Yufeng Investment Group (Australia) Pty Ltd v Guo

1. [1]

   BELL CJ: I agree with Kirk JA.

2. [2]

   KIRK JA: This appeal concerns r 12.6 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) which deals with a procedure for the withdrawal of any matter in a defence or subsequent pleading. The appeal focuses on two particulars in a Commercial List statement being withdrawn by means of the unopposed filing of an amended statement. The appellant has now claimed on appeal that those amendments effected the withdrawal of admissions in a manner precluded by r 12.6. In fact the rule is not relevant to the matter.

3. [3]

   Mr Wencheng Guo (the first respondent) commenced proceedings in the Commercial List in the Equity Division of the Supreme Court in late 2022. Amongst other things, he sought repayment of a loan of $16.8 million (the Loan) he said he had made to Mr Changran Huang (the second respondent), and which he alleged was guaranteed by a company related to Mr Huang, Yufeng Investment Group (Australia) Pty Limited (the appellant).

4. [4]

   In his Commercial List Statement (CLS) Mr Guo particularised various payments which he alleged were payments of interest made pursuant to the Loan. At the commencement of the hearing before the primary judge, Nixon J, Mr Guo sought and was granted leave to file an amended CLS (ACLS). The changes included amendment of two of the particularised figures (items 3 and 4), with the effect of reducing the sum of the interest payments he alleged had been made in relation to the Loan. By taking that step Mr Guo was effectively pleading that more money was owing under the Loan than what had originally been pleaded. The amendment was not opposed by Mr Huang and Yufeng; on one view they gave their consent. They did not raise any concern relating to the changed figures at any stage during the hearing. His Honour’s judgment thus did not traverse the issue: Guo v Yufeng Investment Group (Australia) Pty Ltd [2024] NSWSC 1599.

5. [5]

   The primary judge relevantly held that there was an oral loan agreement between Mr Huang and Mr Guo by which the latter loaned $16.8 million to the former, with the Loan guaranteed by Yufeng. His Honour also held that no interest was payable under the terms of the Loan and that the payments which Mr Guo had claimed were for interest were in fact repayments of capital. On that basis his Honour held that repayments of $13,472,869.50 plus 4 million Chinese yuan had been made. He subsequently made an order that Yufeng and Mr Huang pay Mr Guo $2,912,358.44, being the calculated remaining balance of the Loan. It is that order which is now disputed.

6. [6]

   It is notable that no part of his Honour’s careful and lengthy reasons for judgment, dealing with a range of issues, is challenged by either side. What Yufeng really challenges is his Honour’s decision at the commencement of the hearing to make an order that Mr Guo have leave to file the ACLS.

7. [7]

   Yufeng appealed on three overlapping grounds (Mr Huang has filed a submitting appearance). In substance it asserted that:

   1. (1)

      the two original particulars in items 3 and 4 of the CLS constituted admissions;

   2. (2)

      the formal process stipulated under r 12.6 was not complied with in relation to the withdrawal of those admissions, where that rule applied to the amendments made to the particulars;

   3. (3)

      in that context Mr Guo should be held to his initial admissions, albeit that they should be understood as an admission of the monies having been repaid as capital rather than as payments of interest; and

   4. (4)

      as a result, the repayment order should be modified on appeal to take account of the additional repayments, with the effect of reducing the amount that Mr Huang and Yufeng owed on the Loan by a net amount of some $2.2 million.

8. [8]

   Yufeng’s arguments are without merit. The appeal should be dismissed. In what follows I first set out the background of the appeal (at [9]-[25]), then turn to consider the construction and significance of r 12.6 (at [26]-[54]), before setting out the series of reasons why the appeal fails (at [55]-[63]).

Background

1. [9]

   While Commercial List statements and responses “differ from pleadings in substance, they nevertheless stand in the place of pleadings in proceedings commenced in the Commercial List and Technology and Construction List”: Roberts v Goodwin Street Developments Pty Ltd (2023) 110 NSWLR 557; [2023] NSWCA 5 at [61]. It is convenient to assume here that a Commercial List statement can be equated with a statement of claim for the purposes of the rules: note ibid at [60]-[66].

2. [10]

   In his CLS Mr Guo pleaded that in October 2013 he had reached an agreement to loan Mr Huang $16.8 million with interest payable at 24% per annum, with Yufeng guaranteeing repayment of the loan, and which loan amount was transferred that month. He pleaded at [67] of the CLS that Mr Huang caused payments of interest under the loan agreement to be paid to Mr Guo. The particulars provided for that paragraph stated: “The date and amount of each payment is set out in Schedule A”. Schedule A to the CLS was headed “Particulars of interest payments”. It identified 15 itemised payments, totalling $15.67 million and 4 million yuan. Mr Guo then pleaded that the loan had not been repaid in full. He did not assert that there had been any repayments of capital, merely that interest had been paid.

3. [11]

   The ACLS involved a limited number of amendments to the CLS. The changes were marked up in the conventional way by striking out deletions and underlining additions. In Schedule A two of the payments were amended. For item 3, the date was changed from 13 December 2017 to 10 August 2017, and the amount was reduced from $700,000 to $200,000. For item 4, the date was changed from 13 December 2017 to 2 November 2017 and the amount reduced from $1,930,000 to $232,869.50. The effect of those amendments was that the claimed amount owing by Mr Huang to Mr Guo pursuant to the loan was greater than it originally was on the basis that less interest was now alleged to have been paid.

4. [12]

   In his Commercial List response (CLR) Mr Huang admitted that some $16.8 million had been transferred from Mr Guo to Yufeng, denied that this was done pursuant to the claimed oral loan agreement, and as regards items 3 and 4 in Schedule 1 claimed that these payments were actually a loan made by Mr Huang to Mr Guo. Mr Huang denied [67] of the CLS relating to the claimed interest payments. In its CLR, Yufeng also admitted that some $16.8 million had been transferred to it by Mr Guo, but otherwise it did not admit the allegations, including [67].

5. [13]

   In May 2024 Mr Huang filed an amended CLR (ACLR). No amendment was made in his response to [67] of the CLS. In the same month Yufeng filed an ACLR in which it now denied that the amounts identified in Schedule A were payments of interest (and denied [67]) but alleged that those amounts were transferred by way of loan from Mr Huang to Mr Guo (consistently with Mr Huang’s case). It then said, alternatively, that the amounts were transferred by way of repayment of principal owing to Mr Guo.

6. [14]

   In July 2024 Mr Guo filed Commercial List Replies responding to each of the ACLRs, and saying relevantly that Mr Guo joined issue with each allegation in the ACLRs “other than express admissions of what Mr Guo has pleaded”. In dealing with a limitation period defence that had been raised by both Mr Huang and Yufeng, Mr Guo also pleaded (as one of a number of variants) that Mr Huang had caused the payments of interest to be made “as pleaded at paragraph 67 of the Commercial List Statement”, and each of those was a confirmation of the cause of action under the claimed loan agreement. Mr Guo was thus re-asserting that the Schedule A payments were interest payments.

7. [15]

   At the same time that the ACLS was filed (in the circumstances explained immediately below), leave was sought and given to file amended Commercial List Replies. The amendments to those documents did not affect what was asserted about the interest payments having been made. Yufeng half-heartedly submitted to this Court that because those documents thus continued to refer to the original CLS, that had the effect that the “admissions” contained in Schedule A of the CLS had continuing force despite having been changed in the ACLS. Yet, in context, the reference to “CLS” in the Amended Commercial List Replies should be read on an ambulatory basis such as to encompass later iterations of the document. Mr Guo’s intent to withdraw reference to the payments previously identified at items 3 and 4 of Schedule 1 was made clear by the changes made in the ACLS.

8. [16]

   The hearing below occurred over five days commencing on 4 November 2024. Each of Mr Guo, Mr Huang and Yufeng was represented by senior and junior counsel and a law firm.

9. [17]

   At the commencement of the first day of the hearing, after raising an issue about late and incomplete discovery by some of the defendants, the then senior counsel for Mr Guo (Mr Henry) sought leave to file in court the ACLS and two amended replies. The following exchange occurred (emphasis added):

10. [18]

    Three points should be made about this exchange. First, it is implicit that the defendants had been notified in advance of the proposed amendments – as one would expect – and that they had indicated they did not oppose the amendments. Second, one way of reading the italicised part of the exchange is that senior counsel for each of Yufeng and Mr Huang communicated that they consented. Regardless of whether they did so, in substance they were acceding to the application. They had a clear opportunity to object to the changes which they declined to take. Third, Mr Henry expressly identified that changes had been made to the particulars of interest in Schedule A.

11. [19]

    The amendments made to Schedule A – and the basis of Mr Huang’s and Yufeng’s assertions about a loan having been made by Mr Huang to Mr Guo – were connected to an agreement made on 20 December 2017 between Mr Guo and Yufeng. It is not necessary to go into the details of this agreement.

12. [20]

    In short, Mr Guo gave evidence that after chasing Mr Huang to repay the Loan and asking to be paid interest to support his living costs, Mr Huang offered to loan him funds on the basis that Mr Guo wrote an “IOU note”, which he did. That note indicated that Mr Guo owed Mr Huang $2.63 million. That amount corresponded to the sum of items 3 and 4 in Schedule A to the CLS. Originally, thus, Mr Guo had alleged in the CLS that that whole amount had been transferred to him but said that this had actually represented interest payments on the loan on which he was suing. Yet in his affidavits Mr Guo did not give evidence that he had in fact received $2.63 million (whether or not he had, and if so for what reason and under what terms, is not currently to the point).

13. [21]

    After the CLS was amended, Mr Guo no longer alleged that he had received $2.63 million, whether as interest payments or otherwise. Rather, he focused simply on two particular, smaller payments which he said had been paid as interest.

14. [22]

    As the primary judge noted at [288], no cross-claim asserting the existence of a loan of $2.63 million, as set out in the IOU note, was brought by Mr Huang. Although Mr Huang had filed two affidavits, he did not give evidence. Parts of one of his affidavits were tendered as admissions by Mr Guo.

15. [23]

    Mr Guo was cross-examined by Mr Huang’s senior counsel on the IOU note (Yufeng’s senior counsel did not cross-examine him at all). The denouement of that portion of the cross-examination was the suggestion to Mr Guo that “you didn’t use your claim for unpaid interest as leverage against Mr Huang, because you didn’t have a claim for unpaid interest”. Thus the position being put on behalf of Mr Huang was that such money as had been paid was not for interest because there was no entitlement to interest. It was not put to Mr Guo that he had in fact received $2.63 million, nor was it put that that amount had been paid as a repayment of the Loan. Nor was that case put in the submissions of either Mr Huang or Yufeng.

16. [24]

    The primary judge did not address the difference between the sums referred to in the respective Schedules of the CLS and ACLS. His Honour had no reason to do so, the issue not having been raised. His Honour noted at [257] that it was common ground that Mr Guo had transferred $16.8 million to Yufeng, doing so pursuant to an oral agreement with Mr Huang. His Honour then identified the issues in dispute in relation to the Loan, including: whether interest was payable on the principal sum at a rate of 24% or whether it was interest-free; whether payments had been made in respect of the Loan and whether such moneys had been paid in reduction of principal or interest; and whether the Loan was repayable on demand and, connectedly, whether the claim was statute-barred as a result.

17. [25]

    His Honour concluded that interest was not payable pursuant to the Loan (at [363]). His Honour further held that each payment specified in Schedule A had been made and was in fact a repayment in respect of the Loan. He held that if the Loan was repayable on demand, each repayment made constituted a confirmation such that the claim was not statute-barred (at [379]-[385]).

Construction and significance of r 12.6 of the UCPR

1. [26]

   Rule 12.6 of the UCPR is as follows:

2. [27]

   The heading refers to predecessor provisions, including in the Supreme Court Rules 1970 (NSW) (SCR). The rules in Pt 21 of the SCR provided, prior to their repeal:

3. [28]

   In this appeal various questions arise with respect to the scope and application of r 12.6.

4. [29]

   Rule 12.6 falls to be construed by reference to its text, context and purpose. The four subrules should be construed together. That is the natural inference, subject to any contrary indication, given that they are grouped together under the one heading.

5. [30]

   Subrule (1) permits a party to withdraw any matter raised in a defence or in a subsequent pleading (in what follows I will just focus on a defence).

6. [31]

   Subrule (2) limits the extent to which that can be done, in prescribing that an admission or other matter that operates for the benefit of another party may not be withdrawn except with consent of the other party or leave of the court.

7. [32]

   Subrule (3) provides for how a withdrawal under subrule (1) is to be effected, that is, simply by filing a notice of withdrawal stating the extent of the withdrawal. Subrule (3) is to be contrasted with earlier approaches whereby notice could be effected by letter: note Spincer v Watts (1889) 23 QBD 350. And the Rules of the Supreme Court (Revision) 1965 of England provided that a defendant “may, without leave of the Court … withdraw his defence or any part of it at any time … by serving a notice to that effect on the plaintiff or other party concerned” (see Order 21 r 2(2)(a) – that being the rule referred to in the heading to SCR Pt 21 r 3). Rule 12.6, like its predecessor in the SCR, has gone further than its progenitors by requiring that the withdrawal be done by notice, which notice must be filed and not merely served. But withdrawal of a matter under the rule remains a distinct process from amending a defence.

8. [33]

   Subrule (4) of r 12.6 spells out a further aspect of how a withdrawal is to be effected. If the withdrawal is by consent then the notice must be accompanied by a consenting notice from each party whose consent is required by subrule (2). Subrule (4) should be read together with subrule (2). That is, it only applies in circumstances where the party is withdrawing a matter in a defence or subsequent pleading which is an admission or that operates for the benefit of another party (in other words, where the withdrawal is to the detriment of the other party). In such instances that other party’s consent is required. If the other party’s consent is not required because subrule (2) does not apply, then a notice of withdrawal need not be accompanied by any consenting notice.

9. [34]

   An effect of r 12.6 is that a defendant can withdraw part of their defence directly by their own action, without seeking consent of the other party or parties, and without going through the process of formally seeking the court’s leave to amend the defence. The defendant may simply file a notice of withdrawal under the rule, subject to the need for consent or leave if the withdrawal is the detriment of the other side. The rule is a facultative one. The commentary in Ritchie’s Uniform Civil Procedure at [12.6.5] correctly summarises the position:

10. [35]

    For example, a defendant might withdraw its denial of a pleaded allegation that it had done a particular thing, or had breached a contract, or that its actions had caused loss. To withdraw the denial would leave the allegation unanswered in the defence such that, pursuant to r 14.26(1), the allegation would be taken to be admitted. The rule thus enables a defendant to narrow the issues in dispute. If the defendant withdrew its entire defence – in other words, no longer contested the claim – then so long as the plaintiff had pleaded a complete cause of action it would be entitled to judgment.

11. [36]

    If the withdrawal would be to the detriment of the other party then consent or leave is needed. In such cases the withdrawing party is broadening the issues in dispute, by backtracking on its earlier narrowing of the issues by having made an admission or pleaded something to the other side’s benefit. If consent or leave is granted then, again, there is no need formally to amend the defence.

12. [37]

    If a notice was filed without consent but in fact it withdrew a matter that was an admission or was properly characterised as for the benefit of another party, then the notice would be ineffective to withdraw that matter. That is so because r 12.6 would not give legal effect to the notice to that extent, it being outside the operation of the rule. If the other party was concerned that this had occurred, it would be appropriate to raise this promptly with the withdrawing party and, absent agreement being reached, one side or the other should raise the issue before the court.

13. [38]

    There is much to be said for the view that r 12.6(2) simply does not address the other, more common way in which a defendant might alter its pleading, namely by seeking leave to amend its defence. That construction is consistent with the context outlined. Nothing in r 12.6 refers to amendments. The natural reading of the word “withdraw” in subrule (2) is that it refers to the withdrawal of a matter pursuant to the particular procedure addressed in subrules (1), (3) and (4), as just discussed. The construction also reflects the wording of the previous Supreme Court rule (see above at [27]).

14. [39]

    However, the contrary has generally been assumed, as manifest in countless cases. It is not necessary to resolve the issue here. And in any event that construction would likely make no practical difference. If the amendment was not consented to then the defendant still would need to persuade the court that leave to amend – and to withdraw the admission – should be given. Courts have required that sufficient cause be shown for withdrawal of other formal admissions which had narrowed the issues in dispute, such as those made on behalf of a party by counsel: see the discussion in eg Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738; Drabsch v Switzerland General Insurance Co Ltd, (Supreme Court (NSW), Santow J, 16 October 1996, unrep); SLE Worldwide Australia Pty Ltd v Wyatt Gallagher Bassett Pty Ltd [2005] NSWSC 816 at [57]; The Nominal Defendant v Gabriel (2007) 71 NSWLR 150; [2007] NSWCA 52 at [103]-[112]; J & M McNamee Holdings Pty Ltd v Mungerie Vale Pty Ltd trading as Greenwood Group Realtors [2019] NSWCA 283 at [73]; Coates-Kelly v New Zealand (2022) 294 FCR 422; [2022] FCAFC 131. Those principles would apply to contested applications to amend a defence or later pleading so as to remove an admission, even if r 12.6(2) did not apply. And, either way, the matters addressed in ss 56-58, 60 and 64 of the Civil Procedure Act 2005 (NSW) would be relevant, including the reason given for seeking to withdraw the admission, the stage of proceedings, and any prejudice suffered by the other party.

15. [40]

    I note for completeness that it might have been arguable in this case that such a general legal principle about needing leave to withdraw formal admissions which narrow the issues in dispute could apply to an admission in a statement of claim. Such an argument would face, at the least, the difficulty identified by Darke J in Sergi v Sergi [2019] NSWSC 865:

16. [41]

    The term “admission” is not defined in the UCPR. The Macquarie Dictionary provides three relevant definitions including: “confession of a charge, an error, or a crime; acknowledgment”; “an acknowledgment of the truth of something”; and “a point or statement admitted; concession”. All of those involve an admission being responsive to something, as opposed to being part of a positive assertion (including an assertion of something only to a limited extent). That being said, it is possible that in some particular circumstances something said in a statement of claim might in substance be an admission in response to some other allegation. It is not necessary to consider these issues further. The appellant did not seek to rely on a broader, general law principle about admissions. It relied only on r 12.6(2).

17. [42]

    Rule 12.6(2) cannot be read in a way that is divorced from the context of the other subrules, which operate cohesively in the manner just explained. Rule 12.6, including subrule (2), applies to defences or subsequent pleadings. The rule does not apply to statements of claim: note Sergi at [22].

18. [43]

    A contrary view has been taken by some: Khouri v National Australia Bank Ltd [2007] NSWSC 987 at [2] (Gzell J); Marahra Holdings Pty Limited v Insurance Australia Limited [2024] NSWSC 1368 (Schmidt AJ). In the latter case, her Honour said that “[b]y way of contrast to r 12.6(1), r 12.6(2) is not concerned with pleadings” (at [47]), adding at [50]-[51] that an admission can be made in many different ways. That view should not be accepted:

    1. (1)

       It treats subrule (2) as though it were a distinct rule, divorced from its context, thus failing to take account of the facultative, cohesive nature of r 12.6.

    2. (2)

       It is inconsistent with the heading of rule 12.6: “Withdrawal of matter in defence or subsequent pleading”. The heading of a provision is not deemed to be part of the UCPR: Interpretation Act 1987 (NSW), s 35(2)(a). Nonetheless it can be considered as part of the context used to construe the rules: ibid, s 34(2)(a); Attorney-General (Tas) v Casimaty [2024] HCA 31; (2024) 98 ALJR 1139 at [29]. Yufeng submitted that the wording of the heading of r 12.6 was drawn from the subject matter of r 12.6(1) and that sub-rule is “directed to a different issue or concern”. But the heading applies to the whole of r 12.6, and throws some light on the scope and purpose of the rule. Yufeng’s submission that subrules (1) and (2) operate independently of each other would render r 12.6 a miscellaneous and disjointed provision containing sub-rules directed to entirely different subject matters. Contrary to that argument, the words “[d]espite subrule (1)” in subrule (2) link the two subrules. They indicate that the breadth of subrule (1) applies in a qualified manner in the specific circumstances outlined in subrule (2).

    3. (3)

       To treat r 12.6(2) as not concerned with pleadings, but as extending to any type of admission, fails to recognise that other rules specifically address the need for leave to withdraw admissions made voluntarily (r 17.2(2)) or made in relation to a notice to admit facts (r 17.3(3)) or a notice to admit documents (r 17.4(3)). Those provisions would not be necessary on the broad view taken by Schmidt AJ.

    4. (4)

       The heading of r 12.6 refers to SCR Pt 21 rr 3 and 5. The phrase in the equivalent subrule in the SCR, being Pt 21 r 3(2), states that “[s]ubrule (1) does not enable a party to withdraw…”. Subrule (1) was the equivalent of what is now r 12.6(1). The quoted words indicate that the rules had to be read jointly. Of course, it is possible that the change in language employed in r 12.6(2) was deliberate (ie from ““[s]ubrule (1) does not enable” to “[d]espite subrule (1)”). But there is no particular reason to infer that the slightly different language was meant to effect some substantive change. That being said, this historical factor is only of slight weight.

19. [44]

    A premise of Yufeng’s challenge on appeal – that r 12.6(2) applies to statements of claim (including in that notion a CLS) – is thus not made out.

20. [45]

    The claimed admissions here were contained in a pleading, and they were withdrawn by virtue of being removed in an amended version of the document which was filed without opposition. In this context, another premise of Yufeng’s argument is that when r 12.6(2) does apply then, pursuant to subrules (3) and (4), it would be necessary for the party seeking to withdraw the admission to have filed a notice in the court prior to seeking the amendment, and any consent given by the other party had to be given in writing. This is said to be so even when a party is seeking the court’s leave to file an amended document. Senior counsel for Yufeng submitted that notwithstanding the opposing party consenting to an amendment:

21. [46]

    It was submitted that despite the amendments to the CLS in this case being struck through and underlined in the conventional fashion, “what was not explicit was the plaintiff in amending this is withdrawing the admissions”. Senior counsel said that the proposition that his predecessor consented to (or did not oppose) the amendment, and thus the withdrawal, “presupposes that there was a conscious engagement with something that wasn’t explicitly identified”.

22. [47]

    This type of argument has some support: eg The Owners – Strata Plan No 82089 v Omaya Holding Pty Ltd [2024] NSWSC 992 at [54]-[55]. However, it should not be accepted.

23. [48]

    As outlined above, r 12.6 is a facultative provision enabling a defendant to withdraw parts of its defence without having to amend the document. That may be done without consent if the withdrawal is not to the detriment of the other party, or it may be done with consent or by leave of the court. The purpose of requiring a “notice”, which must be filed, is to formalise this process (see above at [32]). It would be ironic if a facultative provision was construed as introducing a degree of formalism to the process of a party seeking to take the alternative path of amending its defence. The nature of that other pathway, in circumstances where that requires leave (cf r 19.1), is well-established. The party seeking to amend its pleading should send a marked-up proposed amended pleading to the other party; seek that party’s consent to it being filed; and then seek leave of the court to file the pleading. There is no need to complicate that procedure by the formalism of requiring a defendant to draft, serve and then file a notice, where that would be required in addition to the necessary notice of motion seeking leave to amend if the other party opposed the amendment.

24. [49]

    As for the argument that this formalistic approach might have been an intended effect of the rule in order clearly to identify where admissions are being withdrawn, that fails to take account of “the adversarial paradigm of curial proceedings in Australia” where “[t]he parties define the issues to be determined at trial”: Productivity Partners Pty Ltd v Australian Competition and Consumer Commission (2024) 281 CLR 338; [2024] HCA 27 at [59]. In general courts are entitled to rely on a party, and the party’s legal representatives, to protect the party’s own interests. If one party proposes to amend its pleading, and provides a draft amended document marked up in the ordinary way, and the other party consents, then the court is entitled to assume that the consenting party has carefully considered its position, including in light of whether or not the changes withdraw an admission. It is “a cardinal principle of litigation … that parties are bound by the conduct of their counsel”: Patel v The Queen (2012) 247 CLR 531; [2012] HCA 29 at [114].

25. [50]

    The type of transparency argument put by Yufeng has been rejected by a majority of this Court before. In Global Alliance Network Pty Ltd v Sensis Pty Ltd [2007] NSWCA 163, Tobias JA said the following (with Mason P agreeing):

26. [51]

    Similar sentiments were expressed in Owners Strata Plan No 80453 v Walsh [2014] NSWSC 729 at [11]-[14] and in Investec Bank (Australia) Limited v Steven Burge (No 3) [2012] NSWSC 7 at [9].

27. [52]

    There is yet a further difficulty with Yufeng’s argument. If a court has made an order granting leave to file an amended pleading then that order has effect unless and until revoked or altered. Here, the primary judge made such an order. An order of the Supreme Court, as a superior court of record, is valid until set aside: State of New South Wales v Kable (2013) 252 CLR 118; [2013] HCA 26 at [28]-[37]. More broadly, for all courts, a failure to comply with a requirement in the rules is an irregularity; it does not invalidate the proceedings or any document, judgment or order therein: Civil Procedure Act, s 63.

28. [53]

    Parties and practitioners may make a mistake. They might fail to appreciate the significance of an amendment. A party in such a position is not without a potential remedy. An order granting leave to file an amended pleading is an interlocutory order. Such orders may be revisited during the course of a proceeding: note Moore (a pseudonym) v The King [2024] HCA 30; (2024) 98 ALJR 1119 at [26]. The mistaken party could approach the court, explain its error, and seek that the earlier interlocutory order be revoked or altered. That possibility has long been recognised: eg Mullins v Howell (1879) 11 Ch D 763. The onus of proof and persuasion would be on the party seeking the revocation or alteration and, as usual, the considerations in ss 56-58 and 60 of the Civil Procedure Act would be relevant.

29. [54]

    Thus even if r 12.6 did speak to the current type of situation at all, the core issue would be not whether the process set out in that rule had been complied with. In substance, Yufeng was seeking to overturn the order made by the primary judge at the commencement of the hearing granting Mr Guo leave to file the ACLS. It failed to recognise this point.

Determination

1. [55]

   Yufeng’s appeal fails for a series of reasons.

2. [56]

   First, r 12.6(2) does not apply to statements of claim (see above at [42]-[44]).

3. [57]

   Second, even if it did so apply, the rule does not require that a formal notice of the kind described in subrules (3) and (4) be provided when a defence is sought to be amended pursuant to a court order (see above at [45]-[51]).

4. [58]

   Third, even if those subrules did have that effect, non-compliance with those requirements of the rules would not have undermined the validity and efficacy of the order made by the primary judge granting Mr Guo leave to file the ACLS (see above at [52]-[54]). It would have been necessary for Yufeng to make out a case why that order should have been overturned. Yufeng did not do so.

5. [59]

   Fourth, any such application would not have succeeded in any case (and the same point applies if it had argued that there was a general principle against withdrawal of an admission beyond that set out in r 12.6(2) – cf [38]-[40] above). The order was made at the commencement of a five day hearing, presumptively after notice of the proposed amendments had been given. Yufeng was represented by experienced senior and junior counsel and by its current law firm. At no stage during the trial did Yufeng make any case of the kind now sought to be made on appeal. Nor did it do anything during the course of the hearing to suggest that its consent had been given by mistake. On the contrary, there was some cross-examination with respect to the payments of $2.63 million that had originally been included in items 3 and 4 of Schedule A in the CLS, but for a different forensic purpose (see above at [19]-[23]).

6. [60]

   Yufeng asserted that it should win on appeal because, amongst other things, Mr Guo had provided the primary judge with “no explanation, let alone evidence, identifying the circumstances” in which the claimed admissions had been made and why he was seeking to change his position. That understanding is the wrong way around. No such explanation by Mr Guo was called for when Mr Huang and Yufeng did not oppose the filing of the ACLS. If Yufeng wished to change its position in the five days of the hearing that followed, then it would be expected that it provide evidence and good justification as to why it had changed its position on the issue. The same is even more true when it seeks to do so on appeal, as here, when the issue is raised not at the heel of the hunt but when the hunt is over.

7. [61]

   Fifth, in any event, the allegations in question were not an admission (as to which, see above at [40]-[41]), nor were they a statement for the benefit of the other parties. Items 3 and 4 in Schedule A of the CLS formed part of Mr Guo’s positive assertion of what his claim was in relation to the existence of, and desired repayment of, the Loan. That claim was limited insofar as he claimed and acknowledged that certain amounts had been paid to him as interest pursuant to the Loan. His altering the allegations in his positive case with respect to these payments did not constitute alteration of an admission. He was not responding to any allegation in making those allegations.

8. [62]

   Sixth, even if the original items 3 and 4 were characterised as admissions, they expressly related to payments of interest not repayments of capital. As addressed in the judgment of the primary judge, there were various arrangements in place between the parties, with various payments going to and fro. In that context it cannot be said with respect to a payment made from Mr Huang to Mr Guo that the only alternative to it being a payment of interest with respect to the Loan was that it must have been a repayment of capital with respect to the Loan. True, the primary judge did find that the other claimed interest payments identified in Schedule A were repayments of capital:

9. [63]

   As this quotation shows, his Honour reached that conclusion having analysed the evidence and taking account of a concession. It cannot be assumed that the analysis of the evidence and any concession would have been to the same effect with respect to the two large sums originally identified in items 3 and 4 of the CLS.

Orders

1. [64]

   Yufeng had filed a notice of motion seeking leave to amend its notice of appeal. In the end that motion was not pressed and the parties agreed it should be dismissed with costs. Such an order should be made. There is no reason why costs should not follow the event in the appeal.

2. [65]

   The following orders should be made:

   1. (1)

      Appellant’s notice of motion filed 24 October 2025 dismissed with costs.

   2. (2)

      Appeal dismissed.

   3. (3)

      Appellant to pay the first respondent’s costs of the appeal.

3. [66]

   ADAMSON JA: I agree with Kirk JA.