Fang v Yao

Case [2025] QSC 265

SUPREME COURT OF QUEENSLAND

CITATION:

Fang v Yao [2025] QSC 265

PARTIES:

LINA FANG
(first plantiff)
NAXI AGRICULTURE INVESTMENT PTY LTD
ACN 634 072 209 (AS TRUSTEE FOR THE NAXI AGRICULTURE TRUST)
(second plaintiff)
NAXI @ TROUGHTON PTY LTD ACN 634 070 698 (AS TRUSTEE FOR THE NAXI PROPERTY INVESTMENT TRUST)
(third plaintiff)
NAXI (CHINA) PTY LTD ACN 616 666 749
(fourth plaintiff)

v
WENLIANG YAO (ALSO KNOWN AS WILLIAM YAO)

(first defendant)
QIUYUE LI
(second defendant)
LIANRU ZHAO
(third defendant)
NEW AUS GROUP PTY LTD ACN 165 555 733
(fourth defendant)
W HOLDING GROUP PTY LTD ACN 619 024 341
(fifth defendant)
BRISBANE VALLEY INVESTMENTS PTY LTD ACN 623 094 306 (BOTH IN ITS OWN RIGHT AND IN ITS CAPACITY AS TRUSTEE FOR THE BRISBANE VALLEY INVESTMENTS TRUST)
(sixth defendant)
AIRHOME BRISBANE PTY LTD ACN 624 970 501
(seventh defendant)
ANXIN CAPITAL PTY LTD ACN 632 712 675
(eighth defendant)
THE COMMISSIONER OF TAXATION
(ninth defendant)

FILE NO/S:

SC No 13370 of 2022

DIVISION:

Trial

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

17 October 2025

DELIVERED AT:

Brisbane

HEARING DATE:

25 July 2025

JUDGE:

Freeburn J

ORDERS:

1.   The Yao, Zhao and Li defendants are directed to provide to the registrar a bundle of the documents in respect of which legal professional privilege is claimed.

2.   That bundle be prepared having regard to these reasons and remain confidential.

3.   The registrar be directed to provide that bundle to the Associate to Freeburn J for Freeburn J.

4.   Following inspection, the Associate to Freeburn J will return the documents in the bundle for which privilege is properly claimed to the solicitors for the Yao, Zhao and Li defendants.

5.   I will hear the parties on costs. 

CATCHWORDS:

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DISCOVERY AND INTERROGATORIES – DISCOVERY AND INSPECTION OF DOCUMENTS – DISCOVERY OF DOCUMENTS – where the proceeding has reached disclosure – where the list of documents delivered by the defendants lists documents in respect of which legal professional privilege is claimed – where an interlocutory application is brought pursuant to rule 213 of the Uniform Civil Procedure Rules 1999 (Qld) to challenge the claims of privilege – where the defendants were required to file and serve an affidavit stating their privilege claim – where r 213 requires the claim to the privilege to be supported by an affidavit “by an individual who knows the facts giving rise to the claim” – where the Yao and Zhao defendants claim privilege over documents in Annexure 1 – where the Yao and Zhao defendants’ solicitor prepared the affidavit – where the Yao and Zhao defendants’ solicitor’s affidavit does not say he has any direct knowledge of the circumstances in which some of the documents were created – where the Li defendants claim privilege over documents in Annexure 2 – where the Li defendants previously claimed privilege over documents entitled ‘heads of agreement’ – where the Li defendants argue a number of documents attract…

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Details
AGLC
Fang v Yao [2025] QSC 265
Case
[2025] QSC 265
Decision Date

CaseChat Overview and Summary

In the case of Fang v Yao, the parties are engaged in civil litigation in the Queensland state court, with the primary dispute centring around claims of legal professional privilege over certain documents. The court was tasked with determining whether the defendants had properly sustained their claims of privilege, in accordance with the requirements of rule 213 of the Uniform Civil Procedure Rules 1999 (Qld). This rule mandates that claims of privilege must be supported by an affidavit from an individual who has direct knowledge of the facts giving rise to the privilege. The defendants had listed several documents over which they claimed privilege, and an interlocutory application was brought to challenge these claims.

The legal issues before the court involved whether the defendants' claims to privilege had been properly sustained under rule 213. Specifically, the court examined the affidavits provided by the defendants' solicitors, assessing whether these affidavits met the requirement of being based on direct knowledge. The court scrutinised the evidence presented by the defendants, particularly focusing on the affidavits from their solicitors and the direct knowledge they claimed to have regarding the circumstances surrounding the creation of the documents in question. The court also evaluated whether the documents were appropriately protected by legal professional privilege, considering the nature of the communications and their purpose.

The court found that the claims of privilege were not properly sustained, primarily because the affidavits did not demonstrate the requisite direct knowledge of the circumstances in which some of the documents were created. The court highlighted that the affidavits from the defendants' solicitors did not provide evidence of direct knowledge from individuals who were involved in the creation of the documents, which was a critical requirement under rule 213(3). Consequently, the court concluded that the defendants had not complied with the procedural requirements for sustaining their claims of privilege. As a result, the court directed the defendants to provide a bundle of the documents in question to the registrar for inspection, to determine which documents could properly be subject to privilege.

In light of the findings, the court made specific orders to address the procedural issues. The defendants were required to submit a confidential bundle of the documents in question to the registrar. The registrar would then provide this bundle to an associate for inspection by the judge. Following the inspection, the judge's associate would return the documents for which privilege was properly claimed to the defendants' solicitors. The court also scheduled a subsequent hearing to address the costs associated with the interlocutory application.

Orders

Orders of the court

1. The Yao, Zhao and Li defendants are directed to provide to the registrar a bundle of the documents in respect of which legal professional privilege is claimed.

2. That bundle be prepared having regard to these reasons and remain confidential.

3. The registrar be directed to provide that bundle to the Associate to Freeburn J for Freeburn J.

4. Following inspection, the Associate to Freeburn J will return the documents in the bundle for which privilege is properly claimed to the solicitors for the Yao, Zhao and Li defendants.

5. I will hear the parties on costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

The Yao and Zhao defendants, however, submit that Mr Cohen gives “direct evidence” of the basis for the privilege claim on behalf of Mr Yao.[25] It is difficult to see how that can be so. There is no evidence that Mr Cohen had any involvement at the relevant time. Ms Malloy may have been able to give direct evidence of the confidentiality of the communication, and the dominant purpose of its creation. But Mr Cohen’s role in reviewing the documents hardly gives him any direct knowledge of the confidentiality of the communication or the dominant purpose for its creation. The review by Mr Cohen does not have the effect of converting indirect knowledge into direct. In fact, the vice that rule 213(3) was evidently designed to overcome was claims of privilege supported by indirect evidence. [25]See the Yao and Zhao defendants’ submissions, at [24] – the submission is made that: “Mr Cohen deposes that he has reviewed the documents which relate to this retainer and, as a result of that review, gives direct evidence of the basis for the privilege claim on behalf of Mr Yao.” [emphasis added] As explained, Mr Cohen has exhibited the costs agreement between Tucker & Cowen and Mr Yao. That costs agreement is dated 4 October 2017 and records that Tucker & Cowen were to act for Mr Yao in reviewing a notice by MARA to cancel or suspend Mr Yao’s registration as a registered migration agent, or to caution him.[26] They were also to act for him in providing preliminary advice on the notice and in preparing submissions in response to MARA’s notice. Ms Malloy of Tucker & Cowen seems to have given that advice because items 1 and 2 of the schedule comprise an email dated 25 October 2017 enclosing, presumably, a draft letter to MARA.[26]Migration Act 1958 (C’th) s 309(2). That direct communication between solicitor and client, enclosing a draft response to the notice from MARA would, more than likely, be subject to legal professional privilege because it would be a confidential communication for the purpose of providing legal advice. In essence, the draft is likely to reflect what Ms Malloy advised her client to communicate to MARA. Even if the draft was the same or little different from the version that ultimately went to MARA, the communication between solicitor and client would ordinarily be the subject of advice privilege.[27] On the other hand, what eventually goes to MARA, a government department, can hardly be said to be a communication between solicitor and client, confidential or created for the dominant purpose seeking or being provided with legal advice. [27]Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 207 ALR 217 at [20]. The difficulty is that the claim of privilege has not been established by direct evidence in accordance with rule 213(3). The failure to properly sustain the claim to privilege means that the court could reject the claim of privilege, or inspect the documents itself, or give the Yao defendants a further opportunity to sustain their claim to privilege. I will return to those three options later.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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