposed the application in respect of each proposed category of documents, and requiring the parties to prepare and deliver to my Associate a schedule setting out each proposed discovery category, Sunnya’s contentions in support of a discovery order concerning each disputed category, and the relevant defendants’ responses in respect of each disputed category. The motion was listed for hearing on 10 December 2025.

In breach of those orders, the defendants failed to notify Sunnya of their consent or opposition to each proposed discovery category.

Dr Baron Levi of counsel appeared at the hearing of the discovery motion for Mr He and Ms Lu, but informed the Court that his instructing solicitors had not been able to contact Mr He and Ms Lu to obtain any instructions in relation to the discovery motion. Dr Baron Levi nevertheless assisted the Court by making submissions identifying the extent to which he considered that the scope of Sunnya’s proposed discovery categories was unduly broad having regard to the matters in issue and the relevant legal principles.

There was no appearance for any of the other defendants, notwithstanding that they were on notice of the discovery application and the listing for hearing. All parties who had entered an appearance in the proceedings were afforded an opportunity to make submissions in writing in relation to the proposed discovery categories after the conclusion of the hearing. Written submissions were received from Sunnya and from Supermega and Megadairy on 17 December 2025. The submissions of Supermega and Megadairy did not address the proposed discovery categories, but contended that the discovery motion should be dismissed as against them as an abuse of process or, alternatively, stayed pending the determination of their application to the High Court of New Zealand to set aside the registration in New Zealand of the judgments of this Court and the Court of Appeal pursuant to s 61(2)(c) of the Trans-Tasman Proceedings Act 2010 (NZ) (the NZ Trans-Tasman Act).

These reasons assume familiarity with my reasons for judgment published on 19 April 2024 and the judgments of the Court of Appeal published on 24 April 2025.

Relevantly to the present application, Mr He and Ms Lu have been held to have:

The conduct that was the subject of the improper Neurio contracts findings was found to be part of a series of co-ordinated actions undertaken by Mr He and Ms Lu with the intention and purpose of diverting to GABT Sunnya’s business of selling Australian and New Zealand-manufactured Neurio-branded products in China: [2024] NSWSC 403 at [708] and [759].

The conduct that was the subject of the improper Neurio products findings and the Neurio/NRIO findings was held to be part of an alternative ongoing plan to achieve the same ultimate objective in a way that overcame the unsuccessful attempts to transfer the registration of relevant Neurio trade marks in Australia and New Zealand to GABT: [2024] NSWSC 403 [795]-[796]; [2025] NSWCA 79 at [73]-[91].

In respect of the commercial invoices/undervalue sales findings, the improper Neurio products findings, and the the Neurio/NRIO findings, Mr He and Ms Lu have been ordered to pay compensation to Sunnya, or account to Sunnya for any benefit or gain obtained, at the election of Sunnya.

The scope of the liability to account of each of Mr He and Ms Lu extends to any benefit or gain they have received as a result of their breaches of fiduciary duty. Identification of any benefits or gains obtained as a result of the breaches of fiduciary duty is a question of fact. Benefits or gains are not limited to payments or realised profits. They include things such as business connections, and the diversion of business from Sunnya to GABT. If and to the extent that Sunnya ultimately seeks an account of benefits or gains, it will be sufficient for Sunnya to show that each benefit or gain would not have been received by Mr He and Ms Lu but for the breach fiduciary duty. In quantifying any such benefits or gains, it will be relevant to consider the nature and the period of time for which they were apt to endure. [4]

The 24 categories of documents in respect of which Sunnya seeks discovery orders against Mr He and Ms Lu are reproduced in the Schedule to these reasons.

Mr Zhu’s mere assertion that discovery of those categories is necessary in order for Sunnya to make an informed election carries no weight.

On the basis of the scope of the conduct that is the subject of the liability findings referred to above, having regard to the relationships between each of the corporate defendants and Mr He, Ms Lu and/or members of their family (as described at [2024] NSWSC 403 at [2]-[14]), and having regard to the principles referred to at [17] above, and after hearing the submissions made on behalf of Sunnya and on behalf of Mr He and Ms Lu at the hearing on 10 December 2025, I consider that the following categories of documents are relevant to the elections to be made by Sunnya, and that discovery of the documents is necessary for Sunnya to make an informed election:

At the hearing of the discovery application, Sunnya did not oppose the deletion of the words “records and” from categories 5 and 6. Sunnya accepted that sub-category (a) in each of categories 15-17 and 22-24 should be limited to Australian or New Zealand-manufactured Neurio-branded products, and that sub-category (b) within each of categories 15-17 and 22-24 should be deleted. Sunnya also accepted that the time period stipulated in categories 13-14 and 20-21 should be limited to the period from October 2022 (not April 2021) to the date of discovery.

Counsel for Mr He and Ms Lu submitted that categories 1-6 and 7-10 should not be included in the scope of the discovery orders because they would require disclosure of information about income and monetary benefits received from all sources over a four- or five-year period, and would not shed any light on whether Mr He and Ms Lu had benefitted from their breaches of duty. I reject that submission. I accept that the taxation returns and bank statements in those categories will not, by themselves, enable Sunnya to identify any benefits received directly from the breaches of fiduciary duty but, together with the other documents to be discovered, they form part of a whole picture within which Sunnya will be able to cross-check information and draw certain inferences in order to ascertain the likely nature and extent of any benefits received from the breaches of duty and make an informed choice between the remedies of compensation and an account of profits.

Relevantly to the present application, GABT has been held to have:

In respect of each of those liability findings, GABT has been ordered to pay compensation to Sunnya, or account to Sunnya for any benefit or gain obtained, at the election of Sunnya.

In addition, as GABT was held to have acted in concert with Mr He and Ms Lu in relation to the conduct that is the subject of the Neurio/NRIO findings, it has been declared that GABT is jointly and severally liable with Mr He and Ms Lu to either pay compensation to Sunnya or to account to Sunnya for any benefit or gain derived by Mr He and Ms Lu from those breaches of fiduciary duty, at Sunnya’s election.

The 42 categories of documents in respect of which Sunnya seeks discovery orders against GABT are reproduced in the Schedule to these reasons.

Again, Mr Zhu’s mere assertion that discovery of those categories is necessary in order for Sunnya to make an informed election carries no weight.

On the basis of the scope of the conduct that it is the subject of the liability findings against GABT referred to above, having regard to the relationships between GABT and Mr He, Ms Lu and/or members of their family, and having regard to the principles referred to at [17] above, I consider that those categories of documents are relevant to the elections to be made by Sunnya, and that discovery of the documents is necessary for Sunnya to make an informed election, subject to the following exceptions and qualifications:

In addition to the exceptions listed above, I note that many of the discovery categories are expressed in terms which include Chinese characters, which have not been translated for the Court. Those characters are excluded from the description of the categories of documents for discovery by GABT. It will be open to Sunnya to serve on GABT a certified translation of the discovery orders at the same time as serving the orders expressed in the English language.

I have arrived at these decisions after considering Sunnya’s written submissions received on 17 December 2025. As I have already mentioned, GABT did not appear at the hearing of the discovery motion and did not subsequently make any written submissions.

Relevantly to the present application, GNT has been held to have:

In respect of each of those liability findings, GNT has been ordered to pay compensation to Sunnya, or account to Sunnya for any benefit or gain obtained, at the election of Sunnya.

The 40 categories of documents in respect of which Sunnya seeks discovery orders against GNT are reproduced in the Schedule to these reasons.

Again, Mr Zhu’s mere assertion that discovery of those categories is necessary in order for Sunnya to make an informed election carries no weight.

On the basis of the scope of the conduct that it is the subject of the liability findings against GNT referred to above, having regard to the relationships between GNT and Mr He, Ms Lu and/or members of their family, and having regard to the principles referred to at [17] above, I consider that those categories of documents are relevant to the elections to be made by Sunnya, and that discovery of the documents is necessary for Sunnya to make an informed election, subject to the following exceptions and qualifications:

In addition to the exceptions listed above, I note that many of the discovery categories are expressed in terms which include Chinese characters, which have not been translated for the Court. Those characters are excluded from the description of the categories of documents for discovery by GNT. It will be open to Sunnya to serve on GNT a certified translation of the discovery orders at the same time as serving the orders expressed in the English language.

I have arrived at these decisions after considering Sunnya’s written submissions received on 17 December 2025. GNT did not appear at the hearing of the discovery motion and did not subsequently make any written submissions.

Relevantly to the present application, Supermega and Megadairy have been held to have:

In respect of each of those liability findings, Supermega and Megadairy have been ordered to pay compensation to Sunnya, or account to Sunnya for any benefit or gain obtained, at the election of Sunnya.

The 16 categories of documents in respect of which Sunnya seeks discovery orders against Supermega and Megadairy are reproduced in the Schedule to these reasons.

Again, Mr Zhu’s mere assertion that discovery of those categories is necessary in order for Sunnya to make an informed election carries no weight.

On the basis of the scope of the conduct that it is the subject of the liability findings against Supermega and Megadairy referred to above, and having regard to the principles referred to at [17] above, I consider that those categories of documents are relevant to the elections to be made by Sunnya, and that discovery of the documents is necessary for Sunnya to make an informed election, subject to the following exceptions and qualifications:

In addition to the exceptions listed above, I note that many of the discovery categories are expressed in terms which include Chinese characters, which have not been translated for the Court. Those characters are excluded from the description of the categories of documents for discovery by Supermega and Megadairy.

I have arrived at these decisions after considering Sunnya’s written submissions received on 17 December 2025. As I have already mentioned, Supermega and Megadairy did not appear and the hearing of the discovery motion on 10 December 2025 and did not take up the opportunity to make written submissions about the proposed discovery categories after that hearing. Supermega and Megdairy’s written submissions were directed instead to their contentions that the discovery motion should be dismissed or stayed insofar as Sunnya sought orders for discovery against them.

It was submitted on behalf of Supermega and Megadairy that Sunnya’s application for discovery orders against them should be dismissed because Sunnya would not be entitled to apply to a New Zealand court for interim relief in support of any discovery orders made by this Court in these proceedings: see NZ Trans-Tasman Act, s 31. Curiously, it was submitted that Sunnya would “likely and inevitably” attempt to enforce any discovery orders made by this Court in New Zealand, despite the provisions of s 31 of the NZ Trans-Tasman Act. It was submitted that this would result in the unnecessary incurring of costs by Supermega and Megadairy in New Zealand, and that Sunnya’s application for discovery orders against them was therefore an abuse of process.

I reject those submissions. Supermega and Megadairy are subject to the jurisdiction of this Court, having been served and entered appearances in these proceedings, and having actively participated in the hearings that resulted in the liability judgments against them at trial and on appeal. [5] Any wilful non-compliance by Supermega and Megadairy with discovery orders made by this Court may constitute contempt of court for which they may be liable to punishment by this Court. It is not “likely” or “inevitable” that Sunnya will seek relief from a New Zealand court in aid of enforcement of discovery orders made by this Court. On the contrary, s 31 of the NZ Trans-Tasman Act is one reason why Sunnya would be unlikely to do so. Sunnya’s application for discovery orders against Supermega and Megadairy in these proceedings in which they have been held to have knowingly assisted breaches of fiduciary duties by two directors of Sunnya and issues of quantum remain to be determined, is entirely consistent with the principles referred to at [5] above. The application is not an abuse of process.

It was further submitted on behalf of Supermega and Megadairy that the balance of these proceedings, including the discovery application, should be stayed as against Supermega and Megadairy pending the outcome of proceedings in the High Court of New Zealand, which Supermega and Megadairy described as proceedings to “set aside the liability judgments” of this Court and the Court of Appeal under s 61 of the NZ Trans-Tasman Act. Those proceedings have been heard and judgment is reserved. Supermega and Megadairy presently expect that judgment will be delivered in about March 2026. They submitted that such a stay should be granted because: “If the Australian liability judgments are set aside in New Zealand … then all proceedings in NSW against the NZ Parties should naturally fall away as it would no longer be an appropriate forum to determine the intellectual property disputes between [Sunnya] and the NZ Parties.” They referred to the “clearly inappropriate forum test” that governs a stay of local proceedings in favour of a foreign forum, namely that “a stay should be granted if the local court is a clearly inappropriate forum which will be the case if continuation of the proceedings in that court would be oppressive, in the sense of ‘seriously and unfairly burdensome, prejudicial or damaging’, or, vexatious, in the sense of ‘productive of serious and unjustified trouble and harassment’.” [6]

I reject those submissions, which misstate the potential outcome of the proceedings in the High Court of New Zealand, and the nature of the proceedings in this Court.

The proceedings in the High Court of New Zealand are proceedings in which the NZ Parties have applied to set aside the registration in New Zealand of the liability judgments of this Court and the Court of Appeal under s 61(2)(c) of the NZ Trans-Tasman Act. If the NZ Parties succeed in setting aside the registration of those judgments in New Zealand, they will remain judgments of this Court.

As I have already explained, the proceedings in this Court are a dispute about breaches of fiduciary duty by directors of Sunnya. Those directors have been found to have breached their fiduciary duties in several respects, and Supermega and Megadairy have been found to have knowingly assisted some of those breaches. The submissions made on behalf of Supermega and Megadairy do not identify any reason why this Court would become a clearly inappropriate forum to hear and determine the outstanding dispute in these proceedings about the quantum of equitable compensation they must pay or the quantum of profits for which they must account as a consequence of their knowing assistance, if the High Court of New Zealand sets aside the registration in New Zealand of the liability judgments of this Court and the Court of Appeal under s 61(2)(c) of the NZ Trans-Tasman Act.

Finally, it was submitted on behalf of Supermega and Megadairy that this Court should not make any discovery orders against them without first hearing their motion for a stay of these proceedings (including Sunnya’s discovery motion) pending the determination of the proceedings in the High Court of New Zealand.

I reject that submission.

Supermega and Megadairy were on notice of Sunnya’s discovery motion from at least 22 August 2025 when directions were first made to facilitate the filing and hearing of the motion. Supermega and Megadairy informed the Court on that occasion that the outcome of the proceedings they had commenced in the High Court of New Zealand, once known, may affect what should happen with Sunnya’s discovery motion. In order to accommodate that view held by Supermega and Megadairy, and without entertaining any debate about the matter at that time, they were granted to liberty to apply to for any variation that they might wish to seek to the directions for the discovery motion following the determination of those proceedings in New Zealand.

At a further directions hearing on 24 November 2025, Supermega and Megadairy suggested for the first time that the discovery motion should not proceed until their New Zealand proceedings had been determined. They were informed that they would need to formally apply for a stay if they wished to press that contention.

Supermega and Megadairy took no steps to apply for a stay until the day before the hearing of Sunnya’s discovery motion, when their solicitor sent an unfiled notice of motion for a stay by email to my Associate, and advising that he had no instructions to appear at the hearing of the discovery motion (but not seeking leave to be excused).

There was no appearance for Supermega and Megadairy at the hearing of the discovery motion on 10 December 2025. Their notice of motion for a stay was subsequently filed on 12 December 2025, but they took no steps to have that stay motion listed for hearing, choosing instead to seek to prosecute it by the written submissions referred to above in opposition to Sunnya’s discovery motion.

Supermega and Megadairy have offered no explanation to this Court for their delay in filing their notice of motion for a stay, or for their subsequent conduct in relation to it. The submissions they have made in support of the stay motion (in the context of opposing Sunnya’s discovery motion) have been rejected for the reasons explained above.

In my opinion, in all of those circumstances, it would be contrary to s 56 of the Civil Procedure Act 2005 (NSW) to defer the hearing of Sunnya’s discovery motion pending a hearing of Supermega’s and Megadairy’s motion for a stay.

Relevantly to the present application, Sunlife has been found to have knowingly assisted the breaches of fiduciary duty by Mr He and Ms Lu that are the subject of the Neurio/NRIO findings in the period from May 2023 by participating in the marketing and sale of Neurio/NRIO branded formulated milk powder products in China.

The 28 categories of documents in respect of which Sunnya seeks discovery orders against Sunlife are reproduced in the Schedule to these reasons.

Again, Mr Zhu’s mere assertion that discovery of those categories is necessary in order for Sunnya to make an informed election carries no weight.

On the basis of the scope of the conduct that it is the subject of the liability finding against Sunlife, having regard to the relationships between Sunlife and Mr He, Ms Lu and/or members of their family, and having regard to the principles referred to at [17] above, I consider that those categories of documents are relevant to the elections to be made by Sunnya, and that discovery of the documents is necessary for Sunnya to make an informed election, subject to the following exceptions and qualifications:

In addition to the exceptions listed above, I note that some of the discovery categories are expressed in terms which include Chinese characters, which have not been translated for the Court. Those characters are excluded from the description of the categories of documents for discovery by Sunlife.

I have arrived at these decisions after considering Sunnya’s written submissions received on 17 December 2025. Sunlife did not appear at the hearing of the discovery motion and did not subsequently make any written submissions.

Orders for the discovery of those categories of documents by Mr He and Ms Lu, GABT, GNT, Supermega, Megadairy and Sunlife are likely to require the production of a significant volume of documents. That reflects the number of breaches of fiduciary duty that Mr He and Ms Lu have been held to have committed and in which the other defendants have knowingly assisted, the period of time over which those breaches occurred as part of a series of co-ordinated actions, and the number of entities which stood to benefit from those co-ordinated actions in consideration for which they may have conferred benefits directly or indirectly and Mr He and/or Ms Lu.

Mr Zhu gave some very general evidence attempting to estimate the likely time and cost involved for the defendants in complying with the discovery orders sought by Sunnya against each of the defendants. Mr Zhu’s evidence does not rise higher than guesswork without any understanding of the extent to which the documents sought exist and, if so, the manner in which they have been stored by the defendants and the steps that the defendants would need to take to collate, review and discover them. That may be the best that Mr Zhu was able to do in the circumstances, but the evidence carries little, if any, weight. I consider that the costs are likely to be higher than estimated by Mr Zhu, but I do not have the benefit of any evidence from any of the defendants that would assist me in estimating those costs. Importantly, none of the defendants submitted that orders for discovery of the categories of documents sought by Sunnya would be oppressive, with the exception of Supermega and Megadairy which submitted that any discovery would be oppressive. Those submissions have been rejected for the reasons explained above.

For all of the foregoing reasons, the orders of the Court are as follows: