Zhao v Zhang
[2025] NZHC 1792
•3 July 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-1825
[2025] NZHC 1792
BETWEEN XING (STELLA) ZHAO
First Plaintiff
FEDERAL PROPERTY DEVELOPMENT LIMITED
Second PlaintiffAND
HONGCHENG ZHANG
First Defendant
CHENG HOMES LIMITED
Second Defendant
Hearing: 21 March 2025 Appearances:
D Hickson for the Plaintiffs
KL Chu and K Tubbs for the Defendants
Judgment:
3 July 2025
JUDGMENT OF ASSOCIATE JUDGE SUSSOCK
This judgment was delivered by me on 3 July 2025 at 10 am pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors:
PCW Law Limited, Auckland Meredith Connell, Auckland
ZHAO v ZHANG [2025] NZHC 1792 [3 July 2025]
Introduction
[1] The plaintiffs, Ms Zhao and Federal Property Development Limited, seek orders that the defendants file and serve a more explicit statement of defence and counterclaim, including further and better particulars.
[2] The proceedings concern property development projects carried out between the plaintiffs and the defendants.
[3] The first plaintiff and the first defendant were in a personal relationship around the time of the property development projects that continued until April 2024. The parties are in dispute regarding alleged debts and alleged rights to participate in the profits of the developments. Several properties were developed with a number of companies incorporated to undertake the development of the properties, including the second plaintiff and second defendant.
[4] The plaintiffs are seeking to recover amounts they claim are loans owed by the defendants totalling $1,632,500 plus interest and costs. The second plaintiff and second defendant are joined to the proceeding as alleged parties to the loans.
[5] The defendants deny liability to the plaintiffs. In addition, the first defendant, Mr Zhang, has pleaded a counterclaim relying on an alleged partnership pursuant to which he says Ms Zhao owes fiduciary duties to him, which include an obligation to provide an account of financial matters and to distribute the profits and income of the projects equally between them. As an alternative counterclaim, Mr Zhang claims Ms Zhao holds his share of all profits or rents obtained from the developments on constructive trust.
[6] Ms Zhao denies those claims. Ms Zhao does not deny the existence of a joint venture but claims the venture was contingent on the continuation of Ms Zhao and Mr Zhang’s personal relationship and that the financial contributions Mr Zhang made to the developments were “as security for that relationship.” Ms Zhao further claims that in the event the relationship came to an end, so too would the joint venture, and any joint or separate ownership interest which Mr Zhang might otherwise have had in the development projects would immediately vest in Ms Zhao.
[7] Counsel for the plaintiff confirms that the adequacy of the defendants’ pleading has not prevented the plaintiffs from pleading to the counterclaim or reply but submits that it will impede the plaintiffs’ preparation for trial. The plaintiffs say that as the pleadings presently stand, the defence is not sufficiently clear and neither is the case which Ms Zhao must meet on the defendants’ counterclaim.
[8] I set out the relevant principles before considering the paragraphs in the pleadings in respect of which orders are sought.
Relevant legal principles
[9]The application is made in reliance upon r 5.21 of the High Court Rules 2016.
[10] Rule 5.21(3) provides that where a party who has been served with a notice requiring further particulars or a more explicit pleading neglects or refuses to comply with the notice, the Court may:
…if it considers that the pleading objected to is defective or does not give particulars properly required by the notice, order a more explicit pleading to be filed and served.
[11] In Price Waterhouse v Fortex Group Limited, the Court of Appeal commented that:1
Pleadings which are properly drawn and particularised are, in a case of any complexity, if not in all cases, an essential road map for the Court and the parties. They are the documents against which the briefs of evidence are or should be prepared. They are the documents which establish parameters of the case, not the briefs of evidence.
[12]And later:2
The pleader and Court simply ask “in the circumstances of this claim, is that statement sufficiently detailed to state a clear issue and inform the opposite party of the case to be met?” This is not, under modern practice, simply some minimum which a Defendant needs so as to be able to plead. It is intended to supply an outline of the case advanced, sufficient to enable a reasonable degree of pretrial briefing and preparation. Discovery and interrogatories are only an adjunct, not a substitute for pleading.
1 Price Waterhouse v Fortex Group Limited CA179/98, 30 November 1998 at 17.
2 At 19.
In the result, and particularly in complex cases, a rather more detailed factual narrative has come to be required than was the case in earlier and simpler times. That does not require the full detail which later will be contained in a brief of evidence. Nor does the modern requirement for pre-trial exchange of briefs dilute the earlier and differently based requirement for sufficiently particular pleading. What is required is an assessment based on the principle that a pleading must, in the individual circumstances of the case, state the issue and inform the opposite party of the case to be met. As so often is the case in procedural matters, in the end a common-sense and balanced judgment based on experience as to how cases are prepared and trials work is required. It is not an area for mechanical approaches or pedantry.
[13] Counsel for the plaintiffs acknowledged that there is a balance to be struck, referring to BNZ Investments Limited v Commissioner of Inland Revenue (No 5) where Miller J commented that in complex claims cases, over-pleading may obscure rather than clarify the issues.3
[14] In Platt v Porirua City Council, the Court noted that particulars of pleadings are important to:4
(a)inform defendants as to the case it has to meet;
(b)limit the scope of matters the plaintiff may put in issue at trial (or in pre-trial settlement discussion);
(c)enable the defendants to know what witnesses it will need to retain and enable it to start preparing evidence ahead of the formal exchange of evidence; and
(d)provide an opportunity for a defendant to seek summary determination on the basis that the claim as pleaded is untenable.
[15] Counsel for the defendants refers to Body Corporate 207624 v Grimshaw & Co where the Court commented:5
The purpose of requiring particulars is to make one side adequately inform the other of the case that it will set out to prove at trial, but it is not to make that side state another case that its opponent would wish it to make out.
3 BNZ Investments Limited v Commissioner of Inland Revenue HC Wellington CIV-2014-485-1059, 4 February 2008 at 45.
4 Platt v Porirua City Council [2012] NZHC 2445 at [19].
5 Body Corporate 207624 v Grimshaw & Co [2021] NZHC 16 at [5].
[16] The defendants further rely on Body Corporate 74246 v QBE Insurance (International) Ltd, where three questions the Court could usefully ask were outlined:6
(a)Has sufficient information been provided to inform the other party of the case they have to meet and to enable them to take steps to respond?
(b)Is there a real risk that the other party may face a trial by ambush if further particulars are not provided?
(c)Is the request oppressive or an unreasonable burden upon the party concerned?
[17] Ultimately the question to be asked is if, in the circumstances of the claim, the statement sufficiently is detailed to state a clear issue and inform the opposite party of the case to be met?7
Procedural background and particulars sought
[18] The plaintiffs served a notice requiring further particulars on the defendants on 25 September 2024 (Notice), as is required by r 5.21 of the High Court Rules before an application for further particulars is filed.
[19] The Defendants responded to the Notice on 2 October 2024 (Defendants’ Response).
[20] On 4 October 2024, counsel for the plaintiff wrote to counsel for the defendants stating that the Defendants’ Response was inadequate and that they were instructed to make an application to the Court if an amended response was not received by 14 October 2024.
[21] No response had been received by the time the application was filed on 18 October 2024.
[22] The defendants filed a notice of opposition and supporting affidavits on 6 November 2024 and two days later filed an amended statement of defence and
6 Body Corporate 74246 v QBE Insurance (International) Ltd [2015] NZHC 1360 at [18(h)]. In relation to the third question, see also Minister of Education v James Hardie New Zealand [2014] NZHC 2432 at [92].
7 Price Waterhouse v Fortex Group Limited, above n 1, at 19.
counterclaim on 8 November 2024 (ASOD) providing some of the further particulars sought. The plaintiffs continue to consider that further particulars are required of several paragraphs and so continue this application.
[23] Counsel for the plaintiffs accepts that this is not a complex case and so submits that there is no risk that over-pleading will obscure, rather than clarify, the issues. Furthermore, counsel submits that Ms Zhao is not probing for evidence with her request for particulars as contended by the defendants.
[24] Before working through each of the paragraphs in respect of which further particulars are still sought below, I set out the issues as recorded in Associate Judge Brittain’s case management review minute on 26 November 2024:8
[5]The key issues for determination in the proceeding are:
(a)whether there are any loan advances outstanding between the parties;
(b)whether Ms Zhao and Mr Zhang undertook property development projects as a business partnership or joint venture on the following properties with a common goal to make a profit:
(i)7 Bevyn Street, Castor Bay;
(ii)6 Kumukumu Road, Long Bay;
(iii)8 Kumukumu Road, Long Bay; and
(iv)14 Headsail Drive, Long Bay.
(c)if a partnership or joint venture existed between Ms Zhao and Mr Zhang, whether Ms Zhao owes any duty to Mr Zhang to account and share the profits and income;
(d)whether Mr Zhang’s interests in the joint venture reverted to Ms Zhao in or about April 2024 when their personal relationship ended; and
(e)whether Ms Zhao held Mr Zhang’s share of all profits or income from the property developments on constructive trust for Mr Zhang.
8 Zhao v Zhang, CIV-2024-404-1825, 26 November 2024 (Minute at [5]).
Paragraph 16 of the ASOD
[25]Paragraph 16 of the ASOD pleads:
The first defendant denies paragraph 16 and further says the first plaintiff and first defendant verbally agreed that these payments would be set-off from the net proceeds obtained from the sale of the parties’ joint property development project at 6 Kumukumu (Record of title 854162 with legal description Lot 720 Deposited Plan 528006).
[26] The plaintiffs seek further particulars of paragraph 16 on the basis that the defendants fail to identify how the verbal agreement was entered into, by phone or in person.
[27] The defendants say that the particulars requested were provided on 2 October 2024 in the Defendants’ Response:
The agreement between the parties was entered into verbally on the phone sometime around 18 December 2023.
[28] The plaintiffs say however that this response has not been included in the ASOD and submit that it ought to have been.
[29] The defendants respond that whether the agreement was entered into over the phone or in person is inconsequential and does not go to the root of the claim or defence and in any event, is also now known to the plaintiffs.
[30] I accept that the particulars have now been provided. However, the Defendants’ Response was provided prior to the ASOD. It is helpful for the parties (and the Court) if particulars are included in the pleading if possible. I accept that if an amended pleading is not otherwise required to be filed, then the Court may not require an amended pleading simply to incorporate relatively minor particulars. However it is expected that they will be incorporated into an amended pleading if the response is provided prior to an amended pleading.
[31] Below, I determine that the defendants are required to provide further particulars in respect of other paragraphs and so I include a requirement for the
particulars provided in the Defendants’ Response for paragraph 16 to be incorporated into paragraph 16 of the defendants’ amended statement of defence.
Paragraph 19 of the ASOD
[32]Paragraph 19 of the ASOD pleads:
19Save for admitting that he signed an English document on 21 February 2024, the first defendant denies paragraph 19 and says further that:
(a)Based on a verbal agreement that Mr Zhang and Ms Zhao entered into in 2018 to jointly develop properties together, and split the net profits equally, the first defendant understood he was to receive at least $750,000 as his share.
(b)The first defendant verbally requested the first plaintiff to transfer these funds to him on multiple occasions in January 2024.
(c)The first plaintiff did not agree to do so without the Zhao Loan Agreement being signed.
(d)The first defendant cannot read English well and did not understand the terms set out.
[33]The plaintiffs request that the defendants:
State whether the English document which the first defendant signed on 21 February 2024 was entitled "Loan Agreement."
[34]The following particulars were provided in the Defendants’ Response:
Mr Zhang recalls the document was in English and has insufficient knowledge of what it was titled.
[35] The plaintiffs continue to seek further particulars on the basis that there is no response to the allegation that the document Mr Zhang signed was a loan agreement and bore the title “Loan Agreement”.
[36] The plaintiffs say the defendants’ response is inconsistent with the heading above paragraph 19 of the ASOD, which refers to the “Zhao Loan Agreement – Zhao, Zhang and Cheng Homes” and is also inadequate in circumstances where Mr Zhang must have known the document he signed was a loan agreement. Furthermore, the
plaintiffs say there is no response at all to any of the allegations in paragraph 19 from the second defendant.
[37] I do not consider that the first defendant is required to provide any further particulars other than those already provided in the Defendants’ Response. Statements of defence frequently adopt the structure of the statement of claim and so the fact that the ASOD includes reference to the “Zhao Loan Agreement” in a heading cannot be taken as any indication or admission by the defendants. I agree with the defendants’ submission that the criticism of the first defendant's pleading on the basis that Mr Zhang must have known the document he signed was a loan agreement is a critique of the first defendant’s defence and evidence rather than providing a basis for seeking further particulars.
[38] The first defendant has denied the pleading at paragraph 19 of the statement of claim that Ms Zhao, Mr Zhang and Cheng Holmes entered into a written loan agreement except as set out in the ASOD. The particulars include that the first defendant cannot read English well and did not understand the terms set out. I consider that no further particulars are necessary on behalf of the first defendant except those provided in the Defendants’ Response for the same reasons as set out in relation to paragraph 16.
[39] The second defendant has not yet pleaded to paragraph 19, or in fact paragraph 20, when those paragraphs relate to both the first and the second defendants. I therefore make directions below that the second defendant is required to plead to paragraphs 19 and 20 of the statement of claim.
Paragraph 19(a) of the ASOD
[40]The relevant paragraph in the ASOD is set out above.
[41]In addition, in relation to paragraph 19, the plaintiffs’ Notice requests:
13.State the factual basis for the first defendant's alleged understanding, ie the background facts which the first defendant says gave rise to the alleged understanding.
14.Provide full particulars of the first defendant's alleged request that the first plaintiff transfer $750,000 to him, namely:
(a)approximately when he made the request.
(b)whether he made the request in writing or orally;
(c)if he made the request in writing, identify the document(s) containing the written request.
(d)if he made the request orally, whether he made the oral request over the phone or in person.
(e)if he made the request orally and in person, where he and the first plaintiff were when he made the oral request in person.
[42]The Defendants’ Response records in reply:
7Based on the verbal agreement that Mr Zhang and Ms Zhao entered into since 2018 to jointly develop properties together, and split the net profits equally, Mr Zhang calculated that he would receive approximately $750,000 from the sale of all the Developments.
8The first defendant made the request to the first plaintiff verbally on multiple occasions sometime in January 2024. These verbal requests were made on the phone and in person when the first plaintiff and first defendant met up in person.
[43] The plaintiffs say that while the Defendants’ Response says Mr Zhang’s understanding was based on a verbal agreement, no particulars have been provided as to how the verbal agreement was entered into, by phone or in person, or if in person, where the oral agreement is alleged to have been entered into. Nor, the plaintiffs submit, is there even any approximate date given as to when in 2018 the alleged oral agreement was entered into. And the plaintiffs again say that whilst the Defendants’ Response included particulars in respect of 19(a), those particulars were not included in the ASOD.
[44] The defendants respond that the verbal agreement referenced at paragraph 19(a) is a clear reference to the agreement which forms the basis for the alleged Partnership and that this agreement is addressed further at paragraphs 31 to 33 of the ASOD (being the beginning of the defendants’ counterclaim).
[45] I do not consider that it is necessarily clear from paragraph 19(a) that the first defendants are referring to the alleged Partnership pleaded in paragraphs 31 to 33 of the ASOD. If it is the same agreement, this ought to be included in the pleading.
[46] In addition, the particulars provided in the Defendants’ Response ought to now be included in the amended pleading as for the paragraphs already discussed.
Paragraph 31 of the ASOD
[47] Paragraph 31 of the ASOD which is the first paragraph of the defendants’ counterclaim pleads:
From 2018, the first plaintiff and first defendant jointly undertook property development projects with a common goal to make profit (Partnership) pursuant to an agreement entered into orally in 2018, and continued with this arrangement from then on in the subsequent years with other projects.
[48]In the Defendants’ Response it records:
10The first development project that Mr Zhang and Ms Zhao undertook for the common goal of making profit is 7 Bevyn Street, Castor Bay.
11The parties had entered into this arrangement/agreement orally sometime in 2018 and continued with this arrangement from then on in the subsequent years with other projects.
[49] The plaintiffs seek particulars of the particular property development project(s) of which the first plaintiff and first defendant are alleged to have jointly undertaken on or around 2018. The plaintiffs say that providing particulars of just one property development project is no answer to the plaintiffs’ request and is inconsistent with paragraphs 34 and 35 of the ASOD which make no mention of Bevyn Street and instead refer only to two properties in Kumukumu Road and 14 Headsail Drive.
[50] The plaintiffs further refer to paragraph 34 of the ASOD which now refers to four properties and paragraph 41 which pleads that all except Bevyn Street were sold in March 2021. The plaintiffs say that these pleadings are wholly inconsistent with the defendants’ reply to the plaintiffs’ defence to the counterclaim because in paragraph 1 of the plaintiffs’ defence to the counterclaim, the plaintiffs refer to no less than 10 other projects which the plaintiffs allege Ms Zhao and Mr Zhang worked on together
prior to March 2021 and for which Ms Zhao had no expectation of making any profit for herself or of sharing in profits with Mr Zhang.
[51] In their reply, the defendants allege at paragraph 1(b) that “subsequently from 2021, Ms Zhao and Mr Zhang jointly undertook the projects as pleaded at paragraph 34 of the statement of defence and counterclaim”.
[52] The plaintiffs submit that allegation is factually inconsistent with paragraph 31 of the ASOD, which alleges the arrangement continued from 2018 onwards and not from 2021 onwards. The plaintiffs therefore say the defendants must replead their counterclaim to eliminate these inconsistencies in the allegations being made.
[53] Furthermore, the plaintiffs say the defendants allege at paragraph 31 of the ASOD an oral agreement to undertake property development projects but fail to identify how the oral agreement was entered into (by phone or in person) and if in person, where.
[54] The defendants submit that paragraph 31 is presently sufficient to inform the plaintiffs of the case they need to meet and that there is no risk that the plaintiffs will face trial by ambush as the particulars sought are within the knowledge and control of the plaintiffs as both Ms Zhao and Mr Zhang were privy to all relevant discussions regarding the Partnership.
[55] The defendants further submit that the particulars regarding whether the agreement was entered into over the phone or in person and the specific date in 2018 are inconsequential and do not go to the root of the claim or defence and that further details will be revealed through discovery if contemporaneous records exist.
[56] If the discussions were largely in person, the defendants submit that Ms Zhao and Mr Zhang will respectively give their account at trial and it will be a matter for the trial judge to determine whether any agreement was reached.
[57] In my view, the defendants’ pleading is not sufficiently clear currently in terms of the dates from when the agreement was reached to jointly undertake property
development projects and whether it was from 2018 or from 2021 and which projects were included.
[58] From the correspondence exchanged and the defendants’ submissions in response to this application it appears that the projects that the defendants allege were undertaken by the partnership are the four projects now listed in paragraph 34. For clarity and given the number of other projects referred to in the plaintiffs’ defence to the counterclaim, further particulars ought to be added to paragraph 31 listing the relevant projects (either by reference to paragraph 34 or by separate listing).
[59] Again, I also consider that the particulars provided in the Defendants’ Response ought to be included in the ASOD.
Paragraph 33 of the ASOD
[60]Paragraph 33 of the ASOD pleads:
The first plaintiff and first defendant also verbally agreed in 2018 and in subsequent years, to evenly share the profits resulting from the net sales of the projects, or after the projects were sold.
[61] The plaintiffs seek particulars of how the oral agreement, resulting in the partnership was entered into, specifically whether it was entered into by phone or in person and if in person where the agreement was entered into in the approximate date in 2018.
[62]The Defendants’ Response stated:
Mr Zhang and Ms Zhao agreed to evenly share the profits resulting from the net sales of the projects. This agreement was entered into orally sometime in 2018 and mentioned again at various times over the years during their oral discussions and in Wechat correspondence since 2018.
[63] The plaintiffs submit that paragraph 33 of the ASOD morphs the verbal agreement in 2018 into a verbal agreement in 2018 (and in subsequent years) but submits that the defendants fail to identify how the verbal agreements were entered into.
[64] In addition, the plaintiffs submit the allegation in paragraph 33 is inconsistent with paragraph 1(b) of the defendants’ reply to the plaintiffs’ defence to the counterclaim.
[65] The defendants submit that there is no inconsistency between these paragraphs, especially reading paragraphs 1(a) and (b) of the defendants’ reply together. The defendants say their position is consistently that the Partnership commenced in 2018 with the development of 7 Bevyn Street, followed by the development of the “Remaining Properties” from 2021. I note that the “Remaining Properties” are defined in the defendants’ submissions as 6 Kumukumu Road, 8 Kumukumu Road and 14 Headsail Drive but do not appear to be defined in the defendants’ pleadings. The defendants submit that this pleading is consistent with paragraphs 31 to 34 of the ASOD and that their current pleadings adequately inform the plaintiffs of the case they must meet.
[66] As I have said above in relation to paragraph 31, I do not consider that the ASOD currently is sufficiently clear. I consider the particulars provided in the Defendants’ Response ought to be included in the ASOD and for details such as that the profit share was a natural part of everyday discussions and therefore occurred numerous times, as set out in the defendants’ submissions, to be included in the particulars provided if that better reflects the defendants’ position. I therefore make this direction below.
Paragraph 38 of the SOD/Paragraph 44 of the ASOD
[67]Paragraph 38 of the SOD/paragraph 44 of the ASOD pleads:
The first plaintiff and first defendant carried out the Developments via the second plaintiff, the second defendant and the following additional companies:
(a)Koi Properties Limited (KPL);
(b)Donald Properties Group Limited (DPGL); and
(c)ZZ Management Limited (ZZML).
Particulars
(i)The first plaintiff and first defendant decided to incorporate ZZML for the purposes of managing the Developments and paying development invoices for the Developments;
(ii)The first plaintiff and first defendant agreed for the first plaintiff’s mother, Zhihua Ye, to be the director and shareholder of ZZML; and
(iii)ZZML was at all material times controlled by the first plaintiff and first defendant.
[68] The plaintiffs seek further particulars on the basis the defendants have failed to properly particularise the role allegedly played by KPL and DPGL. The plaintiffs say that the defendants’ objection to providing particulars “sits uncomfortably with the fact that the defendants had no qualms about pleading the same particulars in respect of ZZML”.
[69] The defendants say that the particulars given in respect of ZZML are to explain the connection to the parties in the proceedings as Ms Zhao's mother, Ms Zhihua Ye, is the sole director and shareholder of this entity. Conversely, Ms Zhao is the director and shareholder of KPL, and Mr Zhang is the director and shareholder of DPGL.
[70] Furthermore, the defendants say that the particulars sought are matters of evidence and not necessary to give fair notice of the defendants’ case.
[71] It seems relatively straightforward for the defendants to provide similar particulars as they have in respect of ZZML. I accept that the details provided at paragraphs 44(c)(ii) and (iii) of the ASOD are details that could be ascertained on discovery, but 44(c)(i) may not be and that was in fact the focus of the particulars sought. I therefore direct that particulars are to be provided for KPL and DPGL in the same way as they have been for ZZML.
Paragraph 46 of the SOD/paragraph 53 of the ASOD
[72]Paragraph 46 of the SOD/paragraph 53 of the ASOD pleads:
The first defendant made direct and indirect contributions to the Developments through loans from the first defendant personally and companies controlled by the first defendant.
[73] The plaintiffs seek particulars of the loan amounts, identity of the borrower or lender, term of the loan and details of any interest.
[74] The defendants say in response that paragraph 55 of the ASOD quantifies the loan amount using the information currently available and is sufficient to inform the plaintiff of the claim it is to meet.
[75] Furthermore, the defendants have also provided the particulars sought in a letter from Meredith Connell to PCW Law dated 6 November 2024 by confirming its position that the loan amounts were repayable on demand, had no interest component, and no accompanying loan agreements and attaching a breakdown of the net amounts and individual advances from Mr Zhang and each of his companies based on the information presently available. The defendants submit that requiring the defendants to fully particularise in its pleadings details of every transaction over the span of many years would create an unreasonable burden and crosses over into evidence given the nature of the relationship between the parties and that this funding was provided as required between related parties.
[76] Furthermore, they say that as the transactions span several years it would be impractical to list every single transaction in the pleadings, especially when this will be fully addressed and set out in the discovery and eventually evidence.
[77] The defendants say it is unlikely at the current stage of the proceedings that this exercise would be of substantial assistance to the plaintiffs, and that complete discovery and a review by an independent expert accountant is the usual means by which related party lending is microscopically examined.
[78] The defendants therefore say the pleadings are sufficiently particularised to inform the plaintiffs of the defendants’ case, that the requested particulars have been made available to the plaintiffs, and this is not an instance where an amendment to the pleadings is required.
[79] The particulars provided in the letter of 6 November 2024, including that the loans were repayable on demand, had no interest component and no loan agreements ought to be included in the amended pleading.
[80] It is not necessary for the particulars set out in the counterclaim to include the individual transactions in the schedule attached to Meredith Connell’s 6 November 2024 letter but the table grouping the transactions in the body of the letter would be useful from a pleading perspective. Those amounts can be updated as necessary following discovery. I make these directions below.
Paragraph 55 of the SOD/paragraph 62 of the ASOD.
[81]Paragraph 55 of the SOD/paragraph 62 of the ASOD pleads:
Based on the bank statements of the second plaintiff, first and second defendants, DPGL, KPL, ZZML up to March 2024:
(a)the first defendant owes the first plaintiff $971,700;
(b)the first plaintiff owes the first defendant $2,584,196;
(c)resulting in a net balance of $1,612,496 owed to the first defendant by the first plaintiff.
[82] The plaintiffs request that the ASOD is amended to include the commencement date of the bank statements referred to. The plaintiffs acknowledge that this information was provided in the Defendants’ Response but submit that it ought to have been included in the pleading.
[83] The defendants say in response that the starting date of the bank statements has no bearing on the claim or issues for trial and that in any event, the bank statements relied on are now known to the plaintiffs and were provided as part of the initial disclosure and the Defendants’ Response.
[84] The defendants further submit that it would be unnecessary and disproportionate for the Court to require the defendants to file an amended counterclaim on this point. However, again, where the defendants are filing an amended pleading in any event, it is not disproportionate and in my view ought to have been included in the ASOD. Given the pleading relies on bank statements, it is
important to know from when those bank statements start so that the amounts can be checked and the decision to include bank statements from that date considered and pleaded to. As was stated by the Court of Appeal in Fortex, discovery is only an adjunct, not a substitute for pleading. The fact that the relevant bank statements were included in the defendants’ discovery so the plaintiffs can apparently work out the dates is not sufficient.
[85] I therefore require this information to be included in the further amended statement of defence filed.
Result
[86]The plaintiffs’ application for further and better particulars is granted.
[87] The defendants are to file and serve within 10 working days an amended statement of defence and counterclaim as follows:
(a)Amend paragraph 16 to include the particulars provided in the Defendants’ Response;
(b)Amend paragraph 19 (including 19(a)) to include the particulars provided in the Defendants’ Response, to provide further particulars of the agreement alleged, including whether it is the same agreement as pleaded in paragraphs 31 to 33, and to provide a pleading by the second defendant;
(c)Amend paragraph 20 to provide a pleading by the second defendant (as well as any other paragraph that the second defendant is required to plead to but has not yet done so);
(d)Amend paragraph 31 to provide further particulars listing the relevant projects (either by reference to paragraph 34 or by separate listing) and include the particulars provided in the Defendants’ Response;
(e)Amend paragraph 33 to provide further particulars of the discussions as to profit share including the particulars provided in the Defendants’ Response;
(f)Amend paragraph 38 of the SOD/paragraph 44 of the ASOD to provide further particulars for KPL and DPGL in the same way as they have been provided for ZZML;
(g)Amend paragraph 46 of the SOD/paragraph 53 of the ASOD to include the further particulars set out in the letter from Meredith Connell to PCW Law dated 6 November 2024 including the table of grouped contributions;
(h)Amend paragraph 55 of the SOD/paragraph 62 of the ASOD to include the commencement date of the bank statements referred to as provided in the Defendants’ Response.
Costs
[88] The plaintiffs have succeeded and are entitled to costs. I ask counsel to confer and only if costs cannot be agreed to file memoranda, on behalf of the plaintiffs by 25 July 2025 and the defendants by 8 August 2025.
Associate Judge Sussock
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