Liu v Chen (No 1)

[2021] NSWDC 125

District Court

New South Wales

Medium Neutral Citation:

Liu v Chen & Anor (No 1) [2021] NSWDC 125

Hearing dates:

12-16 April 2021

Date of orders:

13 April 2021

Decision date:

13 April 2021

Jurisdiction:

Civil

Before:

Neilson DCJ

Decision:

Leave granted

Catchwords:

PRACTICE AND PROCEDURE – Amendment of pleadings – Amendment complies with common sense and no evidentiary prejudice can be established – leave granted.

Legislation Cited:

Australian Consumer Law

Civil Liability Act 2002

Category:

Procedural rulings

Parties:

Plaintiff – Guo Hua Liu
1st Defendant – Qi Lian Chen
2nd Defendant – Fu Xin Zhao

Representation:

Counsel:
Plaintiff – C. Peadon
1st Defendant – S. Bell
2nd Defendant – J. Lawrence

Solicitors:
Plaintiff – WB Legal
1st Defendant – Lloyd Truman Sadiq Solicitors
2nd Defendant - Parish Patience Legal & Migration

File Number(s):

2019/00396393

Publication restriction:

Nil.

Judgment

1. HIS HONOUR: This is an application to amend the statement of claim.

2. These proceedings were commenced by statement of claim, filed 17 December 2019, almost 18 months ago. The plaintiff is claiming damages of approximately $424,000 for alleged breaches of the Australian Consumer Law (NSW).

3. The structure of the initiating process is to recite representations allegedly made by the first defendant and then to cite representations allegedly made by the second defendant and then, before par 15, is a heading, "Investment in MFC". MFC has been described as a trading platform on which the Malaysian company, known as MBI International Sdn Bhd, operated an investment scheme. The statement of claim, in par 4 pleads:

"where investors trade virtual investments such as CRC, and Advertisement Points, and cryptocurrency such as World Crypto Gold."

There are other descriptions of MFC in other pleadings.

4. Paragraph 15 of the current pleading commences thus:

"Pursuant to par 8 above, the plaintiff relied upon the Return Representation, the Safety Representation, the Withdrawal Representation, the Profit Representation and the Guarantee Representation made by the first defendant, and transferred upon the first defendant's direction to her first nominated account..."

There follows the details of the account and moneys deposited into it. A little later in the same pleading there is a reference to a second bank account into which further payments were made. Paragraph 15 also contains a total of those investments amounting to $82,850. Paragraph 16 of the pleading also relies upon another representation made by the first defendant and a further transfer at the first defendant's direction. Paragraph 17 also contains an allegation that, relying upon, representation the plaintiff transferred further moneys at the first defendant's direction into a fourth nominated account. There is a similar allegation in par 18 of the statement of claim.

5. Paragraph 19 of the statement of claim commences thus:

"Pursuant to par 12 above, the plaintiff relied upon the Return Representation, the Safety Representation, the Financial Freedom Representation, the Withdrawal Representation, the Profit Representation and the Guarantee Representation made by the second defendant and paid to her.”

Then are sums recorded that were allegedly paid to the second defendant in cash. Likewise, par 20 and 21 recite further payments made by the plaintiff pursuant to representations made by the second defendant at the direction of the second defendant.

6. The plaintiff was only able to recover of the money she invested in the MFC Platform $6,552.

7. According to the initiating process, the plaintiff was claiming damages pursuant to s 236 of the Australian Consumer Law for Australian $247,824, and Yuan ¥881,300. The proposed amended statement of claim reduces the amount of dollars claimed to $222,724, but maintains the claim for Yuan ¥881,300. I have been advised that the approximate value of the plaintiff's claim, that is the approximate value of her loss, is about $424,000.

8. The amended statement of claim seeks to make it clear that the plaintiff relied upon all of the representations made to her by both the first and the second defendant in making the various investments, which she did in the MFC Platform. The practical consequence of the amendment is that the total of the damages claimed may be recoverable from each of the defendants, but under Pt 4 of the Civil Liability Act 2002, such liability is apportionable. The practical effect of the current pleading, that is the originating process, is that the damages sought has been apportioned between the person who gave the direction to the plaintiff as to how the payment was to be made. Sometimes it was the first defendant and sometimes it was the second defendant. As currently pleaded, the first defendant is only liable for the sum of $138,174 and the second defendant is only liable for $109,650 plus all of the Chinese yuan.

9. Much time today in fact most of the hearing day has been spent not only on the plaintiff's opening explaining what has happened but also pointing out why the amendment to the statement of claim is sought, and also what prejudice may befall the defendants if the amendment be allowed. If the amendment be allowed there would, of course, be a need for each of the defendants to file an amended defence to respond formally to the new pleading and also a need to serve, probably, a cross-claim, each defendant against the other, seeking an apportionment of liability between them pursuant to the Civil Liability Act. However, the pleadings can be attended to as the case progresses. Its current estimate is four days. I suspect that is a gross under estimate as is very common in civil litigation in this Court.

10. When Counsel were pressed, I found it very difficult to see any real prejudice that either defendant might suffer on an evidentiary basis. It is hard to see what other evidence could be adduced and clearly, insofar as the amendment allows each defendant to be able to cross-examine the other defendant, but prior to that the plaintiff, as to the extent of the influence upon her of the representations made by each of the defendants. The first defendant pointed out that it may be necessary to call some participants in a meal at the New Imperial Chinese Restaurant at Kingsford in October 2016; that was yum cha. Certain representations were clearly made by somebody other than either of the defendants but they are not admissible through the plaintiff and if someone were to rely upon them they would need to call that third party. Otherwise I find it difficult to see how the first defendant is prejudiced by the amendment in an evidentiary sense, that is in the presentation of a defence case. When pressed the second defendant, through her counsel, cannot advise me of any real evidentiary prejudice that would befall his client should the amendment be allowed.

11. The amendment affords with common sense. I am persuaded that it would be in the interests of justice to allow the amendment as there will be no practical prejudice to either of the defendants. For those reasons I grant leave to the plaintiff to file and rely upon an amended statement of claim provided that a duly signed and verified statement of claim is provided to the Court and copies provided to the defendants.

12. I grant leave to the defendants to file in court and serve amended defences in answer to the amended statement of claim, and they can also file in court a cross-claim, one against the other, but I see no pressing need at this stage for that to be done forthwith and I will allow the defendants and their lawyers such time as they require to put the pleadings in order.

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Decision last updated: 16 April 2021