BN Global Trading Limited v Broadtrust Group Limited
[2016] NZHC 987
•3 May 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND` REGISTRY
CIV-2015-419-87 [2016] NZHC 987
BETWEEN BN GLOBAL TRADING LIMITED
Plaintiff
AND
BROADTRUST GROUP LIMITED First Defendant
ZHONG (aka John) ZHANG Second Defendant
Hearing: 3 May 2016 at 2:15pm Appearances:
F C Deliu for Plaintiff
S Keall for DefendantsJudgment:
3 May 2016
ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL
Solicitors:
Amicus Law (Richard Zhao), Auckland, for Plaintiff
Whitworth & Co (Craig Whitworth), Auckland, for Defendants
Counsel:
F C Deliu, Barrister, Auckland, for Plaintiff
S Keall, Barrister, Auckland
BN GLOBAL TRADING LIMITED v BROADTRUST GROUP LIMITED [2016] NZHC 987 [3 May 2016]
[1] In March 2014, Broadtrust Group Ltd sold its foreign exchange business in Hamilton to BN Global Trading Ltd. Broadtrust’s director is Mr Zhong (John) Zhang, the second defendant. BN Global Trading Ltd’s director is Mr Kok Tin Wong. BN Global Trading Ltd is disappointed with its purchase. It says that the business is not as profitable as it was led to believe. In particular, there seems to have been a change of regulatory requirements which made the business less profitable. It sues the vendor and its director under a number of causes of action, but broadly complains of misrepresentation.
[2] This decision is about pleadings. The defendants say that the statement of claim is defective and contains insufficient particulars. They served a notice under r
5.21 of the High Court Rules requiring further particulars, but did not receive any constructive response. The defendants’ application seeks orders that the plaintiff’s claim be struck out in its entirety, and alternatively, that the plaintiff file and serve a more explicit pleading. In the hearing today, Mr Keall, for the defendants, made it clear that he was not aiming to knock out the plaintiff’s claim in its entirety – for example, to allege that there was no tenable cause of action. The defendants’ aim is instead to obtain a more explicit pleading that complies with the High Court Rules.
[3] The defendants put in evidence a copy of the agreement for sale and purchase. The parties agree that that is the written agreement between the parties. Mr Wong, the director of the plaintiff, has sworn an affidavit providing general verification of the factual allegations in the statement of claim. In particular, he describes Mr Zhang as having made representations as to the business of the first defendant, its transactions, monthly turnover, profitability and the like. He also says that he had no prior involvement in the foreign exchange business or the financial services industry.
[4] The parties used the REINZ/ADLS form for the agreement for sale and purchase of the business. In it Broadtrust Group Ltd is identified as the vendor. BN Global Trading Ltd is identified as the purchaser. The business is described as “foreign exchange”. The purchase price was $200,000 broken down into tangible
assets of $6,650 and intangible assets of $193,350. The deposit was $20,000. The settlement date was 25 March 2014. While the agreement provides for a turnover warranty, that space on the front page has been left blank. The vendor’s assistance period is 20 working days after possession. The vendor’s restraint of trade is three years after possession date, within five kilometres of the premises – those being identified as 462 Victoria Street, Hamilton. The agreement was conditional on the landlord’s approval. The agreement apparently settled on or about 25 March 2014. The parties disagree on the date of the agreement. The defendant says 19 March
2014; the plaintiff says 25 March 2014. The plaintiff’s version seems unlikely because that is the possession date on the agreement. The date of the landlord’s approval was 21 March 2014, which suggests that the parties entered into the agreement before then.
The statement of claim
[5] Tthe defendants do not say that the plaintiff does not have an arguable case against them. Their complaint is that the statement of claim does not meet the requirements of the High Court Rules and does not give sufficient particulars of the plaintiff’s case against them.
[6] After a notice has been given under r 5.21, the court has power to direct a further pleading. Rule 5.21(4) says:
Even if no notice has been given under this rule, the court may on its own initiative order a more explicit pleading to be filed and served.
During the hearing I drew to the attention of counsel for the plaintiff matters which I considered required attention. Mr Deliu objected that some of those matters had not been forecast and they were matters of my initiative. In so far as they were matters of my initiative, Mr Deliu reminded me of my obligations under r 7.43(2)(b) that his client had to be given a proper opportunity to reply to them. Given that I have canvassed the matters with Mr Deliu, and that he was instrumental in drafting the statement of claim at the outset, I consider that he has had adequate opportunity to address the matters which I will deal with in this decision.
[7] The rules do not prescribe any form for a notice under r 5.21. The notice was a letter between lawyers. While that may seem relatively informal, that aspect is immaterial. It was a lengthy considered letter that drew to the plaintiff’s attention the matters which the defendants required to be attended to.
[8] The relevant pleading rules are r 5.17 (which applies to pleadings generally)
and some of the rules for statements of claim, rr 5.26-5.28 and rr 5.31-5.33:
5.17 Distinct matters to be stated separately
(1) Distinct causes of action and distinct grounds of defence, founded on separate and distinct facts, must if possible be stated separately and clearly.
(2) If a party alleges a state of mind of a person, that party must give particulars of the facts relied on in alleging that state of mind.
(3) A state of mind includes a mental disorder or disability, malice, or fraudulent intention but does not include mere knowledge.
5.26 Statement of claim to show nature of claim
The statement of claim—
(a) must show the general nature of the plaintiff’s claim to the relief sought; and
(b) must give sufficient particulars of time, place, amounts, names of persons, nature and dates of instruments, and other circumstances to inform the court and the party or parties against whom relief is sought of the plaintiff’s cause of action; and
(c) must state specifically the basis of any claim for interest and the rate at which interest is claimed; and
(d) in a proceeding against the Crown that is instituted against the Attorney-General, must give particulars of the government department or officer or employee of the Crown concerned.
5.27 Statement of claim to specify relief sought
(1) The statement of claim must conclude by specifying the relief or remedy sought.
(2) If the statement of claim includes 2 or more causes of action, it must specify separately the relief or remedy sought on each cause of action immediately after the pleading of that cause of action.
5.28 Inclusion of several causes of action
(1) A plaintiff may include several causes of action in the same statement of claim.
(2) Despite subclause (1), claims by or against an Official Assignee in bankruptcy, or a liquidator or a receiver of a company, in that capacity, must not, without leave of the court, be joined with any claim by or against that person in any other capacity.
(3) Despite subclause (1), claims by or against an executor or administrator or trustee, in that capacity, must not be joined with claims by or against that person in a personal capacity unless those personal claims are alleged to arise with reference to the estate or trust in respect of which the person sues or is sued as executor or administrator or trustee.
5.31 Specifying relief sought
(1) The relief claimed must be stated specifically, either by itself or in the alternative.
(2) Despite subclause (1), it is not necessary to ask for general or other relief but the court may, if it thinks just, grant any other relief to which the plaintiff is entitled, even though that relief has not been specifically claimed and there is no claim for general or other relief.
5.32 Amount of money claim
A statement of claim seeking the recovery of a sum of money must state the amount as precisely as possible. 5.33 Special damages
A plaintiff seeking to recover special damages must state their nature, particulars, and amount in the statement of claim.
[9]
The statement of claim has 20 paragraphs. It has one prayer for relief.
It
alleges six causes of action:
(a) breach of contract;
(b) contractual misrepresentation under the Contractual Remedies Act
1979;
(c) Contractual Mistakes Act 1977;
(d) breaches of the Fair Trading Act 1986;
(e) negligent misstatement; and
(f) unconscionable bargain.
All causes of action are pleaded against both defendants.
[10] As something of a coincidence, the statement of claim has already drawn comment from Asher J in E-Trans International Finance Ltd v Kiwibank Ltd.1 In that case, BN Global Trading Ltd sought access to the file in the E-Trans proceeding. Asher J said:
[7] … I found the Global statement of claim hard to follow and contradictory at times, and Mr Butler and Mr Farmer questioned whether there was a relevant common issue. I am prepared to adopt a liberal approach to the meaning of the pleadings, acknowledging the ability to amend. I will accept for the purposes of this proceeding that it is a relevant issue in the Global proceedings whether the vendors failed to inform Global that New Zealand banks had ceased opening new bank accounts for foreign exchange businesses or would not do so in the future.
Clearly Asher J anticipated that changes may be required to the current pleading. Indeed, Mr Deliu accepted in submissions that the statement of claim would always have to be amended but he stated that the plaintiff had not had discovery and the upgrading of the pleadings was to be deferred until discovery had been completed.
Separation of claims against defendants
[11] The plaintiff may sue both Broadtrust Group Ltd and Mr Zhang in the same proceeding, as allowed by r 4.3 of the High Court Rules. But the plaintiff must, however, distinguish between causes of action that can be run against only one defendant and those against the other or both of them. The statement of claim pleads all causes of action against both defendants without drawing any such distinction.
[12] As only BN Global Trading Ltd and Broadtrust Group Ltd are parties to the written agreement for sale and purchase of the business, in general Broadtrust Group Ltd is the only person who can be sued on a contractual cause of action. There is a
qualification to that on the matter of restraint of trade, which I shall deal with
1 E-Trans International Finance Ltd v Kiwibank Ltd [2015] NZHC 2164.
separately. Because Mr Zhang is not named as a party to the agreement, he cannot be sued for breach of the agreement or for contractual misrepresentation. Equally, it is not possible to claim relief against him under the Contractual Mistakes Act and he cannot be ordered to give relief for any unconscionable bargain.
[13] Paragraph 3 of the statement of claim says:
The second defendant is a natural person, one hundred per cent shareholder, sole director, and alter ego of the first defendant who at all material times assumed personal responsibility for his actions and/or those purported to have been done on behalf of the first defendant.
[14] By this pleading the plaintiff hopes to run a case that the director is to be equated with the company and that he carries equal responsibility in contract for the actions of his company. No doubt Mr Zhang, as Broadtrust’s director, acted as its agent and caused the company to enter into the agreement with BN Global Trading Ltd. But his agency does not make him a party to the agreement and his agency, his office as director and even the fact that he was the 100 per cent shareholder of the company do not create any identity between him and Broadtrust Group Ltd. Mr Zhang and his company are separate entities, as recognised by the Companies Act, s
15:
A company is a legal entity in its own right separate from its shareholders and continues in existence until it is removed from the New Zealand register.
[15] The agreement for sale and purchase itself recognises the distinction between the company and its shareholders and directors. The restraint of trade provisions draw a distinction between a company on the one hand (cl 7.1) and the shareholders and directors on the other (cl 7.2).
[16] It is plain that the plaintiff does not have any arguable causes of action against Mr Zhang in contract apart from any claim in respect of restraint of trade under cl 7.2 of the agreement. In filing a new pleading, the plaintiff is not to retain any claims in contract against Mr Zhang based on the written agreement except any made under cl 7.2 (the restraint of trade provision).
[17] BN Global Trading Ltd has sued Broadtrust for negligent misstatement in respect of representations made to induce the agreement for sale and purchase. BN Global Trading Ltd can, of course, sue Mr Zhang for negligent misstatement, but such a claim against Broadtrust Group Ltd is barred under s 6(1)(b) of the Contractual Remedies Act 1979:
6 Damages for misrepresentation
(1) If a party to a contract has been induced to enter into it by a misrepresentation, whether innocent or fraudulent, made to him by or on behalf of another party to that contract—
(a) he shall be entitled to damages from that other party in the same manner and to the same extent as if the presentation were a term of the contract that has been broken; and
(b) he shall not, in the case of a fraudulent misrepresentation, or of an innocent misrepresentation made negligently, be entitled to damages from that other party for deceit or negligence in respect of that misrepresentation.
That claim against Broadtrust Group Ltd is struck out.
[18] Only one of the causes of action can be pleaded against both Broadtrust
Group Ltd and Mr Zhang. That is the claim for breaches of the Fair Trading Act.
Breach of contract allegations
[19] Paragraph 15 of the statement of claim sets out these breaches of the agreement:
(a) The defendants continued to operate a foreign exchange business in
Hamilton, New Zealand;
(b)the defendants have operated, and indeed are operating, a foreign exchange business within five kilometres of Level 1, 462 Victoria Street, Hamilton;
(c) the defendants did not transfer their entire client base to the plaintiff;
(d)the defendants did not organise everything that is required to ensure the plaintiff is able to run a business smoothly and legitimately;
(e) the defendants did not assist the plaintiff in completing the requirements for the opening of the necessary bank account(s) to operate the business.
The terms of the agreement alleged to have been breached are clauses 6.2(4), 6.4(3),
7.1 and/or 7.2.
[20] Clause 6.2(4) says:
6.2 The vendor warrants and undertakes that between the date of this
agreement and the giving and taking of possession the defender shall …
(4) Promptly notify the purchaser of any lawsuits, claims, proceedings, investigations or adverse events which may occur, be threatened, brought, asserted or commenced against the vendor involving the business or the premises in any way which may adversely affect the business.
[21] It was unclear what the non-disclosure allegation was about. From discussion with Mr Deliu, I understand that there was a change in the regulatory environment relating to foreign exchange business in New Zealand. The plaintiff’s case is that this change had an adverse effect on the business. That comes under cl
6.2(4) and the defendants ought to have disclosed it. Further particular of those aspects are required.
[22] Clause 6.4(3) says:
6.4 The vendor warrants and undertakes that on or immediately after possession - …
(3) The vendor will, at the vendor’s cost, do and execute all such acts and deeds as may reasonably be required to enable the purchaser to obtain the full benefit of the business.
[23] I understand that the allegations as to the entire client base not being transferred to the plaintiff falls within cl 6.4(3). There is, however, a lack of specificity. There is a potential prejudice to the defendants in the generality of the allegation. I expect the plaintiff to specify what client base has been transferred and
what was not, and what matters remain to be transferred or ought to have been transferred.
[24] The first two points in paragraph 15 go to restraint of trade. The restraint of trade provisions in the agreement are:
7.1In consideration of the purchase price the vendor hereby agrees with the purchaser that the vendor will not during the vendor’s restraint of trade period stated on the front page of the agreement either directly or indirectly carry on or be interested either alone or in partnership with or as manager, agent, director, shareholder, financier or employee of any other person in any business similar to the business within the radius and from the premises stated on the front page of the agreement.
[25] Clause 7.1 directly binds Broadtrust Group Ltd with effect from the date of settlement. It is not apparent from the pleadings what the defendants have done that is said to amount to a breach of that restraint of trade provision. I expect fuller particulars. Usually, breaches of restraint of trade clauses can be identified by showing that a vendor is carrying on business from some other place within the restraint of trade territory. That, however, has not been done in this case but the plaintiff should be able to do so.
[26] Clause 7.2 says:
7.2If the vendor is an incorporated company it will on or before the possession date procure its shareholders and its directors, other than any shareholders or directors specifically excluded from this provision in terms of Schedule 2 of this agreement, to enter into a deed of covenant with the purchaser binding themselves to like effect, such deed of covenant to be prepared by and at the expense of the purchaser and tendered to the vendor or the vendor’s lawyer for execution in a reasonable time before settlement.
[27] The clause applies to directors and shareholders who are not otherwise parties to the agreement for sale of the business. They become contractually bound only if they enter into a deed of covenant under cl 7.2. I understand from Mr Deliu that on settlement the plaintiff did not arrange for Mr Zhang to give a written deed of covenant in terms of cl 7.2. Given that state of affairs, it is open to question whether the plaintiff can at present sue Mr Zhang for breach of a non-existent deed of covenant. The matter may not however end there. Clause 11 of the agreement for
sale and purchase is a non-merger clause. That means that BN Global Trading Ltd may still be able to call upon Broadtrust Group Ltd to provide a deed of covenant under cl 7.2 signed by Mr Zhang. If Mr Zhang refuses to sign, BN Global Trading Ltd may be able to seek further relief in this court, perhaps an order for specific performance of cl 7.2. That may be only a partial remedy for BN Global Trading Ltd. It is uncertain whether Mr Zhang could be liable for any breach of the restraint of trade provision that occurred before he signed the deed. I leave that open to be addressed in any amended pleading.
Relief for breach of contract
[28] The breach of contract allegations require their own prayer for relief. Strictly, each contractual provision breached has its own cause of action. It may be difficult to separate out damage under the warranty provisions under cl 6.2 or 6.4(3), but it should be possible to separate out damages for breach of any restraint of trade from the damages for the warranty clauses. Damages for breach of contract come in different forms, such as reliance damages or expectation damages. The plaintiff will need to set out the damages and show the basis for them.
Warranties
[29] Paragraph 6 of the statement of claim pleads statements made to the plaintiff about the business. These are said to have been made “on or before 25 March 2014”. The defendants complain that “on or before” is open-ended and want some specificity, that is, a more exact time-frame within which the representations were made. For completeness, the plaintiff should specify the person who made the statements. I assume from the nature of the case that the statements were oral but if the plaintiff says that the defendants also used written materials, they should be appropriately identified in the pleadings.
[30] The statements in paragraph 6 are pleaded as both representations and warranties. “Warranties” requires attention. Whereas “representations” go to facts, “warranties” are promissory. The pleaded statements do not appear as written terms of the agreement for sale and purchase. The representations were about past and
future profitability, turnover and the like. As there are no such written provisions in the agreement for sale and purchase, the plaintiff will need to set out how the matters pleaded in paragraph 6 can constitute contractual terms binding Broadtrust Group Ltd. Ordinarily the parol evidence rule applies. There is a strong presumption that the written document sets out all the terms of the agreement. If BN Global Trading Ltd wants to show that notwithstanding that these were contractual promises, it should set out clearly the basis for these statements having contractual effect (as opposed to factual representations).
Misrepresentation allegations
[31] Misrepresentation is relevant to these causes of action:
(a) Contractual misrepresentation under the Contractual Remedies Act; (b) breaches of the Fair Trading Act;
(c) negligent misstatement;
(d) the Contractual Mistakes Act; and
(e) to a lesser extent, unconscionable bargain.
[32] Among the requirements for a representation to be actionable are that it is a statement of past or present fact and that it is not true. There are allegations of falsity in the contractual mistakes pleading, but I cannot find them in any other place. To the extent that falsity is pleaded for contractual mistake, the pleading is inadequate as to particulars. An example is the pleading:
“The weekly profit of the business was not at least $3,000 weekly as it
mistakenly believed it was”.
The plaintiff should be able to specify with greater particularity in what respects the misrepresentations were false. In particular, it should be able to do that once discovery has been completed. It should then have materials from which it can state what it contends the weekly profit actually was.
[33] Some of the alleged misrepresentations are about events to happen in the future. For example, paragraph 6 includes these:
The plaintiff’s weekly profit when operating the business would be at least
$3,000 a week;
The plaintiff’s weekly turnover when operating the business would average
$5,000 a week; and
The plaintiff’s turnover when operating the business would be a minimum of
$200,000 a year.
[34] Statements as to matters to happen in the future are not statements of past or present facts. They may, for example, be only opinions or forecasts. In some cases the courts have accepted that representations as to future earnings may be representations of fact by reason of the implication that there must be a reasonable basis for the forecast. A leading case in New Zealand is New Zealand Motor Bodies Ltd v Emslie.2 These aspects are not addressed in the current pleadings but they should be. I expect them to be addressed in all pleadings where misrepresentation is in issue, including contractual misrepresentation, negligent misstatement and
breaches of the Fair Trading Act.
Fair Trading Act
[35] The pleading of breach of the Fair Trading Act is general only with a reference to these sections: ss 9, 12A(1) and 13 (a), (e), (g) and/(i) of the act. Each of those sections imposes a distinct liability. Each breach of those provisions is a separate cause of action for which there must be a separate pleading with a separate prayer for relief. While saying that, I invite both the plaintiff and the defendants to consider whether there might be some economy by reducing the causes of action. For example, it may not be necessary for the plaintiff to allege breaches of every available section of the Fair Trading Act. In many cases plaintiffs find that s 9 is entirely adequate. I emphasise that some discussion between counsel could be useful. If the defendants were to take the attitude holding everything in reserve, they may have to face a very lengthy statement of claim under which every conceivable cause of action is pleaded. There should be room for streamlining.
Unconscionable bargain
[36] The unconscionable bargain pleading simply states:
The defendants are liable for unconscionable bargaining against the plaintiff who was under a significant disability or disadvantage from exploitation that they knew and took advantage of.
[37] There are no particulars to support those allegations. The plaintiff could usefully refer to the Court of Appeal’s decision in Gustav & Co Ltd v Macfield Ltd3 for guidance on what needs to be pleaded and proved in a claim for unconscionable bargain. It needs to be remembered that in this case there was an apparently arm’s length commercial transaction, not the normal setting for an unconscionable bargain. The unconscionable bargain jurisdiction is not intended to relieve parties from hard bargains or to save the foolish from their foolishness. It is only intended to protect people who are under a specific and significant disability or disadvantage. That
needs to be specified. Such disadvantages do not arise just from an inequality of bargaining power. Likely characteristics are ignorance, lack of education, illness, age, mental or physical infirmity, stress or anxiety. There are no such allegations in this case. The allegations of unconscionable bargain need to be further particularised.
[38] The normal remedy for unconscionable bargain is rescission. Under rescission the parties are put back into the position they were in originally. As an equitable remedy, it is subject to specific defences. I invite the plaintiff to consider carefully whether that is an appropriate remedy in this case, bearing in mind the possible defences of affirmation and acquiescence. I note that the proceeding was not issued until 12 months after settlement.
Prayer for relief
[39] There is a single prayer for relief for all causes of action. It says:
Wherefore the plaintiff seeks:
1 a judgment in its favour against both defendants
2concomitant orders for cancellation of the agreement for sale and purchase of the business, damages (including but not limited to restitution or compensation) interest, costs and/or such other relief as seen fit by this honourable Court.
[40] That pleading is not adequate in terms of setting matters out completely. In its present form the court would not set a close of pleadings date. There needs to be a separate prayer for relief for each cause of action. Where monetary relief is sought, specific sums need to be set out.
[41] The plaintiff needs to bear in mind that there are different measures for relief for claims in contract (usually expectation or reliance damages) and in tort (reliance damages in most cases). Contractual damages can be awarded only for the claims for contractual misrepresentation of the Contractual Remedies Act and breach of contract. Tort damages are available for negligent misstatement and under the Fair Trading Act. Damages are not normally available for a claim of unconscionable bargain.
[42] Section 7 of the Contractual Remedies Act states the conditions to be satisfied before a contract may be cancelled for misrepresentation, breach or repudiation. The court does not order cancellation, although it can make a declaration that the contract has been cancelled by one of the parties. The statement of claim does not presently set out how any of the requirements of s 7 are satisfied, and there is no pleading of cancellation by the plaintiff. I invite the plaintiff to consider carefully whether it should pursue cancellation of the contract, particularly in light of the restraint of trade issues. If the plaintiff wishes to hold Mr Zhang to a deed of covenant (which he has not yet signed), it will need to pursue Broadtrust Group Ltd under cl 7.2 to obtain a deed of covenant. If the contract is cancelled, under s 8(3) of the Contractual Remedies Act, Broadtrust Group Ltd will be relieved of performance. That may mean that BN Global Trading Ltd will not be able to obtain a deed of covenant signed by Mr Zhang.
Discovery
[43] The case has been running since March 2015. So far that time has been taken up with the pleadings. Neither side points the finger at the other for delays in the
case. While the defendant is entitled to come to court to obtain directions for a statement of claim that is more compliant with the High Court Rules, I regard matters as sufficiently clear that the parties can begin discovery, even though better particulars are required. There is potential inconvenience to the plaintiff if it has to file a fresh statement of claim now ahead of discovery, and another one after discovery to address questions of relief. The case can be run in a more streamlined fashion if discovery is carried out first and the plaintiff files a complying statement of claim once it has inspected documents and has calculated the relief it is seeking.
[44] I give a direction for discovery. That is to be standard discovery. The sworn affidavits of documents are to comply with the second part of the protocol in Part 2 of Schedule 9 of the High Court Rules. Affidavits of documents are to be filed and served by 3 June 2016. Electronic copies of documents for inspection are to be provided at the same time.
[45] While I hope that discovery will proceed smoothly, there may be queries. In that event, either side may file a memorandum asking for a conference. I would expect to conduct a conference on relatively short notice with a view to giving directions if there are any difficulties on discovery.
Outcome
[46] The plaintiff is to file and serve a new statement of claim by 24 June 2016. That statement of claim is to be amended in light of the matters I have highlighted in this decision as requiring attention. Barring any claim under cl 7.2 of the agreement for sale and purchase of the business, the statement of claim is not to contain any causes of action in contract against Mr Zhang. The plaintiff may of course claim against him for negligent misstatement and under the Fair Trading Act. Equally the new pleading should not contain any pleading of negligent misstatement against Broadtrust Group Ltd. It should also give the particulars I have highlighted in this decision. I also expect the plaintiff to have made significant progress in quantifying the financial relief it seeks in respect of all its causes of action.
[47] The defendants are to file and serve statements of defence by 22 July 2016.
[48] I direct the Registrar to arrange a face-to-face case management conference on an available date in August 2016 for further directions to be given. I anticipate that by then discovery will have been completed and new pleadings will have been exchanged. If the case is in fit state, a close of pleadings date may be set and directions for hearing may be given. I invite memoranda from the parties to address trial directions. In particular, I note that both parties are Chinese. I may wish to know how fluent they are in English.
[49] I reserve leave to apply for further directions before 22 June 2016, if there are any difficulties, for example, any queries as to the adequacy of the new statement of claim. I hope that there will be only one further statement of claim in this case. But to avoid difficulties, I invite Mr Deliu to consider sending a draft to Mr Keall for comment.
Costs
[50] Each side sought costs. For the plaintiff, Mr Deliu claimed to have been vindicated because the plaintiff only intended to file an amended pleading after discovery in any event. This decision has gone in favour of the defendants. Although they gave proper notice under rule 5.21, when that was not complied with this application was necessary. There are significant defects in the statement of claim which does not comply with the High Court Rules. The defendants are therefore to have costs on this application. The case is category 2 for costs. I invite the parties to confer as to costs on the application. I note that the case has taken a half day for hearing. If there are any differences over costs, memoranda may be filed.
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Associate Judge R M Bell
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