Hexin Pty Ltd v Fei

[2023] VSC 476

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

GENERAL LIST

S ECI 2022 03909

HEXIN PTY LTD	First Applicant
and
L.D.3 PTY LTD	Second Applicant
v
JINFENG (LINCOLN) FEI	Respondent

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JUDGE:	Matthews J
WHERE HELD:	Melbourne
DATE OF HEARING:	24 March 2023
DATE OF JUDGMENT:	15 August 2023
CASE MAY BE CITED AS:	Hexin Pty Ltd & Anor v Fei
MEDIUM NEUTRAL CITATION:	[2023] VSC 476

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PRACTICE AND PROCEDURE – Preliminary discovery – Whether reasonable grounds to believe that applicants may have right to obtain relief against prospective defendant – Preliminary discovery granted in part – Supreme Court (General Civil Procedure) Rules 2015, r 32.05 – Pandolfo v Finadri [2018] VSC 211 – Alex Fraser Pty Ltd v Minister for Planning [2018] VSC 391 – Bougainville Copper Ltd v RTG Mining Inc & Anor [2021] VSC 231.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr S.J. Prendergast	Norton Rose Fulbright Australia
For the Respondent	Mr J.D. McKay	Boon Legal

TABLE OF CONTENTS

Introduction........................................................................................................................................ 1

Background......................................................................................................................................... 2

Relevant background regarding the dealings between the parties....................................... 2

Documents sought by the Applicants........................................................................................ 4

Applicable law and principles........................................................................................................ 7

Evidence............................................................................................................................................. 11

The Korda Mentha reports........................................................................................................ 11

Evidence regarding general matters........................................................................................ 12

Reliance and alleged signature on Stanleyfield documents................................................. 13

The Chapel Road Project............................................................................................................ 14

Context and nature of the Chapel Road Profit Calculations....................................... 14

Accuracy of Calculations.................................................................................................. 16

Lots sold at undervalue....................................................................................... 16

Profit discounts of $250,000 and $200,000......................................................... 16

Council Rebate...................................................................................................... 17

The Church Road Project........................................................................................................... 18

The First Applicant’s standing to sue regarding the Church Road Project.............. 18

Accuracy of Church Road Profit Calculations.............................................................. 19

Excessive sales and marketing costs.................................................................. 19

The Magnolia Project.................................................................................................................. 19

Accuracy of Magnolia Profit Calculations..................................................................... 19

Lots sold at undervalue....................................................................................... 20

Excessive rental payment.................................................................................... 20

Submissions...................................................................................................................................... 20

The Chapel Road Project............................................................................................................ 22

Context and nature of the Chapel Road Profit Calculations....................................... 22

Accuracy of Calculations.................................................................................................. 23

Profit discounts of $250,000 and $200,000......................................................... 23

Council Rebate...................................................................................................... 25

The Church Road Project........................................................................................................... 25

The First Applicant’s standing to sue regarding the Church Road Project.............. 25

Accuracy of Church Road Profit Calculations.............................................................. 26

Lots sold at undervalue....................................................................................... 26

Excessive sales and marketing costs.................................................................. 26

The Magnolia Project.................................................................................................................. 27

Accuracy of Calculations.................................................................................................. 27

Lots sold at undervalue....................................................................................... 27

Excessive rental payment.................................................................................... 28

Second Applicant’s standing to sue regarding the Magnolia Project........................ 28

Reliance and alleged signature on company documents...................................................... 29

Impact of limitation periods applying to claims arising from the Projects........................ 30

Consideration.................................................................................................................................... 31

Is there reasonable cause to believe that the Applicants have or may have a right to obtain relief?.............................................................................................................................................. 31

Church Road Project......................................................................................................... 31

Magnolia Project................................................................................................................ 33

Chapel Road Project.......................................................................................................... 34

Signing/authorising the Company Documents or the Transfer Documents........... 35

Limitation issues................................................................................................................ 35

Summary of conclusion regarding whether there is reasonable cause to believe that the Applicants may have a right to relief................................................................. 36

If there is reasonable cause, should the Court exercise its discretion to order preliminary discovery?........................................................................................................................... 37

Applicable principles........................................................................................................ 37

Discussion........................................................................................................................... 38

Conclusion......................................................................................................................................... 39

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