Liu & Ors v Lin

This is the Court’s second judgment in these proceedings. In the Court’s first judgment it: (1) continued certain freezing orders against the defendant and ordered that each party’s costs of the application for freezing orders would be that parties cost in the proceedings; and (2) extended time for the plaintiffs to serve on the defendant and provide to the Court a Further Amended Statement of Claim: Liu v Lin [2023] NSWSC 750.

The plaintiffs provided a Further Amended Statement of Claim (“the new pleading”) in accordance with the orders made at the time of the first judgment. Minor parts of the new pleading are still in dispute. At a brief post-judgment hearing on 28 August 2023 the Court heard supplementary submissions and directed the filing and serving by the plaintiff by 1 September 2023 of short further written submissions in relation to the new pleading, dealing with the remaining disputed questions raised by the defendant.

This judgment should be read with the Court’s first judgment. Events, matters and persons are referred to in both judgments in the same way.

Mr E. Cox SC and Mr A.L. Oakes of counsel, instructed by Broaden Legal continued to appear for the plaintiff on this remaining part of the March motion. Mr D Pritchard and Ms A. Lim of counsel, instructed by BY Associates Lawyers continued to appear for the defendant.

The defendant’s written submissions acknowledge that there had been significant simplification of the plaintiff’s claim in the new pleading. But the defendant contended that despite that simplification the new pleading was still inadequate in its pleading of the call representation said to constitute fraud (described in the pleading as the “genuineness representation”) as well as the pleading of causation in the misleading and deceptive conduct claim.

The defendant contends that the allegations of fraud cannot be either understood or pleaded to or met in a fair way because of these two defects. The plaintiffs’ lodged written submissions in reply. In these reasons the Court has decided to allow the pleading to be filed and only refers to the plaintiffs’ written submissions in the course of analysis of the defendants’ submissions.

In relation to the genuineness representation, the defendant’s submissions set out the argument:

After citing authority of Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd [1990] HCA 11;169 CLR 279 at 286 in relation to the principle of fairness intrinsic to pleading, the defendant’s submissions continued:

In the Court’s analysis the position from the defendants’ point of view is not as unfair as the defendants say but the new pleading has been improved by various suggested amendments with the plaintiff submissions in reply and because of those improvements the Court will allow the new pleading so modified to be filed.

But the Court would observe that it is possible to plead matters based upon Court’s ultimate findings of fact as part of its formulation. That is all the plaintiffs can rely upon to make out their case at the end of the day. And if some the conduct constituting representations extends past the time of the making of payments then the conduct causing a particular payment will be taken only to be the conduct occurring before that payment.

In relation to the pleading of causation the defendants submitted the following:

Issues of causation are matters for submission at final hearing. The plaintiff should not have to unstring and try and plead the different combinations of causation in the pleading. To do so would create an unnecessarily complex pleading.

The Court will allow the new pleading to be filed subject to the usual order that the plaintiff pay the costs thrown away by the amendment (and there may be none). Otherwise, costs will be borne by each party in accordance with the costs orders they agree between them. It is important these parties now concentrate on the main issues in the proceedings, which do not involve a large sum of money from the Supreme Court and therefore the strictures of Civil Procedure Act 2005, ss 56 – 60 should be observed closely. For these reasons, the Court makes the following orders and directions: