Lu v Beijing Hua Xin Liu He Investment

Background 2 It appears that in broad terms, there are two areas of dispute in WAD 563 of 2016. One is a claim based on an alleged oral contract (alternatively estoppel by convention), which is brought by the first applicant in that proceeding (respondent in this one), Beijing Hua Xin Liu He Investment (Australia) Pty Ltd (Beijing) against the respondents in that proceeding, Mr Lu and Zeus Technology HQB Pty Ltd (Zeus). The claim is to the effect that Mr Lu is obliged to transfer his shares in Zeus to Beijing. As well, the second and third applicants in WAD 563 of 2016 seek orders against Mr Lu and Zeus to the effect that a resolution passed to subdivide the shares in Zeus is invalid. The summary judgment application related only to the first of these areas of dispute. 3 It should be noted at the outset that the application for summary judgment was brought unusually late in the course of the proceeding. It was in fact the second such application; a different summary judgment application brought at an earlier time by Mr Lu and Zeus had been allowed by the then docket judge, but that was overturned and the first summary judgment application dismissed by the Full Court. At the time of the second summary judgment application, the matter had been programmed to a trial which was expected to have been heard at some time between December 2021 and February 2022. The parties had complied with orders for the filing of affidavits as evidence in chief, and the provision of outlines of evidence in relation to oral conversations that were not to be the subject of affidavits. The second application for summary judgment was filed on 30 July 2021 and the parties agreed to the Court making orders to stay compliance with further programming orders pending the outcome of the application. But for the application and that stay, it is likely that the trial would have been held by February 2022. 4 Mr Lu has sworn an affidavit in support of the application for leave to appeal. He deposes as to the first summary judgment application, which the Full Court ordered to be dismissed in December 2017. He says that in October 2018, Beijing made significant amendments to the contract claim, including an alteration of the time at which the alleged oral contract was made, from 2010 to early May 2011, and an alteration to the place at which it was made, from China to Singapore. There were also new allegations that persons other than Beijing had paid certain amounts as part of the consideration for the transfer of the shares in Zeus. At the hearing on 14 April 2022, Beijing did not contest this account of the proceeding. 5 Mr Lu also deposes to the circumstances which, he says, led to the second summary judgment application. It is not necessary to go into detail; in summary, his evidence is that three documents or sets of documents that were not before the Full Court show that the contract claim does not have reasonable prospects of success. At [102] of the primary judge's decision, her Honour expressed concern about the timing of the second summary judgment application, notwithstanding that the documents now relied on had been available to Mr Lu from dates in 2018. I make no comment on whether those concerns are well founded, in case that becomes an issue in the application for leave to appeal. But I mention it to note that Mr Lu's affidavit in this proceeding does not say when he became aware of the documents or relevant circumstances, nor does he seek to explain the timing of the second summary judgment application in the affidavit. While his affidavit lists a number of documents in WAD 563 of 2016 to which he wants to refer, I was not taken to any of them at the hearing on 14 April 2022. 6 Most of Mr Lu's affidavit deposes to the merits of the application for summary judgment and so the merits of the proposed appeal. It is not necessary to go into detail about that because, appropriately, neither party addressed submissions to those merits at this preliminary stage of deciding the constitution of the court that will hear the application for leave to appeal. 7 Mr Lu's affidavit also asserts that the second area of dispute I have mentioned, as to the subdivision of the shares in Zeus, is of little consequence because the relative proportions of each shareholder's holding remains the same. On the face of things that is so, and Beijing has as yet addressed no evidence or submissions to the contrary in this proceeding. So while Beijing relied on the fact that determining the proposed appeal in Mr Lu's favour will not dispose of the whole proceeding, I place little weight on that. 8 Mr Lu says that if leave to appeal is refused, the matter will proceed to a substantial hearing, and that will take five days and will involve witnesses from different parts of the world, each of whom will require interpreters. The trial could take even longer because of what Mr Lu says has been Beijing's unwillingness to make admissions. Save for that last point, which may well be contentious, for present purposes (and, again, in the absence of submissions or evidence to the contrary), I am prepared to accept Mr Lu's estimate of what will be involved in the hearing. 9 Mr Lu's affidavit then contained some evidence about the financial consequences for him of the costs of proceeding WAD 563 of 2016 and of a trial. For reasons I do not need to go into, I was not inclined to put much weight on that particular evidence. I do not need to go into those reasons because, subsequent to the hearing on 14 April 2022, the parties agreed that those particular passages could be struck out. Evidence which remains in the affidavit after those passages are excised is as follows: The trial would impose huge emotional burden [sic] and stress on me and my family. The stress of what appears to be an unnecessary trial is compounded by the continuing stress I face every day. He also says that a costs order arising out of the first summary judgment application 'has adversely affected my health, my family's health [sic]'. While this evidence is at a high level of generality, it can be accepted for present purposes that proceeding to a five day trial will be stressful for Mr Lu.