Han v Jiang

[2025] NSWCA 202

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Han v Jiang [2025] NSWCA 202

Hearing dates:

1 September 2025

Date of orders:

1 September 2025

Decision date:

02 September 2025

Before:

Adamson JA

Decision:

(1)   Subject to order 2, dismiss the applicants’ notice of motion filed 26 August 2025.

(2)   Extend order 4, made by Schmidt AJ on 21 August 2025, for a period of 14 days with the intention of providing the applicants the opportunity to seek review of the dismissal of the notice of motion.

(3)   The applicants to pay the respondent’s costs of the notice of motion.

Catchwords:

CIVIL PROCEDURE — application for extension of stay to prevent monies paid into court being paid to successful party in satisfaction of judgment debt — where unsuccessful parties absent themselves from substantive hearing — where application made to set aside judgment on the basis of absence of unsuccessful parties — where unsuccessful parties seek to rely on evidence which is irrelevant because it is outside extant pleadings — motion dismissed — Uniform Civil Procedure Rules 2005 (NSW), r 36.16

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW), rr 36.16, 51.9, 51.12, 51.44

Cases Cited:

Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685

Allchin v Hunter Water Corporation (No 3) [2025] NSWCA 75

Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11

Dare v Pulham (1982) 148 CLR 658; [1982] HCA 70

Jiang v Han (No 2) [2025] NSWSC 48

Jiang v Han (No 3) [2025] NSWSC 452

Jiang v Han (No 4) [2025] NSWSC 695

Jiang v Han (No 5) [2025] NSWSC 948

Kalifair Pty Ltd v Digi-Tech (Australia) Ltd (2002) 55 NSWLR 737; [2002] NSWCA 383

Category:

Procedural rulings

Parties:

Kairan Han (First Applicant)
Fortune New City (Yarraville) Development Pty Ltd (Second Applicant)
Zhao Qing Jiang (Respondent)

Representation:

Counsel:
D Moujalli / G Antipas (Applicants)
N J Kidd SC (Respondent)

Solicitors:
Hiways Lawyers (Applicants)
Sunfield Chambers Solicitors & Associates (Respondent)

File Number(s):

2025/327473

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Common Law

Citation:

Jiang v Han (No 5) [2025] NSWSC 948

Date of Decision:

21 August 2025

Before:

Schmidt AJ

File Number(s):

2021/273456

HEADNOTE

[This headnote is not to be read as part of the judgment]

The applicants, Kairan Han, a Chinese national, and Fortune New City (Yarraville) Development Pty Ltd, entered into a joint venture agreement in 2016 (the 2016 agreement) with Zhao Jiang, the respondent, to acquire and develop land in Yarraville, Victoria. Mr Jiang successfully sued the applicants for a debt under the agreement and obtained judgment in his favour. Schmidt AJ (the primary judge) ordered that monies which had been paid into Court and subsequently transferred to a joint account (in lieu of a freezing order which had been made when the proceedings were commenced) be paid out to Mr Jiang but stayed the order until 5pm on 1 September 2025. The applicants sought an extension of the stay pending determination of their application for leave to appeal against the judgment.

The applicants initially defended the claim in the Supreme Court by alleging, in their defence and cross-claim, that Mr Jiang was guilty of misleading or deceptive conduct. In May 2025, due to several procedural defaults, the applicants’ cross-claim and the corresponding paragraphs of their defence were struck out. Although a notice of intention to appeal against this order was filed, no notice of appeal was filed.

At the hearing on 30 June 2025, the applicants applied for an adjournment of the substantive hearing as well as for an order reinstating their cross-claim and the corresponding paragraphs of their defence (which alleged misleading or deceptive conduct). When both applications were refused, their counsel, whose retainer was limited to the applications, withdrew. As the applicants absented themselves from the hearing, no evidence was adduced or submissions made on their behalf

The primary judge determined Mr Jiang’s claim on the basis of the extant pleadings (from which claims of misleading or deceptive conduct had been excised). On 1 July 2025, judgment was entered for Mr Jiang in the sum of $7,367,846.60 (including interest), with costs.

The applicants applied to set aside the judgment on the basis that it had been given in their absence. They did not challenge the claim in debt but maintained that they had defences and a cross-claim arising from Mr Jiang’s misleading or deceptive conduct and sought to rely on affidavit evidence which had not previously been adduced. The primary judge dismissed their application on 21 August 2025.

On 26 August 2025, the applicants filed a summons seeking leave to appeal the 21 August orders and a notice of motion for an extension of the stay. They argued that the primary judge failed to consider the merits of their misleading and deceptive conduct claims and that it would be unjust if those claims were not heard. On 1 September 2025, the Court dismissed the motion.

Adamson JA held dismissing the motion:

1. The primary judge entered judgment on the extant pleadings, which raised the sole issue whether the applicants were obliged by the 2016 agreement to pay Mr Jiang the sum claimed: [37].

2. Although the applicants filed a notice of intention to appeal the dismissal of their cross-claim and those paragraphs of their defence alleging misleading or deceptive conduct, they did not file a notice of appeal. As the pleadings no longer contained allegations of misleading or deceptive conduct, it was not open to the primary judge to consider these matters when determining either the substantive hearing or whether to set aside the judgment under UCPR, r 36.16(2)(b): [38].

3. Rule 36.16(2)(b) is concerned with whether a party’s presence at the hearing could have affected the result. Had the applicants remained at the substantive hearing and sought to adduce evidence of misleading or deceptive conduct, the primary judge would have been obliged to reject it as irrelevant because it fell outside the extant pleadings: [38]-[39].

4. The interests of justice do not allow a party to rely on evidence which falls outside of an extant pleading particularly where relevant paragraphs were struck out, not appealed, and leave to reinstate them had been refused. Justice in this context includes the procedural context: [40].

JUDGMENT

Introduction

1. Kairan Han and Fortune New City (Yarraville) Development Pty Ltd (the applicants) seek an extension of the stay granted on 21 August 2025 by Schmidt AJ (the primary judge) of her Honour’s order that monies paid into Court by the applicants be paid to Zhao Jiang (the respondent, or Mr Jiang).

2. At the conclusion of the hearing of the motion on 1 September 2025, I made the following orders, for which my reasons follow:

(1)   Subject to order 2, dismiss the applicants’ notice of motion filed 26 August 2025.

(2)   Extend order 4, made by Schmidt AJ on 21 August 2025, for a period of 14 days with the intention of providing the applicants the opportunity to seek review of the dismissal of the notice of motion.

(3)   The applicants to pay the respondent’s costs of the notice of motion.

3. The underlying dispute between Mr Jiang and the applicants relates to agreements concerned with the acquisition of land at Yarraville for about $165 million for the purposes of developing it. The land was eventually sold for around $225 million in 2021.

The procedural background

4. Some aspects of the procedural background warrant summary. On 24 September 2021, Mr Jiang commenced proceedings by statement of claim filed in the Common Law Division of the Supreme Court (the Court below) to recover more than $5 million under an agreement made with the applicants in 2016 (the 2016 agreement).

5. At the time of filing, Mr Jiang sought a freezing order, ex parte, against the applicants as Mr Han is a Chinese national who lives in China. Orders were made by Johnson J, as Duty Judge, including an order that the freezing order would cease to have effect if the sum of $5,685,262 was paid into Court. This occurred in about December 2023. By about April 2024, the parties agreed that the monies paid into Court ought be deposited into an interest-bearing account (in the names of their solicitors) and the Court made an order accordingly.

6. The applicants defended the claim and filed a cross-claim in December 2021. They alleged, in part, that they had entered into the relevant agreements, including the 2016 agreement, in reliance on Mr Jiang’s misleading or deceptive conduct, including as to the profitability of the development.

7. Mr Jiang applied for security for costs against Mr Han (on the basis that he is a Chinese national who lives in China). On 18 October 2022, Harrison AsJ made orders requiring $215,305 to be paid as security for costs within 28 days in a form acceptable to Mr Jiang. Her Honour also ordered that the proceedings be stayed if the amount was not paid within that time. As this order was not complied with, the cross-claim was stayed until further order. The stay was lifted by consent on 6 February 2023.

8. By 5 February 2023, Mr Jiang had filed all of his evidence. Over a period of more than a year thereafter, several directions were made by consent extending the time within which the applicants were to file their evidence in support of their defence on the basis of misleading or deceptive conduct and their cross-claim. The applicants failed to comply with these directions.

9. On 19 June 2024, the matter was listed for hearing to commence on 30 June 2025 with an estimate of 10 days.

10. On 15 November 2024, Mr Jiang filed a further motion for security for costs. On 13 February 2025, the primary judge ordered the respondents to provide a further $185,000 by way of security for costs within 14 days and, failing provision of such security, that the cross-claim be stayed until further order: Jiang v Han (No 2) [2025] NSWSC 48. The additional amount for security was not paid.

11. By motion filed on 23 April 2025, Mr Jiang sought dismissal of the cross-claim and that the corresponding paragraphs of the applicants’ defence be struck out. He relied on the failure to provide security for costs, as ordered, as well as the applicants’ failure to serve the evidence on which they relied to support their allegations of misleading or deceptive conduct. On 12 May 2025, the primary judge ordered that the amended cross-claim be dismissed and that paragraphs [22]-[40] of the amended defence be struck out (these paragraphs corresponded with the misleading or deceptive conduct claim made in the cross-claim): Jiang v Han (No 3) [2025] NSWSC 452. Directions were also made that the parties were to confer as to a revised estimate of the hearing which remained listed to commence on 30 June 2025.

12. On 10 June 2025, the applicants filed a notice of intention to appeal against the orders made on 12 May 2025. However, they took no steps to prosecute an appeal. Accordingly their notice lapsed in August 2025: Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 51.9(1), (3).

13. On 16 June 2025, the matter came before Chen J for status review, in advance of the hearing on 30 June 2025. Although it appears from the primary judge’s reasons in Jiang v Han (No 4) [2025] NSWSC 695 at [3] that Chen J discussed the need for the applicants to file a notice of appeal and seek a vacation of the hearing from this Court, no notice of appeal was ever filed.

14. On 25 June 2025, the applicants filed a notice of motion seeking that the hearing of the matter be adjourned. They also sought an order that the cross-claim and the paragraphs of the amended defence which had been struck out be reinstated. This motion was returnable on 30 June 2025 at the commencement of the substantive hearing.

15. Mr Kirby of counsel appeared on behalf of the applicants on the motion, which was dismissed by the primary judge with costs: Jiang v Han (No 4). The applicants have not sought to challenge these orders. At the conclusion of the hearing of the motion and the making of orders, Mr Kirby sought and was granted leave to be excused (as his retainer was limited to the motion). The applicants’ other legal representatives also left the courtroom. Neither the applicants nor anyone on their behalf remained at the substantive hearing.

16. The substantive hearing proceeded in the absence of the applicants and without their participation. As a consequence no evidence was adduced on their behalf.

17. On 1 July 2025, the primary judge made orders which included judgment for Mr Jiang against the applicants in the sum of $7,367,846.60 (including pre-judgment interest of $2,010,549.60). The reasons for the primary judge’s orders (Jiang v Han (No 4)) indicate that the judgment turned on the construction of the 2016 agreement. Mr Jiang wholly succeeded in his claim in debt based on that contract (since the amount ordered corresponded with the amount claimed together with pre-judgment interest).

18. In Jiang v Han (No 4), her Honour did not address the applicants’ misleading or deceptive conduct claim and defence (since they no longer formed part of the extant pleadings), although these matters were referred to by the primary judge as part of her Honour’s summary of the procedural background to the proceedings generally.

19. On 14 July 2025, Mr Jiang filed a motion seeking an order for release of the funds paid into Court to him (which continued to be held in an interest-bearing account in the names of the parties’ solicitors).

20. On 18 July 2025, the applicants filed a motion seeking orders setting aside the judgment under UCPR, r 36.16(2)(b), which relevantly provides that the court may set aside a judgment after it has been entered if it has been given in the absence of a party.

21. In support of their motion, they relied on an affidavit of Mr Han (the first applicant) affirmed on 22 April 2025. Despite the affidavit having been sworn in time for the substantive hearing, it was not read by the applicants at that hearing (as they took no part in the substantive hearing). In this affidavit, Mr Han deposed to matters which were relevant to the cross-claim and corresponding paragraphs in the amended defence (which were designed to support the allegations that Mr Jiang was guilty of misleading or deceptive conduct).

22. These motions were heard by the primary judge on 1 August 2025 and determined on 21 August 2025: Jiang v Han (No 5) [2025] NSWSC 948. At the conclusion of the hearing, the applicants’ counsel accepted that if the applicants’ motion were dismissed, payment out from the joint account ought be ordered.

23. The primary judge’s reasons included the following:

The orders sought must be refused

53.   I am satisfied that despite the evidence led the orders pressed by the defendants must be refused, no satisfactory explanation having been given for their failure to remain to resist Mr Jiang’s claims at the June hearing, despite them turning on the proper construction of the 2016 agreement and not the further evidence they now wish to rely on. They not having established a just basis for the exercise of the Court’s discretion to set aside the orders made at that hearing, when I concluded that Mr Jiang had established the case he advanced, for reasons later explained.

54.   There can be no question that the defendants had, to that point, been given a fair opportunity to advance their case and to resist Mr Jiang’s claims.

55.   While on this application the defendants relied on Mr Han’s April 2025 affidavit, no explanation was able to be given for why it was not relied on to advance the motion dismissed for the reasons given in Jiang v Han (No 4). Nor why the evidence relied on to advance their July motion, was not led in support of the motion dealt with on 3 June.

56.   In my view the evidence accords with the affidavits put on only after judgment was given in favour of Mr Jiang in June, being able to have been put on long before, given what they deal with and what the evidence establishes about funds which the defendants arranged to have brought into the country.

…

67.   The defendants having had a fair opportunity to present their case, which they did not avail themselves of despite always being legally represented, including at the June hearing and they not having provided an adequate explanation for their failure to remain to present their case, I am not persuaded that they have met the onus which falls upon them, to establish a just basis for the orders which they seek. That not being established by the evidence which I have explained.

68.   I am certainly not satisfied that the defendants have established that they have an arguable case about the merits of what was decided in Jiang v Han (No 4) as to the proper construction of the 2016 agreement, which might reasonably bring about a different result to that which was there arrived at.

69.   In the result the orders sought must be refused.

24. It was common ground, in the Court below and in this Court, that UCPR, r 36.16(2)(b) applied. I note that this question is not free from doubt: see the discussion in Allchin v Hunter Water Corporation (No 3) [2025] NSWCA 75 at [38]-[49] (Kirk JA), which concerned UCPR, r 29.7 but which referred to UCPR, r 36.16 as part of the relevant context.

25. In substance, the primary judge found that the applicants had chosen not to resist the orders which Mr Jiang sought on the debt claim pursuant to the 2016 agreement (by absenting themselves from the hearing on 30 June 2025).

26. On 21 August 2025, the primary judge dismissed the applicants’ motion and made an order as sought by Mr Jiang that the funds which the applicants had paid into Court be released to him. Her Honour stayed that order until 5pm on 1 September 2025.

27. On 26 August 2025, the applicants filed a summons seeking leave to appeal against the primary judge’s orders made on 21 August 2025. Notwithstanding the requirements of UCPR, r 51.12(2)(b), the applicants did not include in the White Book which they filed with the summons, a summary of their argument. Mr Moujalli, who appeared on their behalf with Mr Antipas, confirmed that none had been filed either with the White Book or subsequently. Indeed, Mr Moujalli conceded that, as at the date of the application for an extension of the stay (1 September 2025), no summary of argument had been prepared.

28. On the same day, the applicants filed a notice of motion seeking an extension of the stay granted by the primary judge.

29. The draft notice of appeal contained in the White Book contains two grounds which allege that the primary judge erred in Jiang v Han (No 5) by failing to take into account the merits of the misleading and deceptive representation claims contained in the amended cross-claim (and corresponding paragraphs in the amended defence) and that it would be unjust if the applicants’ were denied the opportunity to have those claims heard.

Consideration

30. It was accepted that the Court’s power to order a stay is reflected in UCPR, r 51.44. The relevant principles were not in dispute: see Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685 at 693-695 (Kirby P, Hope and McHugh JJA). In Kalifair Pty Ltd v Digi-Tech (Australia) Ltd (2002) 55 NSWLR 737; [2002] NSWCA 383, this Court said at [18]:

Thus the relevant principles are analogous to those which govern the grant of interlocutory relief before trial to protect the status quo. The appellant must show that the appeal raises serious issues for the determination of the appellate court, and that there is a real risk that he will suffer prejudice or damage, if a stay is not granted, which will not be redressed by a successful appeal. This requirement will be satisfied if the appeal will be rendered abortive or nugatory unless a stay is granted. If these pre-conditions are established the Court will then consider the balance of convenience.

31. Mr Moujalli submitted that there were serious issues for the determination of this Court. He submitted that the primary judge was wrong to confine her consideration of the motion to set aside the judgment to the construction of the 2016 agreement (which he submitted was irrelevant to the present application for an extension of the stay). He further argued that her Honour ought to have included in her consideration of the interests of justice the matters raised by the applicants in their cross-claim and corresponding paragraphs of their defence since they were the subject of Mr Han’s affidavit of 22 April 2025. This affidavit was read for the first time on 1 August 2025. He submitted that her Honour was in error in not considering these matters since they were germane to the interests of justice, although they did not fall within the extant pleading (from which the allegations of misleading or deceptive conduct had been excised).

31. Mr Moujalli submitted that, although the primary judge referred to the misleading or deceptive conduct allegations in the prefatory observations, her Honour referred only to those relating to consequential loss and not to those which had brought about the applicants’ entry into the 2016 agreement.

32. Further, he submitted that, if the monies were paid out of the joint account to Mr Jiang, there was a real risk that they would not be recoverable if leave to appeal were granted and the appeal allowed. He relied on affidavit evidence which established that:

1. Tred Nominees Pty Ltd, a company with which Mr Jiang was associated (as sole director and majority shareholder), was subject to external administration in 2021;

2. Tred Nominees Pty Ltd was the sole shareholder of Greenstone Yarra Valley Pty Ltd, whose creditors resolved to wind it up on 25 November 2022;

3. Tred Nominees Pty Ltd was the sole shareholder of Ostar International Media Group Pty Ltd, of which Mr Jiang was a director from 16 February 2018 to 15 March 2019, and which was wound up on 3 March 2021;

4. Mr Jiang was a director of Eastern International Property Development Pty Ltd from 5 December 2013 to 2 October 2020, a shareholder of the company from 16 November 2015 to 6 November 2023 and the company was under external administration from 3 October 2019 to 1 November 2019;

5. Mr Jiang was named as the defendant in proceedings in the Supreme Court of Victoria (which evidence adduced on behalf of Mr Jiang established were dismissed with no order as to costs); and

6. Mr Jiang was the plaintiff in other proceedings in the Supreme Court of Victoria.

34. It was also alleged that Mr Jiang was subject to an enforcement order from the Beijing No 3 Intermediate People’s Court but this was not substantiated, and was denied by Mr Jiang who was unaware of any such order.

35. Although Mr Moujalli accepted that the applicants had not put on any evidence of Mr Jiang’s personal financial position, he submitted that this Court ought draw an inference against Mr Jiang that he would be unable to repay the amount if the appeal were allowed as he did not put on evidence as to his financial means.

36. Mr Kidd SC, who appeared for Mr Jiang, submitted that the applicants had no arguable case which would justify the stay which they sought. Further, he submitted that the applicants had not established that they would suffer any prejudice if the funds were released since there was no evidence that Mr Jiang had guaranteed the debts of the companies that have gone into external administration, that he had ever been bankrupt or ever failed to pay any amount of money which might have been ordered by a court for him to pay, or that there were any proceedings against him on foot. He submitted that the evidence provided no basis for any inference that Mr Jiang is impecunious or would be unable to repay the funds released if leave to appeal were granted and the appeal allowed.

37. The lengthy procedural summary of relevant decisions which I have set out above demonstrates that the judgment was entered by the primary judge on the basis of the extant pleadings at the time of the final hearing. At that time, it was common ground that the only issue on the pleadings was whether the construction of the 2016 agreement obliged the applicants to pay Mr Jiang the sum claimed.

38. Although the applicants filed a notice of intention to appeal the orders refusing to allow the cross-claim and corresponding paragraphs of the defence to be resurrected, they did not act on the intention by filing a notice of appeal. Because, at the time the primary judge heard the subject application, the pleadings no longer contained allegations of misleading or deceptive conduct, it was not open to the primary judge to take these matters into account when deciding whether to set aside the judgment pursuant to UCPR, r 36.16(2)(b). I accept Mr Kidd’s submission that one cannot show a reasonably clear case on the merits in respect of a claim that is not reflected in the pleading (the relevant paragraphs having been struck out). I also accept that the power under UCPR, r 36.16(2)(b) to set aside a regularly obtained judgment on the basis that a party was absent from the hearing which resulted in that judgment is concerned with whether a party’s presence at the hearing could have made a difference.

39. Had the applicants remained at the substantive hearing and sought to adduce evidence of misleading or deceptive conduct (such as was deposed to by Mr Han in his affidavit sworn on 22 April 2025), the primary judge would have been obliged to reject it as irrelevant because it fell outside the extant pleadings. The possibility that Mr Jiang would have acquiesced in allowing the case to be conducted outside the pleadings can be put to one side as fanciful: cf Dare v Pulham (1982) 148 CLR 658 at 664 (Murphy, Wilson, Brennan, Deane and Dawson JJ); [1982] HCA 70 and Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279 at 286-287 (Mason CJ and Gaudron J); [1990] HCA 11.

40. In this context, the interests of justice do not allow, much less entitle, a party to rely on evidence which falls outside of an extant pleading, particularly in circumstances where the paragraphs to which the evidence was relevant have been struck out (and the order that they be struck out was not challenged on appeal) and an application to resurrect them has been refused. Justice in this context includes the procedural context.

41. In these circumstances, I am not persuaded that the applicants have established serious issues for the determination of this Court or any reasonably based allegation of injustice.

42. As to the question of prejudice, I accept Mr Kidd’s submission that the evidence adduced by the applicants was insufficient to establish a real risk that Mr Jiang will not be able to repay the money if leave were granted and the appeal allowed. In circumstances where the applicants’ evidence did not touch on Mr Jiang’s personal financial position, no inference can be drawn from the fact that Mr Jiang did not give evidence of his own financial position.

43. Mr Jiang has also shown prejudice which would arise were the stay to continue. It appears from the evidence that, by reason of Mr Han’s location in China, it is unlikely that Mr Jiang will be paid any money beyond that which is in the joint account. There is already a significant disparity between the interest which is earned in that account and the amount of the applicants’ liability for post-judgment interest, which continues to accrue. Any further delay serves to enlarge that disparity. I reject Mr Moujalli’s submission that, in order to establish prejudice, Mr Jiang must show that he would be able to obtain a return on the funds greater than post-judgment interest.

Conclusion

44. For these reasons, the motion ought be dismissed. However, as Mr Moujalli indicated that the applicants would like to have two weeks to consider whether to seek review of my orders and Mr Kidd did not wish to be heard against an extension for that period, I ordered that the stay continue for a further period of 14 days to permit this occur.

45. The parties accepted that costs ought follow the event.

Orders

46. As referred to above, I made the following orders on 1 September 2025:

1. Subject to order 2, dismiss the applicants’ notice of motion filed 26 August 2025.

2. Extend order 4, made by Schmidt AJ on 21 August 2025, for a period of 14 days with the intention of providing the applicants the opportunity to seek review of the dismissal of the notice of motion.

3. The applicants to pay the respondent’s costs of the notice of motion.

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Decision last updated: 02 September 2025