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  4. Goldenwater LDL Pty Ltd v Kin Sun Chan - [2020] QSC 358

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Goldenwater LDL Pty Ltd v Kin Sun Chan[2020] QSC 358

Goldenwater LDL Pty Ltd v Kin Sun Chan[2020] QSC 358

SUPREME COURT OF QUEENSLAND

CITATION:

Goldenwater LDL Pty Ltd & Ors v Kin Sun Chan & Ors [2020] QSC 358

PARTIES:

GOLDENWATER LDL PTY LTD ACN 166 820 711 AS TRUSTEE FOR THE LDL FAMILY FUND TRUST

(first plaintiff)

and

YUE LIU (ALSO KNOWN AS LINDA LIU)

(second plaintiff)

and

XIANHUI MENG

(third plaintiff)

v

KIN SUN CHAN (ALSO KNOWN AS STANLEY KIN CHAN)

(first defendant)

and

LSA613 TERRITORY FUND PTY LTD ACN165799342 IN ITS OWN CAPACITY AND AS TRUSTEE FOR THE LSA613 TERRITORY TRUST

(second defendant)

and

IWHL PTY LTD ACN 166 797 146 AS TRUSTEE FOR THE HAPPYLIFE FUND TRUST

(third defendant)

and

PROSPER HOLDINGS (SCH) PTY LTD ACN601856491

(fourth defendant)

and

STANDOK CAPITAL HOLDINGS PTY LTD ACN145740521

(fifth defendant)

and

RICHES FOCUS HOLDINGS PTY LTD ACN600150507

(sixth defendant)

and

STANDOAK WINES PTY LTD ACN 160 021 965

(seventh defendant)

and

BUBSC PTY LTD ACN 115 280 530

(eighth defendant)

and

HUGO GLOBAL PTY LTD ACN 052 408 063

(ninth defendant)

and

MAX GAINS PTY LTD ACN 166 575 542 AS TRUSTEE FOR THE MAX GAINS TRUST

(tenth defendant)

and

PROSPER INVESTMENTS (SCH) PTY LTD ACN601856580

(eleventh defendant)

FILE NO:

10409/18

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

2 December 2020

DELIVERED AT:

Brisbane

HEARING DATE:

8 October 2020

JUDGE:

Flanagan J

ORDER:

1.The defendants’ applications filed 15 September 2020 are dismissed.

2.The Court will hear the parties as to costs.

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – STRIKING OUT – GENERALLY – where the plaintiffs alleged that the first defendant engaged in fraud and acted in breach of fiduciary duties in relation to certain real property transactions – where the plaintiffs pleaded facts concerning conversations conducted in Mandarin between the second and third plaintiffs and the first defendant – where the plaintiffs pleaded in English the effect of the relevant conversations – where the defendants sought those paragraphs of the pleading to be struck out on the basis that the plaintiffs are obliged to plead the words spoken in Mandarin together with an English translation – whether the relevant paragraphs of the pleading should be struck out on the basis of failure to disclose a reasonable cause of action or tendency to prejudice or delay the fair trial of the proceeding

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DISCOVERY AND INTERROGATORIES – DISCOVERY AND INSPECTION OF DOCUMENTS – DISCOVERY OF DOCUMENTS – GENERALLY – where the defendants, by a notice of non‑party disclosure, sought production of immigration and travel records in respect of the second and third plaintiffs and the first defendant – where the plaintiffs were granted leave to file an objection to the notice which operated as a stay – where the defendants brought an application to lift the stay – where the plaintiffs opposed the lifting of the stay on the basis that the documents lacked relevance to the proceedings and that there is a reasonably simple and inexpensive way of proving the matter sought to be proved by the document – whether the stay of the notice of non-party disclosure should be lifted

Uniform Civil Procedure Rules 1999 (Qld) r 149(1), r 150, r152, r 171, r 242, r 243, r 247

Bert & Ors v Red 5 Limited & Anor [2017] QCA 233, cited

Brazendale v Tasmaid Foods Pty Ltd (Unreported, Federal Court, 31 October 1991), cited

Brosnan v Katke [2015] FCA 203, cited

Cassimatis & Anor v Axis Specialty Europe Ltd & Anor [2013] QSC 237, cited

Magill v Magill (2006) 226 CLR 551, cited

Watson v Foxman (1995) 49 NSWLR 315, cited

COUNSEL:

D D Keane, with J K Carter for the applicants/defendants

K E Downes QC, with P A Ahern for the respondents/plaintiffs

SOLICITORS:

MHL Legal for the applicants/defendants

Potts Lawyers for the respondents/plaintiffs

  1. [1]
    The defendants bring two applications. The first is that, pursuant to r 171 of the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”), 21 paragraphs of the fourth amended statement of claim filed 19 June 2020 be struck out. The second application, brought pursuant to r 247(1) of the UCPR, is that the stay of the notice of non‑party disclosure addressed to the Proper Officer, Department of Home Affairs, dated 4September 2020 be lifted.

The strike out application

  1. [2]
    The first defendant, Mr Chan, is a real estate agent. The second to eleventh defendants are companies associated with him. Mr Chan was born in China and became an Australian citizen in 2004. The second plaintiff, Ms Liu, and third plaintiff, Mr Meng, are Chinese nationals and are married. It is pleaded that they are unable to read, write or speak English.[1] Ms Liu moved to Australia in 2013 with her two children. She is the sole director and shareholder of the first plaintiff, Goldenwater.
  2. [3]
    The primary allegation against Mr Chan is that he was provided with money from the plaintiffs for a specific purpose associated with the acquisition of real properties in Queensland but that he either did not carry out that purpose or, by reason of statements made by him to MsLiu and Mr Meng, was overpaid. The plaintiffs’ case is that MrChan purported to assist Ms Liu and Goldenwater with real estate purchases and in doing so, engaged in fraud and acted in breach of his fiduciary duties as agent. Each of Mr Chan’s associated companies is alleged to have received a benefit from his conduct. The relevant real property transactions occurred between 2013 and 2015.[2] In each of the relevant paragraphs sought to be struck out, the plaintiffs have pleaded facts concerning alleged conversations between MsLiu and Mr Chan, and Mr Meng and Mr Chan. These conversations were conducted between the parties in Mandarin and the relevant paragraphs plead the effect of these conversations in English.
  3. [4]
    The strike out application is premised on the proposition that, in order to deliver a pleading that “state[s] with sufficient clarity the case that must be met”, [3] the plaintiffs are required to plead the precise words alleged to have been spoken in Mandarin together with the translation of those words into English, and “not merely the conclusions of fact for which [the plaintiffs] contend by way of the alleged misrepresentations”.[4] That is, the defendants assert that when alleging fraud (specifically deceit) the plaintiffs should plead the words spoken in Mandarin with an English translation, rather than pleading in English the effect of the words spoken. The defendants submit that without a pleading of the precise words, they are unable to plead.[5]
  4. [5]
    There is no rule under the UCPR that expressly requires, in a deceit case, the actual words spoken to be pleaded in the original language with an English translation. The defendants accept that there is no authority directly on point which supports this proposition.[6] Rather, the defendants rely on a combination of rr 149(1)(b), 150(1)(f) and (j), 150(2) and 152 of the UCPR. Rule 149(1)(b) requires that each pleading must contain a statement of all the material facts on which the party relies but not the evidence by which the facts are to be proved. Rule 150(1)(f) and (j) requires that fraud and misrepresentation must be specifically pleaded. Rule 150(2) provides that any fact from which any matters mentioned in sub‑rule (1) is claimed to be an inference must be specifically pleaded. Rule 152 provides:

“Unless precise words are material, a pleading may state the effect of spoken words or a document as briefly as possible without setting out all of the spoken words or document.”

  1. [6]
    For the reasons which follow, I do not accept that any of the impugned paragraphs are amenable to be struck out on the basis that the conversations are not pleaded in the original language (together with an English translation).
  2. [7]
    The paragraphs of the fourth amended statement of claim sought to be struck out are 16, 18, 19, 29, 30, 36, 72, 73, 117, 149, 194, 196, 203, 205, 206, 213(b)-(d), 214, 281, 282, 286 and 307.
  3. [8]
    These paragraphs fall within two categories. Paragraphs 16, 18, 19, 194, 203, 205 and 206 do not plead material facts in relation to a cause of action in deceit against any of the defendants and are pleaded for context. The balance of the paragraphs are pleaded as material facts in relation to a cause of action in deceit. For the purposes of dealing with the strike out application, it is sufficient to set out examples of the pleading in each category.
  4. [9]
    Paragraphs 16 and 18 fall within the first category. Paragraphs 15 to 18 of the fourth amended statement of claim plead as follows:

“ASSISTANCE BY CHAN TO OBTAIN AUSTRALIAN VISA

  1. In or about 2011, Liu and Meng decided that Liu would emigrate from China to Australia along with their two children, and Liu informed Chan of that fact.
  1. In or about September or October 2011, during a conversation with Liu, Chan:
  1. (a)
    offered to assist with the migration process;
  1. (b)
    said to Liu words to the effect that she should apply for a ‘163 visa’ for Meng, herself and their children, that this was the fastest visa to obtain and that it required an investment of AUD$700,000 into Australia.
  1. Liu and Meng decided to take up Chan’s offer of assistance with the migration process, to apply for a 163 visa and to invest AUD$700,000.
  1. In or about November 2011 or December 2011, Liu informed Chan of their decision.”
  1. [10]
    As to the second category, the pleading identifies a number of real property transactions that are the subject of alleged false representations made by Chan. These transactions and the relevant false representations are referred to in the pleading as:
  • “2107 Oracle” and “first 2107 Oracle representation” which relate to a unit in the Oracle building at Broadbeach (paragraphs 28 to 71).
  • “Robina Property” and “Robina representation” which concern a shop in Robina close to the Robina train station and the Robina Town Centre (paragraphs 72 to 106).
  • “21904 Oracle and 22407 Oracle” and “Oracle price representation” which concern the purchase of two further units in the Oracle building (paragraphs 117 to 144).
  • “Merrimac” and “Merrimac representations” which relate to a property at Lakelands Drive, Merrimac (paragraphs 145 to 191).
  • “Clear Island Property” and “Clear Island representation” which concern a property at Istana View, Clear Island Waters (paragraphs 192 to 212).
  • “Carrara” and “first”, “second” and “third” “Carrara representation” which relate to a property located at Maryland Avenue, Carrara (paragraphs 213 to 280).
  • “Coco’s” and “first” and “second” “Coco’s representation” which relate to a shopping centre at Manchester Road, Carrara (paragraphs 281 to 326).
  1. [11]
    By way of an example in relation to 21904 and 22407 Oracle, the defendants seek to strike out paragraph 117 which alleges a conversation between Mr Chan and Ms Liu. Paragraphs 117 to 125 of the amended statement of claim plead:

“117.Further and alternatively, in or about early November 2013:

  1. (a)
    Chan told Liu words to the effect that:
  1. (i)
    two further units in the Oracle building were for sale, being unit 21904 and unit 22407 (respectively, 21904 Oracle and 22407 Oracle);
  1. (ii)
    the purchase price for each of 21904 Oracle and 22407 Oracle was over $1,000,000;
  1. (iii)
    that $2,293,000 in total would be needed to purchase 21904 Oracle and 22407 Oracle;
  1. (iv)
    Liu should purchase 21904 Oracle and 22407 Oracle now as the prices for the units would go up in the future;
  1. (b)
    Liu decided to purchase 21904 Oracle and 22407 Oracle, and said words to Chan to that effect; and
  1. (c)
    Chan said to Liu words to the effect that he would assist Liu to purchase 21904 Oracle and 22407 Oracle, and Liu agreed to this.
  1. In the premises of paragraphs 4(d) and 117:
  1. (a)
    Liu appointed Chan as her agent, and Chan accepted that appointment, for the purposes of arranging the acquisition by Liu of 21904 Oracle and 22407 Oracle;
  1. (b)
    Chan owed a fiduciary duty to Liu to not, except with her informed consent, place himself in a position where there was or may be a conflict between his duty as a fiduciary and his own interest or a duty to a third party;
  1. (c)
    Chan owed a fiduciary duty to Liu to not make a profit out of their fiduciary relationship except with her informed consent.
  1. On 11 November 2013, Chan caused $2,293,000 to be paid from Liu’s bank account to BUBSC (the Oracle Funds).

Particulars

The best particulars which can be provided prior to interlocutory steps are as follows:

  1. (a)
    Chan took Liu to the branch of the HSBC bank located at Southport, Queensland on 11 November 2013;
  1. (b)
    Chan spoke to the bank staff but Liu did not understand what he said to them;
  1. (c)
    Chan showed his mobile telephone or small notepad to the bank teller;
  1. (d)
    Chan asked Liu to enter her PIN in the EFTPOS machine, which she did;
  1. (e)
    the amount of $2,293,000 was transferred from Liu’s personal bank account to BUBSC on this date.
  1. As at 11 November 2013, Chan knew (as was the case) but did not disclose to Liu that:
  1. (a)
    the purchase price of 21904 Oracle was $820,000;
  1. (b)
    the purchase price of 22407 Oracle was $938,000;
  1. (c)
    further and alternatively, that the amount of $2,293,000 exceeded that required to enable the purchase of 21904 Oracle and 22407 Oracle to be completed.

Particulars

That Chan had the pleaded knowledge is to be inferred from the matters pleaded in the next two paragraphs below, including that the date of each of the contracts was only two days after the date of the transfer of the Oracle Funds, and the fact that each contract referred to in those paragraphs bore Chan’s name as the real estate agent, and so it is to be inferred that he was aware of the purchase price of each of the properties by reason of those facts.

  1. By a contract dated 13 November 2013 between South Sky and Liu, South Sky agreed to sell, and Liu agreed to buy 21904 Oracle (more particularly described as Lot 21904, SP 194241, Local Government: Gold Coast, Title Reference 50822137), for $820,000 (21904 Oracle Contract).
  1. By a contract dated 13 November 2013 between South Sky and Liu, South Sky agreed to sell, and Liu agreed to buy 22407 Oracle (more particularly described as Lot 22407, SP 194241, Local Government: Gold Coast, Title Reference 50822175), for $938,000 (22407 Oracle Contract).
  1. On 9 January 2014:
  1. (a)
    the 21904 Oracle Contract and the 22407 Oracle Contract settled;
  1. (b)
    $781,037.95 was paid on Liu’s behalf to acquire the legal interest in 21904 Oracle;
  1. (c)
    $892,469.62 was paid on Liu’s behalf to acquire the legal interest in 22407 Oracle.
  1. By his conduct pleaded in paragraphs 117, 119 and 120 above, Chan represented to Liu that $2,293,000 in total would be needed to be paid by her to purchase 21904 Oracle and 22407 Oracle and that the transfer of the Oracle Funds was necessary to enable Liu to become the owner of 21904 Oracle and 22407 Oracle (Oracle price representation).
  1. In the premises of paragraph 120, Chan made the Oracle price representation knowing it to be false (as was the case) and intending to induce Liu to rely on it.”
  1. [12]
    The alleged false representation is that Mr Chan inflated the total purchase price for the two Oracle units. This is consistent with other allegations in the pleading that MrChan, in relation to a number of the property transactions:
    1. (a)
      told Ms Liu or Mr Meng that the purchase price of a property was higher than it actually was, with the result that more money was transferred by Ms Liu, Goldenwater or Mr Meng than was required for the acquisition; and/or
    2. (b)
      agreed to assist Ms Liu to purchase a property (or an interest in property) in her name or in Goldenwater’s name, but then acquired it in the name of one of his associated companies.
  2. [13]
    In the amended defence, the applicants plead in response to each of the paragraphs which are the subject of the strike out application including, for example, paragraph 117 (set out above) as follows:

“(a)having regard to the nature and gravity of the matters alleged in the 4ASOC, the precise words spoken are material;

  1. (b)
    in the premises, rule 152 of the UCPR does not apply so as to permit the plaintiffs to state merely the effect of spoken words without setting out all of the spoken words.”
  1. [14]
    The defendants further plead that “unless and until the plaintiffs set out the precise words alleged to have been spoken, they are unable to plead to” the particular paragraph.
  2. [15]
    The defendants, in seeking to strike out the relevant paragraphs, rely on sub‑rules 171(1)(a) and (b) of the UCPR. These sub-rules give the Court the discretion to strike out all or part of the pleading if it discloses no reasonable cause of action or has a tendency to prejudice or delay the fair trial of the proceeding. The power to strike out a pleading will only be exercised in a “plain and obvious case”,[7] and it is to be exercised with “exceptional caution”.[8]
  3. [16]
    For the purposes of r 171(1)(a), the relevant cause of action in the present case is one of deceit. The elements of the tort of deceit were described in Magill v Magill[9] as follows:

“Where a defendant makes a false representation, knowing it to be untrue, or being reckless as whether it is true, and intends that the claimant should act in reliance on it, then in so far as the latter does so and suffers loss the defendant is liable for that loss.”

  1. [17]
    The first element of the tort of deceit is that the defendant makes a false representation.[10] The making of a false representation has also been referred to as there being a “misstatement of an existing fact”[11] or “a representation of fact made by words, or, it may be, by conduct”.[12]
  2. [18]
    The defendants rely on the statement of Greenwood J in Brosnan v Katke,[13] where his Honour observed:

“The reason it is important to plead the actual words used in an express representation case (and thus a mis-representation cause of action based upon prohibitions upon misleading conduct) is that the words constituting the express representations actually matter in determining what representations were made and, in context, the meaning to be attributed to the particular words. There is likely to be a real difference of understanding between a contention about something someone actually said and a contention that someone said something to a certain effect, as they understood it.”

  1. [19]
    To similar effect is the statement of McClelland CJ in Eq, in Watson v Foxman[14] where, in the context of a misleading and deceptive conduct claim, his Honour stated:

“Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction … processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.”

  1. [20]
    The observations of Greenwood J and McLelland CJ in Eq were made in the context of the quality of evidence to be given by a witness in establishing a misrepresentation. Neither case involved a strike out application or consideration of whether representations spoken in a language other than English should be pleaded in the original language. Rule 149(1)(b) requires each pleading to contain a statement of all the material facts on which the party relies but not the evidence by which the facts are to be proved. Rule 5(2) of the UCPR provides that the rules are to be applied by the courts with the objective of avoiding undue delay, expense and technicality and facilitating the purpose of the rules. That purpose is to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum of expense. The defendants’ submission that all pleaded conversations between Mr Chan and MsLiu or Mr Chan and Mr Meng must be pleaded in Mandarin (together with an English translation) is not consistent with r 149(1)(b) as construed in accordance with the philosophy set out in r 5. The application of the defendants’ proposition to the pleading would, in my view, result in the plaintiffs being required to plead evidence rather than material facts.
  2. [21]
    The defendants, however, rely on r 152 of the UCPR on the basis that in a deceit case, the precise words that are spoken are material. What is presently pleaded by the plaintiffs is not the words actually spoken in Mandarin, but rather their effect in English. The defendants submit that the proviso to r 152 contemplates that there must be some cases in which “precise words are material”, otherwise the proviso would have no work to do:

“It cannot simply refer to defamation actions, where it is well settled that precise words are indeed material,[15] because if the rule-making authority had intended the proviso to be limited in that way, then it could have said so. It did not. To the contrary, the proviso as framed requires a consideration of the particular case to determine whether, consistent with the rule 5 philosophy, precise words rather than mere effect is necessary.”[16]

  1. [22]
    In their written submissions, the defendants detail the experience of the Hong Kong Courts and the difficulties experienced in translating English legal concepts into Chinese.[17] While it may be accepted that in a number of the pleaded conversations, legal terms such as “family trust”, “ownership” and “permanent resident” are used, the deceit case pleaded by the plaintiffs concerns alleged false representations as to the purchase price of properties and what entity would hold a particular property. These are representations of fact.
  2. [23]
    In Brazendale v Tasmaid Foods Pty Ltd,[18] Northrop J set out the purpose of a similar rule to r 152:

“The effect of O11 r 4 is quite clear. It is designed to overcome the problems that had arisen in the past of pleaders adopting a very prolix form of pleading by copying at great length the whole contents of documents, and even, for that matter, conversations, in the pleading itself. The rule was designed to avoid that prolixity and to compel a pleader to state the effect of a document or, under our rules, the spoken words, without referring to the precise terms of them or setting them out in full …”[19]

  1. [24]
    In a deceit case, a material fact that must be pleaded is the false representation. This does not mean that the precise words spoken in Mandarin in each of the pleaded conversations between Mr Chan and Ms Liu or Mr Chan and Mr Meng are material for the purposes of r 152. That proposition is inconsistent with the approach taken by Sofronoff P in Bert & Ors v Red 5 Limited & Anor:[20]

“Mr Bert made an allegation of actual dishonesty against Mr Jackson. Even in cases of innocent misrepresentation it is imperative, as Applegarth J observed, that a plaintiff proves what was said with a reasonable degree of precision. A plaintiff is not obliged to prove the precise words which were used. In R v Noble Pincus JA said:

‘There is, in my respectful opinion, no rule that a witness who does not claim to remember the words spoken in a conversation must attempt to give it in direct speech, manufacturing a conversation from a recollection of its effect. Of course, the ideal is that the exact words be given, but it is so unlikely that [the witness] could have remembered anything other than the substance of the conversations that the judge plainly erred in attempting to have him give evidence using direct speech. The erroneous idea that people can accurately recall conversations in direct speech, long after their occurrence, appears to have been encouraged by practices observed by some magistrates and police, in days gone by. That it is erroneous can be easily demonstrated, if one tries to perform this feat oneself.’

Pincus JA quoted the following passage from Wigmore on Evidence:

‘The general rule, universally accepted, is therefore that the substance or effect of the actual words spoken will suffice, the witness stating this substance as best he can from the impression left upon his memory. He may give his “understanding” or “impression” as to the net meaning of the words heard.’” (citations omitted)

  1. [25]
    As correctly submitted by the plaintiffs, if a party alleging fraud does not need to prove the precise words which were used during a conversation, it cannot be correct that a party alleging fraud must plead the precise words of that conversation.[21] The plaintiffs submit that this is especially so where to do so would lead to the result that:
    1. (a)
      a party would almost certainly be prevented from pleading fraud at all if required to plead the precise words of conversations dating back as far as 2013 (as in this case); and
    2. (b)
      the party wishing to claim fraud would not have to prove the precise words at trial.[22]
  2. [26]
    In seeking to strike out the relevant paragraphs, the defendants also rely on r 171(1)(b) on the basis that the paragraphs have a tendency to prejudice or delay the fair trial of the proceeding. Rule 149(1)(c) is also relevant. It provides that each pleading must state specifically any matter that if not stated specifically may take another party by surprise. The defendants submit that “it is impossible to ascertain from the 4ASOC what it is alleged was said by Chan, or by what words the representations pleaded are alleged to have been made. In those circumstances, the allegations are pleaded at ‘too great a level of generality’ and, therefore, are embarrassing to the defendants.”[23]
  3. [27]
    The difficulty with this submission is that the defendants have already pleaded to similar allegations in the second amended statement of claim in a previous version of the defence. Annexed to the plaintiffs’ written submissions is a schedule which contains three columns: “Second Amended Statement of Claim”, “Defence” and “Fourth Amended Statement of Claim”. This schedule shows the similarity between the conversations pleaded in the second amended statement of claim with those pleaded in the fourth amended statement of claim. In the defence to the second amended statement of claim, the defendants were able to plead specifically to the alleged conversations. In most cases, this is to be contrasted with the amended defence to the fourth amended statement of claim, where the defendants plead and rely on r 152 of the UCPR. This is not in all cases. Paragraph 117 of the fourth amended statement of claim, which is set out above, was previously paragraph 104 of the second amended statement of claim. In paragraph 104 of the previous version of the defence, the defendants pleaded a positive case in response to the alleged conversation. A similar positive case is now pleaded by the defendants in paragraphs 374 to 379 of the amended defence, including Mr Chan’s version of his conversation with Ms Liu at paragraph 377.
  4. [28]
    As the defendants were previously able to plead to the alleged conversations, I do not accept that the impugned paragraphs of the fourth amended statement of claim have a tendency to prejudice or delay the fair trial of the proceeding, or that the pleading fails to specifically state matters so as not to take the defendants by surprise. This conclusion is strengthened by the fact that in relation to many of the real property transactions pleaded in the fourth amended statement of claim, the defendants have pleaded a positive case in the amended defence, raising an alternative factual scenario which contradicts the premise of the plaintiffs’ case.[24]

Application to lift a stay of the notice of non-party disclosure

  1. [29]
    By a notice of non-party disclosure dated 4 September 2020 directed to the Proper Officer, Department of Home Affairs, the defendants seek production of two categories of documents:
  1. all records, including records relating to the Australian visa status, applications for and grant or refusal of any temporary or permanent visa or other travel document, correspondence and electronic data in relation to Ms Liu and MrMeng (Category 1);
  1. from 2011 to present, international travel records, including dates of entry into and exit from Australia in relation to Ms Liu, Mr Meng and Mr Chan (Category2).
  1. [30]
    On 9 September 2020, Boddice J made orders by consent granting the plaintiffs leave under r 245(2) of the UCPR to object to the production of the documents sought by the defendants. The plaintiffs filed an objection which operated as a stay of the notice upon service.
  2. [31]
    The plaintiffs oppose the lifting of the stay on two grounds, namely:
    1. (a)
      the lack of relevance of the documents to the proceedings; and
    2. (b)
      that the defendants may not, pursuant to r 242(2) of the UCPR, require production of a document if there is available to them a reasonably simple and inexpensive way of proving the matter sought to be proved by the document.
  3. [32]
    The test under r 242(1)(a) in relation to a notice requiring non-party disclosure is that the document sought is directly relevant to an allegation in issue in the proceeding. Further, r 242(2) provides that the applicant may not require production of a document if there is available to the applicant another reasonably simple and inexpensive way of proving the matter sought to be proved by the document. Rule 243(1)(b) is also relevant as it provides that a notice of non-party disclosure must state the allegation in issue in the proceeding to which the document sought is directly relevant.
  4. [33]
    The term “directly relevant” means “something which tends to prove or disprove the allegation in issue”.[25] Rule 242 does not authorise a fishing expedition.[26] As to what constitutes a “fishing expedition”, Brownie AJA (with whom Spigelman CJ and Ipp AJA concurred) stated:

“[T]he opponents were not entitled to procure the issue of the subpoena for the purpose of fishing, that is, endeavouring not to obtain evidence to support their case, but to discover whether they had a case at all, or to discover the nature of the case of the defendant. In the language of Lord Wilberforce in [Air Canada v Secretary of State for Trade [1983] 2 AC 394] at 439 there must be something beyond speculation, some common ground for belief that takes the case beyond a mere fishing expedition.”[27]

The Category 1 documents

  1. [34]
    The notice specifies the following allegations in the fourth amended statement of claim as the allegations to which the documents sought are said to be directly relevant. It is convenient to group them as follows:
    1. (a)
      paragraphs 2(b), 3(b) and 4(f) of the statement of claim, which allege (respectively) that at all material times, the second plaintiff Ms Liu was unable to read, write or speak English; the third plaintiff Mr Meng was unable to read, write or speak English; and that the first defendant Mr Chan knew that Ms Liu and Mr Meng were unable to read, write or speak English;
    2. (b)
      paragraphs 15 and 17 of the statement of claim, which allege (respectively) that, in or about 2011, Ms Liu and Mr Meng decided that Ms Liu would emigrate from China to Australia along with their two children, and Ms Liu informed Mr Chan of that fact; and that Ms Liu and Mr Meng decided to take up Mr Chan’s offer of assistance with the migration process, to apply for a 163 visa and to invest AUD$700,000;
    3. (c)
      paragraphs 33(a), 77(a), 119(a), 159(a), 197(c), 222(a), 289(a) and 308(a) of the statement of claim, each of which alleges that on various dates between 10September 2013 and 21 July 2015, Mr Chan took Ms Liu to bank branches located at either Southport or Pacific Fair on the Gold Coast;
    4. (d)
      paragraphs 192 and 205, which allege that in or about 2014, on a date prior to 15 July 2014, Mr Chan took Ms Liu to inspect a property located at Clear Island Waters; and that on at least two occasions between in or about September 2014 to in or about late 2017, Mr Chan said to Ms Liu words to the effect that the Clear Island Property had been rented out;
    5. (e)
      paragraphs 196 and 199, which allege that in or about August 2014, Mr Chan spoke to Mr Meng by telephone and that induced by and in reliance upon a certain representation, on 15 August 2014, Mr Meng transferred an amount of money to a bank account held in Hong Kong, as instructed by Mr Chan;
    6. (f)
      paragraph 213, which alleges that in or about late August or early September 2014, Mr Chan took Ms Liu to a property located at Carrara.
  2. [35]
    The defendants assert that the Category 1 documents are directly relevant to the allegations in issue in the proceeding which concern whether Ms Liu and Mr Meng are able to read, write or speak English. This is because the legislative criteria for the subclass of visa sought by Ms Liu and Mr Meng includes English language proficiency.
  3. [36]
    There are a number of difficulties with the defendants’ application in respect of the Category 1 documents. The first is that, as is evident from the defendants’ strike out application, the relevant conversations between Mr Chan and Ms Liu or Mr Chan and Mr Meng were conducted in Mandarin, not English. Secondly, the notice of non‑party disclosure seeks, without any limitation as to time, all records in the Department’s possession relating to Ms Liu and Mr Meng’s Australian visa status. The events pleaded in the fourth amended statement of claim extend from September or October 2011 to about 21 July 2015. As such, the notice makes no attempt to limit the scope of the request to documents directly relevant to allegations in issue in the pleadings or even to any time period that may be relevant to those allegations. As observed by Jackson J in Cassimatis v Axis Specialty Europe Ltd:[28]

“… [i]t is concerning that a large number of documents could be caught by the notice, including documents that are not directly relevant. It is not consistent with the objective of UCPR 5 that more documents than are necessary should be required to be produced for proof of the issue raised …”

  1. [37]
    Whether Ms Liu or Mr Meng could establish some proficiency in English after July 2015 through to the date of the notice (4 September 2020) cannot be said to be directly relevant to any pleaded issue. Thirdly, the only visa referred to in the pleadings at paragraphs 15 to 18 (set out above) is a “163 visa”. An application for a subclass 163 visa had to be made before 1 July 2012.[29] As identified by the plaintiffs, there is no proper basis for the defendants to seek any documents about a 163 visa application beyond 1 July 2012.[30] Fourthly, there is no allegation in the fourth amended statement of claim that Mr Meng failed to understand Mr Chan speaking English to a third party. Fifthly, the issue of whether Ms Liu is proficient in English is raised in the pleaded context that Mr Chan would attend at a bank with her for the purposes of facilitating a transfer of money. For example, paragraph 33 of the fourth amended statement of claim pleads that Mr Chan took Ms Liu to the branch of the HSBC Bank located at Southport, Queensland on 10 September 2013 in respect of the 2107 Oracle transaction. It is further pleaded that Mr Chan spoke to the bank staff but Ms Liu did not understand what he said to them. The defendants have previously pleaded to this allegation in paragraph 40(c) of the original defence by denying that Mr Chan facilitated the transfer and positively asserting that the transfer was made by Ms Liu with the assistance of a Mandarin speaking employee of HSBC. In light of this allegation as previously pleaded by the defendants, it is not readily apparent how MsLiu’s proficiency in English as at 10 September 2013 is directly relevant.
  2. [38]
    For those reasons and given the width of the notice, I do not accept that the Category 1 documents sought from the Department are directly relevant to allegations in issue.

The Category 2 documents

  1. [39]
    The documents sought in this category are the travel records for Ms Liu, Mr Meng and Mr Chan. The defendants assert that these documents are directly relevant because paragraphs of the fourth amended statement of claim bring into issue the whereabouts of Ms Liu and Mr Chan.[31] This submission cannot be accepted. First, the fourth amended statement of claim pleads that Ms Liu was in Australia when certain events occurred between 10 September 2013 and 21 July 2015. There is no pleading in the amended defence that any of these allegations is denied because MsLiu was not in Australia on the date or during the period in question. Secondly, the travel documents sought by the notice are not limited in time. Thirdly, any travel documents concerning Mr Meng are entirely irrelevant. There is no allegation as to whether Mr Meng did or did not travel to Australia or whether he was or was not located in Australia at any particular point in time. For example, paragraph 196 of the fourth amended statement of claim in relation to the Clear Island Waters representation pleads that the conversation between Mr Chan and Mr Meng was by telephone.

There is another reasonably simple and inexpensive way of proving the matter

  1. [40]
    I have already set out r 242(2) of the UCPR above. In the present case, the current round of pleadings has not yet closed and disclosure has not occurred. The parties will be required, pursuant to r 211(1)(b) of the UCPR, to disclose such documents that are in their possession or power. The plaintiffs submit that the parties will only be in a position to assess whether further documents are genuinely required to prove or disprove allegations in issue after disclosure is complete.[32] The defendants submit, however, that it is not ordinarily within the scope of the obligation to give disclosure for the disclosing party to apply to a Government department to obtain possession, custody or control of documents which may pertain to the party’s own affairs and might have been created originally by the party, but which have passed from that party’s possession, custody or control to a Government department.[33] This submission entirely discounts the possibility of the plaintiffs disclosing copies of documents provided to the Department. Further, as observed above, the category of documents sought from the Department cannot be said to be directly relevant in circumstances where the notice is not relevantly limited as to time.

Disposition

  1. [41]
    1.The defendants’ applications filed 15 September 2020 are dismissed.
  1. The Court will hear the parties as to costs.

Footnotes

[1]Fourth Amended Statement of Claim, paras 2(b) and 3(b).

[2]Plaintiffs’ Submissions (Strike Out), para 9.

[3]Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279, 286 per Mason CJ and Gaudron J.

[4]Defendants’ Submissions (Strike Out), para 2.

[5]Affidavit of Lynn Hu filed 15 September 2020, Exhibit LH-A, page 2.

[6]T 1-17, line 42 to T 1-18, line 30.

[7]Davis v Commonwealth (1986) 68 ALR 18, 23 per Gibbs CJ.

[8]Morton v Vouris (1996) 21 ACSR 497, 513 per Sackville J; Plaintiffs’ Outline of Submissions, para 46.

[9](2006) 226 CLR 551, [59].

[10]Defendants’ Submissions (Strike Out), para 29 citing Magill v Magill (2006) 226 CLR 551, [114].

[11]Edgington v Fitzmaurice (1885) 29 Ch D 459, 483.

[12]Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205, 211.

[13][2015] FCA 203, [227].

[14](1995) 49 NSWLR 315 at 318-319.

[15]Monte v Mirror Newspapers Ltd [1979] 2 NSWLR 663, 676 per Hunt J.

[16]Defendants’ Submissions (Strike Out), para 67.

[17]Defendants’ Submissions (Strike Out), paras 72-76.

[18]Unreported, Federal Court, 31 October 1991.

[19]Rule 16.04 of the Federal Court Rules 2011 (Cth) is in similar terms to r 152 and provides:

“16.04 References to documents or spoken words

(1) A pleading that refers to a document or spoken words need only state the effect of the document or

words without including the terms of the document or the words themselves.

(2) However, if the words are material to the pleading, the pleading must include the words.”

[20][2017] QCA 233, [31]-[32].

[21]Plaintiffs’ Submissions (Strike Out), para 63.

[22]Plaintiffs’ Submissions (Strike Out), para 63.

[23]Defendants’ Submissions (Strike Out), para 53 citing Kernel Holdings Pty Ltd v Rothmans Pall Mall (Australia) Pty Ltd (1991) 217 ALR 171 per French J.

[24]Plaintiffs’ Submissions (Strike Out), para 67.

[25]Robson v REB Engineering Pty Ltd [1997] 2 Qd R 102, 105.

[26]Cassimatis & Anor v Axis Specialty Europe Ltd & Anor [2013] QSC 237, [13].

[27]NSW Commissioner of Police v Tuxford [2002] NSWCA 139, [27].

[28][2013] QSC 237, [27].

[29]Affidavit of Christopher Peter Korbel filed 6 October 2020, para 7.

[30]Plaintiffs’ Submissions (Lifting Stay), para 26.

[31]Defendants’ Submissions (Lifting Stay), para 15.

[32]Plaintiffs’ Submissions (Lifting Stay), para 42.

[33]Defendants’ Submissions (Lifting Stay), para 17 citing Attard v Hore [2002] QSC 437, [4]-[5] per Dutney J.

Close

Editorial Notes

  • Published Case Name:

    Goldenwater LDL Pty Ltd & Ors v Kin Sun Chan & Ors

  • Shortened Case Name:

    Goldenwater LDL Pty Ltd v Kin Sun Chan

  • MNC:

    [2020] QSC 358

  • Court:

    QSC

  • Judge(s):

    Flanagan J

  • Date:

    02 Dec 2020

  • White Star Case:

    Yes

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Air Canada v Secretary of State for Trade (1983) 2 AC 394
1 citation
Jump To
Cite 1 - (1983) 2 AC 394
Attard v Hore [2002] QSC 437
1 citation
Jump To
Cite 1 - [2002] QSC 437
Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279
1 citation
Jump To
Cite 1 - (1990) 169 CLR 279
Bert v Red 5 Ltd [2017] QCA 233
2 citations
Jump To
Cite 1 - [2017] QCA 233
Cite 2 - [2017] QCA 233
Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All E.R. 205
1 citation
Jump To
Cite 1 - [1941] 2 All E.R. 205
Brosnan v Katke [2015] FCA 203
2 citations
Jump To
Cite 1 - [2015] FCA 203
Cite 2 - [2015] FCA 203
Cassimatis v Axis Specialty Europe Ltd [2013] QSC 237
3 citations
Jump To
Cite 1 - [2013] QSC 237
Cite 2 - [2013] QSC 237
Cite 3 - [2013] QSC 237
Davis and Ors v Commonwealth of Australia and Anor (1986) 68 ALR 18
1 citation
Jump To
Cite 1 - (1986) 68 ALR 18
Edginton v Fitzmaurice (1885) 29 Ch D 459
1 citation
Jump To
Cite 1 - (1885) 29 Ch D 459
Kernel Holdings Pty Ltd v Rothmans of Pall Mall ( Australia ) Pty Ltd (1991) 217 ALR 171
1 citation
Jump To
Cite 1 - (1991) 217 ALR 171
Magill v Magill (2006) 226 CLR 551
3 citations
Jump To
Cite 1 - (2006) 226 CLR 551
Cite 2 - (2006) 226 CLR 551
Cite 3 - (2006) 226 CLR 551
Monte v Mirror Newspapers Ltd [1979] 2 NSW LR 663
1 citation
Jump To
Cite 1 - [1979] 2 NSW LR 663
Morton v Vouris (1996) 21 ACSR 497
1 citation
Jump To
Cite 1 - (1996) 21 ACSR 497
NSW Commission of Police v Tuxford (2002) NSWCA 139
1 citation
Jump To
Cite 1 - (2002) NSWCA 139
Robson v REB Engineering Pty Ltd [1997] 2 Qd R 102
1 citation
Jump To
Cite 1 - [1997] 2 Qd R 102
Watson v Foxman (1995) 49 NSWLR 315
2 citations
Jump To
Cite 1 - (1995) 49 NSWLR 315
Cite 2 - (1995) 49 NSWLR 315

Cases Citing

Case NameFull CitationFrequency
Chan v Goldenwater LDL Pty Ltd(2021) 7 QR 566; [2021] QCA 871 citation
Niceforo v Berkshire Hathaway Specialty Insurance Company [2023] QSC 2822 citations
State of Queensland (Department of Families, Seniors, Disability Services and Child Safety) v Workers' Compensation Regulator [2025] QIRC 1792 citations
1

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