Zhao v Luxury Way Pty Limited

[2025] NSWDC 320

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Zhao v Luxury Way Pty Limited [2025] NSWDC 320

Hearing dates:

15 August 2025

Date of orders:

15 August 2025

Decision date:

15 August 2025

Jurisdiction:

Civil

Before:

Dicker SC DCJ

Decision:

(1) The Notice of Motion is dismissed.

(2) The defendants are to pay the plaintiff’s costs of the Notice of Motion, as agreed or assessed; and,

(3) The final hearing on 19 August 2025 is confirmed

Catchwords:

PRACTICE AND PROCEDURE – application for vacation of hearing date and leave to serve an undrafted Defence – delay in preparing a Cross-Claim

Legislation Cited:

Civil Procedure Act 2005 (NSW)

Cases Cited:

Aon Risk Services Australia Limited v Australian National University (2009) CLR 175

Davis v Kent [2017] NSWCA 122

SA v Hatfield [2025] NSWDC 56

Category:

Procedural rulings

Parties:

Dian Zhao (First Plaintiff)
China Post Pty Ltd (Second Plaintiff)
Luxury Way Pty Ltd (First Defendant)
Ziyao Zhou (Second Defendant)

Representation:

Counsel:
A Hopkins (Plaintiffs)
Y Zhou (Solicitor) (Defendants)

Solicitors:
Yingke Lawyers (Plaintiffs)
Legal Point Lawyers & Attorneys (Defendants)

File Number(s):

2024/00396843

Publication restriction:

No

JUDGMENT – EX TEMPORE

1. Before the Court for determination is a Notice of Motion filed on 12 August 2025 by the defendants seeking orders vacating a hearing date listed to commence on 19 August 2025, for leave to be granted to amend the Defence and to file further evidence and other related directions. The Notice of Motion is listed today on an urgent basis in light of the forthcoming hearing.

2. In support of the application, the defendants filed and read an affidavit of Ziyao Zhou dated 12 August 2025. In addition, there is a lengthy exhibit to the affidavit which attaches numerous WhatsApp messages, some of which have been translated from the Chinese language, which it is said are relevant to a potential defence to the claim for the defendants and which came into their possession recently. Exhibit A on the application is merely part of the exhibit showing that the English translations were prepared by a certified NAATI translator.

3. The plaintiffs oppose the application and read the affidavit of Zhimeng Ye dated 14 August 2025. In substance, it has been submitted by the plaintiffs that:

1. The possibility of a Cross-Claim containing the matters which have been put forward by the defendants was raised in March 2025 in correspondence and the Court should presume that there has been a conscious decision not to seek leave to file the Cross-Claim or amend the Defence a number of months ago and before the matter was set down for hearing;

2. No proposed draft Defence has been put forward for the Court’s consideration;

3. The nature of the Defence is vague and uncertain and the plaintiffs are ready to run their case and the Court should maintain the hearing date; and

4. In those circumstances, costs would not be an adequate remedy for the plaintiffs.

4. It is submitted that the excuse of the relevant WhatsApp messages only being available to the defendants recently is difficult to accept, because they were on notice of the alleged relevance of the transaction which I will discuss shortly, ever since the Statement of Claim was filed, and certainly since March 2025 when the correspondence annexed to Mr Ye’s affidavit raised the prospect of a Cross-Claim.

5. Mr Zhou, who appears for the defendants/applicants, submitted:

1. That he accepts that the issue of a potential Cross-Claim was raised earlier, but emphasises that the defendants were concerned for their safety and that of their family, because of the involvement of a third party, who it is alleged stole a motor car, which I will shortly describe;

2. That that restrained them from taking action earlier out of the safety concern, and it is only recently following interactions with the New South Wales Police that they felt able to raise the matters;

3. That there were problems with obtaining the WhatsApp messages because of a fault with the second defendant’s phone; and

4. That overall, it is in the interests of justice to vacate the hearing date and to give the leave sought.

6. Written submissions were supplied by the legal representatives for the defendants. In those submissions they state that costs, whilst not conceding that they should be ordered, would be an appropriate remedy.

7. The matter commenced by Statement of Claim on 25 October 2024 whereby the plaintiffs sought to recover the sum of $280,000, which was said to be owing as a result of a contract to purchase a Mercedes Benz car by the first defendant from the plaintiffs. In addition, there was claimed to be an amount of some $9,000 outstanding.

8. The background to the matter was that in March 2021 the first plaintiff purchased a 2020 high standard Mercedes Benz vehicle for $300,000, which it is pleaded was registered in the name of the second plaintiff, and in May 2024 the plaintiffs decided to consign with the first defendant the Mercedes Benz vehicle with the aim of selling it for $300,000. A written contract it is pleaded was subsequently entered into in July 2024 for the first defendant to buy the Mercedes Benz for $280,000, and that it was said that cleared funds would be provided shortly. In due course, a further amount of $50,000 was advanced by the plaintiffs in July 2024 at the request of the defendants, and it was promised it would be repaid in seven days. Thus, the amount of $280,000 plus $10,000, less an amount of $1,000 that was repaid, is sought to be recovered against the first defendant and the second defendant, respectively.

9. The second defendant was added as a party in the Amended Statement of Claim filed on 19 November 2024. I have earlier referred to correspondence from the solicitors for the defendants. The relevant correspondence is dated 7 March 2025 and 19 March 2025, and is annexed to the affidavit of Mr Ye. This correspondence expressly refers in the first letter to the third party transaction which is sought to be made relevant in the present case. It states as follows:

“We will file our clients’ defence next week. As discussed, we are currently seeking instructions and contemplating a cross-claim against your client in a cryptocurrency trade dispute. In that dispute your client is the seller and has allegedly caused loss to a third party. Our clients have also suffered loss due to your client’s failure to complete the sale, having taken the funds but not provided the cryptocurrency.”

The second email dated 19 March 2025 provides even more detail, including:

“We are instructed to file a cross-claim against your client and a third party in relation to a cryptocurrency trade. As discussed, your client has breached an agreement by failing to deliver cryptocurrency to the third party purchaser after receiving approximately AUD$130,000 in cash, either personally or through a representative. Both the New South Wales Police and our client’s own investigations suggest that the stolen Lamborghini in the substantive matter might have been taken by a third party purchaser to recover his loss.”

10. The Defence which was filed only three days after the first email, puts a different complexion on the contractual relationship between the parties. It suggests that a joint venture was entered into between the plaintiffs and the defendants regarding the acquisition and intended sale, and possibly the rental, of a Lamborghini motor car, which changed the nature of the existing written contract so that the plaintiffs would only be repaid for their Mercedes Benz vehicle when the Lamborghini was sold. It is pleaded that the initial proposed purchaser of the Lamborghini fell out, and the Lamborghini was rented for a while. Apparently, in August 2024, it was stolen by a renter, which was reported to police in September 2024. It is alleged, therefore, that there was an entirely different contract entered into or, alternatively, a variation to the existing contract.

11. The parties were ordered to file affidavits in the main matter and they have filed them.

12. There is a factual issue about the telephone of the second defendant. It is asserted that the telephone needed to be repaired and was only repaired and the WhatsApp messages recovered, a short time ago. That is one reason for the delay. It seems unclear why it would take that long to repair, in circumstances where the proceedings were commenced in October last year, served in November last year, and the defendants have been on notice of the issues, at least since the Amended Statement of Claim was filed in November 2024.

13. I accept, on the basis of the limited material I have, that the defendants were concerned in relation to the involvement of a third party. It is said that they were so concerned that they did not commence the Cross-Claim, or alter the Defence, until they were told by the police recently that the relevant persons allegedly involved in the theft of the Lamborghini had been arrested. However, they were willing to raise the matters in the March 2025 correspondence with the plaintiffs and it is unclear how filing pleadings at that time would have exposed them to unreasonable danger, although I have nothing to suggest that some concern for safety was not still held.

14. The general principles to be applied to a vacation of a hearing date are well-known. A listing for a final hearing in this Court is an important matter, and final hearings are not to be vacated except for good cause. In Davis v Kent [2017] NSWCA 122 at [33] the Court, which consisted of Beazley ACJ and Meagher and Leeming JJA, stated as follows:

“The Court and parties are entitled to, and should expect that, subject to justifiable and justified circumstances, proceedings will commence on the allocated date for hearing and proceed to finality, and that this process will be carried out with appropriate efficiency. The requirement that the proceedings be determined with due despatch, having regard to their just disposition, is now part of the statutory basis upon which litigation is required to be conducted.”

15. Their Honours referred to the High Court decision in Aon Risk Services Australia Limited v Australian National University (2009) CLR 175 at [98]. I have referred in some detail to the principles to be applied on a vacation of a hearing application earlier this year in SA v Hatfield [2025] NSWDC 56 at paragraphs 24 and following, including a reference to a number of Court of Appeal cases. In general terms, those authorities referred to Aon and the prejudice arising from delay in considering applications for vacation of a hearing date. The following matters were referred to:

1. Sections 56 to 58 of the Civil Procedure Act 2005 (NSW);

2. That the Court must consider whether it is consistent with the just, quick and cheap resolution of the real issues in dispute in the proceedings to vacate the hearing date. See s 56 of the Civil Procedure Act;

3. The factors set out in s 58 of the Civil Procedure Act;

4. That those matters must be balanced against the statement in s 64 of that Act, that all necessary amendments are to be made for the purposes of determining the real issues raised by, or otherwise depending on, the proceedings.

16. I set out in that judgment a number of relevant factors which I took into account.

17. The question, in the light of those authorities and the Court of Appeal statement in Davis v Kent, is whether it is in the interests of justice to vacate the hearing date in the present matter. Here, the affidavit for the defendants relies on the second defendant’s fears of the involvement of an alleged crime gang, the concerns for the safety of his family, and the new WhatsApp material. It is suggested that the Lamborghini was stolen because the first plaintiff had defaulted in providing a US dollar cryptocurrency equivalent in exchange for $130,000 cash with the third party.

18. In the present case, if the plaintiffs’ case is accepted, it is unclear to me how the new matters desired to be raised would be relevant. If there is some version of the defendants’ case which would be accepted, the matter would raise difficult questions of causation and remoteness relating to breach. The strength of the apparent defence is a matter to be taken into account. The real question is, how can the plaintiffs’ failure to deliver US dollar cryptocurrency, even if it is established, be seen as a common sense cause of the theft of the Lamborghini and the defendants’ breach.

19. Having regard to the correspondence in the Ye affidavit, it seems to me that a Cross-Claim could have been served much earlier than it was. The matters were raised in March 2025, and the hearing was set down on 27 May 2025. Thus the defendants knew the importance of the hearing coming up. They were able to articulate the matter in the emails but have not taken action. It is said that they have only recently come into the possession of the WhatsApp messages. Why the telephone of the second defendant could only have been repaired recently, when the issues have been apparent for some time, is not clear on the evidence. Much greater expedition should have occurred.

20. In addition, the theft of the Lamborghini was known from September 2024. It is unclear to me how a revised civil pleading, which is private to the parties, would have created greater danger to the defendants. In saying that, I am not questioning that there was some concern in the second defendant.

21. Another discretionary matter which is relevant is that there is no draft Defence setting out what is sought to be raised. It is difficult, therefore, to contemplate what the effect of the Defence would be. In my view, there has been delay in raising the matter. It has only been raised by the defendants in the last few days. The hearing is coming up. I take into account, as I have indicated, that the authorities have emphasised ss 56 to 59 of the Civil Procedure Act.

22. Taking all of the matters that I have referred to into account, I am not persuaded that it is in the interest of justice to vacate the hearing date, particularly where the application is very late, there is no draft pleading proposed, and therefore the position is somewhat uncertain, and a proposed Defence has been raised only a few days before the hearing.

23. Accordingly, I make the following orders in relation to the Notice of Motion filed on 12 August 2025:

1. The Notice of Motion is dismissed.

2. The defendants are to pay the plaintiff’s costs of the Notice of Motion, as agreed or assessed; and,

3. The final hearing on 19 August 2025 is confirmed.

**********

Amendments

18 August 2025 - Case Title Amended

19 August 2025 - Name of Legal Representative for the defendants amended in paragraph 5.

Decision last updated: 19 August 2025