Jiang v Han (No 4)

Catchwords: CIVIL PROCEDURE – application to adjourn proceedings – where cross claim dismissed and part of defence struck out – where defendants failed to comply with court orders and still have not served all the evidence – where still no explanation given – adjournment refused
CONTRACTS – contract for acquisition of land for joint venture development – where defendant did not appear – where plaintiffs evidence about the proper construction of the contract was not challenged – judgment for the plaintiff

Legislation Cited: Civil Procedure Act 2005 (NSW)
Supreme Court Act 1970 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Donau Pty Ltd v ASC AWD Shipbuilder Pty Ltd [2019] NSWCA 185
Jiang v Han (No 2) [2025] NSWSC 48
Jiang v Han (No 3) [2025] NSWSC 452
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37
Sanmik Food Pvt Ltd v Alfa Laval Australia Pty Ltd [2025] NSWCA 7

Category: Principal judgment

Parties: Zhao Qing Jiang (Plaintiff/Cross-Defendant)
Kairan Han (First Defendant/First Cross-Claimant)
Fortune New City (Yarraville) Development Pty Ltd (Second Defendant//Second Cross-Claimant)

Representation: Counsel:
N J Kidd (Plaintiff/Cross-Defendant)
Solicitors:
Sunfield Chambers Solicitors & Associates (Plaintiff/Cross-Defendant)
Hiways Lawyers (First and Second Defendants/ First and Second Cross-Claimants)

File Number(s): 2021/273456

Publication restriction: Nil

JUDGMENT

1. These proceedings concern agreements about the acquisition of land in Yarraville for some $165 million, at a time when it was intended that a joint venture property development would be pursued. The land was sold for some $255 million in 2021. Mr Jiang later brought these proceedings in order to recover over $5 million he claims he is still owed by the defendants under a 2016 agreement.

2. Mr Jiang’s claim was defended and a cross claim was also pursued. But it was dismissed and corresponding provisions of the amended defence were struck out in May 2025, with the result that it was only Mr Jiang’s claim which was left to be heard at the 30 June 2025 hearing: Jiang v Han (No 3) [2025] NSWSC 452.

3. Before Chen J on 16 June the defence position was that a notice of intention to appeal the May decision had been filed and they did not want the impending hearing to proceed. But they had not taken any steps to pursue that aim. Then explored was the necessity for them to file an appeal against the May judgment and to pursue an urgent application before the Court of Appeal, for orders directed to the impending hearing. That did not occur.

4. Instead, on 25 June the defendants filed a motion supported by an affidavit sworn by their solicitor Mr Wang, by which orders adjourning the hearing, giving them leave to rely on the cross claim, provisions of the defence which had been struck out and to serve evidence were all sought. They sought an urgent listing of the motion, which was served only shortly before the matter was listed at 4pm. The orders sought were then opposed.

5. Mr Wang had deposed that some days before, $185,000 of further security which had been ordered to be paid in February 2025, had been paid into his trust account and the defendants had also provided a response to an outstanding notice to produce. But the defendants had still not served all of their evidence, although an affidavit Mr Han had sworn had been served.

6. The motion was listed for hearing at the commencement of the 30 June hearing. Mr Jiang then relied on the affidavit sworn by his solicitor, Ms Zhang. The Court’s power to make orders reinstating the cross claim and the struck out provisions of the defence were put in issue, as was the exercise of the Court’s discretions in the way the defendants sought.

7. I then refused the orders the defendants sought. The reasons for that refusal follow.

8. The result, after an adjournment to obtain instructions, was that their counsel withdrew. The defendants did not remain to resist the orders which Mr Jiang then pursued.

9. They had not filed any submissions about the proper construction of the agreement on which Mr Jiang’s claim depended, having earlier also not complied with the Court’s orders as to the service of any objections to Mr Jiang’s evidence, or the identification of what was in issue. The result was that Mr Jiang’s evidence was unchallenged.

10. The proper inference in those circumstances is that evidence which Mr Han might have been able to give or the defendants were able to lead would not have advanced the defence case: Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8. The construction of the agreement Mr Jiang relied on to advance his claim does not turn on such evidence, but such evidence could conceivably have shed light on the commercial circumstances in which the agreement was entered.

11. Having heard Mr Jiang on the proper construction of the disputed agreement, which the defendants did not dispute, I concluded that the orders which he pressed had to be made. Those entered were:

“1. Judgment for the plaintiff against the first and second defendants in the amount of $7,367,846.60 (including pre-judgment interest of $2,010,549.60).

2. The defendants to pay the plaintiff's costs of the proceedings on the ordinary basis as agreed or as assessed (including the plaintiff's costs of the defendants' notice of motion filed 25 June 2025).

3. Liberty to the plaintiff to seek an order varying the costs order so as to include costs on an indemnity basis, by emailing short written submissions to the Associate to Schmidt AJ within 14 days.

4. The defendants file and serve any submissions in reply within a further 14 days.

5. Any such application by the plaintiff for costs on an indemnity basis be determined on the papers.

6. Liberty to the parties to apply on 2 days' notice for a further order or orders in relation to order 3 of the consent orders made on 5 October 2021 (as varied by the orders made on 12 April 2024) concerning the monies paid into an interest-bearing term deposit account with the Commonwealth Bank of Australia, by emailing to the Associate to Schmidt AJ a notice of motion and affidavit in support.”

12. The reasons for the making of those orders also follow.

Refusal of the motion

13. The cross claim had been stayed as the result of orders made in February 2025 in relation to the provision for further security: Jiang v Han (No 2) [2025] NSWSC 48.

14. In the May judgment I concluded, in summary, that the cross claim and corresponding provisions of the amended defence had to be dismissed in circumstances where the defendants had long been given a fair opportunity to advance their case, which they had not taken advantage of; they had not complied with the Court’s orders for preparation of the matter for hearing while Mr Jiang had; Mr Jiang’s right to have his case heard should not be jeopardised by their ongoing failures; and that the further indulgences which the defendants then sought, including as to service of their evidence and provision of further security, could not justly be granted because the result would be that Mr Jiang would then not have a fair opportunity to meet their case at the 30 June hearing, which could not justly be adjourned.

15. What Mr Wang deposed to advance the orders sought on the defence motion included that:

16. The additional security of $185,000 had been paid into his trust account;

17. The money which had earlier been paid into Court, which was held in a bank account, with interest now amounted to some $6,109,866.74;

18. The notice to produce had been responded to on 23 June 2025, the documents provided being understood already to be in Mr Jiang’s hands;

19. Mr Han was not presently able to defend the proceedings;

20. Mr Han had required funds which had only recently been made available in Australia, there having been ongoing problems with the transfer of funds from China;

21. There had been significant delay in the defendants complying with the Court’s orders;

22. Mr Han had now done his best, with assistance of counsel, to address this non-compliance, but a further four weeks was required to serve accounting evidence on which the defendants wished to rely; and

23. The prejudice of an adjournment of the hearing for Mr Jiang was accepted, with the result an offer to pay his costs of the adjournment, as well as other costs the Court deemed appropriate.

24. Ms Zhang, deposed to the relevant history of the matter and the defendants’ ongoing failures to comply with the Court’s orders, even in relation to the hearing of Mr Jiang’s claims, there having been no response even to her recent enquiries about outstanding matters. While Mr Jiang had continued to comply with the Court’s orders, incurring considerable costs as a result. Her evidence was not challenged.

25. I concluded on the evidence that the orders sought had to be refused, even if within power as they might be, s 23 Supreme Court Act 1970 (NSW), the Civil Procedure Act 2005 (NSW) and the Uniform Civil Procedure Rules 2005 (NSW) being relied on, because:

26. As was explained in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27, a costs order will not always address the injustice occasioned by an adjournment of a hearing long fixed: at [100]-[103];

27. There was no suggestion that the defendants had not been given a fair opportunity to serve their evidence;

28. But even when making this application, they had not served what was then explained to be only an outstanding accountant’s report, to which would be attached the business records which supported the summary provided in the affidavit Mr Han had sworn;

29. This differed from the position in May, when the defendants’ case was that it was Mr Han’s ongoing inability to enter Australia, “due to visa restrictions” and the complexity of work then being undertaken by external consultants and internal staff in Australia, in relation to post sale accounting work and responses to Australian Tax Office queries, as well as an ongoing audit into the corporate defendant, which had delayed the service of the defence evidence: Jiang v Han (No 3) at [9];

30. At that time Mr Wu, another solicitor, had deposed that he had expected shortly to file further affidavits, which would also deal with matters still being investigated, including in China: at [10]; and

31. On the hearing of the motion there was no explanation for the change in the defendants’ position about the evidence they wished to lead; why the documents Mr Han had analysed were not attached to his affidavit; or why the seemingly simple accounting evidence the defendants explained they wished to rely on, had not been put on as the Court had earlier ordered, or in support of their motion.

32. In the face of all of this, as well as the defendants’ continuing failure to comply with the Court’s orders in relation to the preparation of what was listed for hearing on 30 June in respect of Mr Jiang’s claims and their conduct in not even responding to correspondence from Mr Jiang’s solicitors about outstanding matters, I was well satisfied that their approach did not accord with the obligations imposed on them by s 56 of the Civil Procedure Act. Further, that they had not established a just basis for the exercise of the Court’s discretion in their favour.

33. I explained the requirements of s 56 and those of other relevant provisions of the legislative scheme in Jiang (**No 3): at [32]-[41]. They were also relevant on this application, but need not be explained again. I was satisfied that a consideration of their requirements did not support the making of the orders which the defendants sought.

34. Taking that into account, the result was that I was not persuaded that justice permitted the making of the disputed orders.

35. As the defendants candidly accepted, they had given no explanation for their failure to comply with the Court’s orders, let alone a good one. That Mr Han had only now come to appreciate the reality of the consequences of the course they had pursued, did not provide a just basis for the adjournment of the hearing that Mr Jiang had prepared for and was entitled to expect would proceed. Nor for the making of the other orders pressed, despite the undoubted consequence that the result was that the defendants could not advance the case which they wished to pursue by their cross claim and the parts of the amended defence which had been struck out.

36. In the result, I was well satisfied that the orders sought had to be refused.

The proper construction of the 2016 agreement

23. In Mr Jiang’s written submissions he explained the principles which must be applied when a commercial agreement has to be construed, what lay in issue between the parties given the pleadings and the construction of the 2016 agreement which Mr Jiang pressed.

24. The defendants took no issue with any of these submissions or evidence. Mr Jiang’s evidence must, accordingly, be accepted.

25. The 2016 agreement was entered after Mr Jiang and Mr Han had entered their 2015 joint venture agreement, which concerned the proposed acquisition and redevelopment of the Yarraville properties. This was there referred to as the “Yarraville Project”. This agreement expressly contemplated that other agreements could later be negotiated and entered.

26. Mr Jiang’s evidence established that his claim rested on the terms of the 2016 written agreement which Mr Han had produced in both Mandarin and English. It contained a term that in the event of any conflict or inconsistency between the Mandarin and English versions of the agreement, the Mandarin version was to prevail.

27. The Mandarin version of the 2016 agreement had been translated. The unchallenged translation established that there were some conflicts and inconsistencies between the Mandarin and English versions contained in the original agreement. The Mandarin version must thus be preferred.

28. Mr Jiang’s evidence also established that there had been ongoing communications between he and Mr Han about his decision not to proceed with his involvement in the land acquisition and the results of that decision. They communicated with each other in Mandarin. Translations of their written communications were also unchallenged.

29. What the evidence established included:

30. That Mr Jiang was not paid in accordance with the terms of the 2016 agreement;

31. Instead, he received some 51 payments up to June 2021, which left outstanding a sum of $5,357,297 of the $18,990,000 it had been agreed he would be paid;

32. That this was evidenced by a document Mr Han provided Mr Jiang before he commenced these proceedings, it explaining what had been due to be paid to Mr Jiang, all the payments which had been made to him and what remained outstanding. Namely, the $5,357,297 Mr Jiang pursued in these proceedings; and

33. That despite a very large number of WeChat communications between Mr Jiang and Mr Han about payment of what Mr Jiang claims he was still owed, no further payment was made and no further agreement about what he was owed was reached.

The written terms

30. In its recitals this agreement:

31. Referred to Mr Jiang as Party B and Fortune Property Group Pty Ltd as Party A and began by noting that it was Mr Jiang who had entered the “Acquisition Contract” for the purchase of the four plots of land which comprised the Yarraville Project. It was then recited that “the total area of the land is approximately 260,000 square metres, hereinafter referred to as the “Subject Project”: cl 1.

32. Used that defined term in various of its provisions;

33. Noted that Mr Jiang and Mr Han, Party D, had entered into a “Cooperative Agreement” in November 2015 under which they had agreed to hold all the rights and interests and related obligations of the Acquisition Contract and the Subject Project, with Mr Jiang owning 40% of the investment shares and Mr Han owning 60%: cl 2;

34. Also noted that the Cooperative Agreement required Mr Jiang and Mr Han to register a new company, Fortune New City Yarraville Development Pty Ltd, Party C, with all of Fortune Property Group’s interest in the Acquisition Contract and the Subject Project being transferred to it, with Mr Han and Mr Jiang holding shares in it, in the agreed 60/40 percentages: cl 2(2); and

35. Further noted that Mr Han and Mr Jiang had already paid the vendor of the land a deposit and other identified sums: cl 2(3).

36. What was agreed included:

37. That variations to the original Acquisition Contract had been negotiated and that various resulting payments had been made: cls 2(3)(I)(1) and 2(3)(I)(2);

38. That further negotiations with the vendor had resulted in adjustment of the contract price and GST: cl 2(3)(II).

39. That Mr Jiang and Fortune Property Group were responsible for transferring all of Mr Jiang’s rights, interests and obligations under the Acquisition Contract to Fortune New City Yarraville: cl 2(3)(III)(1);

40. Who was to make various further identified payments due under the Acquisition Contract: cl 2(3)(III)(2);

41. Repayment of Mr Han for payments he had borne together with 25% per annum interest: cl 3;

42. How further payments were to be borne by Mr Jiang and Mr Han: cl 4; and

43. What was to result if Mr Jiang failed to make specified payments:

“4) If Party B Zhaoqing JIANG fails to pay in full the money for the vendor and Party D Kairan HAN as mentioned in Item 1) of this clause, then Party D Kairan HAN and a third party nominated by Party D can take the measures below to implement the Acquisition Contract and the subject project:

A. Party D Kairan HAN or a third party appointed by Party D shall pay in full the contract money for that stage AUD $19.25 million and the tax (GST) to the vendor. The 40 % shares in Party C and the rights and interests and obligations of 40% of the subject project held by Party B Zhaoqing JIANG shall all be held and borne by Party D Kairan HAN, or a third party appointed by Party D. Party B Zhaoqing JIANG shall exit from Party C and the subject project. In the future he can only be entitled to a fixed earning and return of AUD $12 million from the subject project (does not include the AUD $6.5 million that Party B Zhaoqing JIANG put in.). Party D Kairan HAN shall provide guarantee for this. The execution plan is as follows:

B. Party D Kairan HAN guarantees to return to Party B Zhaoqing JIANG the contract money of AUD $6.5 million that he paid within the first year after the actual settlement of the subject project has been completed. (In addition, the GST tax of AUD $490,000 paid by Party B Zhaoqing JIANG will be paid to Party B immediately when the GST is refunded by the government). From the second year to the fourth year after the settlement of the project has been completed, Party B Zhaoqing JIANG shall be paid a fixed earning return of AUD $4 million per year.

C. Party B Zhaoqing JIANG agrees to continue to use his resources and media resources in Australia to assist Party C, Party D Kairan HAN and the third party nominated by Party D and the subject project free of charge to plan, publicise, promote, and coordinate the relationships between the government and the society, to promote the development of the subject project.”

32. It is the construction of B above on which Mr Jiang’s claim depended.

Mr Jiang’s case

33. Mr Jiang’s case was in essence that the 2016 contract provided for specified payments to be made to him, he not having made specified payments. They did not depend on the land having been acquired, redeveloped and sold, as was the defence case.

34. When the payment clauses were read as they had to be, with the Mandarin version prevailing, it was clear that this contract was not concerned with the redevelopment or later sale of the land, but with its acquisition and the consequences of Mr Jiang failing to make specified payments. That reflecting that the term “Subject Project” used in the clause in question and elsewhere in the contract, was defined by reference to the land, not its redevelopment.

Why Mr Jiang’s case must be accepted

35. I was persuaded that Mr Jiang’s case had to be accepted, given that it is settled that a commercial agreement such as the 2016 contract must be construed in the way explained in Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited [2015] HCA 37. That is:

36. The parties’ rights and liabilities under their written commercial contract must be determined objectively, by reference to its “text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose”: at [46];

37. In determining the meaning of its terms “it is necessary to ask what a reasonable businessperson would have understood those terms to mean”. That enquiry requiring consideration of the language used in the contract, the circumstances it addresses by the contract and the commercial purpose or objects it secures: at [47];

38. Ordinarily, this process of construction must be undertaken by reference to the contract alone. If an expression is “unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning”: at [48];

39. Where there is a constructional choice, it may be necessary to consider “the genesis of the transaction, the background, the context and the market in which the parties are operating”: at [49];

40. They are all objective, what may be referred to being “events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating”: at [50]

41. What is inadmissible is evidence of the parties’ statements and actions reflecting their actual intentions and expectations: at [50];

42. Unless the contract evinces a contrary intention, the Court is entitled to approach its construction on the assumption that the parties intended to produce a commercial result: Mount Bruce at [51]; and

43. Care must, nevertheless, be taken when resort is had to the commerciality of litigants’ dealings when departing from the language which the parties have in fact used in their contract: Donau Pty Ltd v ASC AWD Shipbuilder Pty Ltd [2019] NSWCA 185 at [56]-[58] referred to in Sanmik Food Pvt Ltd v Alfa Laval Australia Pty Ltd [2025] NSWCA 7 at [55].

44. The terms which Mr Han drafted in Mandarin are relatively clear. Even accepting that there is some ambiguity, given what the 2016 contract provided for in respect of the acquisition of the land which comprised the “Subject Project” and what it did not deal with, its redevelopment after acquisition and eventual sale, I was satisfied that Mr Jiang’s case as to its proper construction had to be accepted.

45. It was pertinent that the parties’ contract was entered in the context of what they had earlier agreed about the Yarraville Project, it having been Mr Jiang who had introduced Mr Han to the opportunity.

46. In the 2016 contract they agreed that both Mr Jiang and Mr Han would have an interest in the entity which they agreed would acquire the land, Fortune Property Group. It regulated the payments which they were each to make in respect of its purchase. It also made provisions for Mr Han to acquire Mr Jiang’s interest in Fortune Property Group, in the event that he did not make the payments they had agreed, with the result that Mr Jiang would receive the specified payments and without any further payment, would continue to use his resources to promote the development of the land.

47. In that event, clause 4(4)(B) required Mr Han to pay Mr Jiang:

48. $6.5 million which Mr Jiang had earlier paid, “within the first year after the actual settlement of the subject project has been completed”;

49. The $490,000 GST Mr Jiang had also already paid, when it was refunded by the government; and

50. A fixed earning of $4 million per year from “the second year to the fourth year after the settlement of the project has been completed.”

51. The requirement to make the $6.5 million payment after the “settlement of the subject project has been completed”, must be understood as referring to the settlement of the acquisition of the 260,000 square metres of land which was defined to comprise the “Subject Project”.

52. The requirement to make the three further payments of $4 million was “from the second year to the fourth year after the settlement of the project has been completed”. True it thus is that the defined term “Subject Project” was not again there used in the paragraph. Nevertheless, I am satisfied that this is the project to which reference was there made.

53. This follows from the earlier reference in the clause to the subject project. It being that project which was the subject of this contract, not the redevelopment of that land after its acquisition. Had it been intended that the three further payments were to be made to Mr Jiang only after the completion of the Yarraville project, that is after the redevelopment of the land and its sale, the clause could easily have said so. It did not.

54. This reflects that these were not matters with which the 2016 contract dealt, other than requiring Mr Jiang to continue assisting Mr Han and Fortune Property Group without any further payment, “to promote the development of the subject property”: cl 4(4)(C).

55. Completion of such a project would not ordinarily involve any “settlement”. Nor did the 2016 contract make any provision in respect of the redevelopment of the land. It not dealing with obvious matters such as what the redevelopment would involve; how it was to be funded; who would undertake it; when it would commence; when it was intended to be completed; or who would share in any profits which it might generate.

56. Like in Donau at [56]-[57], looking at the construction question which arises to be resolved objectively, in light of the evidence about the parties’ dealings with each other, which resulted in them entering the 2016 contract Mr Han had produced, I am satisfied that it must be accepted that an agreement for the payments he promised to make Mr Jiang, in the event that Mr Jiang exited from their arrangement in relation to the purchase and ownership of the land, “does not strike me as an uncommercial outcome; and certainly not one which would justify doing violence to the language of the contract.”

57. What does strike me as uncommercial is an agreement that in the event that Mr Jiang did not make a specified payment, as it was contemplated he might, with the result that Mr Han acquired his interest, that he would not be entitled to be paid anything by Mr Han, despite what he had already paid, until after the land was redeveloped and sold, during which he would have to use his resources free of charge to promote the development.

58. That the 2016 contract did not require either that the land ever be redeveloped, or sold, supporting the conclusion that it was the settlement of the acquisition of the property which triggered the payments it was agreed Mr Han would make to Mr Jiang.

The defence

48. It is unnecessary to deal with other aspects of the amended defence, the defendants having chosen not to appear to press what they had there pleaded, which had not been struck out.

49. It is sufficient to note that the orders which I made reflect payments which on the evidence it was common ground Mr Jiang had received under the contract, as well as the sum which Mr Han had advised Mr Jiang was still outstanding, which he accepted and pursued.

Orders

50. The orders made provided for costs to be paid by Mr Han on the ordinary basis, but giving Mr Jiang liberty to apply to seek an order on an indemnity basis within 14 days. They also provided for further orders to be pursued in respect of the monies which are held in Court as the result of the freezing orders earlier made.

51. The parties should confer about these matters and approach within the time specified, in the event that they are not agreed.

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