Li v Zhu

[2024] NSWSC 270

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Li v Zhu [2024] NSWSC 270

Hearing dates:

19 March 2024

Date of orders:

19 March 2024

Decision date:

19 March 2024

Jurisdiction:

Equity

Before:

Elkaim AJ

Decision:

1. The plaintiff has leave to file and serve, within 14 days, a further amended statement of claim in the form annexed to the affidavit of Mr Abbas Soukie dated 21 November 2023.

2. The plaintiff is to pay the defendants’ costs thrown away by the whole of the amendments contained in the further amended statement of claim.

3. Each party is to pay its own costs of the notice of motion filed on 21 November 2023.

4. It is noted that the reference to the defendants in these orders is to the third, fourth, fifth and sixth defendants.

Catchwords:

CIVIL PROCEDURE – Pleadings – Amendment – Plaintiffs seek to file Further Amended Statement of Claim – Defendants’ consent to substantive amendments but oppose deletion of a paragraph – No real prejudice to the defendants – Amendment allowed

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Category:

Procedural rulings

Parties:

Jiawen Li (Plaintiff)
Marlas Maole Zhu (First Defendant)
Nina Flynn Zhu (Second Defendant)
Perpetual Property Holdings Pty Ltd (Third Defendant)
PIC Parramatta 1 Pty Ltd (Fourth Defendant)
Parkroyal Investments Pty Ltd (Fifth Defendant)
Cecil Developments Pty Ltd (Sixth Defendant)

Representation:

Counsel:
Mr S Ahmed (Plaintiff)
Mr A Ogborne (Defendant)

Solicitors:
Hanna Legal (Plaintiff)
CBB Law (Third, Fourth, Fifth & Sixth Defendants)

File Number(s):

2019/237630

JUDGMENT

1. The plaintiff commenced these proceedings by filing a statement of claim on 31 July 2019. The claim primarily revolved around an alleged loan agreement. An amended statement of claim was filed on 3 April 2023.

2. The plaintiff wishes to file a further amended statement of claim. He filed a notice of motion seeking the appropriate leave on 21 November 2023. The third, fourth, fifth and sixth defendants oppose the application. These defendants are jointly represented.

3. The first and second defendants play no part in the proceedings. The first defendant is bankrupt, the second defendant has never been served.

4. There is no issue that I have the power to permit the amendment, whether under Div 3 of the Civil Procedure Act 2005 (NSW) or pursuant to the Uniform Civil Procedure Rules 2005 (NSW).

5. The motion is supported by two affidavits of Mr Abbas Soukie, of 21 November 2023 and 22 December 2023 respectively. Mr Soukie is the plaintiff’s solicitor. An affidavit of Mr Marlas Zhu dated 24 December 2020 was added as an exhibit in the course of the hearing.

6. The proposed pleading is annexed to Mr Soukie’s first affidavit. This pleading deletes paragraph 34. This deletion is the only point of contention in the current motion. The defendants do not oppose other amendments which actually allege new causes of action.

7. This apparently unusual state of affairs, with substantial amendments being consented to, but a deletion being opposed, was explained by learned counsel for the defendants in this way. He said that paragraph 34 was actually an admission made against interest by the plaintiff. It’s deletion therefore would take away from the defendants an allegation upon which they could rely.

8. Paragraph 34, in the amended statement of claim states:

“The parties agreed that the loan of $9,243,112.50 pursuant to the Loan Agreement was satisfied by the Plaintiff converting his rights:

a. against Marlas and the Second Defendant for the Payments; and

b. to the Tahmoor Development,

into the principal of the loan by the Loan Agreement such that no further transfer of funds beyond the Payments was required from the Plaintiff to Marlas and the Second Defendant (or either of them) to comply with the Loan Agreement.”

9. This clause, or one very similar to it, was contained in the original statement of claim at paragraph 30. The defence to the statement of claim, also at paragraph 30, denies the asserted agreement.

10. The clause remained in the amended statement of claim (now in paragraph 34), but the defence to this pleading took a very different approach from the earlier defence, now pleading effectively an assertion of accord and satisfaction.

11. I have decided to allow the deletion of paragraph 34, for the following reasons:

1. there would be nothing to stop counsel opening the case for the plaintiff from stating that paragraph 34 was not pressed;

2. there would be nothing to stop the plaintiff simply not leading evidence concerning paragraph 34;

3. there would be nothing to stop the plaintiff from being cross-examined about the deletion of paragraph 34, noting that the plaintiff had confirmed its truth in the affidavit verifying the amended statement of claim; and

4. if paragraph 34 is regarded by the defendants as an admission, then that admission could be pleaded in the defence that will no doubt be filed in response to the further amended statement of claim.

12. In reaching my decision I have taken into account the apparent delay and breach of previous court orders that have preceded the notice of motion. Some of the delay is explained in the affidavit of Mr Soukie dated 22 December 2023. There is no adequate explanation however for the breach of court orders.

13. In addition to the delay and breach of orders the defendants also resisted the notice of motion on the basis that the deletion of paragraph 34 would occasion prejudice to them and there would be a “loss of confidence in the legal system”.

14. In regard to prejudice, I think it would only arise if paragraph 34 did actually amount to an admission in the defendants’ favour. As noted above, this assertion is disputed. However, again as set out above, I think any prejudice could be met through cross-examination or inclusion of the admission in the defence that will be filed to the new pleading.

15. As to loss of confidence in the legal system, in circumstances where substantive amendments are consented to, but a deletion is opposed, I struggle to imagine any consternation arising from my decision.

16. In relation to costs, the plaintiff said that the defendants should pay the costs of the motion because they had unsuccessfully opposed the deletion of paragraph 34. I disagree. I think the plaintiff’s conduct prior to the filing of the notice of motion has not been fully explained. No doubt there has been great effort put into preparation such as examination of documents produced under subpoena. However, I am more concerned with the absence of explanation for breach of court orders. To allow breaches to have no consequence could indeed have an impact on confidence in the legal system.

17. I think that the defendants’ suggestion in respect of costs is both fair and just. I intend to adopt their suggestion.

18. I make the following orders:

1. The plaintiff has leave to file and serve, within 14 days, a further amended statement of claim in the form annexed to the affidavit of Mr Abbas Soukie dated 21 November 2023.

2. The plaintiff is to pay the defendants’ costs thrown away by the whole of the amendments contained in the further amended statement of claim.

3. Each party is to pay its own costs of the notice of motion filed on 21 November 2023.

4. It is noted that the reference to the defendants in these orders is to the third, fourth, fifth and sixth defendants.

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Amendments

20 March 2024 - Counsel for Defendant was omitted

Decision last updated: 20 March 2024