FX Group Holdings Pty Ltd v Perpetual Trustee Co Ltd as trustee of the CPEC 8 Trust A (formerly the CHAMP IV Trust A) (No 2) (late evidence)

[2025] NSWSC 623

Supreme Court

New South Wales

Medium Neutral Citation:

FX Group Holdings Pty Ltd v Perpetual Trustee Co Ltd as trustee of the CPEC 8 Trust A (formerly the CHAMP IV Trust A) (No 2) (late evidence) [2025] NSWSC 623

Hearing dates:

5 June 2025

Date of orders:

5 June 2025

Decision date:

05 June 2025

Jurisdiction:

Equity

Before:

Rees J

Decision:

Refuse leave.

Catchwords:

CIVIL PROCEDURE — evidence — plaintiff tenders supplementary expert report at commencement of expert conclave — report served the day before — leave required — principles at [4]-[5] — no explanation — plaintiff earlier failed to produce the material in discovery — prejudice — leave refused.

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 62(1)
Uniform Civil Procedure Rules, r 29.5

Cases Cited:

Goodman Fielder Consumer Foods Pty Ltd vGraincorpFoods Australia Pty Ltd [2020] NSWSC 706

Roach v Page (No 27) [2003] NSWSC 1046

Urban Transport Authority of New South Wales vNweiser (1992) 28 NSWLR 471

Category:

Procedural rulings

Parties:

FX Group Holdings Pty Ltd (Plaintiff)
Perpetual Trustee Company Ltd as trustee of the CPEC 8 Trust A (1st Defendant)
PT Ltd as trustee of the CPEC 8 Trust B (2nd Defendant)
Perpetual Corporate Trust Ltd as trustee of the CPEC 8 Trust C (3rd Defendant)
The Trust Company (Australia) Ltd as trustee of the CPEC 8 Trust D (4th Defendant)
David Swinden (5th Defendant)
Georgina Gane (6th Defendant)
Natalie German (7th Defendant)
Sheldon Chapman (8th Defendant)
Toby Tan (9th Defendant)
Vincent Gross (10th Defendant)
Xiaohong Yan (11th Defendant)
Xingjia Zhang (12th Defendant)
Daniel Poon (13th Defendant)
Fiona Lock Rimmer (2nd Cross-Defendant)
Vishal Ahuja and the other persons also named in Schedule A t/as King & Wood Mallesons (12th Cross-Defendant)

Representation:

Counsel:
M Izzo SC, C Hamilton-Jewell, H Whitwell (Plaintiff/1st, 2nd cross-defendants)
PD Herzfeld SC, AG Willoughby (1st - 4th Defendants)
A Munro SC, R Pietriche (12th Cross-Defendant)

Solicitors:
Minter Ellison (Plaintiff)
Arnold Bloch Leibler (1st - 4th Defendants)
Collin Biggers & Paisley (12th Cross-Defendant)

File Number(s):

2022/311060

EX TEMPORE JUDGMENT

1. HER HONOUR: On the sixth day of trial, as the parties’ experts on capital retention are about to commence their conclave, the plaintiff has tendered a supplementary report by its expert, Huseyin Sahin. The report was served yesterday afternoon. The specific issue to which the supplementary report goes is the appropriate margin to use when calculating the amount of capital to retain in respect of a book of clients of the Pepperstone business, referred to as the “S-book”.

2. The defendants object to the tender. The cross-defendants take no position, having no interest in the capital retention issue.

3. The plaintiff’s tender of a supplementary expert report does not overcome the fact that leave is needed to rely on further evidence at this late stage. Directions were made for the plaintiff to serve evidence in reply. Three extensions were granted. As extended, any evidence in reply was to be served a month ago, on 5 May 2025.

Principles

4. As to whether leave should be given to rely on evidence served after the required date, s 62(1) of the Civil Procedure Act 2005 (NSW) provides that the Court may give directions as to the conduct of any hearing; see also Uniform Civil Procedure Rules, r 29.5. The power to make such directions includes a power to grant leave for a party to adduce further evidence at trial: see for example, Goodman Fielder Consumer Foods Pty Ltd v Graincorp Foods Australia Pty Ltd [2020] NSWSC 706 at [48] (per Henry J).

5. In deciding whether to grant leave, the Court will consider whether allowing the application is in the interests of justice, having regard to prejudice that may be suffered by the party resisting the application, and the reason why the evidence was not led in the first place: Urban Transport Authority of New South Wales v Nweiser (1992) 28 NSWLR 471 at 478 (per Clarke JA, Mahoney and Meagher JJA agreeing).

Consideration

6. There is no evidence as to why the evidence in Mr Sahin’s supplementary report was not addressed in his earlier report, nor what led to it being tendered moments before the expert conclave began. I was limited to what I was told from the bar table by the parties’ respective senior counsel.

7. I was taken to the procedural history of this matter by the defendants’ senior counsel. In October 2023, orders were made for the plaintiff to give discovery of documents recording or evidencing the margin requirements for different market indices and/or client segments on specific dates when dividends were declared in respect of the Pepperstone business. I am told from the Bar table that there was no discovery of such documents. The plaintiff’s senior counsel accepted that there was no discovery of website material – being material now annexed to the supplementary expert report – but did not accept that there was no discovery of this category of documents at all.

8. In any event, the fact that the plaintiff did not provide discovery of this material was said to have the consequence that the defendants’ expert, Andrew Brown, made his own investigations in respect of margin requirements, including on Pepperstone’s website. Mr Brown set out what he had found in his first report, dated December 2023. Mr Brown noted that the information obtained from the Pepperstone website was in respect of Pepperstone EU. The parties' experts have since proceeded on the basis that the documents identified by Mr Brown were an appropriate source. They prepared a joint report in April 2025, in which the experts agreed that the appropriate margin rate was 1.6%.

9. During a period when this trial was adjourned for three days, Mr Sahin met in conference with the plaintiff's counsel. He appears to have been invited to consider other sources of margin information and did so. That is, the expert did not identify an error in his earlier report which he would otherwise be obliged to rectify, given his obligations as an expert. Rather, Mr Sahin was invited to take a different approach, and did so, in accordance with additional instructions that he was given.

10. The plaintiff then served some 150 pages of Pepperstone website printouts on the defendants two days ago, on 3 June 2025, in respect of the margin for trading in other jurisdictions, specifically, Australia and the Bahamas. I am told, again from the Bar table, that the defendants had an opportunity to look at this material before receiving a supplementary report from the plaintiff's expert yesterday afternoon, on 4 June 2025.

11. I was pointed to a number of problems with the supplementary opinion by the defendants’ senior counsel. First, the supplementary opinion is based on inadmissible hearsay, being promotional material on the Pepperstone website: Roach v Page (No 27) [2003] NSWSC 1046 at [8]-[12] (Sperling J). The plaintiff rejoined that Mr Brown had relied on website material in his first report; it was a matter for the experts to determine what sources of material they thought were useful in forming their opinions.

12. Second, the website material did not actually support the conclusion for which it was relied upon, as Mr Sahin said he could not find an equivalent explanation of the margins in Australia or the Bahamas on the Pepperstone website. The website simply indicated that Pepperstone committed clients to increase their leverage “up to” a certain limit, but not what other margin requirements may be imposed. The plaintiff rejoined that this was a matter of the weight that should be given to the website material.

13. Third, the issue in dispute was the appropriate capital retention on three particular dates when dividends were declared. There was nothing to show that the websites reflected the margin permitted on those dates. Indeed, there was reason to think otherwise, where the document referred to in the supplementary report was for a later date, being May 2024. The plaintiff submitted that this was a basis on which the report could be attacked, but not rejected. Mr Sahin had assumed that the information held good for the relevant dividend dates.

14. The fourth problem, and the one in which I am most interested, is that I am told by the defendants’ senior counsel that the defendants have no ability to investigate this further material in the short time available before the expert conclave - which was due to commence at 10 am this morning - that is, there is prejudice. The defendants submitted that they had been asking for proper information in respect of the margin for some time, including with the benefit of an order for discovery. Having not been provided with the information, Mr Brown gave a report on the basis of the best information he could find. Mr Sahin raised no issue about this in his report, nor in their joint report. This was said to be a late attempt to undercut the experts’ agreement by the late service of inadmissible material.

15. The plaintiff did not seek an adjournment of the trial to enable the defendants to address this material. I am told that the ramifications of the views expressed in this supplementary opinion may be in the order a little over $1 million. It is also relevant, I think, that the material addressed by Mr Sahin in his supplementary report emanates from the plaintiff and could have (and apparently should have) been provided before now.

16. Having regard to the inability of the defendants to meet this material in the time available, coupled with the fact that the defendants have been asking for this material for over 18 months but have not been provided with it, I do not consider that it is in the interests of justice to grant leave to the plaintiff to rely on this late-served material. I decline to grant leave and, accordingly, reject the tender of the supplementary report.

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Decision last updated: 22 August 2025