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[2014] NSWCA 71
Court of Appeal (NSW)
2013-07-25
Beazley P, Basten JA, Barrett JA
Original judgment source is linked above.
Judgment 1BEAZLEY P: I agree with Barrett JA. 2BASTEN JA: The background to the proceedings brought by the appellants against the State of New South Wales is fully explained in the judgment of Barrett JA. The case of Mr Zhang has two parts: first, he challenges the refusal of the primary judge to strike out elements of the State's defence as abusive; secondly, he challenges the refusal of the primary judge to order the State to make admissions of certain facts. The appeal brought on behalf of Mr Liao is limited to the refusal to order admissions. Underlying each appeal is the proposition that the conduct of the State (through the agency of the Sydney Organising Committee for the Olympic Games ("SOCOG")) had been the subject of findings made in separate proceedings brought by Mr Zhu: Zhu v Sydney Organising Committee for the Olympic Games [2001] NSWSC 989 (Bergin J). As Mr Zhang and Mr Liao were sub-agents responsible to Mr Zhu, they submitted that the State should not be entitled to relitigate factual matters common to all three proceedings. 3The State accepted that there were "some matters" which it accepted were "incontrovertible", as a result of the judgment of Bergin J in the Zhu proceedings, upheld on appeal by the High Court: Tcpt, 25/07/13, p 17(45). However, the State also asserted that the position of the present appellants was "altogether different from the position of Mr Zhu": Tcpt, p 18(18). Both propositions may be accepted, with the result that it becomes necessary to deal with the particular nature of each allegation in order to identify that which is truly and properly in issue between the parties, and to determine the extent to which, as the appellants asserted, the State is seeking to reagitate issues resolved against it. 4An interlocutory appeal of this kind presents an unattractive challenge to this Court. However, it must be accepted that the issues raised could potentially affect the conduct of the trial in significant ways and, if the appellants be correct (whether in whole, or in part), could allow findings to be made at their trial which might be inconsistent with those made in respect of Mr Zhu. The proceeding also engages the regulatory function of this Court with respect to the proper administration of justice between the State and individual members of the community. 5The resolution of the claims and counter claims requires a fine balance between the application of an overly broad brush and resort to overly fine semantic distinctions. A concern that the trial judge, in different respects, may have erred in both directions warranted a grant of leave to appeal. However, as became apparent in the course of submissions, there were real concerns that both the amended statements of claim and the defences failed to disclose with clarity and precision that which was in dispute and that which was not. Accordingly, the parties were invited to revisit their pleadings after the completion of oral argument. 6The parties duly met on 13 August 2013 and subsequently filed a document setting out their respective positions with respect to repleading each of the disputed paragraphs. Although a covering letter noted that the parties had been unable to agree as to the proposed repleading of the defences, that proposition was not entirely accurate. There had, in fact, been considerable progress made, which limited the areas in dispute significantly. Given the course that has been taken, there is a lack of practical utility in addressing the precise terms of the pleading before the primary judge. The preferable course is to resolve the pleading issues by reference to the document submitted on 14 August 2013, which should be marked as exhibit "A" on the appeal. (1) Further background (a) the agents' authority 7The language employed in legal texts (including pleadings and judgments) is often considered dry and austere, to the extent of being tiresome. That is because lawyers seek to use precisely the same word or phrase consistently throughout a document. To refer in a judgment to Mr Zhang and Mr Liao by name on some occasions and in other places as "the appellants" contravenes the principle of consistency; however, it is unlikely to give rise to confusion, if the context is understood. Sometimes similar phrases are used to refer to the same conduct or concept, but in other circumstances such a course may seek to point up differences over and above the similarities. For example, when, in her judgment in the Zhu proceedings, Bergin J referred to "club memberships" and "tour packages", was she referring to the same concepts? Similarly, in describing "non-genuine membership certificates", and certificates that "contained numbers that were not on the Club database", was the judge describing the same idea, or making a point of distinction? These issues cannot usefully be addressed by reference to semantics: it is necessary to understand the language used in the context provided by the evidence. 8The staging of the Olympic Games in Sydney in 2000 involved complex legal provisions for the protection of intellectual property and extensive local and international marketing strategies. A company involved in providing consulting services with respect to marketing was Synthesis Consulting Pty Ltd ("Synthesis"). Jointly with the Australian Organising Committee and SOCOG, Synthesis entered into a trust deed in September 1997 pursuant to which the Olympic Club Trust was established, with a corporate trustee, TOC Management Services Pty Ltd ("TOC"). TOC appointed a Mr Noble, a chartered accountant working for Synthesis, as its commercial director and Mr Keith Wyness as its managing director: Bergin J at [10]-[14]. The Club was established in December 1997 by the "Establishment Agreement" entered into between the same parties (including TOC) "as an affinity program" to have effect by way of contract between TOC and each member: at [15]. Among other things, members of the Club would obtain "Olympic benefits" which were defined to include tickets to Olympic functions, including the official dress rehearsal of the opening ceremony and other particular privileges, including the right to become a volunteer and be involved in the torch relay: at [16]. 9In February 1999 Mr Zhu met with Mr Noble, with a plan to market Club memberships in China as part of a travel and accommodation package. Mr Zhu said he would "be prepared to pay a $350 fee for each Club membership, if that includes one ticket to the Opening Ceremony Dress Rehearsal": at [25]. Mr Noble told Mr Zhu: "You can buy memberships in bulk and on-sell them as part of your travel packages. Then you provide us with the member's name and mailing address we can then send out the welcome kit and enter the details in the database." 10Mr Zhu advised that he would sell the travel packages through a company, Australian Chinese Sports Connections Pty Ltd ("ACSC"). Mr Noble accepted that arrangement, but said that the agency agreement needed to be in Mr Zhu's name because the Club wanted him to be personally responsible for the agency: at [27]. On 8 March 1999 Mr Wyness signed a letter as managing director of TOC appointing Mr Zhu "an Authorised Agent of the Olympic Club" stating that he was "authorised on an exclusive basis in the territory of the Peoples Republic of China to sell Olympic Club international memberships to Chinese residents travelling to Sydney for the Sydney 2000 Olympic Games as a component of a travel and accommodation package": at [28]. On 11 March 1999 Mr Zhu signed an agency agreement with TOC. 11Mr Zhu wanted to include tickets to particular events as part of the package, a matter which TOC said it could not itself arrange, but was happy to support any application made by Mr Zhu to SOCOG: at [23]. 12In addition to the ticket to the dress rehearsal, the membership provided an entitlement to a welcome kit containing a satchel, magazine, video, CD, membership certificate, member's pin and an Australian souvenir: at [393]. 13The relationship of the club memberships to the travel package was not a point of confusion in the reasons of Bergin J: the relationship was central to part of SOCOG's case that its termination of the agency agreement was justified. It submitted that the scope of Mr Zhu's agency was limited so as to prohibit him "from utilising the agency or the Olympic Club logo to sell 'any services other than the International Memberships'": at [341]. Bergin J continued: "343 ... [Mr Zhu] was appointed as the authorised agent of the Club on an exclusive basis to sell International Memberships 'as a component of a travel and accommodation package'. SOCOG submitted, and I accept, that [Mr Zhu] recognised the distinction between the sale of International Memberships pursuant to the Agency Agreement and the sale by him of his travel and accommodation package .... 344 As a component, or part or element of a larger whole, the International Membership was part of the 'package' which included the travel and accommodation for the attendance at the Games. To dissect the marketing of this part from the larger whole or package presented some challenges and the alleged repudiatory breaches in relation to the marketing of the International Memberships need to be assessed in a realistic way having regard to the commercial purpose of the Agency Agreement." [Emphasis in original.] 14It is also necessary to provide a little further background in relation to the reference to certificates which were later alleged to be "not genuine". An element of the entitlements of a member was a document certifying that the individual was a member of the Club. To describe a certificate as "not genuine" was to indicate that it had not been issued by the Club or with the authority of the Club. No doubt it might be possible, as with a forged banknote, to demonstrate the false nature of the certificate in a number of ways, including by reference to numbers, the signatory or other information contained on the certificate which should not have been there or which was omitted. The nature of membership certificates was discussed by Bergin J in the following passages: "260 The Membership Certificate was part of the International Membership Welcome Kit .... Once TOC had received notification from [Mr Zhu] of the enlistment or signing of not less than 500 new International Memberships and had received payment of Membership Fees it was obliged to supply [Mr Zhu] with a Kit for each new International Membership .... [Mr Zhu] was obliged to provide TOC with the name, address and Passport or Identification Card details of all new International Memberships within 14 days of 'selling' such membership .... 261 Noble gave evidence that over 100 kits were provided to [Mr Zhu] for marketing or demonstration purposes. He said that the only difference between the Membership Certificate in the Kits provided to [Mr Zhu] and the final Certificate was that the latter had the member[']s name on it and a number allocated by TOCMS.... 262 TOC had what has been referred to in evidence as a database of memberships. There were different categories within the database including individual memberships and corporate memberships. The correspondence in November 1999 refers to [Mr Zhu's] 743 memberships. ... ... 265 Wyness gave evidence that the intended arrangement with [Mr Zhu] was that he would buy blocks of memberships and they would be 'warehoused or put into inventory in the database'.... When [Mr Zhu] paid money referable to any blocks of memberships a large number of unallocated and open memberships would go into the database. Wyness' evidence was that [Mr Zhu] was then at liberty to allocate or attach those memberships as he saw fit .... Wyness also gave evidence that as [Mr Zhu] had paid for the membership kits 'he should receive them'...." 15The genuineness of the certificates issued by Mr Zhu was directly relevant to the circumstances and lawfulness of his arrest, the background to which was discussed in the following passages. The individuals referred to are: (a) Y F Wang - Mr Ya Fa Wang was a businessman who had purchased club memberships from Mr Zhang and Mr Liao; (b) DS Nicholls - Detective Sergeant Leslie Nicholls was the senior officer of the Olympics Investigation Strike Force responsible for arresting Mr Zhu; (c) Ford - Ms Moiya Ford was an employee of SOCOG who became program manager of the Club when SOCOG took over the management of the club on 30 August 1999. The relevant passages in the judgment were as follows: "368 It is submitted that but for the erroneous information provided to YF Wang and DS Nicholls by Ford and the failure of SOCOG to provide other obviously relevant information [Mr Zhu's] arrest would not have occurred. It is submitted that the provision of the information that the certificates were not genuine and the failure to inform DS Nicholls of the arrangement between TOC and [Mr Zhu] and the dispute that had arisen in November 1999 was a wrongful and unlawful act resulting in the exercise of discretion by DS Nicholls to arrest the plaintiff. ... 370 No one informed DS Nicholls of the fact that [Mr Zhu] had at least six hundred and fifty seven memberships in the database. No one informed DS Nicholls that [Mr Zhu] had paid nearly a quarter of a million dollars to TOC and no one informed DS Nicholls that in June 1999 the Agency Agreement had been extended to December 2000. No one informed DS Nicholls that a purported termination of the Agency Agreement on 5 November 1999 was being challenged by the plaintiff and his solicitors. ... ... 376 ... After [Mr Zhu's] arrest DS Nicholls informed him that the Strike Force was investigating a complaint that he had been representing himself as a person who was entitled to sell memberships of the Club in China without having authority to do so. [Mr Zhu] informed DS Nicholls that he was an authorised agent and he was the exclusive agent for the Club in China. DS Nicholls said 'that is not what I have been told. What authority have you got?'. [Mr Zhu] informed him that he had an Agency Agreement and an authority in writing under seal. He was asked where the authority was and, after looking through the documents he had with him, the plaintiff produced the letter of 4 June 1999. 377 DS Nicholls went away for a period and on his return said to [Mr Zhu] 'I have been told that this is a forgery. It must have been put together by photocopying other documents'. [Mr Zhu] then informed DS Nicholls that such allegation was 'not true' and that he had paid the Club $260,000 and that he was an authorised agent. DS Nicholls asked who could confirm this claim and the plaintiff informed him that either Wyness or Noble could do so. DS Nicholls then said that he had been told that the agency had been terminated on 5 November 1999. [Mr Zhu] informed him that it was not and that he had written to Wyness disputing such purported termination. ... 386 ... The information that the Certificates were not genuine provided by SOCOG was pivotal to the exercise of DS Nicholls's discretion to arrest [Mr Zhu]. In my view to suggest that the complaint was from a third party and not SOCOG does not accurately reflect the reality of the situation. This was a complaint that [Mr Zhu] was acting criminally and at no stage prior to the arrest of [Mr Zhu] did SOCOG withdraw or qualify that information in any way. It had that opportunity on 3 December 1999. It did not inform DS Nicholls that many blank certificates had been issued to the plaintiff and that these were part of a Kit of paraphernalia that the plaintiff was entitled to issue or have issued. 387 ... I am satisfied that but for the information provided by SOCOG that the Certificates were not genuine and the failure to provide the information in relation to the civil dispute that had arisen [Mr Zhu] would not have been arrested on 6 December 1999." 16Read against the background of this material, the statements by Bergin J in the following passages are clear and unambiguous: "149 In the meeting on 2 December 1999 Ford informed DS Nicholls that Liao had no connection with the Club and had no authority to sell Club memberships .... Ford also informed him that the certificates that Wang had been given contained numbers that were not on the Club data base.... Ford informed DS Nicholls that the information on the certificates was 'not genuine'.... DS Nicholls said that Ford was the 'central person' for him to contact for inquiries he had in relation to the investigation.... ... 155 This was the mindset of the SOCOG representatives by this stage with Ford advising that the Certificates were not genuine in an atmosphere of deep suspicion that [Mr Zhu] and his sub-agents were operating without any authority and fraudulently. I am also satisfied that Ford had suspicions about the bona fides of Wyness and Noble. Ford had consulted with Ernst & Young after the OI Centre suggested a full audit of the financial transactions of the Club .... Ernst & Young provided an oral report and an interim written report dated 6 December 1999...." 17Properly understood, these propositions amounted to no more and no less than that the certificates had not been issued by the Club, or not by a person acting under a valid authority. (b) roles of Zhang and Liao 18Messrs Zhang and Liao were intimately involved in the arrangements for selling Club memberships in China, with Mr Zhu. Bergin J referred to them as "sub-agents". As the State sought to raise an issue on the pleadings as to the party by whom they were appointed as a sub-agent, it is necessary to refer to findings made by Bergin J in relation to agency and sub-agency. First, as noted at [9] above, Mr Zhu personally was appointed an authorised agent of the Club in a letter signed by Mr Wyness as managing director of TOC, the trustee of the Club. Mr Wyness' letter was dated 8 March 1999; two days later Mr Noble supplied the plaintiff with a letter to the Chairman, Chinese Olympic Committee, advising that Mr Zhu had been appointed an exclusive authorised agent of the Club to market international memberships to residents of the PRC: Judgment at [29]. That Mr Zhu operated through a company he controlled, ACSC, was known to TOC, but her Honour accepted that the authority was conferred on Mr Zhu personally: at [27]. The agency agreement executed on 11 March 1999 was signed by Mr Zhu and TOC. Mr Zhu was described as "the Agent". Significantly, ACSC was not a party in the proceedings before Bergin J, relief being granted to Mr Zhu for repudiation of his agency agreement. 19There was a live issue before Bergin J as to the authority of the "sub-agents". She stated: "266 [Mr Zhu] utilised a system with his sub-agents. Those numbers were the internal records of the plaintiff and his sub-agents that enabled the identification of the sub-agent and the memberships sold. There were a number of certificates into which the internal numbers from the plaintiff's records were typed. These were the memberships 'sold' to YF Wang and contained the names of the persons Wang represented and their application form number. The plaintiff intended to present these Certificates to those members at the Media conference on 6 December 1999 in Shanghai. It is these Certificates that SOCOG alleges were 'false' certificates, the creation of which justifies summary dismissal [of Mr Zhu] pursuant to cl 15.4 of the Agency Agreement. ... 273 [Mr Zhu] agreed to sell 2,000 International Memberships during the initial term of the Agency Agreement, that is, between 11 March 1999 and 30 June 1999. This Agreement was subsequently varied, but the initial obligation required [Mr Zhu] to put in place an infrastructure to enable him to market and sell those memberships in the PRC. Noble claimed that he was 'pushing him hard' for the money from those sales because the Club was in a tight financial position at that time. ... Commercial good sense dictated that it would have been impossible for [Mr Zhu] to comply with this obligation without the assistance of others. Noble agreed that he authorised [Mr Zhu] to appoint sub-agents. 274 Noble asked [Mr Zhu] to provide details of the people he intended to use as sub-agents so they could be 'checked out'. Noble said that the plaintiff 'made available' to him 'copies of the passport details (including photographs) of a number of people' he wanted to appoint as sub-agents. Noble passed those documents on to the OI Centre. ... 275 It was suggested to [Mr Zhu] in cross-examination that he did not seek TOC's approval for the appointment of any sub-agents prior to 17 June 1999. [Mr Zhu] said that he provided to the Club copies of the appointment letters of the sub-agents, a photocopy of their passport and details of their residential address if they lived in Australia. If the sub-agents lived in China [Mr Zhu] said that he provided a copy of the identity card to the Club." 20There appears to have been no dispute as to the appointment and authority of Mr Zhang, who played an important role in the marketing exercise with Mr Zhu. Bergin J stated at [45]: "During the period from March until June 1999 [Mr Zhu] made trips to and from China and was away from Australia most of the time in that period setting up the marketing of his project. He appointed a number of sub-agents one of whom was Zhang Zhao Ming (Zhang)." 21On 27 April 1999, her Honour recorded that Mr Zhang had been subjected to a baggage search by Customs at Sydney International Airport and produced evidence that he was a sub-agent of Mr Zhu who was an agent of TOC to sell international memberships in China: at [52]. Copies of the documents were sent to the Olympic Intelligence Centre, which consulted with Mr Noble who said that Mr Zhu "does indeed have an authority to sell Olympic Club memberships in China and authority to appoint other agents who may obtain Olympic Club memberships from Chinese residents" on his behalf: at [53]. At [289] Bergin J concluded: "I am satisfied that notwithstanding Wyness' letter of 17 June 1999 TOC permitted the plaintiff to go forward in this fashion appointing sub-agents and then after the event receiving from him, without complaint, the documents to which reference has been made. It was not suggested to [Mr Zhu] during 1999 nor has it been shown in these proceedings that any of the sub-agents appointed by [Mr Zhu] were persons in respect of whom TOC would have withheld approval. I am not satisfied [Mr Zhu's] conduct in respect of the appointment of sub-agents was a repudiatory breach justifying summary dismissal." 22There was also a specific complaint made by SOCOG that Mr Zhang had received moneys on behalf of TOC without its authority. Bergin J rejected that submission, at [309]. Although there was some doubt as to precisely how many sub-agents had been appointed, her Honour accepted that Mr Liao (appointed on 31 May 1999) was one: at [280]. Three factual findings arise from this material: (1) Mr Zhu was appointed an agent in his personal capacity; (2) Mr Zhang and Mr Liao were appointed sub-agents by Mr Zhu (and not by his company ACSC), and (3) Mr Zhang and Mr Liao had authority to sell Club memberships in China for TOC. 23With respect to the appointments of Mr Zhang and Mr Liao, an issue was raised by SOCOG as to whether they were properly appointed in circumstances where the letters of appointment were signed by Mr Zhu as chairman of ACSC. Her Honour made the following findings: "329 SOCOG also relied upon the appointment letters of [Mr Zhu's] sub-agents Zhang and Liao. Each of the letters of appointment of Zhang and Liao were signed by [Mr Zhu] as Chairman as ACSC. Each of the letters referred to the certification of Zhang and Liao being authorised by ACSC as an agent in their respective provinces to enrol international members for the Australian Olympic Club. There is no doubt that Noble informed [Mr Zhu] that he was entitled to use ACSC but that his Agency Agreement had to be personal as TOC wanted him to be personally liable. 330 It is true that the letters of appointment referred to ACSC but on the evidence before me [Mr Zhu] accepted that his Agency Agreement and his responsibilities for his sub-agents would be personal and not that of his company. A further document was relied upon which is a contract between ACSC, as Party A and Zhang as Party B. It provided: (1) Party A authorises party B to be agent for Guizhou, Guangdong (provinces) of China, and to provide relevant information. ... 331 Once again reliance is placed on the fact that ACSC was the party to the contract rather than [Mr Zhu] personally. Having regard to the findings that I have made in respect of the appointment of sub-agents and the notification to TOC of the appointment letters with the Olympic Club seal thereon I am satisfied that it is more probable than not that TOC was aware of the appointments by ACSC and continued to allow [Mr Zhu] to proceed on this basis. SOCOG cannot rely upon this conduct for any justification of the termination of the Agency Agreement." (2) The Zhang pleadings 24Mr Zhang's amended notice of motion dated 20 March 2012 sought an order striking out paragraphs 12, 16, 17, 18, 19, 19A and 19B of the State's defence to the third further amended statement of claim ("the claim"). The primary judge struck out paragraph 18, but as that has now been covered by a proposed repleading, it is appropriate to consider all of the challenged paragraphs, other than paragraph 12 as to which the challenge was withdrawn. 25Before dealing with the specific elements of each pleading, it is convenient to accept Mr Zhang's submissions as to a matter of form. In each paragraph, the defence commenced with a denial (or non admission) of the relevant paragraph of the claim, followed by what was described as a "further answer", which in each case constituted admission of various elements of the claim. Mr Zhang submitted that the appropriate form for the defence was, first, to set out those parts which were admitted and to conclude that the allegations were otherwise denied (or not admitted). That submission should be accepted: a single pleading which commences with a global denial, followed by specific admissions is internally inconsistent and thus bad in form. 26Paragraph 16 in the claim reads as follows: "In about March 1999 Zhu entered an agreement with the Plaintiff for the Plaintiff to act as sub-agent of Zhu to sell memberships in the Olympic Club in Guangdong and Guizhou provinces in China for reward." 27The proposed defence reads: "The defendant denies Paragraph 16 of the Third Further Amended Statement of Claim. In further answer to paragraph 16, the defendant says that: i. In and about March 1999 the plaintiff entered into an agreement with Australian Chinese Sports Connections Pty Ltd ("ACSC") to act as a sub-agent of ACSC. ii. The sub-agency was in respect of the sale of Olympic Club memberships in Guizhou province in the Peoples Republic of China. iii. The defendant does not know and cannot admit what, if any, remuneration the plaintiff was to receive for acting as a sub-agent." 28For the reasons already given, the first sentence of the defence should be omitted. The word "further" should also be omitted. 29The findings set out above with respect to the appointment of Mr Zhang do not support the conclusion that he was to be an agent of the company for the purpose of selling Club memberships. The finding was that Mr Zhu personally was appointed an agent by TOC and, although he operated through a company, was directly responsible in his personal capacity for the work of his sub-agents in so far as they were selling international memberships of the Club. Further, Mr Zhang's agency region extended to Guangdong as well as Guizhou: at [330], set out above. 30Accordingly paragraph 16(i) should be omitted to the extent that the last reference is to ACSC, which should be replaced by "Zhu". Secondly, the effect of the finding at [330] extends to Guangdong province and, to the extent that the proposed defence excludes that province, the province should be added. In relation to (iii), there can be no objection to the State not admitting what, if any, remuneration Mr Zhang was to receive: Bergin J made no finding in that regard. 31Paragraph 17 of the claim reads as follows: "On 13 September 1999 SOCOG, TOC (as trustee of the (Olympic Club Trust) and other parties entered a Deed of Release and Termination which operated to terminate the Olympic Club Trust and place control of the Trust in the hands of SOCOG with effect from 20 September 1999." 32The proposed defence is in the following terms: "The defendant denies paragraph 17 of the Third Further Amended Statement of Claim. In further answer, the defendant says that: i. on 13 September 1999, a Deed of Release and Termination was executed between TOC Management Services Pty Ltd (as both Trustee and in its personal capacity), SOCOG, the Australian Olympic Committee Inc. and Synthesis Consulting Pty Ltd. ii. upon execution, the Deed of Release and Termination terminated the role of TOC Management Services Pty Ltd in the Olympic Club Trust. iii. the Deed of Release and Termination did not take effect on 13 September 1999 as TOC Management Services Pty Ltd (as both Trustee and in its personal capacity), SOCOG, the Australian Olympic Committee Inc. and Synthesis Consulting Pty Ltd entered into a further agreement extending the date of the termination of the Olympic Club Trust until 20 September 1999. iv. as the Trust had been terminated on 20 September 1999, the Olympic Club Trust was not placed in the control of SOCOG from that date. v. from 20 September 1999, the control of the Olympic Club was transferred to SOCOG." 33Consistently with the generic criticism, the first sentence of the proposed defence should be omitted, as should the word "further" in the second sentence. 34Paragraphs (ii) and (iii) are internally inconsistent: (ii) states that the deed took effect "upon execution" whereas (iii) states that it did not. Further, the word "extending" in (iii) is inapt: the intended meaning would presumably be served by replacing it with "delaying". 35With those amendments and, if thought fit, the addition of a final paragraph otherwise not admitting or denying the allegations, the proposed defence should be allowed. 36Paragraph 18 of the claim reads as follows: "Entry into the Deed - a. prevented TOC from performing its obligations under the contract of agency with Zhu, which SOCOG well knew, and, b. prevented further performance of the sub-agency agreement between Zhu and the Plaintiff." 37The proposed defence is in the following terms: "The defendant does not admit paragraph 18. In further answer to paragraph 18, the defendant says that: i. On 11 March 1999, Mr Zhu entered into an Agency Agreement with TOC Management Services Pty Ltd. ii. In and about but after 11 March 1999, the plaintiff entered into an agreement with Australian Chinese Sports Connections Pty Ltd ("ACSC") to act as a sub-agent of ACSC. iii. On 13 September 1999, a Deed of Release and Termination was executed between TOC Management Services Pty Ltd (as both Trustee and in its personal capacity), SOCOG, the Australian Olympic Committee Inc. and Synthesis Consulting Pty Ltd. iv. Upon execution, the Deed of Release and Termination terminated the role of TOC Management Services Pty Ltd in the Olympic Club Trust. v. The Deed of Release and Termination did not take effect on 13 September 1999 as TOC Management Services Pty Ltd (as both Trustee and in its personal capacity), SOCOG, the Australian Olympic Committee Inc. and Synthesis Consulting Pty Ltd entered into a further agreement extending the date of the termination of the Olympic Club Trust until 20 September 1999. vi. As the Trust had been terminated on 20 September 1999, the Olympic Club Trust was not placed in the control of SOCOG from that date. vii. As from 20 September 1999, the control of the Olympic Club was transferred to SOCOG. viii. On 5 November 1999, TOC Management Services Pty Limited sent a letter of termination to Mr Zhu in respect of the Agency Agreement. ix. The letter was sent at the request of SOCOG. x. The letter was ineffective in bring[ing] the Agency Agreement to an end. xi. Entry into the Deed did not of itself affect the performance by TOC Management Services Pty Ltd of its obligations under the Agency Agreement with Mr Zhu. xii. The plaintiff did not enter into a sub-agency agreement with Mr Zhu. The plaintiff entered into a sub-agency agreement with ACSC." 38The first sentence should become a final paragraph and the word "further" should be omitted in the second sentence. In (ii), the final word should be "Mr Zhu". Changes should be made to (iv) and (v) to be consistent with cl 17 (if those sub-clauses are necessary). Subclauses (vi) and (vii) are repetitive and unnecessary but harmless. 39As to (xi) it may be appropriate to offer the State an opportunity to put submissions in support of such a pleading, before leave to amend is granted. It would appear to be inconsistent with (iv) and (vi). Thus, if the effect of the deed were to terminate the trust, and place the Club under the control of SOCOG, thus removing TOC as trustee of the Club, it is difficult to see how TOC could thereafter perform any obligations under the agency agreement with Mr Zhu, for example by supplying certificates and kits for new members. 40In relation to (xii), the correct pleading, consistently with the findings of Bergin J, would be to the effect that the plaintiff entered into an agreement with ACSC to act as a sub-agent for Mr Zhu. (That was done with the knowledge and approval of TOC.) 41Paragraph 19 of the claim reads: "Further, on 5 November 1999 TOC and SOCOG wrongfully purported to terminate the contract of agency with Zhu." 42The proposed defence is as follows: "In answer to paragraph 19: The defendant denies that on 5 November 1999, TOC Management Services Pty Limited and SOCOG wrongfully purported to terminate the agency agreement with Mr Zhu. The defendant admits that SOCOG procured TOC Management Services Pty Limited to wrongfully repudiate TOC Management Services Pty Limited['s] agency agreement with Mr Zhu. In further answer to paragraph 19, the defendant says that: i. On 5 November 1999, TOC Management Services Pty Limited sent a letter of termination to Mr Zhu in respect of the Agency Agreement. ii. The letter was sent at the request of SOCOG. iii. The letter was ineffective in bring[ing] the Agency Agreement to an end. iv. The allegations as contained in paragraph 19 are embarrassing. 43The first sentence should be deleted. It may form a final paragraph in the terms that the defendant otherwise denies the allegations. The third sentence, with the word "further" omitted, will then replace the first sentence, so that what was the second sentence forms part of the answer to paragraph 19, by way of a partial admission. Subclause (vi) is, in its context, unhelpful and should probably be omitted. The State should have leave to present submissions in support of it if it wishes to, when leave to amend is sought. 44Paragraph 19A of the claim reads as follows: "The purported termination amount to a repudiation of the contract of agency which remained on foot until 22 December 1999 when the repudiation was accepted by Zhu and the contract was terminated." 45The proposed defence is as follows: "In answer to paragraph 19A, the defendant denies that on 5 November 1999, TOC Management Services Pty Limited and SOCOG wrongfully purported to terminate the agency agreement with Mr Zhu as alleged in paragraphs 19 and 19A of the Third Further Amended Statement of Claim; In further answer to paragraph 19A, the defendant says that: i) On 5 November 1999, TOC Management Services Pty Limited sent a letter of termination to Mr Zhu in respect of the Agency Agreement; ii) The letter was sent at the request of SOCOG; iii) The letter was ineffective in bring[ing] the Agency Agreement to an end; iv) On 22 December 1999, Mr Zhu commenced proceedings in the Supreme Court of New South Wales against SOCOG, TOC Management Services Pty Limited, and Mr Keith Wyness, alleging interference with the Agency Agreement; v) The allegations as contained in paragraph 19A are embarrassing." 46The generic amendments should be made by deletion of the first paragraph up to the semi-colon and the deletion of the word "further" in the next line. Subject to what follows, a final sub-paragraph otherwise denying the allegations may be inserted. 47What is missing from the response to the pleading is that (a) the commencement of proceedings by Mr Zhu amounted to an acceptance by him of the repudiation, and (b) as a result, the agreement was then terminated. 48Arguably, these are mixed questions of fact and law. It is generally accepted that a repudiatory breach does not automatically determine the contract, but gives the injured party the option of terminating or affirming and claiming further performance: E Peel, Treitel - The Law of Contract (13th ed, 2011) at [18-005]. Whether this constitutes part of Mr Zhang's cause of action is unclear; there is no suggestion that Mr Zhu sought to affirm the contract and acceptance of the repudiation by commencing proceedings was likely to have been relevant only to the question of the relief available to him. That is not in issue in the present case. On the other hand, the finding that "SOCOG procured TOC to wrongfully repudiate [Mr Zhu's] Agency Agreement" was a composite finding recorded by Bergin J at [461]. The problem for the defendant is that it admits precisely that conclusion in relation to the previous pleading, namely par 19. To the extent that paragraph 19A repeats the allegation, it is not open to the defendant to deny it in responding to paragraph 19A. 49The allegation of embarrassment at (v) is unnecessary. Embarrassment may provide a ground for striking out a pleading, but it is not a relevant answer to the content of a pleading which is not sought to be struck out: cf Uniform Civil Procedure Rules 2005 (NSW), r 14.28. (3) Conclusions as to pleading 50The defendant should seek leave to amend its defence in accordance with the document provided to the Court on 14 August 2013, subject to the preceding findings. To the extent that those findings give rise to uncertainty and to the extent that they reserve the right of the defendant to support particular aspects of its proposal, those matters should be dealt with by a judge in the Division. 51Because these issues have been resolved by reference to a document which was not before the trial judge, there is no need to interfere with the orders made by him in respect of Mr Zhang's notice of motion filed 20 March 2012, being orders 1 and 2. (4) Direction to make admissions (Zhang) 52Although the argument with respect to the admissions was developed by reference to the documents in Mr Liao's proceedings, it is convenient to commence with Mr Zhang as the discussion so far as focused on his claim. The admissions sought related to particulars contained within paragraphs 9, 12 and 19 of that claim. (a) paragraph 19 53Dealing with paragraph 19 first, the State's proposed amended defence makes relevant admissions, without the need for Mr Zhang to rely on admissions. There is, accordingly, no purpose in requiring admissions with respect to the particulars supporting that allegation. 54Paragraphs 9 and 12 of the claim fall into a different category. Paragraph 9 alleges that the "charging and prosecution of the Charges by the DS Nicholls against the plaintiff was malicious and without reasonable and probable cause". The phrase "the Charges" was defined in paragraph 4 to refer to charges laid by Detective Sergeant Nicholls at Waverley Local Court on 27 March 2000. In answer to paragraph 4, the State accepted that Mr Zhang was arrested on 27 March 2000 and charged at Waverley Local Court with two contraventions of s 178BA of the Crimes Act 1900 (NSW). There is no reference in that paragraph to the role of Detective Sergeant Nicholls, but in the previous paragraph of the defence, the State had accepted vicarious liability for the conduct of Detective Sergeant Nicholls. It may be assumed that his involvement was admitted. The State denied paragraph 9, by which it may be taken to have denied that the actions of Detective Sergeant Nicholls against Mr Zhang were "malicious and without reasonable and probable cause". The particulars are lengthy, but unfortunately, they must be addressed seriatim. It may be noted that counsel for the appellant provided little by way of assistance in submissions. In relation to Mr Zhang, all that was done was to refer the Court to the submissions before the primary judge. 55Particular (a) was in the following terms: "Between 23rd November and 3rd December, 1999 in the course of her employment with SOCOG Ford informed DS Nicholls that - i. certificates of membership to the Olympic Club provided to YF Wang by the Plaintiff and/or Liao were not genuine, and, ii. the Plaintiff and Liao did not have authority to provide Olympic Club tour packages to Chinese nationals." 56Reliance was placed in support of this proposed admission on the statement of Bergin J at [149] in the following terms: "In the meeting on 2 December 1999 Ford informed DS Nicholls that Liao had no connection with the Club and had no authority to sell Club memberships.... Ford also informed him that the certificates that Wang had been given contained numbers that were not on the Club data base .... Ford informed DS Nicholls that the information on the certificates was 'not genuine' .... DS Nicholls said that Ford was the 'central person' for him to contact for inquiries he had in relation to the investigation." 57First, it may be accepted that the factual finding extended to the chapeau of particular (a). Secondly, it extended to particular (i). While there was no mention of Mr Zhang at [149], as appeared at [138]-[145], Mr Wang was dealing with both Mr Liao and Mr Zhang and it was Mr Zhang - at [142] - who handed him the memberships certificates. There is thus no disparity between particular (a)(i) and the findings made by Bergin J. 58If (ii) had referred to the lack of authority to sell Club memberships, sub-particular (ii) would also have been within the factual findings. The problem raised by particular (ii) is to be found in the reference to "Olympic Club tour packages": the Club did not offer tour packages but memberships, which were part of the tour packages offered by Mr Zhang and his sub-agents. Accordingly an admission could be directed in the terms of sub-particular (ii) with minor amendments. 59Particulars (b), (c) and (d) are negative propositions. They should, accordingly, be treated with caution. The case which Bergin J upheld with respect to Mr Zhu was based upon wrongful repudiation of his agency agreement with TOC and unlawful interference with his contractual rights in a high handed manner, entitling him to aggravated and exemplary damages. Her Honour upheld a submission that SOCOG "showed a conscious disregard for the rights of [Mr Zhu] and that its conduct was an outrageous misuse by a government instrumentality of the police powers of the State": at [424]. Bergin J focused on the failure of anyone from SOCOG to inform Detective Sergeant Nicholls of the truth, rather than the failure of the officer to make inquiries: at [370]. No basis has been shown for admissions in the terms of particulars (b), (c) and (d). 60Before the primary judge, Mr Zhang did seek to support his claim for admissions set out in particular (e)(i) and (ii), which read as follows: "i. The facts of Zhu's agency with TOC and Zhang's sub agency were known to Nicholls after a baggage search of sub-agent Zhang at Sydney Airport on 27 April 1999 where documents disclosing the Zhu agency and Zhang's sub agency for Guizhou Province in the PRC were obtained. Nicholls was aware of the subsequent confirmation of this information by Noble to the OIC (as recorded in discovered document TR 4). ii. Police had been informed by Noble, that Zhu had authority to sell Olympic Club memberships in China, through his company, Australian Chinese Sport Connections Pty Ltd ("ACSC"), and to appoint sub agents." [The submissions actually referred to the date of Mr Liao's arrest, but nothing turned on that for present purposes.] 61Reference was made to the judgment of Bergin J at [52], [53], [61]-[64] and [28], in support of the proposed admissions. The passages relied upon identify the letter of authority given to Mr Zhu, the search of Mr Zhang at Sydney Airport on 27 April 1999, the forwarding by Customs of a copy of documents, including the Zhu letter, to the Criminal Intelligence Unit of the Olympic Intelligence Centre on 24 May 1999 and an Intelligence Summary, referring to the documents, which was passed to Detective Sergeant Nicholls on 27 May 1999. The gravamen of the complaint was that Detective Sergeant Nicholls was or should have been aware from the Intelligence Summary that officers had been in touch with Mr Noble, who had confirmed Mr Zhu's authority both to sell Olympic Club memberships and to appoint other agents to sell such memberships. 62An allegation that Detective Sergeant Nicholls was aware of those facts in mid-1999 might well have been supportable: but Mr Zhang was not arrested until 27 March 2000. By that stage, TOC (and hence Mr Noble) had ceased to have control of the Club and Ms Ford, who was then in a position of authority, gave Detective Sergeant Nicholls contrary information. It would not be reasonable to require the State to make an admission in the terms pleaded, either as to the state of mind, or what reasonably ought to have been known to, Detective Sergeant Nicholls in March 2000. 63Submissions were also made before the primary judge in support of particular 9(e)(iv) which read: "The Zhu agency agreement made provision for the appointment of Zhu and/or his company ACSC and the Plaintiff to act as properly authorised agents of TOC and the Club." 64In support of this particular, Mr Zhang relied upon an admission said to have been made in paragraph 67(d) of the defence to the amended statement of claim. At that stage, the amended statement of claim pleaded that "the Agency Agreement and other documents made provision for the appointment of Mr Zhu and/or ACSC and the Plaintiff as properly authorised agents of TOC and the Club". The defence admitted that Detective Sergeant Nicholls was or ought to have been aware that "the Agency Agreement made provision for the appointment of Mr Zhu and the Plaintiff as properly authorised agents of TOC and the Club (for the limited purposes permitted by the Agency Agreement) but does not otherwise admit paragraph (d)". 65Although the form of the pleading has changed, the State has not sought leave to withdraw the admission and an admission in the terms contained in the defence stands: no directed admission is necessary. The admission (correctly) makes no reference to ACSC. 66Particular 9(e)(v) was in the following terms: "Zhang paid $230,006.00 to Zhu and/or ACSC which had been paid to TOC and the Club for the purchase of international memberships in the Club and TOC had issued receipts in that regard." 67Mr Zhang relied on a statement of Bergin J at [126] to support the particular. However, the only finding in that paragraph was that Ms Ford, at the meeting with the officers on 2 November 1999, had "expressed concerns", one of which involved "cheques totalling $230,006". There is no reference in that passage to the money being paid by Mr Zhang: rather, there are numerous references to that amount having been paid by Mr Zhu to TOC: see at [168], [263], [269], [270], [389] and [441]. Bergin J does not appear to have made any finding in the terms of particular 9(e)(v). Mr Zhang cannot seek an admission in those terms. 68No particular reference was relied on to support particular (e)(vi). Particular (e)(vii) referred to Mr Zhu commencing legal proceedings in the Supreme Court against TOC and SOCOG concerning the termination of the agency agreement. This particular makes sense only when the date at the commencement of particular (e) is understood to be the date of arrest and charging of Mr Zhang on 27 March 2000 (and not, as appeared in the submissions, 1 December 1999). The importance of that date is that Mr Zhu commenced his proceedings on 22 December 1999, which was after the date of Mr Liao's arrest, but before Mr Zhang was arrested. The claim includes the correct date (27 March 2000), as did the amended statement of claim, to which pleading an admission was made as to this particular at paragraph 67(g). The State should be held to that admission, in the absence of leave to withdraw it, but no further admission is required. (b) paragraph 12 - false information 69Paragraph 12 alleged the charge and prosecution of Mr Zhang involved a malicious prosecution by SOCOG, acting through Ms Ford. Particular (d) was in the same terms as particular (a) under paragraph 9. Particular (b) was also in the same terms, except that it referred to information supplied by Ms Ford to Mr Wang. Particular (c) alleged that Ms Ford intended that Mr Wang would pass on that information to the police - no admission is sought in respect of that particular. 70So far as the supply of information by Ms Ford to Mr Wang is concerned, Bergin J identified the information as being conveyed at a meeting on 2 December 1999. The information conveyed was that "that the twenty five membership certificates provided to YF Wang were 'not genuine'": at [382]. This passage does not refer to any involvement of Mr Zhang. However, Bergin J found that it was Mr Zhang who provided Mr Wang with the relevant certificates: at [142]-[143]. Mr Wang had queried the validity of the certificates with Mr Zhang, noting that the signatures of the AOC officials were "printed": at [143]. She noted that Mr Wang later contacted the Club "to ascertain the genuineness of the Certificates and the authority of Messrs Liao and Zhang": at [145]. However, it is not clear that a finding was made as to Ms Ford's state of knowledge with respect to Mr Zhang's role in providing certificates to Mr Wang. Nor was there a finding that Ms Ford told Mr Wang that Messrs Zhang and Liao did not have authority to provide "Olympic Club tour packages to Chinese nationals". Accordingly, an admission in the terms sought in paragraph (b) should not be required. The terms sought in particular (d) have already been addressed. 71Particular (e) was in the following terms: "The information provided to Wang and to the Police was false in that the certificates were genuine and the plaintiff did have authority to provide Olympic Club tour packages to Chinese nationals." 72This particular is not self-contained: the references to "the information" harks back to the information referred to in particulars (b) and (d). Further, the basis on which it is said that Mr Zhang had authority to act with respect to Club memberships was further set out in particulars (f)-(h). These particulars were as follows: "f. The Plaintiff had been appointed a sub-agent of Peter Tao Zhu who was appointed as agent for [TOC] to provide such certificates to Chinese nationals. g. The Plaintiff thereby had authority of TOC to provide such certificates to Chinese nationals. h. The certificates were provided to Zhu by [TOC]." 73These particulars involve both drafting problems and, having regard to the amended proposed defence, are largely otiose. As has been explained above, the proposed defence to paragraph 16 of the claim assumes the validity of Mr Zhu's appointment as an agent to sell Club memberships and accepts Mr Zhang's sub-agency. The difficulties relate to so much of the "information" as includes "Olympic Club tour packages", a concept which is imprecise and cannot form the basis of an appropriate admission, as discussed above. Nevertheless, for reasons which have already been explained in relation to the pleading, particulars (f), (g) and (h) are all covered by findings made by Bergin J. The final particular, namely that Ms Ford managed the Olympic Club for SOCOG at the time of the charging and prosecution (in March 2000) is probably uncontroversial and is supported by the findings at [116]. A direction in those terms could be given, if not conceded. (c) paragraph 12 - malice 74Particular (a) alleged that Ms Ford was "motivated by a concern for the safety of staff of TOC". Again, the particular is not self-contained in that it must be read with the particulars of providing false information in order to identify the time at which Ms Ford was said to be so motivated and as to the conduct which was motivated by the concern. However, that conduct must be specified as, presumably, the supply of false information. Bergin J found that, as at 2 November 1999, Ms Ford advised police officers that "she had concerns over the physical safety of the staff from former members of TOC": at [126]. Thus, the concern related to possible actions "from former members of TOC", not from Mr Zhu, Mr Zhang or Mr Liao. Further, although Bergin J was highly critical of the activities of SOCOG, particularly at [437]-[445], there was no reference to any motivation of Ms Ford in terms reflecting this particular. No admission should be directed in the terms sought. 75The other particulars of malice identify further motivations of Ms Ford: at (b), "a desire that all ties between Zhu/ACSC and TOC be severed" and, at (c), "a desire and intention to end the selling of memberships in the Olympic Club". 76The precise conduct which was said to be motivated by these concerns must be identified in order for such particulars to have relevance. It is true that Bergin J considered in some detail the nature of the information supplied to Detective Sergeant Nicholls prior to the arrest of Mr Zhu on 6 December 1999. She also considered what Detective Sergeant Nicholls had not been told. In particular, Bergin J relied upon particular evidence of Mr Zhu and of Detective Sergeant Nicholls: at [376]-[379]. In the last paragraph she concluded that had Detective Sergeant Nicholls been told about the dispute between Mr Zhu and SOCOG in relation to the termination of his agency, "he would not have gone ahead and arrested [Mr Zhu] on 6 December 1999 without a further investigation". Critical to Mr Zhang's case for malicious prosecution will be the steps which were taken by Detective Sergeant Nicholls (and no doubt members of SOCOG) after 6 December 1999. Admissions should not be directed in the terms sought. (d) paragraph 12 - absence of reasonable and probable cause 77All of the particulars under this heading relate to knowledge of various persons within SOCOG as to particular events. Particular (a) stated: "By 6 October 1999, Ford knew that there was some arrangement between Zhu and TOC or SOCOG for the sale of Olympic Club memberships." 78The justification for the date was not explained in submissions. Bergin J noted that Ms Ford had started with SOCOG on 30 August 1999. Bergin J stated at [117] that Ms Ford "claimed to be totally ignorant of any concept of International Memberships of the Club until it was raised some weeks later". She continued at [118]: "It is apparent that in early October 1999 an officer from [the Department of Immigration] contacted Ford in relation to enquires being made in China in relation to Visas. Ford was apparently concerned by this conversation and subsequently met with the officers of OI Centre including Honeyman. Honeyman informed Ford that there had been several meetings between the OI Centre and Noble in relation to [Mr Zhu] and that Noble had been informed that [Mr Zhu] had not been charged with any offences 'nor were any of his sellers'." 79This paragraph contains a finding consistent with the proposed particular, if the phrase "early October 1999" were substituted for "6 October 1999". A direction could be given, with that variation. 80Particulars (b), (c) and (d) were in the following terms: "b. At the time of providing the information to YF Wang and to Police, Ford knew that information relevant to the statements that she made to DS Nicholls that - i. certificates of membership to the Olympic Club provided to Wang by the Plaintiff and/or Liao were not genuine, and, ii. the Plaintiff and Liao did not have authority to provide Olympic Club tour packages to Chinese nationals, was available to her within TOC and SOCOG and she failed to enquire into that further information in order to consider the accuracy of what she had told DS Nicholls. That further information is identified below. c. By 24 August, 1999, Reading of SOCOG knew that there was an arrangement between Zhu and the Olympic Club for the sale of OC memberships to Chinese residents, and same had been extended to December 2000. d. By letter 29 October 1999, Wyness advised Ford that Zhu had purchased $260,000.00 of tickets in the Olympic Club which were being held, unnumbered, in the Club's database." 81Although not stated in the particular (b), the time at which Bergin J found that information had been provided by Ms Ford to Mr Wang and to Detective Sergeant Nicholls was 2 December 1999. 82For reasons already given, any admission in these terms must be limited to reference to the certificates of membership in the Club being not genuine. Sub-par (b)(ii) requires clarification for reasons already noted. 83Bergin J held that there was "no doubt that Ford knew [Mr Zhu] had purchased at least 657 memberships": at [435]. Bergin J was also satisfied that Ms Ford "had decided not to telephone Wyness to have an open and frank discussion with him because she was suspicious of him". As she further found, Ms Ford failed to speak to either Mr Wyness or Mr Noble, "the very people who were in control of the management of the Club at the time" the relevant arrangements with Mr Zhu were put in place: at [436]. 84Again, the particular is ineptly drafted. The information which it is said Ms Ford "knew ... was available to her" included information known to Mr Reading. There is, however, no finding that Ms Ford knew that Mr Reading had information which he had not provided to her. Secondly, the information known to be available to her was said to be information which had in fact been supplied by letter on 29 October 1999. No admission can be directed in these terms. However, particulars (c) and (d) reflect findings by Bergin J and should be admitted. 85Particular (e) was not one of those listed in the notice of motion, although it was addressed in submissions before the primary judge. It referred to a meeting between Ms Ford and members of the OI Centre on 2 November 1999. Bergin J made a finding that such a meeting took place. However, the particular also asserted that Ms Ford handed to the officers present a copy of the letter from Mr Wyness to her dated 29 October 1999, which gave some information concerning Mr Zhu's purchase of $260,000 worth of international memberships. No reference was proffered for a finding in those terms: it has not been justified. 86Particulars (f) and (g) read as follows: "f. By about 5 November 1999, Ford knew of the agreement between TOC and Zhu, and knew that Wyness had promised Zhu that the Olympic Club would fulfil its contractual obligations to him with respect to memberships sold by him. g. Ford gained her knowledge of Wyness' views above when she read the letters from Wyness to her [of] 29th October and 5 November 1999." 87The letters from Mr Wyness to Ms Ford were set out by Bergin J at [124] and [130]. The second letter (of 5 November 1999) enclosed a copy of the letter to Mr Zhu, the contents of which were set out at [129]. Admissions in the form of particulars (f) and (g) accord with the facts accepted by Bergin J and should be made. 88Particular (h) stated that "[b]y November 1999 Ford had expressed the wish that all ties between Zhu and TOC be severed". The arrangements between TOC and Mr Zhu arose, as explained by Bergin J, in the following circumstances: "20 Prior to January 1999 TOC engaged a company known as Salesforce Australia Pty Limited (Salesforce) to provide services for direct sales of the Club memberships to the general public. Salesforce arranged for a team of sales representatives to sell Memberships of the Club by way of a door knock approach. Noble was responsible for the supervision of the Salesforce personnel, one of whom was Mr Tim Go (Go). 21 In January 1999 Go informed Noble that he knew [Mr Zhu] and that [Mr Zhu] thought that there was a market for selling Club memberships to residents of Mainland China as part of an accommodation and travel package for the Games. Noble asked Go to arrange for the plaintiff to visit him." 89The relationship continued: at [45], Bergin J stated: "During the period from March until June 1999 [Mr Zhu] made trips to and from China and was away from Australia most of the time in that period setting up the marketing of his project. He appointed a number of sub-agents one of whom was [Mr Zhang]. Whilst he was away Go acted on [Mr Zhu's] behalf in communicating with Noble and the Club. [Mr Zhu] rang Go every few days whilst he was away." 90By July 1999 Mr Go had been appointed by TOC as agent for Indonesia: at [85]. Ms Ford was advised of some of the background (including reference to Mr Go) in the letter of 29 November 1999 from Mr Wyness. Bergin J continued, after setting out the content of that letter: "134 From approximately 22 November onwards Go was attempting to make contact with Ford. On 30 November 1999 Ford wrote to Reading [Commercial Director, SOCOG] advising that she had done everything to try and avoid meeting Go but with no success stating 'I now think it will only get worse if I continue to fob him off'. She advised that she would go ahead and meet with Go with another Club staff member present. 135 Ford advised Reading that she intended to explain to Go that the Club was seeking legal advice on the 'whole issue' and that [Mr Zhu] had paid $260,000 approximately for around 730 memberships. She explained that she intended to advise Go that the 'Zhu Contract was terminated by TOCMS in September and that SOCOG had no arrangement with Mr Zhu and would not be entering into any in the future'. She further explained that she intended to advise Go that SOCOG would not be offering 'any International Memberships or engaging any other agents in the future' and that SOCOG were currently exploring whether to refund [Mr Zhu] money or fulfil obligations to provide the kits." 91Those findings warrant an admission in terms of particular (h). 92Particular (i) is poorly drafted: it contains two primary factual allegations, together with the supposed sources of the information. Broken into its parts, with the source material in added parentheses, particular (i) reads: "By 2 or 3 December 19999, Ford and Reading of SOCOG were aware that in March 1999, TOC and Zhu and/or ACSC had entered into the Agency Agreement [as Ford had been told of the contract under cover of Wyness' letter 5th November 1999] and Zhu and/or ACSC had purchased and paid over $240,000 to TOC for at least 657 memberships in the Club. [the said information was contained in Wyness's letters to Ford of 29th October 1999, 5th November 1999 and also in an Ernst and Young Audit of TOC which Ford received in early December 1999 and emailed to Reading.]" 93At [100] Bergin J recorded: "On 24 August 1999 Reading had a conversation with Wyness in which Reading said to Wyness 'Who is Peter Zhu - I have seen some documents in which you refer to him as being an agent of the Olympic Club?' Wyness said words to the effect 'Some sort of arrangement has been reached with Peter Zhu regarding the Olympic Club in China'. The documents to which Reading referred were the letter of authorisation for the plaintiff for the period 1 April 1999 to 31 December 2000 and the letter of 8 March 1999 signed by Noble and the plaintiff." 94That paragraph constitutes a finding that Mr Reading was aware of the March 1999 agreement, although it did not involve ACSC. On 3 November 1999 Ms Ford wrote to Mr Wyness asking for "a copy of the agreement" with Peter Zhu. The 5 November 1999 letter from Mr Wyness to Mr Zhu referred to "the agency agreement executed in March 1999" for the PRC. A copy of that letter was sent to Ms Ford: at [129] and [130]. Accordingly Ms Ford was aware of the document by 2 or 3 December 1999. As already noted, following a conversation between them, Mr Wyness sent a facsimile to Ms Ford on 29 November 1999 setting out further background to the arrangement: at [133]. At [135], in a letter to Mr Reading dated 30 November 1999, Ms Ford "advised Reading that she intended to explain to Go that the Club was seeking legal advice on 'the whole issue' and that the plaintiff had paid "$260,000 approximately for around 730 memberships". 95The references in particular (i) to ACSC were inappropriate and not supported by the findings relied upon. By the date specified, Ms Ford and Mr Reading were aware of the agency agreement with Mr Zhu and that he had paid an amount of $260,000 approximately for around 730 memberships. That is somewhat different to paying "over $240,000", which provides a range without an upper limit. Although imprecise figures were used by Bergin J at times, an admission should reflect the precise finding. Similarly, a reference to "at least 657 memberships" provides a range without a limit. Admissions should not be directed in those terms, but they might be directed in terms which reflected the actual findings in [135]. 96There was no material identified in this Court which stated that the Ernst and Young audit had been "emailed to Reading", nor that it contained the information referred to. No admission should be required in the terms of the last sentence of particular (i). Indeed, no admission is necessary in relation to the source of the information set out in the passages in square brackets: they refer to evidence, not material facts . 97Particular (j) is as follows: "In June 1999, the Agency Agreement had been extended by TOC to December 2000 in consideration for a payment of over $200,000 from Zhu and/or ACSC to TOC." 98In identifying a matter of which SOCOG did not inform the police, Bergin J referred to "the fact that TOC had extended the Agency Agreement in consideration of the payment by the plaintiff of over $200,000": at [445]. The extension was not "to December 2000" but "to 31 December 2000". There was no reference to a payment by ACSC. Accordingly, a direction could be given in respect to particular (j) if the date were to be corrected and the reference to "and/or ACSC" deleted. 99Particular (k) reads as follows: "In August 1999, SOCOG had given assurances to the Chinese Consul that the Olympic Club and Zhu and/or ACSC's agency were genuine." 100Again, the reference to ACSC was inapt and could not form the part of any directed admission. Further, the facts accepted by Bergin J do not support the view that SOCOG gave the relevant assurances. She stated at [95] that Mr Wyness (of TOC) had given such assurances on 5 August 1999. Mr Wyness was also asked questions about visas for people travelling from China to attend the games and had said "We, in conjunction with SOCOG, are in a position to assist ...": at [96]. While it was true that SOCOG had announced an intention to assume ownership of the Olympic Club, those steps had not been taken by 5 August and Mr Wyness remained the managing director of TOC. The passage relied upon by the appellant therefore did not provide support for the particular. However, as Bergin J explained at [102], the Chinese Consul met officers of SOCOG on 25 August 1999. The judge found: "The Consul informed the SOCOG officers that he was concerned to ensure that the Club was genuine and capable of performing its obligations to the Chinese members. The Consul was informed that the Club was 'real' and that it was 'genuine'." 101The finding continued at [103]: "The Officers informed Consul Wang that they were not directly concerned with the Club however they believed that the Club had been taken over by SOCOG and that SOCOG would be running it from now on. They advised Consul Wang that they did not have direct information about the Club but would be happy to arrange for someone to meet with the Consul and answer any questions so that he could be satisfied that 'it is genuine'." 102In contrast to the assurances given by Mr Wyness, the assurances given by SOCOG were more muted: in particular, there was no assurance with respect to the agency of Mr Zhu. Accordingly, particular (k) cannot be the basis of a directed admission. 103Particular (l) was in the following terms: "Many blank certificates had been issued by SOCOG, TOC and/or the Club to Zhu and/or ACSC and that these were part of a kit of paraphernalia that Zhu and/or ACSC were entitled to use or have used." 104Again, the references to ACSC were inapt. The particular contained an additional problem, in that it did not identify a point in time at which these events were said to have occurred. Reliance was placed for this particular on a passage in similar language in the judgment of Bergin J at [386]. Again it was expressed in terms of a fact of which Detective Sergeant Nicholls was not informed. The date on which he should have been so informed was identified as 3 December 1999. A directed admission in those terms could be made if the date were inserted and the reference to the company omitted. 105Particular (m) was in the following terms: "Zhu and/or ACSC and TOC and SOCOG were involved in a civil dispute arising from the termination by SOCOG of the Agency Agreement in November 1999 and Wyness had advised Ford of the said civil dispute by 29 November 1999." 106This particular is inaccurate in a number of respects. As the proposed defence now acknowledges, a letter of termination was sent by TOC on 5 November 1999 to Mr Zhu, but was ineffective to bring the agency agreement to an end. The letter was sent at the request of SOCOG, but not by SOCOG: the letter was sent by Mr Wyness. That it gave rise to a civil dispute is correct in that Mr Zhu responded on 18 November 1999 in terms of a denial, set out at [132]. The judge referred to a conversation between Ms Ford and Mr Wyness on 29 November 1999, but did not make findings as to its content. On the same date, Mr Wyness sent a facsimile to Ms Ford, the terms of which were set out by the judge at [133]. They did not contain any reference to the fact that Mr Zhu had taken immediate objection to the purported termination. 107The significance of the date for Mr Zhang is, in any event, obscure. The finding at [445] that Mr Reading was well aware of the civil dispute that had arisen in respect of the purported termination on 5 November 1999 appears to have referred to the period immediately prior to the arrest of Mr Zhu on 6 December 1999. However, no date was identified. A finding that Mr Reading had been informed of the civil dispute between 18 November and 5 December 1999 might well form the basis of a directed admission. 108Particular (n) was: "International sales to the Chinese were a well known strategy of TOC as was advised in the said Ernst and Young report which Ford provided to Reading." 109As already noted, the appellant did not identify the finding of Bergin J that Ms Ford had sent the December audit report to Mr Reading. Although neither report is before this Court, the passing reference in the judgment of Bergin J at [137] suggests that the statement in question had been made in an earlier report, dated 8 July 1999, which had been provided to the Club committee - see at [91] - of which Mr Reading was a member. 110The precise focus of the particular is not clear: in its present terms it is not appropriate for a directed admission. 111No admission was sought in respect of particular (o), that Ms Ford knowingly provided false information to Detective Sergeant Nicholls or was recklessly indifferent to its truth or falsity. An admission is sought, however, with respect to particular (p) which was in the following terms: "Subsequent to 3 December 1999, Ford and/or Reading on behalf of SOCOG, failed to bring to the attention of the Police information in its possession to the effect that the membership certificates were valid and that Zhu/ACSC the plaintiff and Liao were authorised by TOC and/or SOCOG to sell memberships in the Club to Chinese nationals." 112This particular is again uncertain as to timing (the period identified is open-ended). The specific concern of Bergin J was that relevant information was not disclosed to the police prior to the arrest of Mr Zhu and the release of information about him to international policing agencies. There is a further difficulty with the form of the particular: it does not identify the specific information which should have been disclosed, but rather identifies the inference to be drawn from that material. Bergin J was concerned, not that SOCOG failed to advise the police that "the memberships certificates were valid", but that nearly $250,000 had been paid to TOC by Mr Zhu and that at least 657 memberships were recorded on the database: at [372]. She was also concerned, not that SOCOG had failed to advise the police that Messrs Zhu, Zhang and Liao were authorised to sell memberships in China, but that the payment by Mr Zhu and the letter extending Mr Zhu's agency until 31 December 2000 had not been disclosed. No doubt Mr Zhang would wish to submit that the inferences contained in particular (p) should be drawn from the documentary evidence referred to at [372] and [445]; however, it is the findings by the judge in Mr Zhu's proceedings upon which the appellants rely for directed admissions. 113No admission is sought with respect to particular (q); particular (r) stated "Ford knew that memberships had been made available by TOC for use by authorised agents." No admission can be directed in these terms. First, the particular is non-committal as to time. Secondly, the reference to "memberships" is confusing. (An earlier particular referred to the "issue" of blank certificates: the agents were authorised to "sell" memberships.) The precise nature of the knowledge to be attributed to Ms Ford is not sufficiently clearly stated: no admission should be directed with respect to particular (r). (5) Admissions with respect to Mr Liao 114Mr Liao's proceedings are limited to a claim for damages (including aggravated and exemplary damages) for malicious prosecution. There is no claim for unlawful interference in contractual relations, nor for wrongful arrest and false imprisonment. 115Many of the particulars relied upon by Mr Liao mirror those discussed above with respect to Mr Zhang's pleading. It is not necessary to address those again: the same findings should be made. However, other particulars are sought to be the basis of directed admissions and differ from those relied upon by Mr Zhang. (a) particulars of malice 116Mr Liao relies upon two particulars of malice on the part of Detective Sergeant Nicholls: "b. DS Nicholls issued or caused to be issue a press release on or about 14 January 2000 which contained false and misleading statements; c. DS Nicholls issued or caused to be issue a fact sheet and a press release on or about 1 December 1999 which contained false and misleading statements." 117No submissions were put before the primary judge in respect of this material and it was not apparently the subject of findings by Bergin J. (b) particulars of absence of reasonable and probable cause 118Particular (d), for which there is no immediate equivalent in Mr Zhang's pleading and which is sought to be supported by reference to findings of Bergin J, alleges that prior to the arrest and charging of Mr Liao on 1 December 1999 Detective Sergeant Nicholls was aware, or ought to have been aware, of a number of matters. Of these, submissions were made with respect only to (i) and (ii), which provided: "i. The facts of Zhu's agency with TOC and Zhang's sub agency were known to Nicholls after a baggage search of sub-agent Zhang at Sydney Airport on 27 April 1999 where documents disclosing the Zhu agency and Zhang's sub agency for Guizhou Province in the PRC were obtained. Nicholls was aware of the subsequent confirmation of this information by Noble to the OIC (as recorded in discovered document TR 4). ii. Police had been informed by Noble, that Zhu had authority to seel Olympic Club memberships in China, through his company, [ACSC], and to appoint sub agents." 119Bergin J made findings as to the search of Mr Zhang at Sydney International Airport on 27 April 1999. Customs officers found documents including a letter from the Consulate General and the March letter from Mr Wyness to Mr Zhu appointing Mr Zhu as the exclusive agent in China for the period 1 April to 30 June 1999. Mr Zhang told the Customs officers that he was a sub-contractor to Mr Zhu: at [52]. Bergin J also found that Customs advised the OI Centre of the search and the documents found. The OI Centre consulted with Mr Noble and was informed that Mr Zhu did have authority to sell Olympic Club memberships in China and to appoint other agents: at [53]. Mr Fergus, the Director of Criminal Intelligence Unit of the OI Centre, sent a report to Mr Reading referring to the material and making some comments on the individuals involved. Detective Sergeant Nicholls obtained a copy of the report and made a note on it: at [64]. The information which became available to Detective Sergeant Nicholls, on or about 27 May 1999 - see [64] - was: (a) the existence of a document purporting to appoint Mr Zhu as TOC's agent to sell international memberships of the Club in China; (b) a statement by Mr Zhang that he was a sub-contractor to Mr Zhu for that purpose, and (c) a statement by Mr Noble, the relevant officer of TOC, confirming the authority of Mr Zhu to sell memberships and to appoint other agents to sell memberships in China. 120The "fact" of Mr Zhu's valid appointment as an agent and Mr Zhang's appointment as a sub-agent could not properly be said to fall within Detective Sergeant Nicholls' knowledge when he obtained the report. Presumably it is the availability of that information to Detective Sergeant Nicholls which is significant for Mr Liao's purposes, although it did not immediately affect Mr Liao. There was no reference in the particular passages relied upon to the regional limit on Mr Zhang's authority, nor does it appear to have been relevant. There was no reference to ACSC. Admissions in these terms cannot be directed, although the information contained in the paragraphs of Bergin J's judgment could give rise to appropriate admissions. (c) malicious prosecution by SOCOG 121Reliance was placed on the particulars of false information provided by Ms Ford: these were not materially different from the particulars already considered in Mr Zhang's pleading. However, the time period specified with respect to the information set out in particulars (b) and (d), namely 23 November - 3 December 1999 fails to recognise that Mr Liao was arrested on 1 December 1999 and, indeed, at least one meeting between Detective Sergeant Nicholls and Ms Ford occurred the day after his arrest. 122The particulars of malice on the part of Ms Ford were also relevantly the same as those in the Zhang pleading. 123Particular (b) fails to identify the time to which Ms Ford held the knowledge alleged, which would cause an additional problem in directing an admission in respect of that particular. 124Particular (m) also contains an additional temporal problem in that the date by which it was alleged that Mr Wyness had advised Ms Ford of the civil dispute is not identified. 125Directions as to admissions should not be given in relation to these particulars in their present form. (6) Conclusions 126It is apparent from the reasons set out above that admissions cannot be made with respect to most of the particulars in their present form. In some cases admissions could be directed with minor amendments to the particulars relied upon. There is a question, therefore, as to whether the appellants should be given a further opportunity to seek directed admissions in accordance with the reasoning set out above. 127So far as the power to compel admissions is concerned, the principles are set out by Barrett JA at [238]-[243]. However, at [353], Barrett JA concludes that, as with the approach to striking out elements of a defence, the Court should not force a defendant to accept a proposition established in earlier proceedings against it, but brought by another person, unless it would be "unfair" to require the plaintiff in the present proceedings to prove the matter in the usual way, or, in the alternative, a requirement to prove the matter afresh would bring the administration of justice into disrepute. 128These are value laden concepts. The power to require a party to make admissions, with respect to any document or any question of fact, is conferred by s 70(1)(c) of the Civil Procedure Act 2005 (NSW). It is not in terms qualified by an explicit restriction to matters "not bona fide in dispute": cf s 70(1)(a). Nevertheless, it must obviously be approached with caution so as not to become a mechanism by which one party is unfairly deprived of its legitimate entitlement to challenge an allegation against its interests. How it should operate in particular circumstances must be governed by an assessment of those circumstances in the light of the guiding principles set out in s 56 of the Civil Procedure Act, requiring that all powers be exercised so as to facilitate the just, quick and cheap resolution of the real issues in the proceedings. 129Mr Zhang and Mr Liao could, on one view, reasonably have joined in the proceedings brought by Mr Zhu. Had they done so, these issues would not have arisen. On the other hand, there may have been good reason why they did not seek to join in those proceedings and their failure to do so should not be held against them. They were not called as witnesses by either party in those proceedings. Again, there can be no criticism of the State for failing to call them, given the possibility that each had a legitimate grievance against the State. 130A significant factor, however, is that Bergin J was called upon to make findings of fact with respect to various aspects of Mr Zhu's relationship with Mr Zhang and Mr Liao (and particularly Mr Zhang) because their role in assisting Mr Zhu was relied upon by SOCOG as a breach of Mr Zhu's contractual obligations, which justified SOCOG's conduct in instructing TOC to terminate the agency agreement with Mr Zhu. Mr Zhang's claim for interference with contractual relations by SOCOG is, to a significant extent, consequential upon the finding that SOCOG unlawfully directed TOC to repudiate its agreement with Mr Zhu. There would be good reason to conclude that the State should not be permitted to challenge that finding in the present proceedings. However, the effect of the proposed amended defence is to accept that finding. 131To the extent that SOCOG sought to rely upon the existence of Mr Zhang's sub-agency (and, to a lesser extent, that of Mr Liao) as a basis for avoiding liability in the course of defending the proceedings brought by Mr Zhu, it should not be allowed now to reverse that position and dispute the findings made by Bergin J relevant to the existence of the sub-agency. In part the proposed admissions are designed to ensure that the State does not now seek to adopt a position which could give rise to findings inconsistent with those which were made by Bergin J, made, to a significant extent, in response to the defence raised by SOCOG. In the circumstances of the litigation overall, that is an appropriate constraint to place upon the State in the present litigation. 132The circumstances are not entirely the same with respect to the claims based on malicious prosecution. Mr Zhu brought no such claim: rather, the characterization of the conduct of SOCOG in respect of him by various epithets, including "high-handed and reprehensible" - at [446], was relied on to augment the damages to which he was entitled. Nevertheless, to the extent that the Zhu proceedings resulted in findings of fact, not by way of concession or inadvertence, but after a trial, hard fought over some 20 days, directed to specific issues, the present appellants should be entitled to rely upon those findings and, to the extent necessary, the State should be directed to make appropriate admissions. Subject to one matter to be dealt with below, the admissions sought by reference to the particulars discussed above, fall within the field thus identified. Subject to one matter, the appellants should be allowed to formulate a set of specific admissions in accordance with the reasons set out above. Rather than extend the hearing in this Court, the matter should be remitted to the Common Law Division to allow any incidental disputes arising from the application of these reasons to be resolved by a single judge. 133The other matter, relied upon by the State, was the "fresh evidence" which it has now obtained from Mr Zhu. An affidavit has been filed indicating the evidence that Mr Zhu would now give, the content of which is summarised by Barrett JA at [217]. 134The application is somewhat opportunistic: no doubt the evidence could not have been obtained from Mr Zhu whilst the State was defending the claim brought by him against SOCOG. On the other hand, it cross-examined him at some length in relation to issues relevant to those proceedings. To the extent that Mr Zhu is prepared now to give evidence helpful to the State about matters which were not litigated in his claim against SOCOG, that evidence is not presently relevant. Indeed, it is only relevant to the extent that it challenges findings made by Bergin J in the proceedings which he brought against SOCOG. (The extent to which it does so is actually quite limited.) However, to use as a witness a successful opponent in a way which may cast doubt upon findings made in his favour in proceedings brought by him but now concluded, has the potential to bring the administration of justice into disrepute. Accordingly, the availability of Mr Zhu to give evidence on behalf of the State is not a reason to deprive the appellants of their entitlement, to the extent outlined above, to rely on findings made by Bergin J by way of admissions by the State. (7) Orders 135Because the matters should be remitted to the Division for further orders and directions with respect to the pleadings and directed admissions, it is neither necessary nor appropriate to set aside the orders made by the primary judge. He left the costs of the motions before him (with minor exceptions which are not affected by the appeals) to be resolved by the judge having continuing management of the proceedings in the Division. Those orders may also stand. 136With respect to the proceedings in this Court, neither party has been entirely successful. In the circumstances the appropriate course is to allow each party to bear its own costs: no order is required. 137BARRETT JA: This is a dispute about pleading. It comes before this Court by way of appeal, by leave, against refusal by a judge of the Common Law Division (Grove AJ) to order that certain parts of the defence in a pending action be struck out and that the defendant in that and another proceeding make certain admissions.
Parties to the pending proceedings 138The two proceedings have been pending in the Common Law Division for more than seven years. The defendant, in each case, is the State of New South Wales ("the State"). 139The plaintiff in one case is James Zhao Ming Zhang ("Mr Zhang"). The plaintiff in the other is Shao Qiang Liao ("Mr Liao"). Their claims are in some respects similar and arise from events that were the subject of earlier litigation between Peter Tao Zhu ("Mr Zhu") and Sydney Organising Committee for the Olympic Games ("SOCOG"), a statutory body: Zhu v Sydney Organising Committee for the Olympic Games [2001] NSWSC 989; Sydney Organising Committee for the Olympic Games v Zhu [2002] NSWCA 380; Zhu v Treasurer of the State of New South Wales [2004] HCA 56; (2004) 218 CLR 530. 140SOCOG was dissolved in 2002. It is accepted by the parties that the State became the statutory successor of SOCOG. The present matter was approached on the common footing that the State is responsible for tortious conduct of SOCOG as if it were conduct of the State and that the two entities are, for all relevant purposes, identical and may be treated as one. It is accepted, in particular, that the action that Mr Zhu initially took against SOCOG became, by force of statute, an action against the State and the State was in all respects substituted for SOCOG. 141Mr Zhang and Mr Liao wish to take advantage of certain findings made in the Zhu litigation. They cannot, of course, tender reasons for judgment to prove facts found in that litigation. They contend, however, that the court should intervene to relieve them of the obligation they would otherwise have to prove things which, they say, have already been proved in the Zhu litigation.
Factual background 142The factual background may be described briefly. In March 1999, Mr Zhu entered into an agreement with TOC Management Services Pty Ltd ("TOC"), the trustee of the Olympic Club Trust. The agreement authorised the sale to Chinese nationals of "Olympic Club" memberships carrying an entitlement to attend events at the Sydney Olympic Games in 2000. A number of other persons, including Mr Zhang and Mr Liao, were appointed to sell Olympic Club memberships in particular parts of China. TOC experienced financial difficulties and, in September 1999, transferred its business to SOCOG. After that transfer, SOCOG played a part in events that brought about termination of the agreement between TOC and Mr Zhu. When Mr Zhu's agreement was terminated in December 1999, the foundation of the agreements to which Mr Zhang and Mr Liao were parties was removed. In addition, SOCOG provided information to the New South Wales police that led to the arrest of Mr Zhu and Mr Liao in December 1999 and Mr Zhang in March 2000. Mr Zhu, Mr Zhang and Mr Liao were each charged with offences involving dishonesty in connection with the selling of Olympic Club memberships. The Director of Public Prosecutions subsequently withdrew the charges. 143Mr Zhu sued SOCOG for interference with contractual relations. At trial, Mr Zhu was awarded some $4 million in damages by Bergin J (as she then was). SOCOG successfully appealed Bergin J's decision to this Court - a result that was later reversed by the High Court which reinstated the award of damages made by Bergin J.
Claims and pleadings in the pending proceedings 144Each of Mr Zhang and Mr Liao sues the State for malicious prosecution by SOCOG and by police. Alleged misconduct is thus sought to be sheeted home to the State in two different ways. The State is said to be liable for misconduct of SOCOG because of the statutory substitution of the State for SOCOG to which reference has already been made. The State is said to be liable for misconduct of police officers on ordinary principles of vicarious liability. 145Mr Zhang also sues the State for wrongful arrest and false imprisonment by police and unlawful interference with contractual relations by SOCOG. There is no corresponding claim by Mr Liao. 146Mr Zhang and Mr Liao filed statements of claim on 6 December 2005 and 2 August 2006 respectively. The State filed defences on 19 March 2007 (Zhang) and 21 December 2011 (Liao). There were subsequent amendments to both the statements of claim and the defences. 147The claims and grounds of defence considered by the primary judge are those contained in the third further amended statement of claim filed by each of Mr Zhang and Mr Liao on 1 March 2012 and the defence to third further amended statement of claim filed by the State on 14 March 2012 in each matter. It will be convenient to refer to each third further amended statement of claim as simply "the statement of claim" and to each defence to third further amended statement of claim as "the defence".
Issues on appeal 148Mr Zhang maintains on appeal that the primary judge erred in failing to strike out all paragraphs of the defence in Mr Zhang's case that Mr Zhang sought to have struck out. No like appeal is pressed by Mr Liao. He no longer seeks to have paragraphs of the State's defence to his claim struck out. 149Both Mr Zhang and Mr Liao appeal against the judge's refusal to order that the State make certain admissions. 150Mr Zhang's principal contentions on the striking out question are, in substance, that (a) the judge wrongly held that there was insufficient identity or correspondence between findings of fact in the Zhu litigation and allegations in Mr Zhang's statement of claim to justify depriving the State of a right to deny those allegations and thereby put Mr Zhang to proof of them; and (b) to the extent that the judge's refusal to strike out the relevant parts of the defence reflected a view that it was not an abuse of the court's process for the State to deny the allegations in question, that view was erroneous. 151The contentions of both Mr Zhang and Mr Liao in relation to the judge's refusal to compel the State to make admissions are essentially the same as those that Mr Zhang advances on the strike-out question. They say that factual findings in the Zhu proceedings make it an abuse of the court's process for the State not to accept relevant facts as sufficiently established for the purposes of the pending proceedings and that Mr Zhang and Mr Liao should not be put to proof of those facts. 152At the end of the hearing of the appeal, the Court encouraged the parties to attempt to find common ground. The need for co-operation in identifying the real issues in dispute was emphasised - as was the possibility that the outcome in the Zhu proceedings might allow certain common ground to be found. Counsel engaged in discussions and in due course advised that no consensus had been reached. Their report to the Court dated 14 August 2014 recorded concessions that the State was prepared to make. These were apparently not sufficient for the needs of Mr Zhang and Mr Liao. 153The State has made it clear that it intends to seek leave to amend its defence in ways outlined in the report of 14 August 2013. Mr Zhang and Mr Liao have indicated that they will not consent to the grant of such leave. The parties wish to have a determination of the matters in issue as presented at the hearing of the appeal. I therefore proceed to consider those issues.
The approach on appeal 154It is uncontroversial that the primary judge had a discretion both as to the striking out of parts of Mr Zhang's defence and on the question whether the State should be compelled to make the admissions that Mr Zhang and Mr Liao sought. The questions before the judge were discretionary questions of practice and procedure. 155The discretionary nature of the decisions means that appellate intervention is warranted only on grounds identified in House v R [1936] HCA 40; (1936) 55 CLR 499 at 504-5 including that the decision is affected by extraneous or irrelevant matters or the judge mistakes the facts, acts on a wrong principle or does not take into account a material consideration or the decision is unreasonable or plainly unjust. The fact that matters of practice and procedure only are involved means that the appellate court should exercise the "added restraint" that that circumstance attracts (Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170) and be "extremely reluctant to interfere" (In the Will of F B Gilbert (dec) (1946) 46 SR (NSW) 318).
The appeal concerning striking out of parts of the defences 156I consider first the appeal against the primary judge's refusal to strike out parts of the State's defence in Mr Zhang's proceedings. I begin by setting out the five relevant paragraphs of Mr Zhang's statement of claim. Each paragraph of the statement of claim is followed immediately by the paragraph of the defence that Mr Zhang says should be struck out: Paragraph 16: Statement of Claim: "In about March 1999 Zhu entered an agreement with the Plaintiff for the Plaintiff to act as sub-agent of Zhu to sell memberships in the Olympic Club in Guangdong and Guizhou provinces in China for reward." Defence: "The defendant denies paragraph 16 of the Third Further Amended Statement of Claim." Paragraph 17: Statement of claim: "On 13 September 1999 SOCOG, TOC (as trustee for the Olympic Club Trust) and other parties entered a Deed of Release and Termination which operated to terminate the Olympic Club Trust and place control of the Trust in the hands of SOCOG, with effect from 20 September 1999." Defence: "In answer to paragraph 17 of the Third Further Amended Statement of Claim, the defendant denies the paragraph. In further answer, the defendant pleads that on 13 September 1999, a Deed of Release and Termination was executed between the company, SOCOG, the Australia Olympic Committee Inc and Synthesis Consulting Pty Ltd. The execution of the Deed of Release and Termination was necessitated by the company's parlous financial state. Upon execution, the Deed of Release and Termination terminated the company's role as the trustee (and manager) of the Olympic Club Trust. In further answer, on 13 September 1999, the company, SOCOG, The Australian Olympic Committee Inc and Synthesis Consulting Pty Ltd agreed to terminate the Olympic Club Trust, the Establishment Agreement and other related Agreements relating to The Olympic Club." Paragraph 19: Statement of claim: "Further, on 5 November 1999 TOC and SOCOG wrongfully purported to terminate the contract of agency with Zhu." Defence: "The defendant denies paragraph 19 of the Third Further Amended Statement of Claim." Paragraph 19A: Statement of claim: "The purported termination amounted to a repudiation of the contract of agency which remained on foot until 22 December 1999 when the repudiation was accepted by Zhu and the contract was terminated." Defence: "The defendant denies paragraph 19A of the Third Further Amended Statement of Claim." Paragraph 19B: Statement of claim: "The actions of SOCOG and TOC by entry into the Deed in the circumstances of the existence of the contract of agency and in purporting to terminate the contract of agency were unlawful and caused the termination of the contract of agency on 22 December 1999 and thereby prevented Zhu and the Plaintiff performing the agreement for sub-agency.' Defence: "The defendant denies paragraph 19B of the Third Further Amended Statement of Claim."
The primary judge's decision on the strike-out motion 157The primary judge's decision on paragraph 16 of Mr Zhang's defence was that the matters raised had not been fully litigated in the prior case. He also noted that there was an issue about whether it was Mr Zhu (as alleged) or Mr Zhu's company that had entered into the agreement with Mr Zhang. 158The judge's decision with respect to paragraph 16 was as follows: "[68] It suffices to deal with this claim to find, as I do, that the issues raised in the pleading have not been fully litigated in the prior case. Apart from the discrepancies abovementioned, no finding was made by Bergin J concerning the rate of reward claimed by Liao. The proposition that SOCOG and its operating corporate vehicles required Zhu to be personally responsible does not enable the plaintiffs to plead agreements with him which were in fact made with Zhu's company, Australia Chinese Sports Connections Pty Ltd (ACSC)." 159The decision in relation to paragraph 17 was: "[73] This application is said to rely upon what was said in the judgment of the High Court of Australia at paragraph 25. The defendant is entitled to raise its denial given that the Court literally did not hold that the trust was placed in the hands of SOCOG but rather its expression related to the running of (the Olympic) Club. The defendant's pleading is not embarrassing as seeking to dispute any issue which has been determined in the Zhu judgments. [74] I decline to strike out this paragraph of the defence." 160In relation to paragraph 19, the judge referred (at [84]) to "the requirement that material facts and not legal conclusions are required to be pleaded". He then said: "[85] The plaintiffs plead a legal conclusion ('wrongfully') and to the extent that it is sought to draw it from passages in the judgments of Bergin J and the High Court, I note the references to concessions having been made which would be, in the absence of some other specification, understood to be made for the purpose of that trial and that trial only." 161The judge said in relation to paragraph 19A: "[92] However, once again, there is said to be pleading inclusive of a legal conclusion apart from what appears to be a typographical error, the documentation and the assertions about it seem to suggest some confusion. For reasons already given, striking out [is] a drastic step and I would decline to order it in the absence of clarity." 162The decision on paragraph 19B was as follows: "[97] There is once more a pleading of legal rather than factual material ('unlawful') but in any event the joinder of SOCOG and TOC leaves it unclear as to which the defendant is being asked to plead. The preclusion of SOCOG from arguing that the arrest of Zhu was not a separate and independent tort of interference with contract was expressly based upon the conduct of the trial (see High Court judgment para 42) and as such did not amount to a finding but rather an inhibition which was applicable in those proceedings for that reason."
The appellants' contentions on the strike-out question 163Rule 14.28(1)(c) of the Uniform Civil Procedure Rules 2005 provides that the court court may at any stage of proceedings order that the whole or any part of a pleading be struck out if the pleading is an abuse of the process of the court. 164Mr Zhang says that it is an abuse of process for the State to persist with the parts of its defence that he wishes to see struck out. That submission is founded on what Mr Zhang says is identity between matters that will necessarily be in issue if the several traverses by the State remain and matters determined in the Zhu litigation and on the proposition that it is an abuse for the defendant to put those matters in issue again. 165Mr Zhang further says that the primary judge took an incorrect approach to the question of identity between matters in issue in the respective cases. His Honour proceeded (at [55]) on the basis that the question of correspondence or identity of issues could not be determined by "the 'broad brush' of asserting substance rather than identifying issues with precision". Mr Zhang complains that the judge's decision exhibited an unacceptable preference for "form" over "substance" and that the approach his Honour took was too severe, particularly to the extent of requiring, as a basis for a finding of abuse of process, that "an exactitude of issue exists" as between the earlier and the later proceedings (at [54]). 166The other complaint made about the judge's approach is that he regarded as defective pleaded allegations that not only stated matters of fact but also incorporated legal conclusions. 167Before the particular paragraphs in dispute are addressed, something should be said about the matters of principle raised by the appeal against the refusal to order that parts of the defence be struck out.
The concept of abuse of process relevant to the strike-out question 168Unless granted some relief by the court, each of Mr Zhang and Mr Liao will have to prove all facts necessary to establish the case he seeks to make against the State. Findings of fact are contained in the judgment of Bergin J and referred to in the judgments of members of this Court and the High Court in the Zhu litigation. Those judgments cannot be tendered by Mr Zhang and Mr Liao to prove the facts previously found. That is the effect of s 91 of the Evidence Act 1995 (NSW). That section reflects the common law which, as Campbell J explained in Gonzales v Claridades [2003] NSWSC 508; (2003) 58 NSWLR 188 (at [66], discussing Hollington v F Hewthorn & Co Ltd [1943] KB 587), took that approach because of its aversion to both hearsay and opinion evidence. And, of course, the circumstance that Mr Zhang and Mr Liao were not parties to the Zhu litigation means that that litigation gave rise to no issue estoppel or res judicata in their favour. It is for these reasons that Mr Zhang and Mr Liao are, as it were, driven back to notions of abuse of process in their attempt to avoid proving elements of their cases. 169Although earlier findings of fact are unavailable for the purpose of proving those facts in subsequent litigation, a court may regard unwillingness to accept findings in earlier litigation as indicative of abuse of process. The decisions in Reichel v Magrath (1889) 14 App Cas 665 and, more recently, Rippon v Chilcotin Pty Ltd [2001] NSWCA 142; (2001) 53 NSWLR 198 illustrate the point. In each of those cases, a person whose earlier claim as plaintiff had been dismissed sought to set up a like case on the same facts in subsequent litigation with another party and thereby to re-litigate issues that had already been decided adversely to the person. In Reichel v Magrath, a clergyman failed in litigation he brought against a bishop to establish his entitlement to a benefice; and, when later sued by a third party claiming the benefice adversely to him, sought to defend on the basis of the asserted entitlement that had been rejected by the court in the first action. In Rippon v Chilcotin Pty Ltd, a person brought successive actions against different defendants alleging that certain company accounts were misleading or deceptive and that he had relied on them to his detriment. The claim of detrimental reliance determined adversely to him in the first proceeding was asserted again in the later proceeding against another party. That was held to involve abuse of process. 170In both these cases, the court intervened in the later action to protect the integrity of its proceedings on a basis stated thus by Lord Halsbury LC in Reichel v Magrath (at 668): "[I]t would be a scandal to the administration of justice if, the same question having been disposed of by one case, the litigant were to be permitted by changing the form of the proceedings to set up the same case again ... [T]here must be an inherent jurisdiction in every Court of Justice to prevent such an abuse of its procedure." 171In Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175, French CJ (at [33]) described Reichel v Magrath as "a long standing example of a re-litigation case decided on abuse of process grounds, rather than on the basis of res judicata or issue estoppel". His Honour noted that Reichel v Magrath was relied upon in Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378 and Rogers v The Queen [1994] HCA 42; (1994) 181 CLR 251; and that, in the former case, Mason CJ, Deane and Dawson JJ said (at 393) that: "proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings." 172The majority in Walton v Gardiner also endorsed the observation of Lord Diplock in Hunter v Chief Constable of West Midland Police [1982] AC 529 at 536 that courts have an inherent power to prevent misuse of their procedures by conduct that, although not inconsistent with the literal application of the rules of court, would nevertheless be unfair to a party to the litigation "or would otherwise bring the administration of justice into disrepute among right-thinking people". 173It is because proceedings against an advocate for negligence in the conduct of a case may require challenge to the result arrived at in that case that such proceedings are unavailable as a matter of policy: D'Orta-Ekanaike v Victoria Legal Aid [2005] HCA 12; (2005) 223 CLR 1. 174In the present case, allegations of abuse of process in the Reichel v Magrath sense are made against the person who is the statutory successor of the defendant in the earlier concluded Zhu litigation and is also the defendant in the pending litigation brought by Mr Zhang and Mr Liao. That party (or, more precisely, its predecessor) did not seek to set up any positive case in the earlier proceedings. It merely sought to defend claims brought against it by Mr Zhu, just as it now seeks to defend claims brought against it by Mr Zhang and Mr Liao which arise out of the same events. 175The position that Mr Zhang and Mr Liao take in this Court thus entails the proposition that a defendant against whom factual findings have been made in earlier civil litigation may, when later sued by a different plaintiff, be deprived by the court of the right to require that different plaintiff to prove facts essential to that plaintiff's case that the earlier plaintiff succeeded in proving - or, looking at matters from the other perspective, that the ends of justice are served by conferring on the subsequent plaintiff the full benefit of decisions on allegations that the defendant unsuccessfully resisted when sued by the earlier plaintiff. 176Neither party sought to argue before the primary judge (or in this Court) that principles of the Reichel v Magrath kind are inapplicable to the present case of a single defendant common to separate actions brought sequentially by different plaintiffs. The scope of the principles was not explored to any extent before the primary judge but his Honour referred to Reichel v Magrath and Habib v Radio Sydney 2UE Pty Ltd [2009] NSWCA 231.
The position of a defendant 177The primary judge made no particular reference to the way in which principles of abuse of process apply when the party whose freedom of action is sought to be curtailed is a defendant who unsuccessfully mounted a like defence in earlier proceedings. When asked in this Court if the principles had been applied to a case of that kind, counsel for Mr Zhang and Mr Liao referred to North West Water Ltd v Binnie & Partners [1990] 3 All ER 547, a decision of the Queen's Bench Division. 178That was a case in which victims of an explosion in a tunnel owned and operated by a water authority successfully sued in negligence the water authority, the contractors who had constructed the tunnel and the consultant engineers involved in the construction. In later proceedings brought by the water authority against the engineers, it was held that there was an issue estoppel in respect of the engineers' negligence (both they and the authority having been party to the earlier proceeding and were privy to the judgment) and that it would be an abuse of process to allow the issue to be relitigated. The abuse of process finding was, in a real sense, subsidiary since an issue estoppel was established. 179Of greater relevance, in my opinion, are three decisions of the English Court of Appeal. 180The first case is Bragg v Oceanus Mutual Underwriting Association (Bermuda) Ltd [1982] 2 Lloyd's Rep 132. In that case, a defendant sought to amend its defence in two respects. The amendments were referred to as the "figures amendment" and the "purple amendment". The issues raised by those amendments had been fully investigated and rejected on their merits in earlier proceedings (the "CTI action") brought by another plaintiff against the same defendant. The argument that that defendant should not be allowed to raise the same defences in the later action was stated by Kerr LJ in this way (at 137): "What is said on behalf of Lloyd's and Heath is that the substance and merits of the 'figures' and 'purple' amendments were fully investigated and rejected by Mr. Justice Lloyd in the CTI action. It is said that their re-litigation in the present action would involve substantially the same witnesses and the same evidence. It is also said that a repetition of this investigation would inevitably again take a very long time and that it would damage the reputation of the Commercial Court to allow this to happen in two successive actions within a period of a few months, with the possibility of conflicting decisions. In these circumstances, it is said, the re-litigation of these issues in the present action should not be allowed, because it would constitute an abuse of the process of the Court." 181The Court of Appeal held that the amendments to the defence had been correctly allowed. Sir David Cairns said (at 139): "It would in my judgment be a most exceptional course to strike out the whole or part of a defence in a commercial action, or to refuse leave to amend a defence in such an action, simply because the issue raised or sought to be raised had been decided in another commercial action brought against the same defendant by a different plaintiff. The facts that the first action had been fairly conducted and that the issue had been the subject of lengthy evidence and argument could not, in my view, be sufficient in themselves to deprive the defendant of his normal right to raise any issue which he is not estopped from raising." 182Stephenson LJ said (also at 139): "It would be a strong thing for a judge to refuse to allow a party to put forward by amendment before trial a clearly arguable defence to a plaintiff's claim, and to refuse it as an abuse of the process of the Court on the single ground that it had already been litigated and decided against the party in earlier proceedings brought by another plaintiff. It would be a still stronger thing for an appeal Court to reverse a judge's decision, in the exercise of his discretion to allow amendments, that the defendant was not abusing the process of the Court." 183Stephenson LJ also said that "it is for the plaintiffs in this action to justify what is an exceptional infringement of a defendant's normal right". 184Kerr LJ said (at 138): "As it seems to me, defendants who wish to re-litigate a particular line of defence in a subsequent action, albeit that they were unsuccessful in this respect in a previous action, are clearly in an a fortiori position from that of the plaintiff in that case." 185The second Court of Appeal case is Secretary of State for Trade and Industry v Bairstow [2003] EWCA Civ 321; [2004] Ch 1. A former managing director sued his company for wrongful dismissal. His action failed when the company proved that he had been guilty of grave misconduct and neglect. The competent authority then proceeded against him seeking an order that he be disqualified from acting as a company director on the grounds of unfitness. A pre-trial ruling in the second case that the parties were bound by findings in the wrongful dismissal case was reversed on appeal. The Court of Appeal was of the view that it would not be manifestly unfair to require the authority to prove its case: it would be wrong to "stigmatise the attitude of [the individual] in requiring [the authority] to prove his case by legally admissible evidence as an abuse of the process of the court" (at [40]). Nor did the Court of Appeal think that such a course would bring the administration of justice into disrepute. The allegations against the individual were serious and had to be proved to the satisfaction of the court hearing the disqualification application by legally admissible evidence. 186The third case, Conlon v Simms [2006] EWCA Civ 1749; [2008] 1 WLR 484, concerned a solicitor (Simms) found guilty by a disciplinary tribunal of unbefitting conduct whose appeal to a Divisional Court was dismissed. In subsequent civil proceedings, certain former partners (Conlon and Harris) alleged that Simms had induced them by fraudulent representations to enter into partnership with him. It was held in the subsequent case that it was not an abuse of process for the solicitor to refuse to concede in those proceedings the adverse findings of the disciplinary tribunal with respect to his conduct. 187The Court of Appeal viewed as particularly pertinent the fact that the solicitor was the defendant before the disciplinary body (although the applicant in the Divisional Court) and also the defendant in the later partnership proceedings. That led Jonathan Parker LJ to observe (at [146]): "In such circumstances I consider that there is force in Mr Simms's submission that in denying the allegations of dishonesty made against him in the present action he is doing no more than continuing to protest his innocence of the charges brought against him by the Law Society, albeit he is doing so in the face of the adverse findings of the [disciplinary tribunal] and the Divisional Court: to use his own words, he has initiated nothing." 188Moore-Bick LJ said (at [174]): "As Jonathan Parker LJ has pointed out, this is not a case in which Mr Simms invoked the process of the court in order to challenge the findings made by the Solicitors' Disciplinary Tribunal. As the defendant to the proceedings he simply put in issue the claimants' allegations and thereby required them to prove their case by any admissible evidence available to them. That there may be circumstances in which it is an abuse of the process for a party to seek to put in issue by his defence a matter determined against him in previous proceedings is demonstrated by cases such as Reichel v Magrath (1889) 14 App Cas 665 and North West Water Ltd v Binnie & Partners [1990] 3 All ER 542, but the facts of those cases were unusual and not at all comparable to those of the present case. In these circumstances I am unable to accept that it would be unfair to require Mr Conlon and Mr Harris to prove their case in the usual way or that to do so would bring the administration of justice into disrepute. It follows that I am unable to accept that the course taken by Mr Simms was an abuse of process." 189Ward LJ said (at [178]): "He [Simms] was defending himself in the Solicitors' Disciplinary Tribunal against the charges of dishonesty brought against him there. He exercised a right of appeal to the Divisional Court but it was still part of the same process of defending himself from the allegations made against him in the context in which they were made. He continues to assert his innocence. When deciding whether it is an abuse of the process for him to continue to demand that the case brought by others in a different context be proved, it seems to me that the essential question is whether it is more unfair on the claimants to require them to prove very serious charges of fraud (or to pick the one case of dishonesty which may be most easily and cheaply proved) than it is unfair on the defendant to prevent him altogether from defending himself in these new and unconnected proceedings. I am uncomfortable that the result might be that a man facing serious charges of fraud is not able to defend himself again, and I conclude that he suffers a greater unfairness than do the claimants. For this reason in addition to those expressed by Jonathan Parker and Moore-Bick LJJ, it would be wrong to hold that the maintenance of the defence is an abuse of process." 190In all three decisions of the English Court of Appeal, the fact that the defendant in the subsequent proceedings had not initiated the earlier action and had simply put the plaintiff in those proceedings to proof of its case was a powerful factor in the court's assessment of whether the administration of justice would be prejudiced if the plaintiff in the subsequent proceedings was also put to proof of the case it brought against that defendant. 191The following passage at [33.17] of Blackstone's Civil Practice 2013 (13th ed (2012) Oxford University Press, edited by S Sime and D French) summarises the position in England: "In applying the principles in Secretary of State for Trade and Industry v Bairstow the court should be slower in preventing a party from continuing to deny serious charges after a previous adverse finding by way of defence, than in preventing a party from initiating proceedings for the purpose of launching a collateral attack on such a previous finding (Conlon v Simms)." 192There is a significant difference between, on the one hand, a plaintiff who, in later proceedings, asserts, by way of either attack or defence, a case that that plaintiff unsuccessfully pursued on an earlier occasion and, on the other, a defendant who initiates nothing, fails to withstand a particular attack and is later subjected to the same attack by a new claimant. The earlier defeat says nothing about any position embraced by the person who suffered it. That person was required to prove nothing. The defeat means only that the evidence adduced by the original claimant was sufficient to warrant the earlier adverse findings. 193It would be going too far to say that the raising of a subsequent defence by such a person could never be an abuse of process in the Reichel v Magrath sense. But it can and must be said that the court will be slower to reach a conclusion of abuse in a case of that kind and that considerations of overall fairness, viewed in the context of the responsibilities of parties to litigation (including the responsibility of a plaintiff to prove its case by leading admissible evidence), will be very much to the forefront of the court's thinking. 194In the end, the question is that identified by Sir Andrew Morritt V-C in Secretary of State for Trade and Industry v Bairstow (above, at [38]) in a passage approved by the Privy Council in Calyon v Michailaidis [2009] UKPC 34 at [35]-[36]: it must be shown either that that it would be manifestly unfair to the plaintiffs in the second action that the same issues should be re-litigated or that to permit such re-litigation would bring the administration of justice into disrepute. 195The position of the State as the sole defendant in the Zhu litigation and in the proceedings brought by each of Mr Zhang and Mr Liao - and therefore as a party who has initiated nothing and has been required to prove nothing - must mean that, if an approach of the Reichel v Magrath kind is taken at all in relation to elements of the State's defences and the question of compelling admissions by it, that approach will be taken only if exercise by the State of its right to put a plaintiff to proof entails manifest unfairness to that plaintiff or would bring the administration of justice into disrepute. That approach was not articulated by the primary judge but must guide this Court as it deals with the challenges to his Honour's decision. 196Before leaving this topic, I should refer to a recent case in which principles of abuse of process were held applicable to preclude a defendant's reliance on a particular defence that it had advanced in defending earlier proceedings decided adversely to it. The decision is that of the Hong Kong Court of Appeal in King's City Holdings Ltd v De Monsa Investments Ltd [2013] HKCA 292 (14 June 2013). De Monsa, the purchaser in a conveyancing transaction, was sued by the vendor following its failure to comply with a notice to complete. De Monsa pleaded that, because of the mental incapacity of its controlling director, the contract was not binding on it. The question of the director's mental capacity had been litigated in earlier proceedings in which De Monsa was sued by Probus (an entity unrelated to the parties to the later case) and mounted a similar defence. The question on the earlier occasion had been directed to the director's capacity during a period of some eight months. The time relevant to the transaction the subject of the second action fell within that period. The court held that it was an abuse of process for De Monsa to seek to set up the defence of the director's incapacity which had been decided adversely to it in the Probus litigation. 197Two particular matters are relevant to an appreciation of the decision of the Hong Kong court. The first is that the evidence relied on in the second case was, in substance, the same as that led in the earlier case where it had been "very thoroughly considered after trial by Reyes J and on appeal to the Court of Appeal" (at [69]). The second point is that the "presumption of sanity" no doubt applied in such a way that the onus of proving incapacity rested with the party alleging it: Attorney-General v Parnther (1792) 3 Bro CC 441; (1792) 29 ER 632. The defendant was thus, in that respect, in the position of a claimant.
"Form" v "substance" and "case" v "issue" and strike-out 198As I have said, Mr Zhang complains that the judge's decision exhibited an unacceptable preference for "form" over "substance" and that his Honour was wrong to require, as a basis for a finding of abuse of process, that "an exactitude of issue exists" between the earlier and the later proceedings. 199Reference was made by counsel for Mr Zhang to the observation of Mason CJ, Deane J and Dawson J in Walton v Gardener (above), at 393, that proceedings should be stayed as an abuse of process if, even though no estoppel arises, "their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings". It is said that the reference here to "a case" indicates that the focus should not be on a single issue or a series of issues treated separately but on a broader view of result. 200Mr Zhang says that the correct approach is one that compares the substance of the earlier findings with the issues in the later case. He refers, in that connection, to White and Libut v Thompson [2011] NSWCA 161. Among the passages in that case relied on is the following (at [55]) which refers to Rippon v Chilcotin Pty Ltd (above): "In the first action the purchasers failed to prove that they had relied on the vendor's representations. Their second action could only succeed if they could prove that they relied on the accountants' representations about the same profits. This was an attempt to relitigate what, in substance, was the same issue against a different party." 201Counsel for Mr Zhang also pointed out that, in Reichel v Magrath itself, there was a difference in the structure and detail of the two proceedings. In the first (brought by the clergyman against the bishop), the ultimate issue was whether the clergyman had withdrawn his resignation; whereas in the second (brought by the successor against the clergyman and defended by him), the ultimate issue was entitlement to possession of the vicarage. 202In D'Orta-Ekanaike v Victoria Legal Aid (above), the thing seen to be in need of protection against collateral challenge was the result arrived at in the earlier proceeding, in the sense of the final outcome. 203I am not persuaded that the approach of the primary judge exhibits error in these respects. This is because the present case involves an attempt to impose on a defendant a result or proposition or series of propositions that that defendant did not actively seek to establish in the earlier litigation where it also occupied the position of defendant. The passage quoted at [199] above refers to a party having "failed to prove" something on the first occasion and to the circumstance that success on the second occasion depending on their being able to "prove" the same thing. It was the earlier inability to "prove" that made abusive the subsequent attempt to "prove" (or, as in Reichel v Magrath, to defend). It probably makes little difference, in circumstances of that kind, whether one concentrates on a "case" (or the "case") in a broad sense or a particular allegation; although it is no doubt to be expected that attention will be paid principally to the substantial effect of what it was that the plaintiff set out to establish on the first occasion. 204Here, of course, the State needs to prove nothing. Nor did it need to prove anything in the Zhu litigation. The State is entitled to have Mr Zhang prove everything necessary to the case he seeks to make. There is no "case", in any broad sense, that the State must establish and no ground on which it can be criticised for failing to succumb to some broad "case" pleaded against it. The State as defendant will be expected to plead to each allegation regularly advanced in the statement of claim. That document is not one that puts forward some broad "case" and requires a response of "substance" to it. It puts forward a series of allegations which together constitute the plaintiff's "case"; and it is for the defendant to deal with each such allegation in the defence or, in default of so doing, to be taken to admit it. 205The judge was right to consider the individual paragraphs of the statement of claim, to compare each with the response made to it in the defence and then to address the question whether some factor arising from the earlier litigation warranted a conclusion that it would be an abuse of the process of the court for the State's defence to be framed as it was. 206As the English cases concerning defendants show, the test to be applied in circumstances of the present kind is whether it would be unfair to require Mr Zhang to prove the matter in the usual way or whether the maintenance of that requirement would bring the administration of justice into disrepute.
Pleading legal conclusions and the strike-out question 207I turn next to the difference between the parties regarding the primary judge's view that it is not permissible or appropriate to plead legal conclusions. An example of this kind of pleading is found in paragraph 19 of the statement of claim which alleges that TOC and SOCOG "wrongfully" purported to do a particular thing. 208The State relies on rule 14.7 of the Uniform Civil Procedure Rules. That rule provides that, subject to certain exceptions, "a party's pleading must contain only a summary of the material facts on which the party relies, and not the evidence by which those facts are to be proved". Mr Zhang refers to rule 14.19 which says that a pleading "may raise any point of law". 209The latter provision is not concerned with the pleading of legal conclusions. Its purpose is to make it clear that a point of law essential to the plaintiff's case may be pleaded despite the general rule that pleading is to be confined to allegations of fact. If, for example, the only substantive matter a plaintiff wishes to advance is the alleged invalidity of a statute, the facts that must be pleaded will be confined to those necessary to show the plaintiff's standing; but it will be permissible (although not necessary) to include an allegation that the statute is invalid: see, for example, Hodges v State of New South Wales [1988] HCA 9; (1988) 62 ALJR 190. 210The process of raising a point of law in that way so that it takes its place with any issues of fact arising from the traversal or non-admission of allegations of fact is quite different from the process of alleging a particular act and attributing to it a particular legal quality or consequence reflective of the application of a legal standard. 211Glass JA said in Grey v Australian Motorists & General Insurance Co Pty Ltd [1976] 1 NSWLR 669 at 676 that a party's admission that he was negligent or not provoked or that his grandfather possessed testamentary capacity adds to the record "something which is, not merely of dubious value, but by definition valueless". In the same way, it was said by Lockhart and Gummow JJ in Eastern Express Pty Ltd v General Newspapers Pty Ltd (1992) 35 FCR 43 at 68 that a trader's admission that his conduct was "misleading" or "deceptive" cannot be relied upon "to usurp the task of the court to judge the legal quality of that conduct". Both these passages were approved by Gummow J (with the concurrence of McHugh and Heydon JJ) in Dovuro Pty Ltd v Wilkins [2003] HCA 51; (2003) 215 CLR 317 at [70]-[71]. See also Hopcroft & Edwards v Edmunds [2013] SASCFC 38 at [109]. 212The purpose of pleadings is to distil issues by means of allegations on one side and responses to them on the other. One possible response to an allegation is that it is admitted. The same result may come from a failure to traverse. If a defendant makes admissions sufficient to support the plaintiff's claim, the admissions alone may form the basis for a judgment for the plaintiff. 213Given, however, that admission of an allegation of breach of some legal standard is useless because it seeks to usurp the court's function, the positive acceptance (or mere non-traverse) of such an allegation in a pleading cannot enable the alleging plaintiff to claim that the allegation has been made good so as to preclude argument of the legal question. An allegation in a statement of claim that an act is of some legal quality or fails to meet some legal standard is thus of no utility and is liable to be struck out. 214The position occupied by a defendant against whom such an allegation is pleaded and who decides not to seek striking-out is referred to in an article by Anthony Morris QC entitled "Seven Deadly Sins of Pleading" (December 2008) 32 Hearsay - The Journal of the Bar Association of Queensland (online). Instancing a pleaded allegation that the defendant's conduct in making a particular representation was "misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the Trade Practices Act 1974", he said that the defendant "would be perfectly entitled to deny the alleged infringement of section 52, without entering into the question whether the representation was made in the course of trade or commerce, whether it was true or false, or whether the other party relied on it". 215In addressing Mr Zhang's statement of claim, the State is entitled to differentiate between allegations of fact and allegations which, while containing some factual element, incorporate a conclusion of legal effect or legal consequence. A defendant can legitimately take the stance that matters of legal effect and legal conclusion are for the court to decide in the fullness of time, and that it is for that reason permissible, as a matter of pleading, to deny pleaded allegations of the latter kind. 216It follows that I do not accept the submission of counsel for Mr Zhang that rule 14.19 of the Uniform Civil Procedure Rules legitimises the inclusion in the statement of claim of allegations of the legal effect or legal consequence of pleaded facts. It also follows that I am of the opinion that, to the extent that such allegations appear in the statement of claim, it is in accordance with sound principles of pleading for the State to deny them as a means of showing its intention that the issue of legal effect or legal consequence is to be decided by the court.
The new evidence 217Before considering the paragraphs of the defence that Mr Zhang says should be struck out, I must note an evidentiary matter of significance. 218In the case before Bergin J, SOCOG was in no position to lead evidence from Mr Zhu. He was the plaintiff who sued the State. In the Zhang and Liao proceedings, by contrast, the State, as defendant, will have the benefit of evidence to be given by Mr Zhu. That evidence is outlined in a witness statement dated 23 March 2011. Several aspects of that evidence should be mentioned:
Paragraph 16: Assessment 219I proceed now to a consideration of the several parts of the defence that Mr Zhang says should be struck out. 220Mr Zhang points out that the issue raised by paragraph 16 of the statement of claim and the response to it is the existence of Mr Zhang's agency (or sub-agency). He maintains that the judge was wrong when he said that the issues in paragraph 16 had not been litigated in the prior case. Criticism is also levelled at the distinction drawn between Mr Zhu and the company ACSC. 221On this, it is relevant to refer to Mr Zhu's witness statement. He there says, in clear terms, that Mr Zhang said he would like to "become the sub-agent of the company for the province of Guizhou" and that Mr Zhu replied, "That would be fine". 222Bergin J referred (at [329]) to "appointment letters of the plaintiff's [ie, Zhu's] sub-agents Zhang and Liao" and said that "they were signed by the plaintiff [Zhu] as Chairman as [sic] ACSC". Her Honour went on to say that, on the evidence before her, Mr Zhu accepted that his own agency agreement was personal to him, as was his responsibility for sub-agents. Reference was then made to a document by which ACSC authorised Mr Zhang to be agent for Guizhou and Guandong and, at a later point, to "the appointment by ACSC". 223There is simply no firm basis for a finding that it would be unfair to Mr Zhang for him to have to prove the propositions in paragraph 16 given the apparent uncertainties as to the identity of the appointor of sub-agents and the provinces concerned. It is not to the point for Mr Zhang to say that the points are petty or unimportant. A purported appointment by someone with nothing to sub-delegate stands in stark contrast to one by an agent holding established authority from a principal.
Paragraph 17: Assessment 224Mr Zhang complains that the State's response to paragraph 17 is a triumph of form over substance and that that response should simply be struck out. 225The State's position is that paragraph 17 of the statement of claim is materially inaccurate and that paragraph 17 of the defence conveys the correct position. The State supports this by pointing out that Bergin J did not hold that the Trust was placed in the hands of SOCOG but that it was the running of the Olympic Club that was dealt with in that way. The State also notes that the High Court, in the Zhu case, referred to SOCOG's taking "responsibility for running" the Club, not "controlling" the Trust. 226The State's submissions must be accepted.
Paragraph 19: Assessment 227Mr Zhang refers to several passages in the judgment of Bergin J (and some parts of the High Court judgment) which, he says, warrant the allegation in paragraph 1-97 of the statement of claim. In relation to the primary judge's point that pleadings should be confined to matters of fact, as distinct from legal conclusion, Mr Zhang relies on rule 14.9 of the Uniform Civil Procedure Rules. 228Mr Zhang refers, in particular, to statements in the earlier judgments that (a) the agency agreement was breached when TOC purported to terminate it on 5 November 1999; (b) SOCOG conceded that it instructed TOC to terminate the agency agreement and that the other ingredients of the tort of interference were present; (c) SOCOG conceded that the grounds for termination stated in the letter of 5 November 1999 were not available grounds for the termination of the agency agreement; and (d) the failure of SOCOG's case on justification meant that the agency agreement was not validly terminated on 5 November 1999. 229The simple - and correct - response of the State is that none of this supports the proposition that "TOC and SOCOG" - that is, both of them - did any particular thing. To the extent that paragraph 19 of the statement of claim refers to TOC and SOCOG together as having done the thing described, it does not reflect the content of the earlier judgments. 230The same objection holds good in relation to the allegation that TOC and SOCOG together acted "wrongfully". The judgment extracts indicate breach of contract by TOC and tortious interference with contractual relations by SOCOG. There was no joint or shared wrongful act of both of them. Also, and for reasons discussed at [206] and following above, pleading of legal conclusions is objectionable and is not legitimised by rule 14.19.
Paragraph 19A: Assessment 231Mr Zhang refers, in this connection, to statements by Bergin J that Mr Zhu's agency agreement remained on foot until he accepted the repudiation of it by commencing the Zhu proceedings on 22 December 1999. 232The State says two things about paragraph 19A of the statement of claim. 233First, the "purported termination" is, clearly enough, that referred to in paragraph 19 and attributed to both TOC and SOCOG. That, for reasons already stated, is seen as erroneous so that, in relation to paragraph 19A, it cannot be accepted as productive of consequences. 234Second, the State says that it is incorrect, as a matter of law, to say that acceptance of repudiation terminates a contract, as distinct from discharging the injured party from performance This aspect is also seen as involving an inappropriate pleading of legal conclusion justifying denial. 235As to the second matter, a more precise formulation of the contractual position is that stated by Basten JA at [48]. Subject to that minor qualification, the contentions of the State must be accepted.
Paragraph 19B: Assessment 236Mr Zhang says that paragraph 19B of the statement of claim pleads what was ultimately held in the Zhu proceedings and was the culmination of all the arguments. He also says that, if a conclusion of law is pleaded, that is not objectionable; that the paragraph goes beyond an allegation of legal conclusion by alleging the causative impact of the actions of TOC and SOCOG upon the contract of agency and performance of the sub-agency agreement, and that the primary judge afforded form an impermissible priority over substance. 237The State says that paragraph 19B exhibits the same shortcomings as paragraph 19A. That criticism is valid. The State also says, correctly, that there was no issue in the Zhu proceedings that an unlawful termination of Mr Zhu's contract prevented the performance of a sub-agency agreement.
Conclusion on the strike-out claims 238Mr Zhang has not shown that the primary judge's discretion miscarried when he declined to strike out any of the relevant paragraphs of the State's defence.
The court's power to compel admissions 239I turn now to the aspect of the appeal concerning the primary judge's refusal to order that the State make certain admissions in both Mr Zhang's proceedings and Mr Liao's proceedings. 240Section 70(1)(c) of the Civil Procedure Act 2005 says that, at any stage of proceedings, the court "may, by order, require any party (not being a person under legal incapacity) to make admissions with respect to any document or to any question of fact". The provision seems to have had its origin, so far as New South Wales is concerned, in s 6 of the Commercial Causes Act 1903 (NSW): Railway Commissioners of New South Wales v G & C Hoskins Ltd (1918) 18 SR (NSW) 424 at 428; BHP Billiton Ltd v Schultz [2004] HCA 61; (2004) 221 CLR 400 at [238]. 241Speaking of a predecessor provision, Young J said in Ishac v David Securities Pty Ltd (Supreme Court of New South Wales, 13 December 1991) that the purpose "is to avoid waste of time at trials and the possibility that justice will be denied because a witness hides from the Court behind some technicality". The rationale is to ensure that a court only determines questions bona fide in dispute (Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 at 742 per Rogers CJ of Comm D). It follows that whether there is a bona fide dispute as to the matters sought to be the subject of directed admissions is a relevant consideration for the purposes of s 70(1)(c): Downey v Acting District Court Judge Boulton (No 4) [2010] NSWCA 114 at [23] per Basten JA. It is to be noted, however, that a preliminary finding of lack of bona fide dispute is not essential and that, in this respect, s 70(1)(c) differs from s 70(1)(a) which allows the court to dispense with the rules of evidence for proving any matter not bona fide in dispute. 242Another factor that may indicate a need to compel an admission is the avoidance of expense or delay. In Downey v Acting District Court Judge Boulton (No 4) (above), the applicant sought an order for the making of admissions to obviate the need to rely upon the production of documents to establish certain facts. While the application was ultimately unsuccessful, Basten JA (at [21) considered this to be a "legitimate purpose". 243It is clear, however, that the power should only be used in clear cases. In Bailey v Director-General, Department of Natural Resources [2013] NSWSC 515, Garling J declined to direct admissions in the absence of a "compelling reason". His Honour said (at [69]): "[W]here a party which is properly advised and in the circumstances of this case, has carefully considered its position and declined to make the admissions sought, unless there is a compelling reason, the court ought not require any admissions to be made". 244Section 70(1)(c) creates a tool to be used in cases where, on an objective assessment, there is no room for challenging a document or allegation of fact, no reason why the other party should be allowed to put the alleging party to proof and a compelling reason, related to efficiency, for requiring that the admission be made.
The judge's decision on compelling admissions 245The notices of motion before the primary judge (Mr Zhang's dated 20 March 2012 and Mr Liao's dated 21 March 2012) had annexed to them the admissions that the applicants sought to have the court compel the State to make. They related, for the most part, to particulars in paragraphs of the statements of claim and, more particularly, to matter under headings "Particulars of absence of reasonable and probable cause", "Particulars of providing false information" and "Particulars of malice". 246The primary judge declined to order that the State make any of the admissions sought by Mr Liao and Mr Zhang. He noted that a relevant power was conferred by s 70(1)(c) but then identified the "appropriate facility" as service of a notice to admit facts or authenticity of documents under rules 17.3 and 17.4 of the Uniform Civil Procedure Rules. Resort to that procedure "might well have had a beneficial effect of avoiding the somewhat prolix procedure of seeking to extract admissions about frequently multiple facts in particulars supplied with the pleading". His Honour then said (at [117]): "The defendant submitted that the course taken by the plaintiff is vexatious. No authority was pointed to in support of that statement but there is substance in the proposition . . . " 247His Honour later elaborated (at [124]-[125]): "A good example of why the failure to deliver specific Notice to Admit Facts is of that character [ie, vexatious] is detectable in the very first dispute concerning paragraph 10 'particulars of absence of reasonable and probable cause' which is in these terms: '(a) between 23 November and 3 December 1999 in the course of her employment with SOCOG Ford informed DS Nicholls that- (i) certificates of membership to the Olympic Club provided to YF Wang by the plaintiff and/or Zhang were not genuine, and, (ii) the plaintiff and Zhang did not have authority to provide Olympic Club tour packages to Chinese nationals'. The defendant pointed out that any agreements were to sell (Olympic) Club memberships and not tour packages. To enforce admission of the proposition that what was communicated was that the certificates were not genuine I was directed to para 149 of the judgment of Bergin J. Her Honour did not there refer to the certificates being not genuine but to the information on them being not genuine. That she later (at paragraph 155) refers to the certificates as not genuine would have to be understood in the light of what was earlier said. Whether anything turns on the distinction, I do not know but, unless there is clarity, the basis for compelling admission does not exist. A similar situation pertains to whether or not 'club memberships' and 'tour packages', are used interchangeably." 248His Honour gave two reasons (at [126]) for declining to exercise the discretion to order that admissions be made: first, the "non specificity in what is sought to be derived from the recitation of extracts from the Zhu judgments"; and, second, because the plaintiffs sought to force the defendant to admit particulars which often asserted more than one fact. 249Mr Liao and Mr Zhang say that the judge erred in two respects. First, they repeat a contention made in relation to the question of striking out of paragraphs of Mr Zhang's defence, namely, that there was an impermissible preference for "form" over "substance". Second, it is said that the judge failed to appreciate that each admission sought coincided with a finding in the Zhu proceedings, at least when substance is preferred to form.
The notice to admit procedure 250The primary judge identified a notice to admit facts or authenticity of documents under rules 17.3 and 17.4 of the Uniform Civil Procedure Rules as the "appropriate facility", thereby expressing (or implying) a view that there should have been resort to that process rather then an application for an order compelling the making of admissions. 251That view cannot be accepted. A plaintiff who takes the view that parts of the statement of claim should be admitted is free to serve a notice to admit facts or to seek an order compelling admissions. A plaintiff who takes one approach rather than the other cannot be criticised. Different consequences (including as to costs) may result but they represent no more than one element that a plaintiff will take into account in deciding which course to take.
The matters concerning Mr Zhang said to require admissions 252I proceed now to a consideration of the several matters in respect of which Mr Zhang says that the State should be forced to make admissions, noting in relation to each the part of the judgment of Bergin J in the Zhu proceedings said to warrant such compulsion. I do so by reference to paragraphs of the Zhang statement of claim identified in an annexure to the Zhang notice of motion and accompanying written submissions. After quoting the relevant part of the statement of claim and the relevant paragraph of Bergin J's judgment, I set out my assessment and conclusion.
Matter A: Contention 253The first matter said to warrant compelled admission is the following: "Between 23rd November and 3rd December 1999, in the course of her employment with SOCOG Ford informed DS Nicholls that - i. certificates of membership to the Olympic Club provided to YF Wang by the Plaintiff and/or Liao were not genuine, and, ii. the Plaintiff and Liao did not have authority to provide Olympic Club tour packages to Chinese nationals." 254Compulsion to admit this allegation is said to be justified by the following paragraphs of the judgment of Bergin J: "[149] In the meeting on 2 December 1999 Ford informed DS Nicholls that Liao had no connection with the Club and had no authority to sell Club memberships (tr 732). Ford also informed him that the certificates that Wang had been given contained numbers that were not on the Club data base (tr 742). Ford informed DS Nicholls that the information on the certificates was 'not genuine' (tr.743-744). DS Nicholls said that Ford was the 'central person' for him to contact for inquiries he had in relation to the investigation (tr. 750)." "[155] This was the mindset of the SOCOG representatives by this stage with Ford advising that the Certificates were not genuine in an atmosphere of deep suspicion that the plaintiff and his sub-agents were operating without any authority and fraudulently. I am also satisfied that Ford had suspicions about the bona fides of Wyness and Noble. Ford had consulted with Ernst & Young after the OI Centre suggested a full audit of the financial transactions of the Club (Ex A 566). Ernst & Young provided an oral report and an interim written report dated 6 December 1999 (Ex A 615)." "[382] DS Nicholls arrested the plaintiff on the basis of the information provided by YF Wang, which was itself reliant on the information provided by Ford, and the information conveyed to him by Ford on 2 December 1999 that the twenty five membership certificates provided to YF Wang were 'not genuine' (Ex 15 para 2(c)). On the same day, 2 December 1999, the CEO of SOCOG, Hollway, advised Reading and Ford that there was to be a 'continuation of full cooperation with the police (Ex A 604).' "[431] Ford gave evidence that she made a number of efforts to ascertain the plaintiff's contractual status. She said that by 2 November 1999 she was 'forming a view that an arrangement appeared to be still in place notwithstanding the information' that Reading had given to her. That information was that Reading had instructed Wyness to terminate whatever arrangements were in place. She said that she asked Reading about the plaintiff and international memberships (tr 528) and was informed that any arrangements had been terminated."
Matter A: Assessment 255The quoted paragraphs of Bergin J's judgment do not warrant any conclusion that the pleaded allegations are uncontroversial. Bergin J said two relevant things about what Ford told DS Nicholls: first, that the certificates Wang had been given contained numbers that were not on the Club database; and, second, that "the information on the certificates was 'not genuine'". If those statements are regarded as findings and as reflective of matters that the State should not regard as being in contest (and I do not, at this point, say that that is so), they do not support an allegation that Ford told DS Nicholls that certificates "were not genuine". Certificates that contain information that is not on a particular database may be "genuine" certificates, as may be certificates that contain "information" that is "not genuine". If A writes and signs a letter addressed to B which contains falsehoods, the letter is a "genuine" letter written and signed by A, even though its content is not truthful (or, perhaps, not "genuine"). The reference in [155] of the judgment to the advice of Ford that "the Certificates were not genuine" is, clearly enough, a reference back to the unverifiable quality of some of their content (when compared with the database) and to the non-genuine quality of information in the certificates. Nothing in the extracted parts of the judgment warrants a conclusion that the certificates were "not genuine" in the sense of being false instruments. 256As to the allegation that Ford had informed DS Nicholls that Mr Zhang and Mr Liao "did not have authority to provide Olympic Club tour packages to Chinese nationals" - there is a clear objection to the notion that compulsion of such an admission is somehow warranted by the quoted parts of the Zhu judgment. The opening words of [149] refer to Mr Liao and "Club memberships". They do not refer to Mr Zhang (either alone or together with Mr Liao) or to "Olympic Club tour packages"; and there is no reference to any class of persons as those to whom either or both of Mr Zhang and Mr Liao lacked authority to sell. 257As to paragraph (i) at [119] above, it may be noted that paragraph [433] of Bergin J's judgement (quoted in relation to Matters F and M below) referred to Ford's having admitted that she informed DS Nicholls that the memberships certificates provided to YF Wang were not genuine. But nothing is said there about who provided them
Matter B: Contention 258I consider next the following particular in the Zhang statement of claim: "Prior to the arrest and charging of the Plaintiff on 27 March 2010, DS Nicholls was aware, or ought to have been aware, of the following: i. The facts of Zhu's agency with TOC and Zhang's sub agency were known to Nicholls after a baggage search of sub-agent Zhang at Sydney Airport on 27 April 1999 where documents disclosing the Zhu agency and Zhang's sub agency for Guizhou Province in the PRC were obtained. Nicholls was aware of the subsequent confirmation of this information by Noble to the OIC (as recorded in discovered document TR 4). ii. Police had been informed by Noble, that Zhu had authority to sell Olympic Club memberships in China, through his company, Australian Chinese Sport Connections Pty Ltd ('ACSC') and to appoint sub agents." 259Mr Zhang says that admission of that material should be compelled because of what was said by Bergin J in the following paragraphs of her judgment: "[52] On 27 April 1999 one of the plaintiff's sub-agents, Zhang, arrived at Sydney International Airport from Hong Kong and was selected by Australian Customs officers for a baggage examination. Documents found in his possession included documents 'authorising him to enrol international memberships' of the Club. Zhang advised the Customs officers he was a sub contractor to the plaintiff who was an agent of TOC to sell international memberships in China. The documents included a copy of the letter from the Consulate General and the March letter from Wyness to the plaintiff appointing the plaintiff as the exclusive agent in China for the period 1 April to 30 June 1999. [53] It is apparent that the Australian Customs Service advised the OI Centre of the Zhang search and the documents found in his possession. The Consulate General's letter was translated and provided to the OI Centre. The OI Centre provided details of the contents of the documents to TOC and SOCOG. It is clear that the OI Centre consulted with Noble in respect of this incident and was informed by him that the plaintiff 'does indeed have an authority to sell Olympic Club memberships in China and authority to appoint other agents who may obtain Olympic Club memberships from Chinese residents' on the plaintiff's behalf (Ex A 328). ... [61] On 24 May 1999 the Director of the Criminal Intelligence Unit of the OI Centre, Neil Fergus (Fergus), wrote to Reading at SOCOG and provided him with a copy of an intelligence report which identified the 'Subject' as: 'Summary of intelligence obtained re: persons of interest involved in the sale of Olympic Club International memberships as a part of a travel and accommodation package to Chinese residents travelling to Australia for the Sydney 2000 Olympic Games. (Ex A 328).' [62] The Intelligence Summary referred to the translation of documents in Zhang's possession which indicated that as part of the contractual arrangements between the plaintiff and TOC, the latter had agreed to 'guarantee to help members to obtain visas' to Australia. The Summary recorded that although the plaintiff was not 'currently involved in either activity' he 'had appeared on a range of Australian criminal indices in relation to unlawful immigration activity and false documentation violations'. It also stated the [sic; scil: "that"] he had been 'recorded as being associated with persons who are currently the subject of investigations involving Asian organised crime' (Ex A 329). [63] The Summary recommended that the Club consider revoking the plaintiff's contract and passing the information on to the Strike Force (Ex A 329). Fergus advised Reading that there were a number of 'vulnerabilities' that had been identified in the Olympic commercial framework which could be exploited by criminal enterprise' and that 'the investigations into the persons of interest will continue with the Strike Force (Ex A 327). [64] The information was passed on to the Strike Force at a meeting with DS Nicholls on 27 May 1999 who subsequently recorded the briefing 'for intelligence purposes only' as no action was required from the Strike Force. His note stated - 'intelligence received from the Olympic Intelligence Centre is that Chinese Nationals recorded on criminal indices - re drugs are involved in the sale of Olympic Club Memberships to Chinese residents travelling to Australia'."
Matter B: Assessment 260In the light of the relevant parts of the judgment, it may be possible to regard as established the following matters: that there existed documents which, on their proper construction, authorised Mr Zhu to enrol international memberships of the Club; that there existed a letter from Wyness to Mr Zhu appointing Mr Zhu as the exclusive agent in China for the period 1 April 1999 to 30 June 1999; that Mr Zhang had represented himself to Customs officers as a sub-agent of Mr Zhu and had told those officers that Mr Zhu was an agent of TOC to sell international memberships in China; that Noble had told OI Centre that Mr Zhu had authority to sell Olympic Club memberships in China and to appoint "other agents" to obtain such memberships from Chinese residents on Mr Zhu's behalf. 261But even if it is possible to regard those matters as sufficiently established, it cannot be expected that the State should admit, in favour of Mr Zhang, that DS Nicholls was on 27 March 2010 (or at any other time) aware - or ought to have been aware - of "[t]he facts" of Mr Zhu's agency and Mr Zhang's sub-agency, with the latter being in respect of Guizhu Province. 262Looking at the sub-agency issue, it can be seen at once that Guizhu Province is not mentioned anywhere in the extracted paragraphs of the judgment. And the only reference in the extracted paragraphs to any sub-agency of Mr Zhang is a reference at [52] to his own statement to Customs officers that he was a "sub-contractor" to Mr Zhu who was an agent of TOC. That is, at best, a hearsay representation on a mixed question of fact and law. Nothing else in the extract corroborates it. There are references to Mr Zhang in [53] and [62] but neither of them touches upon the sub-agency question representation. 263As to the matter of Mr Zhu's agency, there are references in the quoted parts of the judgment to a letter appointing Mr Zhu and to an opinion of Noble that Mr Zhu had authority to sell Olympic Club memberships in China and to appoint other agents. But those elements are scarcely sufficient to put the status and authority of Mr Zhu as agent into the realms of non-controversial issues, particularly when it is remembered that particular (a)(ii) alleges a statement by Noble that Mr Zhu "had authority to sell Olympic Club memberships in China, through his company, Australian Chinese Sport Connections Pty Ltd ('ACSC') and to appoint sub agents", from which it appears that the appointee was ACSC (or Mr Zhu as some kind of agent for ACSC) and the extracted portions of the judgment make no reference whatsoever to ACSC, its role or the position it occupied vis-à-vis Mr Zhu or the appointor.
Matter C: Contention 264I refer next to the following particular in the Zhang statement of claim: "Prior to the arrest and charging of the Plaintiff on 27 March 2010, DS Nicholls was aware, or ought to have been aware, of the following: ... iv The Zhu agency agreement made provision for the appointment of Zhu and/or his company ACSC and the Plaintiff to act as properly authorised agents of TOC and the Club. 265In this case, Mr Zhang relies on an admission by the State in an earlier pleading in the current proceedings, as follows: "admits that DS Nicholls was or ought to have been aware that the Agency Agreement made provision for the appointment of Mr Zhu and the plaintiff as properly authorised agents of TOC and the Club (for the limited purposes permitted by the Agency Agreement) but otherwise does not admit paragraph (d)."
Matter C: Assessment 266The State must be regarded as having made that earlier admission set out. It has not sought or been granted leave to withdraw the admission. 267The earlier admission differs from the admission now sought in two material respects. First, the earlier admission identified Mr Zhu and Mr Zhang ("the plaintiff) as objects of the appointment but says nothing about ACSC, whereas the admission sought refers to ACSC as an appointee in addition to or instead of Mr Zhu. Second, the earlier admission refers to the appointment being for "the limited purposes permitted by the Agency Agreement", a limitation or qualification that is not reflected in the admission now sought.
Matter D: Contention 268The relevant part of the statement of claim is: "Zhang had paid $230,006.00 to Zhu and/or ACSC which had been paid to TOC and the Club for the purchase of international memberships in the Club and TOC had issued receipts in that regard." 269Mr Zhang relies on the following paragraph of Bergin J's judgment as the basis for an order compelling admission: "[126] I am satisfied that at this meeting on 2 November 1999 Ford expressed concerns to the officers in relation to the Club and the possible continual involvement of Wyness in the development and marketing of the Club and its activities. Ford more probably than not expressed the concern about Chinese documentation and copies of invoices and cheques totalling $230,006. I am also satisfied that at this time Ford advised the officers that she had concerns over the physical safety of the staff from former members of TOC."
Matter D: Assessment 270Paragraph [126] of Bergin J's judgment says nothing about payment of $230,006 by anyone to anyone. Nor is there reference to the purpose of any payment or the issue of receipts. 271It may be noted that there are references to a payment of $230,006 at paragraphs [263], [269] and [270] of Bergin J's judgment (set out in relation to Matter H below) but the person making the payment is identified as Mr Zhu.
Matter E: Contention 272The relevant part of the statement of claim is: "Zhu had commenced legal proceedings in the Supreme Court of NSW against TOC and/or SOCOG concerning the termination of the Agency Agreement by SOCOG." 273Mr Zhang relies on the admission of the State in paragraph 67(g) of the defence, as follows: "admits that DC Nicholls was or ought to have been aware that Mr Zhu or ACSC had commenced legal proceedings in the Supreme Court of NSW against TOC and/or SOCOG concerning the termination of the Agency Agreement by SOCOG."
Matter E: Assessment 274The earlier admission was that DS Nicholls was or ought to have been aware that one of two persons had commenced relevant proceedings. The two persons referred to were Mr Zhu and ACSC. The admission did not refer to awareness that one of those possibilities was established or correct to the exclusion of the other.
Matter F: Contention 275The relevant part of the statement of claim is: "Between 23rd November and 3rd December 1999 in the course of her employment with SOCOG Ford informed YF Wang that - i. certificates of membership to the Olympic Club provided to him by the Plaintiff and/or Liao were not genuine, and, ii. the Plaintiff and Liao did not have authority to provide Olympic Club tour packages to Chinese nationals." 276The following parts of the judgment of Bergin J are relied on by Mr Zhang as the basis for an order compelling admission: "[382] DS Nicholls arrested the plaintiff on the basis of the information provided by YF Wang, which was itself reliant on the information provided by Ford, and the information conveyed to him by Ford on 2 December 1999 that the twenty five membership certificates provided to YF Wang were 'not genuine' (Ex 15 para 2(c)). On the same day, 2 December 1999, the CEO of SOCOG, Hollway, advised Reading and Ford that there was to be a 'continuation of full cooperation with the police' (Ex A 604)." "[433] Ford admitted receiving a number of contract documents but could not recall the detail of them. She denied ever having seen the 4 June 1999 letter and admitted that she had informed DS Nicholls that the plaintiff was not an authorised agent of SOCOG. She also admitted that she informed DS Nicholls that the memberships certificates provided to YF Wang were not genuine. She recalled some of the matters that were discussed at the meeting on 3 December 1999. She recalled that the conference in Shanghai was spoken about and her best recollection was that there was discussion about stopping people attending rather than stopping the conference itself."
Matter F: Assessment 277The meaning of "not genuine" in paragraph [382] of the judgment is discussed at [254] above. 278The passages in the judgment relied upon do not refer to Ford informing YF Wang of anything. They say merely that certain information provided by YF Wang was "reliant on" information provided by Ford. The other reference is to information "conveyed to" DS Nicholls by Ford. 279Those passages do not lead to any conclusion that the State should be compelled to make the admission sought.
Matter G: Contention 280The relevant part of the statement of claim is: "Between 23rd November and 3rd December 1999 in the course of her employment with SOCOG Ford informed DS Nicholls that - i. certificates of membership to the Olympic Club provided to Wang by the Plaintiff and/or Liao were not genuine, and, ii. the Plaintiff and Liao did not have authority to provide Olympic Club tour packages to Chinese nationals." 281The passage in the judgment of Bergin J relied upon as a basis for forcing an admission is: "[149] In the meeting on 2 December 1999 Ford informed DS Nicholls that Liao had no connection with the Club and had no authority to sell Club memberships (tr. 732). Ford also informed him that the certificates that Wang had been given contained numbers that were not on the Club data base (tr 742). Ford informed DS Nicholls that the information on the certificates was 'not genuine' (tr 743-744). DS Nicholls said that Ford was the 'central person' for him to contact for inquiries he had in relation to the investigation (tr 750)."
Matter G: Assessment 282This matter is sufficiently covered at [254]-[255] in relation to Matter A. The conclusion is the same.
Matter H: Contention 283The relevant parts of the statement of claim are: "The information provided to Wang and to the Police was false in that the certificates were genuine and the plaintiff did have authority to provide Olympic Club tour packages to Chinese nationals. The Plaintiff had been appointed a sub-agent of Peter Tao Zhu who was appointed as agent for TOC Management Services Pty Ltd ('TOC') to provide such certificates to Chinese nationals. The Plaintiff thereby had authority of TOC to provide such certificates to Chinese nationals. The certificates were provided to Zhu by TOC Management Services Pty Ltd. Ford managed the Olympic Club for SOCOG at the time of the charging and prosecution." 284In relation to the certificates, reliance is placed on the following passages in the judgment of Bergin J as a basis for an order compelling admission: "[260] The Membership Certificate was part of the International Membership Welcome Kit (cl. 1.1 Agency Agreement) (the Kit). Once TOC had received notification from the plaintiff of the enlistment or signing of not less than 500 new International Memberships and had received payment of Membership Fees it was obliged to supply the plaintiff with a Kit for each new International Membership (cl 7.1(c) Agency Agreement). The plaintiff was obliged to provide TOC with the name, address and Passport or Identification Card details of all new International Memberships within 14 days of 'selling' such membership (cl 9.1(e)). [261] Noble gave evidence that over 100 kits were provided to the plaintiff for marketing or demonstration purposes. He said that the only difference between the Membership Certificate in the Kits provided to the plaintiff and the final Certificate was that the latter had the members name on it and a number allocated by TOCMS (tr 383-4). [262] TOC had what has been referred to in evidence as a database of memberships. There were different categories within the database including individual memberships and corporate memberships. The correspondence in November 1999 refers to the plaintiff's 743 memberships. A letter in August 1999 from Wyness' secretary to Cendant, the call centre in Melbourne at which the main frame computer was situated, referred to 657 memberships rather than 743 memberships (Ex. A 444). [263] It was suggested with some ingenuity to Wyness that the difference could be accounted for as a reduction of 'a bit under a hundred' because the plaintiff had been forwarded about 100 Kits. (tr 649). This seems to me to be a non sequitur. There is no evidence that the database entries were deleted once the Kits were sent out. The difference between the two numbers is eighty six. I am of the view that the 657 memberships related to the payment by the plaintiff of $230,006 in late May early June 1999. The membership fee was $350 and $230,006 purchased 657 memberships. [264] The plaintiff had paid $30,000 as an Agency Fee pursuant to the Agency Agreement (cl 6.1). However it appears that later in 1999 when Wyness and Ford were communicating about the alternatives available to SOCOG in respect of the monies paid by the plaintiff, the Agency Fee amount was included in the calculation of the number of memberships to which the plaintiff would be entitled. At $350 per membership that amount would have purchased 86 memberships. When both amounts are taken into account totalling $260,006 the number of memberships purchased is 743. [265] Wyness gave evidence that the intended arrangement with the plaintiff was that he would buy blocks of memberships and they would be 'warehoused or put into inventory in the database' (tr. 647). When the plaintiff paid money referable to any blocks of memberships a large number of unallocated and open memberships would go into the database. Wyness' evidence was that the plaintiff was then at liberty to allocate or attach those memberships as he saw fit (tr. 648). Wyness also gave evidence that as the plaintiff had paid for the membership kits "he should receive them"(tr 649). [266] The plaintiff utilised a system with his sub-agents whereby booklets of application forms with numbers upon them were issued to the sub-agents. Those numbers were the internal records of the plaintiff and his sub-agents that enabled the identification of the sub-agent and the memberships sold. There were a number of certificates into which the internal numbers from the plaintiff's records were typed. These were the memberships 'sold' to YF Wang and contained the names of the persons Wang represented and their application form number. The plaintiff intended to present these Certificates to those members at the Media conference on 6 December 1999 in Shanghai. It is these Certificates that SOCOG alleges were 'false' certificates, the creation of which justifies summary dismissal pursuant to cl 15.4 of the Agency Agreement. [267] SOCOG submitted that the plaintiff gave 'unsatisfactory' evidence on this topic. In his earlier affidavit the plaintiff gave evidence that Noble informed him in late February 1999, prior to the entry into the Agency Agreement, that there was no reason why he could not buy memberships in bulk and 'on-sell' them as part of the travel packages. Noble informed him that the Welcome Kit would not be delivered until a membership number 'is allocated' which would not be until the plaintiff gave TOC the member's name and mailing address (par 15 and tr 129 and 341). The plaintiff gave evidence that he was not aware that TOC had not allocated the numbers on the Certificates and that Zhang had informed him that he, Zhang, had 'put the copy into the Club' (tr 342). [268] The plaintiff also gave evidence that Noble provided him with a few samples of Kits but that after he paid the money to TOC Noble delivered a box of Kits that were not samples (tr 262). The plaintiff said that 25 Membership Certificates that were given to the persons represented by Wang and another 5 given to persons with whom another sub-agent was dealing were the only issued Certificates of which he was aware (tr 263/4). He also said that the number on the Certificate was an internal number of his organisation (tr. 263/4). The plaintiff also gave evidence that he did not understand that the number was the important thing, so long as the name was provided to the Club. He instructed his sub-agent to give Certificates to new members and then notify the Club (tr 266). [269] A system was envisaged at the time the Agency Agreement was entered into whereby TOC would issue Kits to the plaintiff when memberships were purchased. What happened was a little different. TOC accepted the plaintiff's $230,006 in June 1999 and subsequently a total of 657 memberships were 'allocated' on the database to ACSC. The entries in the database in ACSC's name that are in evidence (Ex A 617-629) each had a number. According to the then Managing Director of the Club, Wyness, there is little doubt that the plaintiff was entitled to be issued with the Kits once he had paid the Membership Fee. [270] The most obvious step to be taken by SOCOG was to ask the plaintiff and Zhang about the Certificates. Rather than do this there was a secretive collaboration with the OI Centre and the Strike Force with an abysmal failure to properly assess the very records that would have informed SOCOG that the plaintiff had purchased 657 memberships and was entitled to 'on-sell' them. Noble gave evidence that when a corporate membership was 'taken out', it was allocated a number of memberships, according to the amount paid. This is exactly what happened in respect of the plaintiff's payment of $230,006. His company was allocated 657 memberships. [271] Noble gave evidence that under his management the plaintiff 'and his sub agents were at liberty to allocate any one of those memberships to any person they chose and provide us with the personal details of their customer as and when they thought fit'. He said 'that was the system of handling the sale of International Memberships that was put in place so that Mr Zhu, as our agent, might sell and process as many International Memberships as possible' (affd 25/1/01 par 45). [272] These Certificates were to be presented at the ceremony in Shanghai at which was to be present a bevy of representatives of the press. There was no furtiveness about the creation of these Certificates. They were Certificates that the Club's official sub-agent had inserted an internal number upon with the name of the member who had paid the membership fee. I am of the view that the circumstances of the creation of the Certificates did not strike at the root of the contract nor would such creation, when viewed in the light of the planned presentation under the gaze of national and possibly international press representatives, be wholly inconsistent with the continuance of confidence between the parties. It was not a repudiatory breach and would not justify summary dismissal pursuant to cl15.4 of the Agency Agreement." 285In relation to the authority of Mr Zhu and Mr Zhang, reliance is placed on the whole of Bergin J's judgment.
Matter H: Assessment 286The passages from the judgment of Bergin J refer to Wang in paragraphs [266] (two occasions) and [268] (one occasion). They do not refer at all to police. There are references to certificates in [266] and to an allegation by SOCOG that they were "false". The quotation marks appear in the original and obviously indicate that falsity was alleged, not found or proved. Beyond that, there is a reference in [267] to Mr Zhu having testified that he was not aware that TOC had not allocated the numbers on the certificates. None of this corresponds with the allegation in the first of the extracted parts of the statement of claim. 287As to the second extracted allegation, the paragraphs of the judgment refer to sub-agents of Mr Zhu but do not mention Mr Zhang as such a sub-agent. None of the several references to TOC refers to Mr Zhu as having been appointed as agent for TOC, although there are references elsewhere in Bergin J's reasons to the letter from Wyness to Mr Zhu appointing Mr Zhu as agent (see, for example, paragraph [52] set out above in relation to Matter B). The earlier admission quoted above in relation to Matter C referred to provision being made by the agency agreement for the appointment of Mr Zhang (as well as Mr Zhu) as an agents of TOC and the Club, not anyone's sub-agent . 288As to the allegation of authority of Mr Zhang to "provide such certificates to Chinese nationals", no identifiable part of the paragraphs of the judgment can be said to substantiate the matter. 289As to the provision of certificates to Mr Zhu by TOC Management, there is no reference to the matter in the extracted paragraphs of the judgment. 290As to the allegation concerning management of the Olympic Club by Ford for SOCOG, the only reference to Ford in the extracted paragraphs is at [264] which does not deal at all with that matter, although there is, at paragraph [430] (extracted in relation to Matter M below), a reference to Ford's having been seconded from the ACT Government "to manage the Club for SOCOG" - something that, in a direct sense, goes to the purpose of secondment rather than actual activities. 291Finally, reliance on the whole of the judgment of Bergin J in relation to the authority of Mr Zhu and Mr Zhang is misguided. If a part is said to warrant the admission sought, it should be identified with particularity.
Matter I: Contention 292The relevant part of the statement of claim reads: "Ford was motivated by a concern for the safety of staff of TOC." 293Reliance is placed on paragraph [126] of the judgment of Bergin J (set out at [268] above) as a basis for compelling admission.
Matter I: Assessment 294The quoted paragraph of Bergin J's judgment refers to Ford's having informed other persons that she "had concerns over the physical safety of the staff from former members of TOC". The passage does not, of itself, warrant any conclusion or inference that the concern Ford was found to have expressed constituted her motivation for any course of conduct.
Matter J: Contention 295The relevant part of the statement of claim reads: "Ford was motivated by a desire that all ties between Zhu/ACSC and TOC be severed." 296Mr Zhang says that the following passage in the judgment of Bergin J is sufficient to require an admission: "[136] In her correspondence with Williams and Reading, Ford advised that she had looked at the numbers and it would be 'far cheaper to put together some kits than to refund the money' and that if they decided to provide the kits 'it may close the matter once and for all which would be a really good thing'."
Matter J: Assessment 297Paragraph [136] of the judgment of Bergin J does not refer to any severing of ties and constitutes no basis for compelling the admission sought.
Matter K: Contention 298The relevant part of the statement of claim reads: "Ford was motivated by a desire and intention to end the selling of memberships in the Olympic Club." 299The passage in the judgment of Bergin J relied on is paragraph [136] (see [295] above).
Matter K: Assessment 300The conclusion is the same as that in relation to Matter J and for the same reason. There is no reference to the relevant matter in paragraph [136] of the judgment.
Matter L: Contention 301The relevant part of the statement of claim reads: "By 6 October 1999, Ford knew that there was some arrangement between Zhu and TOC or SOCOG for the sale of Olympic Club memberships."
Matter L: Assessment 302The plaintiffs identify no part of Bergin J's judgment as a foundation for their application for an order compelling this admission. 303It may be that they intend to refer to paragraph [124] which is extracted in relation to Matter O below. If that is so, the words "By 6 October 1999" are inconsistent with the fact that the letter there mentioned was dated 26 October 1999.
Matter M: Contention 304The relevant part of the statement of claim is: "At the time of providing the information to YF Wang and to Police, Ford knew that information relevant to the statements that she made to DS Nicholls that - i. certificates of membership to the Olympic Club provided to Wang by the Plaintiff and/or Liao were not genuine, and, ii. the Plaintiff and Liao did not have authority to provide Olympic Club tour packages to Chinese nationals, was available to her within TOC and SOCOG and she failed to enquire into that further information in order to consider the accuracy of what she had told DS Nicholls." 305The passage in the judgment of Bergin J relied on as a basis for compelling admission of the allegation is as follows: "[430] In deciding whether an award of exemplary damages is appropriate in this case it is necessary to review Ford's evidence. Ford gave her evidence over a two-day period and in many respects did not have a good recollection of events or the timing of events. Ford had been seconded from the ACT government to manage the Club for SOCOG. Her position with the ACT government was as head of the Office of Business Development and Tourism in the Chief Minister's Department. She gave evidence that she had put much of the detail of the time with SOCOG out of her mind because she did not believe it was necessary to retain it. I accept that her memory of the detail of events was not good. [431] Ford gave evidence that she made a number of efforts to ascertain the plaintiff's contractual status. She said that by 2 November 1999 she was 'forming a view that an arrangement appeared to be still in place notwithstanding the information' that Reading had given to her. That information was that Reading had instructed Wyness to terminate whatever arrangements were in place. She said that she asked Reading about the plaintiff and international memberships (tr 528) and was informed that any arrangements had been terminated. [432] However she had formed a view that the matter needed to be assessed and understood. She also said that the question as to whether the plaintiff should have his money back or have the memberships honoured was a question that was on foot 'the whole time'. She said 'the whole discussion of the whole situation was about what is it SOCOG is obligated to do, if anything' (tr 538). As late as 29 November 1999 Ford was still asking about international memberships and SOCOG's obligations. Ford said that she was not going to do anything unless Reading told her to return the money or to honour the memberships (tr.541). She felt it was her obligation to find information from SOCOG about how they wanted her to handle 'the issue' (tr 543). She agreed that if there was a dispute between SOCOG and the plaintiff it was a matter properly to be resolved by legal process. She denied that what she had been doing during November 1999 was to attempt to fob off Mr Go. After being referred to her e-mail of 30 November 1999 she agreed that she had used the term 'fob off' in relation to what she had been doing in relation to Mr Go. [433] Ford admitted receiving a number of contract documents but could not recall the detail of them. She denied ever having seen the 4 June 1999 letter and admitted that she had informed DS Nicholls that the plaintiff was not an authorised agent of SOCOG. She also admitted that she informed DS Nicholls that the memberships certificates provided to YF Wang were not genuine. She recalled some of the matters that were discussed at the meeting on 3 December 1999. She recalled that the conference in Shanghai was spoken about and her best recollection was that there was discussion about stopping people attending rather than stopping the conference itself. [434] The way in which Ford was brought into her task of managing the Club was certainly less than ideal. I accept that she was not informed at the outset of the existence of the contractual arrangements that TOC had entered into not only with the plaintiff but with Mr Go for the agency in Indonesia and Mr Liew for the agency in Singapore. She had reviewed the Deed of Release and Termination and understood that TOC's relationship with the Club had terminated. She was informed that some employees had 'come over' to SOCOG but took the view that Wyness' continued involvement and his use of the letterhead of the Club may be in breach of his obligations. [435] There is no doubt that Ford knew the plaintiff had purchased at least 657 memberships. Her evidence about her attempts to understand the concept of International Memberships was quite extraordinary having regard to the seniority of her previous position and the importance of the position with SOCOG. The impression I am satisfied she sought to convey was that as hard as she tried no one would assist her with an explanation. I am satisfied that she had decided not to telephone Wyness to have an open and frank discussion with him because she was suspicious of him. That is why she told Ernst & Young not to make contact with him or Noble. [436] The obvious step to take to understand what had happened in relation to the plaintiff and his contractual status was to speak to Wyness or Noble. It was never suggested to her that she should not do so, albeit that she gave evidence that it was suggested to her by the OI Centre that she should not speak to the plaintiff. Her failure to speak to the very people who were in control of the management of the Club at the time about any 'arrangements', as she understood them, that were put in place with the plaintiff was, notwithstanding her suspicions or concerns, quite extraordinary. [437] All she had to do was pick up the telephone and ask Wyness what the situation was with the plaintiff. If she had done that in late November 1999 when she was dealing with DS Nicholls I have little doubt that she would have been informed that Wyness had written to the plaintiff purporting to terminate the agreement and that the plaintiff's solicitors were challenging such purported termination. The press release issued by SOCOG on 12 December 1999 in which it claimed that to the best of its knowledge 'any arrangement that may have been in place prior to SOCOG assuming control of the Olympic Club in August was terminated by the previous management of the Olympic Club' is also quite extraordinary in the circumstances. SOCOG well knew by this time that the letter of 5 November was the time at which Wyness wrote to the plaintiff, long after it took over the Club. It also knew that such was at its direction and it well knew that the plaintiff was challenging the entitlement to terminate his contract. This exemplifies SOCOG's conduct in relation to the way it dealt with the plaintiff which was high handed and disgraceful. [438] The level of suspicion in this world of whispers of Ford and others at SOCOG was fuelled by a lack of proper information, a lack of effective communication within SOCOG and with its enquirers, a lack of sensible commercially sound inquiries of the people of whom inquiries should have been made, a refusal to deal in good faith with or even speak to the people who had been appointed as agents of the Club and a willingness to become embroiled in what I am satisfied was a disastrous 'team' approach to what was thought by the police, on the information provided to them by SOCOG, to be an international conspiracy to defraud and damage the Club. I am satisfied on the evidence before me that this concatenation of police 'intelligence' and what was seen as the 'stakeholders' information, or more accurately misinformation, had a disastrous consequence for the plaintiff."
Matter M: Assessment 306The identified paragraphs of the judgment refer to one thing that Ford knew or of which Ford was aware, namely, that Mr Zhu had purchased at least 657 memberships. 307The paragraphs do not say expressly that Ford's state of knowledge was as alleged in the relevant part of the statement of claim and counsel did not see fit to make any submissions regarding a basis on which any implication might be made.
Matter N: Contention 308The relevant part of the statement of claim reads: "By 24 August 1999, Reading of SOCOG knew that there was an arrangement between Zhu and the Olympic Club for the sale of OC memberships to Chinese residents, and same had been extended to December 2000," 309Reliance is placed on the following passages in the judgment of Bergin J: "[100] On 24 August 1999 Reading had a conversation with Wyness in which Reading said to Wyness 'Who is Peter Zhu - I have seen some documents in which you refer to him as being an agent of the Olympic Club?' Wyness said words to the effect 'Some sort of arrangement has been reached with Peter Zhu regarding the Olympic Club in China'. The documents to which Reading referred were the letter of authorisation for the plaintiff for the period 1 April 1999 to 31 December 2000 and the letter of 8 March 1999 signed by Noble and the plaintiff. [101] Towards the end of the conversation Reading said to Wyness 'Well its a bit of a worry, I don't want loose canons running around - I know we want to try to make this thing work but you know the position regarding getting approvals - the Police are looking at this fellow - my advice to you is that you protect yourself by reining him in - if you had plans for China I suggest that you better do what you can to stop them.' Reading informed Wyness that he did not want TOC or SOCOG to be exposed."
Matter N: Assessment 310The passage in the judgment of Bergin J records that Reading was told by Wyness that "some sort of arrangement had been reached with Peter Zhu regarding the Olympic Club in China". Bergin J also said that the documents Reading said he had seen were Mr Zhu's letter of authorisation for the period 1 April 1999 to 31 December 2000 and a letter of 8 March 1999 signed by Noble and Mr Zhu. It is clear from the quoted passages that Bergin J was satisfied that Reading had seen those documents but there was no finding that he had absorbed (so as to appreciate) their content beyond the reference they contained to Mr Zhu being "an agent of the Olympic Club".
Matter O: Contention 311The relevant part of the statement of claim is: "By letter 29 October 1999, Wyness advised Ford that Zhu had purchased $260,000.00 of tickets in the Olympic Club which were being held, unnumbered, in the Club's database." 312Reliance is placed on the following passage in the judgment of Bergin J: "[124] On the same day Wyness wrote to Ford in terms which included the following: Peter Zhu purchased up to $260,000 of International memberships which has been held in inventory until the names were supplied to us as a normal corporate sale would be. He has now asked for information on when he can start to receive this. He has also asked if there is any possibility of assistance he can receive in purchasing a batch of tickets. Paul Reading asked me to unwind any future arrangements with regards to International Memberships which I am doing however he should receive these membership kits which he has paid for. I believe Tina has details of what the contents of these kits were. If you have any questions I will be happy to assist, I believe handled correctly this could be a strong revenue source for you going forward. A copy of that letter was provided to Michael Brann and Reading."
Matter O: Assessment 313There is nothing in the quoted part of the judgment referring to "tickets" (as distinct from "international memberships"), other than "tickets" involved in some separate "batch of tickets"; nor is there reference to tickets (or "international memberships") being held "unnumbered". The reference is to items being "held in inventory" until "names were supplied to us". 314The admission sought to be compelled is not warranted, although a slightly differently worded admission might be.
Matter P: Contention 315The relevant part of the statement of claim is: "On 2 November 1999, Ford met with members of the Olympic Intelligence Centre of the NSW Police and handed them the said letter of 29 October 1999." 316Reliance is placed on the following part of Bergin J's judgment as a basis for compelling admission: "[125] Ford attended the Ol Centre on 2 November 1999. Ford had little recollection of the conversation at this meeting. She emphasised that she was present to 'receive' rather than provide information. Ford gave evidence that when she mentioned the plaintiff's name to the officers of either SOCOG or the OI Centre they 'reacted'. When asked to explain what she meant by that Ford said that they reacted in a way that suggested 'they knew something that I didn't'. [126] I am satisfied that at this meeting on 2 November 1999 Ford expressed concerns to the officers in relation to the Club and the possible continual involvement of Wyness in the development and marketing of the Club and its activities. Ford more probably than not expressed the concern about Chinese documentation and copies of invoices and cheques totalling $230,006. I am also satisfied that at this time Ford advised the officers that she had concerns over the physical safety of the staff from former members of TOC. [127] I am also satisfied that Ford informed the officers that instructions to terminate arrangements between the plaintiff and TOC had been 'ignored' and that Wyness was using Olympic Club official letterhead when he was not authorised to do so and that several boxes of documents were still in his possession which were the property of SOCOG. I am also satisfied that Ford expressed concerns that there were false promises still being made in the market place in relation to the obtaining of Visas."
Matter P: Assessment 317There is no reference in the quoted parts of Bergin J's judgment to Ford handing anything to anyone.
Matter Q: Contention 318The relevant part of the statement of claim is: "By about 5 November 1999, Ford knew of the agreement between TOC and Zhu, and knew that Wyness had promised Zhu that the Olympic Club would fulfil its contractual obligations to him with respect to memberships sold by him." 319The part of Bergin J's judgment relied upon as a basis for compelling admission of the allegation is: "[130] On the same day Wyness forwarded a copy of that letter to Ford advising her of a telephone number on which the plaintiff could be contacted. Wyness advised: I have told him that the contract has been terminated for the reasons given in the letter. The options would be to return his $260,000 or to fulfil his 743 membership kits which he has paid for. These memberships were priced at $350 each and only included the merchandise as listed in the contract. They were not valid to enter the ticket draws. These were treated as a 'Corporate sale' in the sense that they were put into inventory until we received the names from Mr Zhu."
Matter Q: Assessment 320The letter referred to in paragraph [130] of Bergin J's judgment is the letter of 5 November 1999 from Wyness to Mr Zhu set out at paragraph [129] of the judgment. That letter refers to an "agency agreement" executed in March 1999 but does not identify its parties. The letter also refers to "your appointment as agent" (with "your" obviously referring to Mr Zhu) but does not explicitly link that appointment with the agency agreement executed in March 1999 (although there is a reference to "your" - that is, Mr Zhu's - "option to extend that term", that is, the term ending on 30 June 1999). It may be accepted that Wyness stated in the letter that "[t]he Olympic Club will of course fulfil its contractual obligations with respect to the memberships sold by you", that is, Zhu.
Matter R: Contention 321The relevant part of the statement of claim is: "By November 1999 Ford had expressed the wish that all ties between Zhu and TOC be severed." 322The part of the judgment of Bergin J relied upon as a basis for compelling the admission is paragraph [136] set out at [295] above.
Matter R: Assessment 323Paragraph [136] of the judgment simply does not support the statement in question.
Matter S: Contention 324The relevant part of the statement of claim is: "By 2 or 3 December 1999, Ford and Reading of SOCOG were aware that in March 1999, TOC and Zhu and/or ACSC had entered into the Agency Agreement as Ford been told of the contract under cover of Wyness' letter 5th November 1999 and Zhu and/or ACSC had purchased and paid over $240,000.00 to TOC for at least 657 memberships in the Club. The said information was contained in Wyness's letters to Ford of 29th October 1999, 5th November 1999 and also in an Ernst and Young Audit of TOC which Ford received early December 1999 and emailed to Reading." 325Reliance is placed on the following parts of the judgment of Bergin J: "[135] Ford advised Reading that she intended to explain to Go that the Club was seeking legal advice on the "whole issue" and that the plaintiff had paid $260,000 approximately for around 730 memberships. She explained that she intended to advise Go that the 'Zhu Contract was terminated by TOCMS in September and that SOCOG had no arrangement with Mr Zhu and would not be entering into any in the future'. She further explained that she intended to advise Go that SOCOG would not be offering 'any International Memberships or engaging any other agents in the future' and that SOCOG were currently exploring whether to refund the plaintiff money or fulfil obligations to provide the kits." "[435] There is no doubt that Ford knew the plaintiff had purchased at least 657 memberships. Her evidence about her attempts to understand the concept of International Memberships was quite extraordinary having regard to the seniority of her previous position and the importance of the position with SOCOG. The impression I am satisfied she sought to convey was that as hard as she tried no one would assist her with an explanation. I am satisfied that she had decided not to telephone Wyness to have an open and frank discussion with him because she was suspicious of him. That is why she told Ernst & Young not to make contact with him or Noble." "[441] From the moment SOCOG took over the Club the plaintiff's rights under the Agency Agreement were totally disregarded. SOCOG decided that it did not want to deal with the plaintiff and did not have the commercial courtesy to write to the plaintiff directly or to telephone him or to suggest a meeting for the purpose of discussing either the future conduct of the Club or what it was that SOCOG had in mind in respect of the $230,006 that the plaintiff had paid to the Club. It is clear it took the view that it was required to do something about the plaintiff's contract of which it had knowledge by Reading's use of the words in his direction to Wyness to get 'us out' of the arrangements. It decided to retain the money whilst it shuffled between the option of returning the plaintiff's money or providing the Welcome Kits. This decision apparently proved too difficult for it to reach and had not even been made at the time it took part in the 3 December 1999 meeting with the OI Centre and Strike Force. It retains that money to this day." "[445] SOCOG did not inform the police of the fact that TOC had extended the Agency Agreement in consideration of the payment by the plaintiff of over $200,000. It knew that a person claiming to be his sub-agent had been arrested. It knew that the police intended to notify international policing agencies and must have understood the consequences of allowing that to occur. SOCOG was not without the resources to act properly. It had a team of legal people who could have been brought into the matter a great deal earlier than they appear to have been on 14 December 1999. For Reading to simply inform the police that they could look at SOCOG's documents without alerting them to the 4 June 1999 letter of which I am satisfied Reading was well aware and the civil dispute that had arisen in respect of the purported termination on 5 November 1999 was in my view reprehensible."
Matter S: Assessment 326The nominated paragraphs of the judgment do not refer to $240,000, October 1999 or March 1999. There is a reference to "at least 657 memberships" having been purchased, but the purchaser is identified in the statement of claim as "Zhu and/or ACSC", whereas the judgment refers to purchase by Zhu.
Matter T: Contention 327The relevant part of the statement of claim is: "In June 1999, the Agency Agreement had been extended by TOC to December 2000 in consideration for a payment of over $200,000.00 from Zhu and/or ACSC to TOC." 328Reliance is placed on two parts of Bergin J's judgment, paragraphs [65] and [445]. The latter is set out at [324] above. The former is as follows: "[65] On 31 May and 1 June 1999 the plaintiff paid the further amounts required pursuant to his discussions with Noble and Wyness and on 4 June 1999 was issued with a letter signed by Wyness in identical terms to that issued in March save that the period 1 April 1999 to 30 June 1999 was replaced by the period 1 April 1999 to 31 December 2000."
Matter T: Assessment 329The quoted paragraphs of the judgment refer to a payment of "over $200,000" by Mr Zhu, not to a payment of over $200,000 by "Zhu and/or ACSC".
Matter U: Contention 330The relevant part of the statement of claim is: "In August 1999, SOCOG had given assurances to the Chinese Consul that the Olympic Club and Zhu and/or ACSC's agency were genuine." 331Reliance is placed on the following parts of the judgment of Bergin J: "[95] On 5 August 1999 the Cultural Consul of the PRC of the Consulate General's staff in Sydney, Wang Zhiang, attended the Club's offices at Chatswood with the plaintiff, Zhang, Mr Lin and Hu and met with Wyness. Consul Wang asked Wyness whether the Club was genuine and an official SOCOG organisation. He also asked whether it was 'genuine' that the plaintiff had an agency to sell memberships in China. Wyness said 'Yes it is, I can show you some documents which will prove the Olympic Club is a genuine SOCOG body and yes, Mr Zhu is our Olympic Club agent for China'." "[442] Reading's direction to the SOCOG employee to provide Consul Wang with the excuse that SOCOG had not decided what to do about International Members when he knew that he had given a direction to Wyness to 'stop' the plaintiff is hardly the way a statutory body would be expected to deal with an official representative of another government in relation to the enquiries the Consul was making. By this time the Consul had already been informed that the plaintiff and the Club were 'genuine'. The internal correspondence and e-mails in November 1999 evidence a totally unedifying performance by a statutory body. The failure to meet with Mr Go and the obvious 'fobbing off'' tactics that were employed were in the circumstances disgraceful."
Matter U: Assessment 332The statement of Wyness recorded in paragraph [95] of the judgment, if a statement of SOCOG, might warrant compulsion of an admission that SOCOG had given the consul assurances that the Olympic Club was a genuine body and that Mr Zhu was SOCOG's Olympic Club agent for China. But it does not justify compulsion of an admission that there was any agency (genuine or otherwise) of ACSC.
Matter V: Contention 333The relevant part of the statement of claim is: "Many blank certificates had been issued by SOCOG, TOC and/or the Club to Zhu and/or ACSC and that these were part of a kit of paraphernalia that Zhu and/or ACSC were entitled to use or have used." 334Reliance is placed on the following part of the judgment of Bergin J: "[386] The question posed in Dickenson 'do you want to proceed against these people' was not put in express terms to SOCOG. However the consultation between SOCOG and the OI Centre and the Strike Force on 3 December 1999 was to the same effect. The information that the Certificates were not genuine provided by SOCOG was pivotal to the exercise of DS Nicholls's discretion to arrest the plaintiff. In my view to suggest that the complaint was from a third party and not SOCOG does not accurately reflect the reality of the situation. This was a complaint that the plaintiff was acting criminally and at no stage prior to the arrest of the plaintiff did SOCOG withdraw or qualify that information in any way. It had that opportunity on 3 December 1999. It did not inform DS Nicholls that many blank certificates had been issued to the plaintiff and that these were part of a Kit of paraphernalia that the plaintiff was entitled to issue or have issued."
Matter V: Assessment 335Paragraph [386] of the judgment refers to many blank certificates having been issued to Mr Zhu. It says nothing about the issue of many blank certificates to ACSC in addition to, or instead of, Mr Zhu. Nor is there reference to the identity of the issuer as "SOCOG, TOC and/or the Club". Also, while there was, in the judgment, reference to a "kit of paraphernalia that the plaintiff [Mr Zhu] was entitled to issue or have issued", there is no referenced to "Zhu and/or ACSC" - or anyone else - being "entitled to use or have used" any "kit of paraphernalia".
Matter W: Contention 336The relevant part of the statement of claim is: "Zhu and/or ACSC and TOC and SOCOG were involved in a civil dispute arising from the termination by SOCOG of the Agency Agreement in November 1999 and Wyness had advised Ford of the said civil dispute by 29 November 1999." 337The part of the judgment of Bergin J relied on is: "[437] All she [Ford] had to do was pick up the telephone and ask Wyness what the situation was with the plaintiff. If she had done that in late November 1999 when she was dealing with DS Nicholls I have little doubt that she would have been informed that Wyness had written to the plaintiff purporting to terminate the agreement and that the plaintiff's solicitors were challenging such purported termination. The press release issued by SOCOG on 12 December 1999 in which it claimed that to the best of its knowledge 'any arrangement that may have been in place prior to SOCOG assuming control of the Olympic Club in August was terminated by the previous management of the Olympic Club' is also quite extraordinary in the circumstances. SOCOG well knew by this time that the letter of 5 November was the time at which Wyness wrote to the plaintiff, long after it took over the Club. It also knew that such was at its direction and it well knew that the plaintiff was challenging the entitlement to terminate his contract. This exemplifies SOCOG's conduct in relation to the way it dealt with the plaintiff which was high handed and disgraceful."
Matter W: Assessment 338Paragraph [437] of the judgment makes no reference to ACSC or TOC as parties to any dispute.
Matter X: Contention 339The relevant part of the statement of claim is: "International sales to the Chinese were a well known strategy of TOC as was advised in the said Ernst and Young report which Ford provided to Reading." 340The part of the judgment of Bergin J relied on is: "[157] Ernst & Young advised that they had reviewed the deposit books and bank statements in relation to the relevant entries for the Chinese International Memberships. They noted that the quality of the record keeping was 'poor' and recommended that Wyness and Noble be interviewed. Importantly the report stated that 'International Sales was not a secretive initiative but a well known strategy of TOC' and referred to the fact that their 8 July 1999 report had made specific reference to such sales with the estimate of revenues from that program. This did not quell the rising tide of suspicion within SOCOG about the plaintiff's conduct."
Matter X: Assessment 341The most that paragraph [157] of the judgment might warrant, in terms of an admission on the relevant matter, is that Ernst & Young had stated a conclusion or opinion of their own that international sales (without reference to any particular part or parts of the world) were a well known strategy of TOC.
Matter Y: Contention 342The relevant part of the statement of claim is: "Subsequent to 3 December 1999, Ford and/or Reading on behalf of SOCOG, failed to bring to the attention of the Police information in its possession to the effect that the membership certificates were valid and that Zhu/ACSC the plaintiff and Liao were authorised by TOC and/or SOCOG to sell memberships I the Club to Chinese nationals." 343The parts of the judgment of Bergin J relied on are paragraphs [372] and [445]. The latter is set out at [322] above. The former is as follows: "[372] Ford knew that the plaintiff had paid nearly one quarter of a million dollars to TOC and she was hopeful that the whole thing would 'go away' if the kits and paraphernalia were given to the plaintiff. Her own correspondence and e-mails establish that she saw that as a cheaper alternative for SOCOG than refunding the plaintiff's money. It is my view that her failure to inform DS Nicholls of the payment by the plaintiff and the existence of at least six hundred and fifty seven memberships in the database was a significant omission by her and thus by SOCOG. Reading's failure to disclose that he had sighted the letter extending the plaintiff's agency to December 2000 and that there was a dispute as to whether the Agency Agreement had been terminated on 5 November 1999 was also a serious omission."
Matter Y: Assessment 344The identified paragraphs of the judgment refer to Ford having failed to inform DS Nicholls of a payment by Mr Zhu and the existence of at least 657 memberships in the database. The things thus identified as not conveyed or communicated do not, in their description, correspond with those in the extract from the statement of claim. In the case of Reading, the judgment refers merely to a failure to disclose sighting of a particular letter - again, a non-corresponding subject matter. 345It may be noted that paragraph [386] of Bergin J's judgment (set out above in relation to Matter V) refers to a failure by SOCOG to convey information in respect of certificates to DS Nicholls without, however, identifying Ford or Reading as a person who acted on SOCOG's behalf in that respect.
Matter Z: Contention 346The relevant part of the statement of claim is: "Ford knew that memberships had been made available by TOC for use by authorised agents." 347In support of the proposition that the admission should be compelled, Mr Zhang relied on all the passages of the judgment of Bergin J extracted above. Counsel made no attempt to identify any part with precision.
Matter Z: Assessment 348In the absence of identification of particular extracts, there is no sound basis for addressing the contention. 349One might perhaps speculate that there is an intention to rely on paragraphs [124], [431] and [435] of Bergin J's judgment (referred to above in relation to Matters O, A, M and S above). Those paragraphs, however, go to Ford's knowledge of Mr Zhu's having purchased international memberships but not the provision of memberships for use by authorised agents in general. The same is true of paragraph [135], on which the appellants relied in respect of Matter S above, which also refers to Ford's knowledge of agents more generally. It might also be noted that Bergin J's paragraph [434] (referred to above in relation to Matter M) suggests that Ford later became aware of TOC's "contractual arrangements" with agents including Mr Zhang, it does not specifically refer to her knowledge of "memberships" being made available by TOC for use by authorised agents.
The matters concerning Mr Liao said to require admissions 350The matters in respect of which Mr Liao says that the State should be compelled to make admissions are set out in an annexure to Mr Liao's notice of motion. They correspond with the Zhang matters, subject to the following adjustments: (a) Matters C, D, E, F and G are omitted. (b) In Matter A, the references to "the plaintiff and/or Liao" and and "the plaintiff and Liao" are replaced by references to "the plaintiff and/or Zhang" and "the plaintiff and Zhang". (c) In Matter B, the date of the arrest and charging is 1 December 1999. (d) In Matter H (first paragraph), the reference to "the plaintiff" is replaced by a reference to "the plaintiff and Zhang". (e) In Matter H (second paragraph), the reference is to the appointment of "the plaintiff and Zhang" as "sub-agents". (f) In Matter M, the references are to "the plaintiff and/or Zhang" and "the plaintiff and Zhang"; also the timing specification related to the provision of information to Wang and the police is omitted. 351Also, in the equivalent of Matter Y in the Liao document, there is a reference to "the plaintiff and Liao" which no doubt should be read as "the plaintiff and Zhang". 352The assessment in relation to each Liao matter corresponds with that expressed for the corresponding Zhang matter.
Decision on applications to compel admissions 353Mr Zhang and Mr Liao have not identified with precision any secure basis on which the particular findings of Bergin J put beyond controversy the particular allegations in their statements of claim in respect of which they say that admissions should be compelled. In some instances, earlier findings support the admission to a certain extent but not fully. The plaintiffs were not content to seek admissions only to that extent. 354In any event and for reasons discussed above in relation to the strike-out questions, a court should not force a defendant to accept a proposition said to have been established in earlier proceedings brought by another person against that same defendant unless it would be unfair to require the plaintiff to prove the matter in the usual way or adherence to that requirement would bring the administration of justice into disrepute. In my opinion, those forces are not at work here. 355Mr Zhang and Mr Liao have not shown that the primary judge's discretion miscarried in the House v R sense when he declined to order that the admissions sought be made.
The State as "model litigant" 356Counsel for Mr Zhang and Mr Liao referred to the position of the State as a "model litigant" - a reference, I think, to the expectation expressed by Griffith CJ in Melbourne Steamship Co Ltd v Moorehead [1912] HCA 69; (1912) 15 CLR 333 at 342 that it should be "axiomatic that the Crown never takes technical points, even in civil proceedings. . .". At the same time, however, the State "is not obliged to fight with one hand behind its back in proceedings"; and "has the same right as any other litigant notwithstanding it assumes for itself, quite properly, the role of a model litigant": Brandon v Commonwealth [2005] FCA109 at [11] per Whitlam J. 357It is sometimes possible to say that a particular stance taken in litigation is technical, in the sense that it lacks all substantive merit and is supportable only on a narrow or literal appreciation or interpretation that is at odds with clear reality. I do not regard any part of the stance taken by the State on the matters the subject of these reasons as being of that quality.
Disposition 358I propose that the appeal be dismissed with costs.
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 April 2014
[1988] HCA 9
[2013] SASCFC 38
[1994] HCA 42
(2009) 239 CLR 175
(2004) 221 CLR 400
(1992) 26 NSWLR 738
(2005) 223 CLR 1
(2003) 215 CLR 317
(1992) 35 FCR 43
(2003) 58 NSWLR 188
(1988) 62 ALJR 190
(1912) 15 CLR 333
(2001) 53 NSWLR 198
(1994) 181 CLR 251
(1993) 177 CLR 378
(2004) 218 CLR 530
(1936) 55 CLR 499
(1981) 148 CLR 170
[2009] HCA 27
[1936] HCA 40