Lee v Huo

1. [1]

   BELL CJ: This is an appeal from a decision of Gibson DCJ (the primary judge) sitting in the District Court of New South Wales: Huo v Super Sheperd Pty Ltd & Ors [2025] NSWDC 345 (PJ or the primary judgment).

2. [2]

   Ms Jingmin Huo (the Respondent or Ms Huo), who is also known as Ms Crystal Huo, owns a property at 243 Bulwara Road in Ultimo (the property). Mr Chun Ting Lee (the Appellant or Mr Lee), who has also been known as Mr Alfred Lee and Mr Alfred Kin Chau Lee, was a director and secretary of Super Shepherd Pty Ltd (Super Shepherd) between 24 October 2012 and 1 October 2013 but did not hold either of these positions at the time of the events the subject of these proceedings. Super Shepherd from time to time used the business name of Ping Pong Group Developments (PPGD). In May 2021, after a conversation with Mr Lee, Ms Huo engaged Super Shepherd to perform works at the property. It later emerged that Super Shepherd was not a licensed builder and did not hold Home Building Compensation Fund (HBCF) insurance.

3. [3]

   The primary judge held that the Appellant engaged in misleading or deceptive conduct in representing to the Respondent that Super Shepherd was a licensed builder and held HBCF insurance. The primary judge awarded damages in the sum of $944,271.25.

4. [4]

   The appeal challenges the primary judgment on a number of grounds including a lack of procedural fairness in circumstances where the primary judge did not permit the Appellant (who was self-represented) to cross-examine the Respondent even though she was present and available to be cross-examined. A series of other grounds relate to the quantum of damages awarded.

Background

1. [5]

   After purchasing the property, Ms Huo formed an intention to perform building works on it, including renovations of the main dwelling, the demolition of the existing garage and the construction of a new garage with a studio on top of it. She obtained development approval for these works in late 2020.

2. [6]

   In about April 2021, Ms Huo sought to engage a builder to perform the works. She considered several builders, including Macquarie Constructions Group Pty Ltd (MCG). Between 22 April 2021 and 17 May 2021, she corresponded with representatives of MCG regarding the possibility of her engaging MCG to perform the works. MCG proposed to perform the works for a fee of $558,503. However, Ms Huo ultimately did not engage MCG.

3. [7]

   In about May 2021, Mr Qiuming He (Mr He) — Ms Huo’s neighbour — suggested Mr Lee as a builder for the works. In or about May 2021, Mr Lee met Ms Huo, her mother — Mrs Huizhi Long (Ms Long) — and Mr He at the property. Ms Huo said in an affidavit that, at this meeting, Mr Lee said:

4. [8]

   Both Mr He and Ms Long deposed to similar statements having been made by Mr Lee at this meeting. In fact, neither Mr Lee nor Super Shepherd held a building licence at the time and therefore could never have obtained valid HBCF insurance.

5. [9]

   At the meeting, Ms Huo was given a business card by Mr Lee which recorded his name as Alfred Lee, and his Chinese name as Chun Ting Lee, listing his role as “Development Manager” and the company he represented as “PPGD” or “Ping Pong Group Developments”. It also listed his phone numbers, architectural qualifications and email address, as well as the address of Super Shepherd.

6. [10]

   The parties met at the property on two further occasions and negotiated the fee Super Shepherd would receive for performing the works.

7. [11]

   On 21 May 2021, Mr Lee gave Ms Huo a document titled “Construction Contract” and dated 21 May 2021. On 27 May 2021, Mr Lee gave Ms Huo a document titled “Fee Proposal & Engagement Letter” and dated 27 May 2021 (Fee Proposal), attached to which was a document titled “Acceptance of Fee Proposal”.

8. [12]

   The Fee Proposal included a table that contained a list of each element of the works to be performed and its corresponding cost. At the bottom of the table was a cell for the “Sub-Total” with the corresponding cost of $556,000. Above the table was a sentence that read:

9. [13]

   The Construction Contract included item 4 of schedule 1, which stated that the “[p]rice excluding GST” was $561,704.15. However, Ms Huo says that Mr Lee said that he would “only charge [her] $556,000” and would not “charge [her] anything beyond $556,000”.

10. [14]

    The Construction Contract included text on its cover that stated it was “[p]repared by Super Shepherd Pty Ltd”. Item 3 of schedule 1 named “Ping Pong Group Developments (PPGD)” under “Builder(s)” or “Principal Contractor(s)” and listed “Alfred Lee” as the “[c]ontact person”.

11. [15]

    The Fee Proposal concluded:

12. [16]

    As already noted, Super Shepherd was not licensed at the time of entry into the Construction Contract. While it was at one time licensed, that licence was cancelled on 12 April 2018.

13. [17]

    On about 27 May 2021, Ms Huo signed the Acceptance of Fee Proposal attached to the Fee Proposal. She never signed the Construction Contract but paid money to Super Shepherd in relation to preparatory demolitions and works purportedly performed under that contract. On 17 June 2022, Ms Huo signed a document titled “Acceptance of Fee Proposal” that was attached to a document titled “Fee Proposal & Engagement Letter” (Revised Fee Proposal). Ms Huo did so after Mr Lee had informed her that Super Shepherd would require an increase in the fee to perform the works because of a delay in obtaining a construction certificate and an increase in the cost of labour and materials. Under the Revised Fee Proposal, the contractual arrangement was varied such that the date of practical completion became 20 April 2023 and the fee increased to $683,493.13. Super Shepherd never obtained an HBCF insurance policy in relation to the works.

14. [18]

    Super Shepherd continued to perform the works. From 24 January 2022 onwards, Super Shepherd issued to Ms Huo invoices for, and Ms Huo paid to Super Shepherd, a total of $443,493.43 in fees for works performed.

15. [19]

    As the primary judge held at PJ [29]:

16. [20]

    On 9 December 2022, Ms Huo was provided with an HBCF insurance policy which recorded the builder as Yifeng Group Pty Ltd and a contract price of $100,000. As the primary judge held at PJ [14], “[n]ot only was that of the wrong amount, but Yifeng Group had nothing to do with these transactions at any time on the evidence before [the District Court].”

17. [21]

    In about May 2023, Ms Huo discovered that Super Shepherd had not held a building licence since 12 April 2018.

18. [22]

    On 22 November 2023, Ms Huo sent a letter of demand to Super Shepherd and Mr Lee. In this letter, she stated her view that the cessation of the performance of works and attendance at the property by Super Shepherd constituted a repudiation of the Construction Contract, Fee Proposal and Revised Fee Proposal, and purported to accept that repudiation.

19. [23]

    On 29 February 2024, Ms Huo entered into a contract with Felixland Pty Limited (Felixland) to perform the remaining works that Super Shepherd had not performed. Under the contract, she agreed to pay $770,000 for these works. She also paid $2,915 to Partridge Structural Pty Ltd and $1,980 to Peco Masonry to repair and rectify damage caused by Super Shepherd to a neighbouring property.

20. [24]

    Between 1 August 2022 and 3 February 2025, Ms Huo paid $105,512.86 in rent for accommodation as she was not able to occupy the property. She then paid rent at $900 per week until 27 May 2025.

Procedural history

1. [25]

   In December 2023, Ms Huo commenced proceedings in the New South Wales Civil and Administrative Tribunal (NCAT) against Mr Lee, Super Shepherd and Mr Tony Truong (Mr Truong), who had been the principal certifier of the works under an agreement between Ms Huo and Kudos Building Certification (KBC). In these proceedings, Mr Lee was represented by a solicitor and a barrister, and successfully applied to vacate a hearing date.

2. [26]

   On 4 October 2024, the proceedings were transferred to the District Court of New South Wales because the claims exceeded NCAT’s monetary jurisdiction. Tony Truong Pty Ltd (TT), which Ms Huo claimed had been conducting the business of KBC in its capacity as trustee for the Tony Truong Family Trust, had by this point been joined to the proceedings. By this stage of the proceedings, Mr Lee was not represented by a solicitor or a barrister.

3. [27]

   In the transferred proceedings, Ms Huo claimed that Mr Lee and Super Shepherd — or, in the alternative, Super Shepherd alone — had made representations through Mr Lee that Super Shepherd was a licensed builder and had insurance that covered the works. She claimed that they had, through these representations, engaged in conduct in trade or commerce that was misleading or deceptive, or that was likely to mislead or deceive, in contravention of s 18 of the Competition and Consumer Act 2010 (Cth), sch 2 – Australian Consumer Law (the ACL), and that she had suffered loss or damage because of this conduct. It was also alleged that the representation as to Super Shepherd being a licensed builder was also made in the Fee Proposal: see [15] above.

4. [28]

   Claims were also made in the proceedings against Mr Truong and TT for breach of contract and professional negligence.

5. [29]

   Ms Huo relied upon three affidavits of her own as well as affidavits of Ms Long, her mother, and Mr He, who introduced her to Mr Lee. As has already been noted, Ms Huo, Mr He and Ms Long deposed to Mr Lee orally representing to them that Super Shepherd was a licensed builder and that the works were covered by insurance.

6. [30]

   On 10 July 2025, some six weeks before the hearing, Mr Lee filed his verified Defence to Ms Huo’s Amended Statement of Claim (ASOC). He also filed an affidavit he had affirmed on 8 July 2025. In this affidavit, he emphasised that he was not a director but only an employee of Super Shepherd and that all of his dealings with Ms Huo were in that capacity. Conspicuously, he did not in this affidavit refer to the affidavit evidence of Ms Huo, Mr He and Ms Long and the statements attributed to him as set out at [7] above nor did he deny making representations to the effect that Super Shepherd was a licensed builder and had insurance that covered the works although this had been denied in his Defence to Ms Huo’s ASOC.

7. [31]

   On 27 May 2025, Ms Huo obtained default judgment against Super Shepherd with an order for damages to be assessed. Super Shepherd did not participate in the assessment of damages which came before Cole DCJ for hearing on 1 July 2025. On 6 August 2025, her Honour assessed damages in the sum of $779,798.29 together with interest of $164,474.96: Huo v Super Shepherd Pty Ltd [2025] NSWDC 286 at [13], [14], [28]-[29] (Huo).

8. [32]

   On 25 August 2025, the first day of the trial, the District Court was told that Ms Huo had settled with Mr Truong and TT, the other remaining defendants in the proceedings. That left Mr Lee as the only defendant in the proceedings.

9. [33]

   At the outset of the proceedings of 25 August 2025, Mr Lee sought to vacate the hearing date, relying on a Notice of Motion and an affidavit that had been filed by him the previous Friday. Mr Lee deposed to his inability to obtain legal representation and also that he suffered from anxiety for which he was medicated.

10. [34]

    The primary judge heard oral argument on this application before dismissing it on the morning of 25 August 2025. Her Honour’s reasons for so doing appear in the substantive judgment. Those reasons included the following at [51]-[53]:

11. [35]

    After dismissing the adjournment application (from which decision there is no appeal), the primary judge proceeded with the hearing.

The course of the trial

1. [36]

   The primary judge received a Court Book into evidence and had earlier received and read an outline of submissions filed on behalf of Ms Huo. Her Honour invited Mr Lee to make any objections to Ms Huo’s affidavit evidence, explaining various bases upon which objections could be made. Prior to dealing with objections, the primary judge invited a brief oral opening from counsel for Ms Huo (Mr Rizk) in which he made the central point that Super Shepherd was “neither licensed nor insured”, noting that being licensed was a prerequisite to being able to obtain a policy of insurance under the Home Building Act 1989 (NSW).

2. [37]

   In the course of his opening, Mr Rizk said:

3. [38]

   The primary judge then inquired as to the need for an interpreter at which point Mr Rizk indicated that no witnesses had been required for cross-examination by Mr Lee.

4. [39]

   In a letter written to Mr Lee on 5 August 2025 and tendered in the hearing of the appeal, Ms Huo’s solicitors had written to Mr Lee as follows:

5. [40]

   There was no evidence of any response by Mr Lee to this email.

6. [41]

   Mr Rizk indicated that on the basis of the evidence as it stood, he did not require Mr Lee for cross-examination. He continued:

7. [42]

   The primary judge asked Mr Lee a series of questions about his knowledge of the proceedings, the filing of defences and his knowledge of the decision of Cole DCJ before saying:

8. [43]

   A little later in the proceedings, the following exchange occurred:

9. [44]

   After Mr Rizk had made his submissions, the following exchange occurred between the primary judge and Mr Lee:

10. [45]

    Her Honour then proceeded to deliver an ex tempore judgment.

The primary judgment

1. [46]

   As already noted, the primary judge held that Mr Lee contravened s 18 of the ACL because he had engaged in conduct in trade or commerce that was misleading or deceptive.

2. [47]

   At PJ [17], the primary judge, referring to the defence filed by Mr Lee, said that “there is no traversal at all of the claims that he made the statements attributed to him.” This statement was regrettably incorrect as Mr Lee had denied the allegations made at [20] of the ASOC which pleaded the making of the representations. It may be that her Honour conflated the non-traversal of the alleged representations in Mr Lee’s affidavit with his Defence to the ASOC.

3. [48]

   The primary judge referred to two expert reports which she indicated she only needed to refer to briefly, saying at PJ [19] that “[n]one of the deponents was required for cross[-]examination. Although [Mr Lee] stated from the bar table that he wished to cross[-]examine these witnesses, he had given no notification in circumstances where he should have done so.” While it is correct that neither expert had been required for cross-examination, it is not entirely clear from a review of the transcript of the hearing that Mr Lee had indicated that he wished to cross-examine the experts as opposed to Mr He, Ms Huo and Ms Long.

4. [49]

   The primary judge concluded at PJ [39]-[45]:

5. [50]

   On 3 October 2025, Mr Lee filed a Notice of Appeal. On 27 January 2026, Mr Lee filed an Amended Notice of Appeal.

Grounds of appeal

1. [51]

   Mr Lee appeals on some nine grounds.

2. [52]

   Ground 1A raises a question of apprehended bias. In Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577; [2006] HCA 55 (Concrete), Kirby and Crennan JJ, with whom Gummow ACJ agreed at [3], observed at [117] that:

3. [53]

   In the present case, appeal ground 1A is formulated in a composite fashion, drawing on appeal grounds 4, 5 and 6 taken together as well as some supplementary arguments. In these circumstances, it is expedient, exceptionally, to deal with this ground after consideration of grounds 4, 5 and 6.

4. [54]

   For the reasons that follow, grounds 1, 2 and 3 should be rejected.

5. [55]

   Ground 1 is as follows:

6. [56]

   The Appellant was correct to submit that the primary judge erred in stating that he had failed to traverse the making of the alleged representations in his pleaded defence. The significance of that error is diminished, however, when it is appreciated, as her Honour did, that the Appellant had not in his affidavit denied making the representations or contested the evidence of Mr He, Ms Huo and Ms Long setting out in clear terms his statements said to have been made to them, namely that “[w]e are a licenced [sic] builder” and “[a]ll of our work is insured with HBCF insurance”: see [7] above. When her Honour said at PJ [15] that “[h]e has never denied them and that is a significant factor in this case”, she was referring to his affidavit and submissions. When her Honour said at PJ [17] that there was “extensive documentary evidence of the statements made”, it is plain from the context that she was referring to the affidavit evidence contained in the affidavits relied upon by Ms Huo.

7. [57]

   The primary judge’s conclusion that the Appellant made the relevant representations was not “predicated” on her error as to his failure to traverse the allegations in the pleading. Her Honour referred at PJ [23] to the summary of the lay evidence in the Respondent’s written submissions which she relevantly adopted. This included at [14] the following:

8. [58]

   At [33] of the Respondent’s written submissions, the submission was made, and accepted by the primary judge at PJ [34], that:

9. [59]

   In relation to the submission that the primary judge reversed the onus of proof, this appears to be based upon a combination of a “denial of procedural fairness to the Appellant on the basis that he was never cross-examined on having made the representations” and a “reversal of the onus of proof on the issue by determining it on the basis of a lack of evidence from a self-represented litigant that he denied the alleged oral representations”.

10. [60]

    This submission is misconceived. A cross-examiner is not bound to challenge a witness in respect of evidence that a witness has not given, in the current case, a denial of the representations deposed to in the affidavits of Mr He, Ms Huo and Ms Long. Indeed, it would usually be forensically foolhardy for a cross-examiner to seek to do so. It is for a witness to deny allegations, and adverse inferences may be drawn where a witness has the opportunity to go into evidence on an important matter within his or her knowledge and does not do so: see Commercial Union Assurance Co of Australia Ltd v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418. In the present case, Mr Lee filed a quite detailed affidavit in which he placed emphasis on the role he played in his communications with Ms Huo. In it, however, he conspicuously failed to address the central evidence of representations he had made to Ms Huo in the presence of Mr He and Ms Long. There was no evidence either on the adjournment application or in the trial or even in statements from the Bar Table that he did not understand the need to do this and, as the primary judge observed in her reasons in respect of the adjournment application, he was well-educated and articulate and spoke English with “the utmost confidence”: at PJ [15].

11. [61]

    In relation to the third limb of ground 1, there was no deficit in the adequacy of the primary judge’s reasons for finding that the Appellant made what he refers to as the “Licence and Insurance Representation/s”: see, for example, [7]-[9] above.

12. [62]

    For these reasons, appeal ground 1 should be rejected.

13. [63]

    Ground 2 is that the primary judge erred in finding that the Appellant, not Super Shepherd, was responsible for the misleading or deceptive conduct. This ground reflects the principal basis on which, through his affidavit, Mr Lee sought to defend the claim against him, contending that he was merely an intermediary employee speaking for Super Shepherd.

14. [64]

    In support of this ground, it was submitted, citing Anchorage Capital Master Offshore Ltd v Sparkes (2023) 111 NSWLR 304; [2023] NSWCA 88 at [362] (Anchorage) and Care A2 Plus Pty Ltd v Pichardo [2024] NSWCA 35 at [100]-[117], that whether a representation is made by an intermediary, as opposed to the corporation that employs them, depends on by whom a representee would regard the representation as being made and, citing Borzi Smythe Pty Ltd v Campbell Holdings (NSW) Pty Ltd [2008] NSWCA 233 at [53]; Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd (No 2) [2009] FCA 1153; (2009) 74 ACSR 373 at [31]; Richard v Gendore Enterprises Pty Ltd [2004] NSWCA 116 at [26], that an intermediary is more readily inferred to be merely passing on, and not responsible for, information where they “[do] nothing more than provide or refer to a document that, on its face, was prepared by another”.

15. [65]

    The Appellant submitted, citing Granitigard Pty Ltd v Termicide Pest Control Pty Ltd [2011] FCAFC 81; (2011) 281 ALR 1 at [31]; Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200 at [3139], [3165]; Havyn Pty Ltd v Webster [2005] NSWCA 182 at [89]; CH Real Estate Pty Ltd v Jainran Pty Ltd [2010] NSWCA 37 at [123], that an intermediary is more readily inferred to have adopted information where a third-party document has been altered before being passed on, the intermediary knows the representations passed on may not be reliable and the representation concerns a “relatively simple matter” supposedly within their “professional judgment”.

16. [66]

    These submissions do not avail the Appellant. In the first place, on the evidence before the primary judge, the primary source of the representations as to the holding of a building licence and the existence of HBCF insurance was an uncontradicted oral statement made by the Appellant himself. Nothing in this statement, as evidenced in the affidavit evidence of Ms Huo, Mr He and Ms Long supported the contention that the Appellant was speaking only as a conduit or intermediary. Rather, according to their evidence he said that “[w]e are a licenced [sic] builder” and “[a]ll of our work is insured with HBCF insurance”. Whether, in using the words “we” and “our”, the Appellant was referring to himself and Super Shepherd, or simply to Super Shepherd, matters not: it was the Appellant who was making the misleading and deceptive representations and doing so in a positive and unqualified way.

17. [67]

    In relation to the Fee Proposal, it was the Appellant who signed that document on behalf of Super Shepherd. This is a very different context to the realtor in Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 who handed over a document which on its face was not prepared by him.

18. [68]

    Moreover, it was entirely reasonable for the representees to act on the basis that the Appellant was familiar with what he was saying about the status of the licence and insurance of the company whose fee proposal he was proffering.

19. [69]

    Ground 2 should be rejected.

20. [70]

    Ground 3 is that the primary judge failed to take appropriate steps to ensure that the Appellant, as an unrepresented litigant, had sufficient information about the practice and procedure of the District Court of New South Wales as is reasonably practicable for the purpose of ensuring a fair trial. The Appellant submitted that her Honour failed properly to inform the Appellant of his ability to object to the admission of evidence and that she failed to ensure that he understood what “submissions” were.

21. [71]

    In support of this ground, the Appellant submitted that a court’s responsibility to an unrepresented litigant includes that it “must be patient in explaining [the rules]”, citing a passage from the judgment of Samuels JA in Rajski v Scitec Corporation Pty Ltd (Court of Appeal (NSW), 16 June 1986, unrep) which was referred to in Chalik v Chalik [2025] NSWCA 136 at [68] (Chalik). What followed the reference to that passage in Chalik at [69]-[71] should be set out in some detail:

22. [72]

    One of the reasons why the question of the extent, if any, of assistance which a trial judge should afford to an unrepresented litigant in civil proceedings is nuanced is that not all unrepresented litigants are alike: some may lack language skills or be plainly “at sea” in an unfamiliar court environment; others may be fixated on a particular issue or issues; still others may be intelligent and articulate.

23. [73]

    The Appellant in the present case was in the latter category. He was described at PJ [51] by the primary judge when dealing with the adjournment application as speaking “English with the utmost confidence, and [being] a well[-]educated and articulate member of the business community in general and architecture in particular.” This is borne out not only by the affidavit he filed in the principal proceedings at a stage when he was self-represented but also by his affidavit in support of his adjournment application. During the course of that application, he made oral submissions to the primary judge to the effect that he would be denied procedural fairness and would be prejudiced if the adjournment were not granted. These were supported by a well-put-together affidavit.

24. [74]

    Further, in relation to the complaint that the primary judge failed properly to inform the Appellant of his right to object to evidence, there was no such failure as the following extract from the transcript makes plain:

25. [75]

    In point of fact, and contrary to the complaint in relation to the suggested failure to inform him of his ability to object to the admission of evidence, Mr Lee did raise an objection to Mr He’s affidavit, as is borne out in the extract from the transcript reproduced at [43] above. A little after that exchange, the primary judge inquired of Mr Lee, “Anything else?” to which he replied, “No. No your Honour.”

26. [76]

    As to the complaint that the primary judge failed to ensure that the Appellant understood what “submissions” were, immediately after this last exchange, the primary judge announced, addressing Mr Rizk, that, “In that case we’re up to submissions. Do you want to perhaps go first and then I’ll hear from Mr Lee and then you can address me in reply to Mr Lee?” Mr Rizk then proceeded to make oral submissions during the course of which he also made reference to written submissions which had been filed and which the primary judge indicated she had read. At the conclusion of his oral submissions, the following exchange occurred:

27. [77]

    The submission was made, unsupported by any evidence sought to be read on the appeal, that Mr Lee may have been under a misconception that her Honour was inquiring as to whether he had any written submissions and had not understood that he had been asked to make any oral submissions. This is speculative but in circumstances where the primary judge had said, before Mr Rizk’s address, that “we’re up to submissions” and that she would “hear” Mr Lee after Mr Rizk, I am not satisfied that there was any lack of clarity or understanding. More pertinently, the primary judge was entitled to be satisfied that Mr Lee was not labouring under some misunderstanding as to what “submissions” were such that she had failed to ensure a fair trial.

28. [78]

    Ground 3 should be dismissed.

29. [79]

    Ground 4 is that the primary judge constructively failed to exercise jurisdiction when her Honour found at PJ [31] that it was “not necessary … to deal with the expert evidence as the correctness of the sums claimed [had] not been challenged”.

30. [80]

    The expert evidence comprised three reports. The first, by Mr Dan Oakley, of Cosmic Consulting, made an estimate of the percentage of the works that had been completed by Super Shepherd. This was said to be 6.1% with a value of $41,615.89. The second report was by a quantity surveyor, Mr Moises Lopez. He gave a slightly higher estimate of the value of the completed works, namely $57,449.74 inclusive of GST and provided an estimate to complete the works (this report having been prepared prior to Felixland having in fact completed its contract). The third report was also by Mr Oakley. It did not go directly to matters of quantum but to whether and how easily MCG, the other builder that Ms Huo had considered engaging to perform the works in April and May 2021, could have had its building licence modified to remove the restriction on taking contracts that required HBCF insurance.

31. [81]

    Bearing these matters in mind, and in particular that the expert evidence did not go to the “correctness of the sums claimed”, the primary judge’s statement at PJ [31] is difficult to understand and supports an inference that she had not, before giving her ex tempore reasons, in fact read or reviewed the expert reports which were contained in a Court Book.

32. [82]

    But that, in itself, does not particularly assist the Appellant. He had not sought to cross-examine the experts and the experts’ evidence was not in fact relied upon by the primary judge in the assessment of any damages. Further, her Honour was correct to say that the correctness of the sums claimed was not challenged, either by cross-examination or in submissions by Mr Lee.

33. [83]

    That all having been said, however, the evidence as to the value of the works completed was relevant and should have been taken into account in the assessment of loss and damages. That did not occur. Ground 4 should, to this extent, be upheld. The failure to have regard to the value of the work completed was also relevant to ground 7 relating to damages.

34. [84]

    These grounds can be dealt with together.

35. [85]

    Ground 5 is that the primary judge denied the Appellant procedural fairness by refusing him the “right” to cross-examine the Respondent’s lay and expert witnesses.

36. [86]

    Ground 6 is that the primary judge, “by refusing the Appellant the right to cross-examine the Respondent’s lay witnesses, in circumstances where those witnesses were present in person at the hearing, failed to apply the correct principle in refusing cross-examination on the basis that reasonable notice had not been given where those witnesses were otherwise present and there was no prejudice to the Respondent in having them made available for cross-examination.” It is important to note that, contrary to the terms of ground 6, only one of the Respondent’s lay witnesses was present in person at the hearing, namely Ms Huo, who was the plaintiff (and who is the Respondent in this Court).

37. [87]

    The formulation of these grounds and the reference in both of them to the “right” to cross-examine was refined in written submissions in which it was put that:

38. [88]

    In support of this submission, the following cases were cited: GPI Leisure Corp Ltd v Herdsman Investments Pty Ltd (No 3) (1990) 20 NSWLR 15; NMFM Property Pty Ltd v Citibank Ltd (No 8) [1999] FCA 266; (1999) 161 ALR 581 at [16] (GPI); Stack v Western Australia (2004) 29 WAR 526; [2004] WASCA 300 at [99]-[100]. More recently, the authorities were summarised by Ward JA (as the President then was) in B v R [2015] NSWCCA 103 at [203]-[205]:

39. [89]

    The request for cross-examination that was made during the course of the hearing on 25 August 2025 and which was denied by the primary judge related to Mr He, Ms Huo and Ms Long. None of these three had been required for cross-examination prior to the hearing notwithstanding the letter to the Appellant dated 5 August 2025 and extracted at [39] above. In this context, the terms of r 35.2 of the Uniform Civil Procedure Rules 2005 (NSW) should be noted:

40. [90]

    This rule does not prevent or preclude cross-examination of a witness who has not been required for cross-examination. Rather, it operates to prevent a party from relying on an affidavit of a person who has been required for cross-examination within a reasonable time but who does not attend “unless the deponent is dead or unless the court orders otherwise.” Obviously, a party who fails to request a witness for cross-examination in a reasonable time or at all runs the risk that, as a practical matter, that witness may not be present at court and thus not be able to be cross-examined.

41. [91]

    As noted above, neither Mr He nor Ms Long was present in the District Court at the hearing as they had not been required for cross-examination and an adjournment (which had already been refused) would have been required to secure their attendance and Mandarin translators. In the course of argument on the appeal Mr Hopkins, who appeared for Mr Lee, accepted that his complaint of a denial of a fair trial arising from the refusal to allow the cross-examination of these two witnesses was less persuasive than the refusal in respect of Ms Huo, the plaintiff who was present. I agree.

42. [92]

    Acceding to the late oral request to cross-examine those two witnesses would have necessitated an adjournment and it was doubtful, based upon what had been said on the hearing of the adjournment application, that Mr Lee would have been in a position to meet any adverse order for costs thrown away by any adjournment.

43. [93]

    The primary judge’s decision not to permit cross-examination of Ms Huo however, who was present in Court, was far more problematic. The key exchange between the judge and Mr Lee was as follows:

44. [94]

    Shortly after this exchange, the primary judge said:

45. [95]

    The “history of the matter” to which her Honour referred no doubt included:

    1. (1)

       the fact that, although Mr Lee had filed an affidavit in the proceedings denying any responsibility for the claimed loss, this affidavit did not address the critical evidence of Ms Huo as to the making of the oral representations by Mr Lee;

    2. (2)

       Mr Lee had secured an adjournment and ultimately a transfer of the proceedings from NCAT in 2024;

    3. (3)

       Mr Lee had known about the trial date for a reasonable period of time;

    4. (4)

       Mr Lee had been given notice of his opportunity to cross-examine by the letter of 5 August 2025 inquiring whether he required any witnesses for cross-examination; and

    5. (5)

       two of the three lay witnesses who also deposed to the making of the oral representations and who had not been required for cross-examination were not present in Court.

46. [96]

    Importantly it should be noted that part of her Honour’s understanding of the “history of the matter” included that Mr Lee had not traversed the making of the representations pleaded in the ASOC. As already noted, this understanding was erroneous. While the complaint as to this error was rejected in the consideration of appeal ground 1, it assumes more significance in the context of ground 5 because it cannot be excluded that this misapprehension informed the primary judge’s exceptional decision to prevent cross-examination of Ms Huo who was present in Court.

47. [97]

    I use the term “exceptional” because of the myriad statements made in the authorities as to the significance of cross-examination as an essential component of a fair trial in the adversarial system. Thus, in Allen v Allen [1894] P 248 at 253, in a passage frequently cited, Lopes LJ, delivering the judgment of the Court of Appeal of England and Wales, said that it appeared to the Court to be “contrary to all rules of evidence, and opposed to natural justice, that the evidence of one party should be received as evidence against another party, without the latter having an opportunity of testing its truthfulness by cross-examination.” In Mechanical and General Inventions Co Ltd v Austin [1935] AC 346 at 359, it was said that “[c]ross-examination is a powerful and valuable weapon for the purpose of testing the veracity of a witness and the accuracy and completeness of his story.” In Lee v The Queen (1998) 195 CLR 594; [1998] HCA 60 at [32], the High Court said that “[c]onfrontation and the opportunity for cross-examination is of central significance to the common law adversarial system of trial.”

48. [98]

    There may of course be exceptions. For example, cross-examination is not always permitted on interlocutory hearings; a witness may have died since giving their evidence or be unavoidably unavailable. In both of these cases, the evidentiary value attaching to such evidence may be diminished: Abadom v Abadom (1857) 24 Beav 243 at 244; 53 ER 351 at 351; Morley v Morley (1855) 5 De GM & G 609 at 615; 43 ER 1007 at 1009 referred to in Cross on Evidence (online ed, July 2024, Lexis Advance) at [17480]; Amalgamated Television Services Pty Ltd v Marsden [2002] NSWCA 419 at [187]-[192]. By way of further example, a witness’ evidence may just have annexed documents which could readily have been tendered as business records; or, as was so in the present case in respect of Mr He and Ms Long, the cause of the unavailability of a witness to be cross-examined may have rested at the feet of the party wishing to cross-examine because they had failed to request the witness’ presence for that purpose and prejudice would have ensued if the trial was adjourned.

49. [99]

    Mr Lee’s request to cross-examine the plaintiff, Ms Huo, was not in terms opposed by her counsel. All he did was to point out to the primary judge that she had not been required for cross-examination in response to the letter of 5 August 2025. Ms Huo’s counsel did not identify any prejudice that would flow from her being cross-examined. The trial had been set down for three days before the primary judge and her Honour would have been in a position to control the extent, time and manner of the cross-examination in the exercise of her discretion: see also Evidence Act 1995 (NSW) s 41. It is highly likely that the cross-examination would, at least in part, have been directed to the evidence as to the making of the representations which had been denied in the Appellant’s defence. This is supported by what Mr Lee had said when attempting to raise objections to Mr He’s affidavit: see [43] above.

50. [100]

    The primary judge may well have considered that Mr Lee was unlikely to make any headway in his proposed cross-examination of Ms Huo or that cross-examination may not ultimately have made a difference to the outcome of the case. That supposition may or may not have been correct but it is not to the point. Although Ms Huo was not the only witness who had deposed to the making of the representations, she was the only relevant witness for the purposes of reliance. Her evidence was central to her being able to succeed in the case and it is notorious that not all witnesses come up to proof when their affidavit evidence is tested in cross-examination. Fairness dictated that Mr Lee be given the opportunity to cross-examine Ms Huo given that she was present in Court, there was no logistical impediment to this occurring within the timeframe set aside for the trial and no other prejudice was pointed to. The short reasons of the primary judge do not identify any other specific matter that informed her decision although, as I have already said, it cannot be excluded that her Honour’s misapprehension that Mr Lee had failed to traverse the alleged representations in his Defence to the ASOC affected her reasoning.

51. [101]

    Mr Rizk sought to defend the primary judge’s decision to refuse to permit cross-examination of Ms Huo on the basis that it involved an exercise of discretion such that the Court should consider any challenge to it through the eyes of House v The King (1936) 55 CLR 499; [1936] HCA 40. That submission was unavailing, however, because that exercise of discretion was vitiated by her Honour’s mistaken understanding that Mr Lee had failed to traverse the making of the representations in his Defence to the ASOC. Alternatively, her Honour’s decision to refuse to permit Mr Lee to cross-examine Ms Huo fell, in my opinion, into the category of unreasonable decisions that permit appellate interference with a primary judge’s discretionary decision. That it was a decision in some respects on a matter of practice and procedure is not to the point: it was a decision with potential to affect the outcome of the case.

52. [102]

    To the extent that the primary judge relied upon the fact that Mr Lee had not required any witness to attend for cross-examination, that failure should not have counted against him in relation to Ms Huo. The primary judge’s blanket ruling failed to advert to this important fact. The answer to the primary judge’s question to Mr Lee,

53. [103]

    Although grounds 5 and 6 also refer to the primary judge’s refusal to permit cross-examination of the expert witnesses on the question of damages, on my review of the transcript, Mr Lee did not in fact indicate that he wished to cross-examine them. In any event, neither was present and would have fallen into the same category as Mr He and Ms Long.

54. [104]

    Reference was made in argument to the discussion of materiality in MZAPC v Minister for Immigration and Border Protection (2021) 273 CLR 506; [2021] HCA 17 (MZAPC) and the Court’s earlier decision in Stead v State Government Insurance Commission (1986) 161 CLR 141; [1986] HCA 54; see also Nobarani v Mariconte (2018) 265 CLR 236; [2018] HCA 36 at [36]-[38] (Nobarani). In MZAPC, Kiefel CJ, Gageler, Keane and Gleeson JJ said at [46] that:

55. [105]

    The High Court considered MZAPC in LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2024) 280 CLR 321; [2024] HCA 12 (LPDT). In LPDT, Gageler CJ, Gordon, Edelman, Steward, Gleeson and Jagot JJ said at [14]-[16], with Beech-Jones J agreeing at [38], that:

56. [106]

    In my view, appeal grounds 5 and 6 must be upheld. The primary judge’s refusal to permit the cross-examination by Mr Lee of Ms Huo regrettably means that there must be a new trial. In circumstances where permitting such cross-examination could have changed the course of the proceedings — for example, by affecting the assessment of Ms Huo’s credibility or revealing new evidence that undermined her arguments on reliance or damages — it cannot be said that “the outcome would inevitably have been the same” without the cross-examination. The refusal to permit the cross-examination of Ms Huo was therefore not an error of a kind that could confidently be characterised as immaterial, especially at a standard that is “not demanding or onerous”.

57. [107]

    Having now dealt with grounds 4, 5 and 6, it is appropriate to turn to appeal ground 1A.

58. [108]

    Ground 1A is that “[t]he conduct of the Trial Judge would have led a fair minded [sic] observer to conclude that there was as [sic] reasonable apprehension of bias as against the Appellant such that the Appellant was deprived of a fair trial.”.

59. [109]

    As earlier noted, this ground built upon grounds 4, 5 and 6 and contended that, taken together with these matters, the primary judge engaged in the following conduct which warranted a finding of apprehended bias:

60. [110]

    The first four of these matters focused on observations made by the primary judge in the course of the Appellant’s adjournment application, which was rejected and from which decision there was no appeal. It was not inappropriate for the primary judge to engage with the Appellant in the course of this belated application and I do not read the transcript as manifesting either a sarcastic attitude on the part of the primary judge nor of her Honour “making light” of the Appellant’s medical condition as to which there was very general evidence. To the extent that the primary judge was firm in her interaction with the Appellant, there was a legitimate basis for her Honour expressing the view that the Appellant was the author of his dilemma due to his apparent tardiness in seeking to obtain legal representation.

61. [111]

    In relation to the four instances given by the Appellant complaining of “pre-judgment of contested issues”, those references do not bear that character. They involved the primary judge setting out her understanding of key parts of the evidence. In relation to the criticism that the primary judge made comments indicating that “the Court would simply adopt the decision of [Cole DCJ] as to assessment of damages”, this is not a fair criticism of the primary judge. What her Honour did fairly in the course of argument was to indicate that she would be minded to take a similar approach to that taken by Cole DCJ in the assessment of damages against Super Shepherd. Far from manifesting apparent bias, this was putting the Appellant on notice of how her Honour was contemplating assessing damages and it was open to the Appellant to oppose that course or to advance any submissions against that course. That he did not do so did not mean that her Honour’s conduct manifested an appearance of bias against him. Insofar as the primary judge did not differentiate between those witnesses who were not present and thus not available for cross-examination, on the one hand, and Ms Huo, on the other hand, while I have held that her Honour was in error in so doing, that error was not the product of actual or apparent bias but of the miscarriage of her discretion for reasons dealt with in my treatment of appeal grounds 5 and 6. As to the final matter relied upon, the exchange in question related to a passage in the transcript where the primary judge and Mr Rizk had evidently been at cross-purposes, as Mr Rizk acknowledged in the course of the exchange.

62. [112]

    In my view, the complaint of apprehended bias in appeal ground 1A is not sustained.

63. [113]

    Grounds 7 and 8 relate to quantum and the primary judge’s assessment of damages. The appellant’s partial success in relation to ground 4 means that the primary judge’s decision in relation to damages should also be set aside.

64. [114]

    The primary judge’s reasoning in respect of damages was confined to two paragraphs of her judgment (PJ [44]-[45]) reproduced at [49] above and largely represented an adoption of the two paragraphs from the Respondent’s written submissions at first instance. It did not depend on figures taken from the expert reports but on essentially four integers: first, the amount paid by Ms Huo to Super Shepherd; second, the price quoted for the MCG contract; third, the amount paid to Felixland; and fourth, the amount of rent paid by Ms Huo while not able to reside in her property on account of the delay in the refurbishments. The Respondent had prefaced her written submissions on damages in the Court below by stating that:

65. [115]

    This was a reference to the decision of Cole DCJ in Huo. In this decision, the claim for damages was based on a submission, reproduced by Cole DCJ at [20]-[22] and later accepted by her Honour, that Ms Huo:

66. [116]

    During the course of the hearing, the primary judge had foreshadowed that she was inclined to adopt the approach of Cole DCJ in any assessment of damages.

67. [117]

    A large number of criticisms are made by the Appellant of the primary judge’s decision as to quantum including that her Honour:

68. [118]

    There is, in my view, force in a number of these criticisms including as to the mechanical adoption of the reasoning process of Cole DCJ and the failure to account for the value of the works in fact performed by Super Shepherd which was the subject of expert evidence and which authority dictated should have been accounted for: see Mills v Walsh [2022] NSWCA 255 at [110]; Schrader v Broach [2024] NSWCA 14 at [162]-[163]; see also Sabouni v Revelop Building and Developments Pty Ltd [2021] NSWSC 31 at [41]-[46].

69. [119]

    On the other hand, there is force in the Respondent’s position that none of the arguments underpinning many of the criticisms was in fact advanced at first instance, and that they should not be permitted to be raised for the first time on appeal, citing familiar authorities such as University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481 at 483:

70. [120]

    The Respondent submitted that the Appellant needed to demonstrate that it is expedient in the interests of justice to allow new points to be raised, in circumstances where a party is ordinarily bound by their case: Bibby Financial Services Australia Pty Ltd v Sharma [2014] NSWCA 37 at [10]; Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462 at [314]-[316]; TAL Life Ltd v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68 at [164]-[167].

71. [121]

    Given that, because of the Appellant’s success on grounds 4, 5 and 6, there will need to be a new trial, it is unnecessary to resolve this tension, which would have required a detailed consideration as to whether the various matters sought to be raised were confined to matters of law which could not be affected by evidence: Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438; [1950] HCA 35.

Conclusion

1. [122]

   For the foregoing reasons, the appeal should be allowed, the decision of the primary judge set aside and the matter remitted to the District Court for a new trial: see Nobarani at [36]-[38].

2. [123]

   In my view, the appropriate order as to costs should be that the costs of the appeal be costs in the cause.

3. [124]

   MITCHELMORE JA: I agree with the Chief Justice.

4. [125]

   STERN JA: I agree with the Chief Justice.