Plaintiff v Defendants

1 By summons dated 13 July 2023 ('Ma Summons'), the plaintiff, Huaisheng Ma ('Mr Ma') sought orders that the amendments made in paragraphs 40(c) and (d) and paragraph 42 of the amended defence dated 19 June 2023 ('Amended Defence') of the third defendant, Hickory Building Systems Pty Ltd (ACN 134 548 468) ('Hickory'), and the fourth defendant, Michael Argyrou ('Mr Argyrou'), (collectively 'Hickory Defendants') be disallowed pursuant to rr 25.02(5) and 36.04(2)(a) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) ('Rules'). Alternatively, Mr Ma seeks that that those paragraphs be struck out pursuant to rr 23.02 (c) and (d) of the Rules. Mr Ma relies on two affidavits of Peter Edmund Cash, the first affirmed on 13 July 2023 ('First Cash Affidavit') and the second on 24 July 2023 ('Second Cash Affidavit').

2 In response to the Ma Summons, by summons dated 17 July 2023 ('Hickory Summons'), the Hickory Defendants applied for orders pursuant to rr 22.02(5) and 36.01 of the Rules for leave to withdraw admissions made in paragraphs 40, 42 and 43 of the Amended Defence and leave to file and serve a further amended defence ('PFAD') in the form exhibited to the affidavit of Raphael Leibler affirmed on 17 July 2023 ('Leibler Affidavit'), on which they rely.

3 This proceeding was commenced by writ on 12 February 2020. It concerns:

(a) an alleged agreement made in or around late 2013 to early 2014 between the first and second defendants ('Qin Parties') and the Hickory Parties[1] for the construction of a factory in Jiaozuo, China ('Project'); and

(b) a subsequent alleged agreement made in or around November 2013 and March 2014 between Mr Ma and Ruibin Qin ('Mr Qin'), the first defendant, as to the terms of their participation in the Project.

4 Central to the allegations in the proceeding is a claim by Mr Ma that he provided funds in connection with the Project, which funds he now seeks to recover.

5 On 7 February 2022, Mr Ma filed and served his statement of claim ('SOC'). The proceeding was commenced after Mr Ma made an application for preliminary discovery in early 2018. The lengthy history of the proceeding, including the preliminary discovery application, and the timing of the application by the Hickory Defendants is a matter to which I will return.

6 On 6 May 2022, the Hickory Defendants filed their defence ('Defence').

7 On 24 March 2023, Mr Ma filed an amended statement of claim.

8 By a further amended statement of claim dated 19 May 2023 ('FASOC'), Mr Ma alleges breach of an undocumented side agreement with Mr Qin in relation to the Project.

9 After Mr Ma filed his FASOC, from August 2022 to May 2023, discovery took place which included the manual review by the Hickory Parties of some 14,653 documents.[2] Thereafter, the Hickory Defendants took steps to amend their pleading.

10 On 19 June 2023, the Hickory Defendants filed and served their Amended Defence. The Amended Defence purported to withdraw admissions to paragraphs 40 and 42 of the FASOC, and to insert particulars of a new defence to paragraph 40. Mr Ma contends that these amendments are significant in substance and have been made to long-standing admissions.

11 On 21 June 2023, Mr Ma invited the Hickory Defendants to apply for leave to withdraw the admissions, noting that the Hickory Defendants had sought to withdraw those admissions without consent or leave. The Hickory Defendants initially declined to do so, resulting in Mr Ma applying on 13 July 2023 for orders disallowing or striking out those amendments.

12 On 17 July 2023, the Hickory Defendants applied for leave to withdraw those admissions (as well as a further admission to paragraph 43 of the FASOC), and to file the PFAD. In preparing the Hickory Summons, the Hickory Defendants have further revised their Amended Defence and now move the Court for leave to file the PFAD, not the Amended Defence. The Hickory Parties submit that the PFAD corrects an omission at paragraph 43 but is otherwise consistent with the Amended Defence.[3]

13 The PFAD makes various amendments to the Defence, however, only three paragraphs are disputed. The disputed amendments relate to withdrawal of the admissions originally made in paragraphs 40, 42 and 43 of the Defence regarding the categorisation of a payment.

14 In this regard, the Hickory Defendants and Mr Ma accept that in October 2015, Mr Ma made a payment of approximately AUD $5million to the Hickory Parties ('Payment') in connection with the Project. The basis of the Payment is disputed. It is that dispute, and the consequential application to withdraw admissions, which is at the core of the competing applications.

15 Given the overlapping nature of the applications, I consider it convenient to address the Hickory Summons, being the application that ought to have preceded the Ma Summons.

16 Rule 25.02(5) of the Rules provides:

25.02 Discontinuance or withdrawal of proceeding or claim

(5) Paragraph (4) does not enable a party to withdraw an admission or any other matter operating for the benefit of another party without the consent of that party or the leave of the Court.

17 The relevant part of r 36.01 of the Rules provides:

(1) For the purpose of -

(a) determining the real question in controversy between the parties to any proceeding; or

(b) correcting any defect or error in any proceeding; or

(c) avoiding multiplicity of proceedings -

the Court may, at any stage order that any document in the proceeding be amended or that any party have leave to amend any document in the proceeding.

(6) Notwithstanding the expiry of any relevant limitation period after the day a proceeding is commenced, the Court may make an order under paragraph (1) where it is satisfied that any other party to the proceeding would not by reason of the order be prejudiced in the conduct of that party's claim or defence in a way that could not be fairly met by an adjournment, an award of costs or otherwise.

23.02 Striking out pleading

Where an indorsement of claim on a writ or originating motion or a pleading or any part of an indorsement of claim or pleading -

...

(c) may prejudice, embarrass or delay the fair trial of the proceeding; or

(d) is otherwise an abuse of the process of the Court -

the Court may order that the whole or part of the indorsement or pleading be struck out or amended.

19 In contest were three paragraphs of the PFAD. For completeness, I set out the three paragraphs of the FASOC and the corresponding defences:

(a) FASOC:

1. In fact, as at 17 October 2015, Instalment No 3 was not due under the Heads of Agreement, because (among other matters) the Jiaozuo factory had not yet been set up or commissioned.

42. On 20 October 2015, in reliance on:

(a) the false representation conveyed by the 1st Hickory receipt, as alleged in paragraphs 34 and 34A above; and

(b) the statements by Michael Argyrou referred to in paragraph 39 above,

Mr Ma paid RMB 23,045,000 (approximately $5 million) to Michael Argyrou, for the benefit of Hickory Building Systems, as Instalment No 3 under the Heads of Agreement (the Third Payment).

Transfer of RMB 27,000,000 from Mr Ma's bank account no 62281709000233439 to account no 6212263602064184617 in Michael Argyrou's name, of which RMB 3,955,000 was repaid to Mr Ma.

1. Pursuant to or as a consequence of the Heads of Agreement, and in consideration of payment by Mr Ma, on behalf of "Qin", of Instalment No 3, "Qin' became entitled to obtain:

(a) an allotment or transfer of a further 2% shareholding in Hickory Building Systems; and

(b) ownership of a further 10 units in the SMATA Unit Trust.

Particulars

Mr Ma refers to paragraph 19(c) above.

40. As to paragraph 40, they:

(a) admit that, as at 17 October 2015, the Jiaozuo factory had not yet been set up or commissioned;

(b) refer to and repeat paragraphs 24(c)-(d), 38 and 39 above and 42(a) below;

(c) say further that the Hickory Defendants understood that Mr Ma provided further funds in recognition of costs incurred by the Hickory Defendants in connection with the Jiaozuo factory, and to enable the JV to proceed despite unexpected challenges associated with the Jiaozuo factory; and

The Hickory Defendants refer to the following matters:

1. Ben Turner, the supervisor of a team of Hickory employees sent to Jiaozuo in around March 2014 (as referred to in paragraph 24(c) of the Further Amended Statement of Claim), regularly reported concerns regarding the Jiaozuo factory to the Hickory Defendants, Mr Ma and Mr Qin (amongst others) between around June 2014 and March 2015, including:

   1. ongoing issues with local Government approvals for construction of the Jiaozuo factory and the intended site; and

   2. ongoing issues with the level of skill and performance of staff engaged to work at the Jiaozuo factory, which meant that they were not able to be trained by the Hickory employees;

   3. although the parties had intended that modules for a Hickory project at La Trobe Street, Melbourne (La Trobe Project) would be manufactured at the Jiaozuo factory, this was not possible because the Jiaozuo factory was not completed in time;

   4. in around September 2014, it was necessary to set up a temporary factory in China while construction and set up of the Jiaozuo factory was progressed;

   5. in early October 2014, the Hickory Defendants decided that modules for the La Trobe Project should not be manufactured in China, but that materials for the La Trobe Project would be procured from China and assembled by Hickory in Australia;

   6. in around January 2015, the Hickory team were moved to Guangzhou, China to assist with the establishment of an alternative factory to be funded by China Southern Rail (China Southern Rail Factory), while construction and setup of the Jiaozuo factory was progressed;

   7. in around January 2015, Qin and the Hickory Defendants agreed that Hickory employees would return to assist with establishment of the manufacturing lines in Jiaozuo once the factory was ready;

   8. in around early February 2015, workers blocked access to the Jiaozuo factory because they alleged they were not being paid, and the Hickory team were required to evacuate the office building;

   9. in around September 2015, the Hickory Defendants decided that it was not viable to import modules from China, and that the Jiaozuo factory would be set up only to deliver modules within China;

   10. by October 2015, the Jiaozuo factory was significantly behind schedule; and

   11. in around November and December 2019, the People's Court of Bo'ai County, Henan Province executed rulings and enforcement notices in relation to labour disputes between workers at the Jiaozuo factory and Kuaiyiju (as defined in paragraph 23 of the Amended Statement of Claim).

(d) otherwise do not admit the allegations in paragraph 40.

42. As to paragraph 42, they:

(a) admit Mr Ma paid RMB 23,045,000 (approximately AU$5 million) to Mr Argyrou for the benefit of Hickory;

(b) refer to and repeat paragraphs 24(c)-(d), 34, 34A, 34D, 39 and 40 above;

(c) say further that:

1. Mr Ma was a sophisticated commercial businessperson with substantial resources at his disposal; and
2. if the representations as pleaded in paragraph 39 of the Further Amended Statement of Claim were made by Mr Argyrou (which is not admitted), Mr Ma could have and should have sought independent legal advice as to their accuracy; and

43. They deny paragraph 43 and refer to paragraph 42 above.

20 The Hickory Summons was made under rr 25.02(5) and 36.01 of the Rules.

21 The law in relation to applications for leave to withdraw an admission is well settled. Whether an amendment should be permitted is a matter of discretion. A party will not be permitted to withdraw an admission in a pleading 'without good cause'.[4] Whilst the general rule is that all amendments should be permitted (including an amendment to a defence) unless the amendment will cause prejudice to the other party which cannot be overcome in some way,[5] it is neither possible nor desirable to delimit the factors that the Court may take into account in exercising the discretion.[6]

22 In Gregorich v Khouri ('Gregorich'),[7] Nichols J carefully summarised the considerations relevant to the exercise of the Court's discretion, which I respectfully adopt (citations omitted):[8]

[7] An amendment will not be permitted where it would cause irremediable prejudice to the other party. On an application to amend the applicant bears the burden of persuasion that the amendment will not cause such prejudice, while the party opposing the amendment bears an evidential onus of adducing evidence on the question of prejudice. The question is whether the possibility of prejudice or injustice to the opposing party has been excluded. If it has not, the application must be refused. It must also be refused if the Court concludes that it cannot decide whether it is just to allow the amendment.

[8] The loss of an opportunity to take a step in the proceeding in response to a denial may constitute relevant prejudice. An order for indemnity costs may not always undo the prejudice a party suffers by a late amendment. Case management considerations may inform the justice of the grant or refusal of an application to amend.

[9] A court will usually require an explanation for the change in position. In McKenzie v Commonwealth and in Jeanes v Commonwealth Gillard J said that it is not the law that a defendant is not permitted to withdraw an admission unless it was shown to have been made inadvertently or through error, and that the absence of a reasonable or adequate explanation will not determine the outcome of an application in the face of compelling reasons of justice. As Gillard J observed, the criteria for the exercise of the discretion conferred by Rule 36.01(1) are those articulated in the Rule itself. Accordingly, there is no separate rule that the reasons for and explanation of a change of position will of themselves dictate the outcome of an application to withdraw an admission.

[10] Nevertheless, an explanation is ordinarily called for in recognition of the fact that the making of an admission is regarded as a serious step for a party to take - its effect being to remove the admitted fact from the arena of controversy between the parties. Thus it has been said that a party will not be permitted to withdraw an admission in a pleading "without good cause".

[11] That is a more particular emanation of the principle that generally speaking, where a discretion is sought to be exercised in favour of one party and to the disadvantage of the other, an explanation will be required. An explanation is required in order to permit the court to see that the application is brought in good faith and to weigh the circumstances against the effects of an amendment and the objectives of the relevant rule. In Aon Risk Services French CJ said that one consideration in the exercise of an interlocutory discretion is the potential loss of public confidence in the legal system which arises where a court is seen to accede to applications made without adequate explanation or justification.

[12] It has been often said in the context of applications to withdraw admissions, that the explanation proffered should be based on evidence of a "solid and substantial character". However, what is adequate will depend upon the circumstances of the particular case.

[13] Finally, it is now understood (at least since the High Court's decision in Aon) that parties must be given a fair trial and a sufficient opportunity to identify the issues they seek to agitate, but according justice in an application to amend is not to be equated with a requirement to afford a party an unlimited opportunity to amend its case.

23 In Gregorich, Nichols J referenced the need to take into account case management considerations. Necessarily, those considerations include the objectives stated in r 36.01(1)(a)-(c) of the Rules, the overarching purpose and the overarching obligations in the Civil Procedure Act 2010 (Vic) ('CPA').

24 Section 47(1) of the CPA states:

(a) Without limiting any other power of a court, for the purposes of ensuring that a civil proceeding is managed and conducted in accordance with the overarching purpose, the court may give any direction or make any order it considers appropriate, including any directions given or orders made -

(b) in the interests of the administration of justice; or

(c) in the public interest.

25 In exercising its powers, the CPA provides that the Court must seek to give effect to the overarching purpose[9] 'to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute'.[10]

26 Section 9 of the CPA, titled "Court's power to further the overarching purpose", provides:

(1) In making any order or giving any direction in a civil proceeding, a court shall further the overarching purpose by having regard to the following objects -

(a) the just determination of the civil proceeding;

(b) ...

(c) the efficient conduct of the business of the court;

(d) the efficient use of judicial and administrative resources;

(e) minimising any delay ... beyond that reasonably required for any interlocutory steps that are necessary for -

(i) the fair and just determination of the real issues in dispute; and

(ii) the preparation of the case for trial;

(f) the timely determination of the civil proceeding;

(g) dealing with a civil proceeding in a manner proportionate to -

(i) the complexity or importance of the issues in dispute; and

(ii) the amount in dispute.

(2) For the purposes of subsection (1), the court may have regard to the following matters -

(a) ....

(b) the extent to which the parties have used reasonable endeavours to resolve the dispute by agreement or to limit the issues in dispute;

(c) the degree of promptness with which the parties have conducted the proceeding...;

(d) the degree to which any lack of promptness ... has arisen from circumstances beyond the control of that party;

(e) the degree to which each person ... has complied with the overarching obligations in relation to the proceeding;

(f) any prejudice that may be suffered ...

(3) This section does not -

(a) limit any other power of a court to make orders or give directions; or

(b) preclude the court from considering any other matters when making any order or giving any direction.

27 All persons to whom the overarching obligations apply must also use reasonable endeavours to resolve issues in dispute by agreement and narrow the issues in dispute[11], act promptly and minimise delay.[12]

28 In the oft cited decision in Aon Risk Services Australia Ltd v Australian National University ('Aon'),[13] the Court dealt with the meaning of a rule in similar terms to r 1.14 of the Rules[14] and was decided prior to the commencement of the CPA. Aon states:[15]

Of course, a just resolution of proceedings remains the paramount purpose of r 21; but what is a "just resolution" is to be understood in light of the purposes and objectives stated. Speed and efficiency, in the sense of minimum delay and expense, are seen as essential to a just resolution of proceedings. This should not detract from a proper opportunity being given to the parties to plead their case, but it suggests that limits may be placed upon re-pleading, when delay and cost are taken into account. The Rule's reference to the need to minimise costs implies that an order for costs may not always provide sufficient compensation and therefore achieve a just resolution. It cannot therefore be said that a just resolution requires that a party be permitted to raise any arguable case at any point in the proceedings, on payment of costs.

29 In Traffic Technique Pty Ltd v Burgmann,[16] the Court of Appeal held that the trial judge was correct to allow an application made by the plaintiff on the first day of trial to amend its defence and adduce additional expert evidence, resulting in the trial date being vacated.[17] The Court said that Aon should be understood as rebalancing the range of considerations which bear on adjournment applications with the consequence that procedural justice is to be given appropriate importance. Relevantly, for the purpose of this application, the Court said:[18]

... the rebalancing undertaken in Aon did not lead to the universal proposition that applications for an adjournment, even at a late stage, must fail. Delay is not necessarily decisive...

... there is no single universal approach to the question of whether to grant leave in response to an application for adjournment, and that questions about the fair hearing of the substantive merits of the case must be weighed alongside considerations of procedural justice for the litigants in question, the legal system more generally, and the need to preserve public confidence in that system...

...Those passages demonstrate that the question of whether to grant leave to amend a defence, or to grant an adjournment, can only be resolved by balancing a range of factors, no one of which is inherently subservient, or deserving of less weight, than any other.

...The thrust of Aon was to expand the range of interests to be taken into account (including the interests of non-parties who are litigants in other cases) in determining where the interests of justice lie and not to replace one almost universal rule with another...

30 The Hickory Defendants contend that they should be permitted to withdraw their admissions because:

(a) they have shown good cause with respect to the withdrawals;

(b) they have provided an adequate explanation of the circumstances relevant to the admission and its proposed withdrawal; and

(c) Mr Ma will not be prejudiced by the amendments.

Historical circumstances - Preliminary discovery application and the admissions

31 Central to Mr Ma's opposition to the Hickory Defendants obtaining leave is his submission that he is prejudiced because the admissions, which are now sought to be withdrawn, are longstanding, having first been made in the context of a preliminary discovery application brought in 2018.

32 By application filed on 15 February 2018, Mr Ma, as applicant, sought preliminary discovery from, amongst others, the Hickory Defendants of eight categories of documents ('Preliminary Discovery Application'). There were two key affidavits filed in respect of the Preliminary Discovery Application:

(a) an affidavit of Mr Ma sworn on 9 February 2018 ('Ma Affidavit'); and

(b) an affidavit of Ms Poly Kiosses sworn on 26 March 2018 ('Kiosses Affidavit'), the General Counsel of the Hickory Group.

33 It is not necessary to set out all of the categories of preliminary discovery sought by Mr Ma other than observe that two categories included:

(a) "records or evidence of payments made in satisfaction of the seventh respondent's [the second defendant herein] obligation to pay the first to third instalments under the Heads of Agreement or Transaction Agreement";[19] and

(b) "documents from the third respondent, Mr Argyrou [the fourth defendant herein], being documents which record or evidence that the third instalment to be paid by the seventh respondent [the second defendant herein] pursuant to the Heads of Agreement or Transaction Agreement was due to be paid by 17 October 2015."[20]

34 Prior to the Preliminary Discovery Application, the Hickory Defendants denied that Ma had made any payments to them.[21]

35 In the Ma Affidavit, Mr Ma deposed that he made the Payment to Mr Argyrou, as instalment number 3 on 20 October 2015:[22]

1. ... I told Michael that I would pay the third instalment of AUD5 million to him, provided that this money would be re-paid by him if the project later stopped anyway.
2. On 20 October 2015, I paid RMB27 million to Michael's personal bank account in China. This was in excess of AUD5 million, but Michael later refunded the surplus ...

36 Exhibited to the Ma Affidavit was a letter dated 14 December 2015 from Hickory in which Hickory confirmed that AUD $5million had been received from Mr Ma on 20 October 2015 ('2015 Hickory Letter') pursuant to what is referred to as a Transaction Agreement,[23] which I interpolate to be a reference to what is pleaded as the Heads of Agreement.

37 The relevant part of the 2015 Hickory Letter is in the following terms:[24]

Dear David

Transaction Agreement with Qin Group Holdings Pty Ltd & Ors ('Agreement')

Please find enclosed, for your records, our Receipt of the $5,000,000 received on 20 October 2015.

These monies were received from Mr Ma and were paid to us in consideration of the promises made by Qin Group Holdings Pty Ltd under the Agreement.

...

Yours faithfully

HICKORY BUILDING SYSTEMS PTY LTD

38 In response to the Preliminary Discovery Application, Ms Kiosses, deposed that the Payment was paid to Hickory as one of 'the first 3 instalments of AU $5 million'.[25] The relevant parts of the Kiosses Affidavit are extracted below:[26]

The Hickory Parties have been paid AU $15 million of the Qin Investment Sum as follows:

13. Those payments reflect the first three instalments of AU $5 million.

...

39 Ms Kiosses did not dispute Mr Ma's evidence that he made the Payment on 20 October 2015. The evidence, which she gave on information and belief from Mr Argyrou, was consistent with Mr Ma having the Payment on 20 October 2015 as instalment No 3. To this end, later in her Affidavit, Ms Kiosses deposed that:[27]

1. Mr Ma deposes to meeting with Michael, Mr Qin and others in the afternoon of 17 October 2015, in Guangzhou, at paragraph 43 of his affidavit. Michael informs me, and I believe, that at that meeting:

(a) Mr Ma said that he had paid all of the first two instalments to Hickory and that Mr Qin had paid nothing. In response Michael shrugged his shoulders and said words to the effect of "I don't know where the money comes from, but the Transaction Agreement is with Qin Group Holdings and that's what we've been working under"; and

(b) Michael said that the third instalment of AU $5 million was due and that it needed to be paid, that he "had a lot of other partners" in China and that if the third instalment was not paid he had many other potential partners in China.

1. I am informed by Michael and believe that Michael met with Mr Ma and Ma Fusheng again later that day (with an interpreter), after Mr Ma had requested a meeting. I am further informed by Michael that, contrary to paragraph 43 of the Ma Affidavit, Mr Ma did not say to Michael, on 17 October 2015 or otherwise, that he would pay the third instalment of AU $5 million on condition that this money should be re-paid if the project later stopped anyway. Nor did Michael say, or agree to, any such thing.
2. I am informed by Michael and believe that Mr Ma and Ma Fusheng met with Michael in December 2015, in the course of which meeting:

(a) Mr Ma asked Michael to arrange for the transfer of the shares in Hickory held by Mr Qin to Mr Ma or to a company called "Kuaiyiju" and said that the project could continue between Mr Ma and Hickory;

(b) Michael declined the request, and said words to the effect that:

(i) "the Transaction Agreement is what I am complying with and the Transaction Agreement is with Mr Qin"; and

(ii) "I don't really know any specific details of your personal dealings with Mr Qin and they don't concern me";

(c) Mr Ma then asked Michael to refund the third payment because he said that the project could not continue. Michael refused to refund the money and said words to the effect that Mr Qin had claimed that Mr Ma owed him money, and that the AU $5 million was therefore Mr Qin's money, not Mr Ma's. Mr Ma then said this was not correct and said that Mr Qin had not provided any money for the venture;

(d) Michael then again said words to the effect of:

(i) "the Transaction Agreement is what I am complying with and the Transaction Agreement is with Mr Qin"; and

(ii) "I don't really know any specific details of your personal dealings with Mr Qin and they don't concern me".

1. I am informed by Michael and believe that, at that meeting, he gave Mr Ma a copy of a letter from Hickory to B2B Lawyers dated 14 December 2015. A copy of the letter sent to B2B Lawyers and given to Mr Ma is included at page 158 of Exhibit MH-1 to the Ma Affidavit. Hickory had written that letter (and provided the enclosed receipt) to B2B Lawyers at B2B Lawyers' request. B2B Lawyers also requested that Hickory provide the copy to Mr Ma. B2B Lawyers asked Michael to write that letter but did not provide reasons for that request. I am informed by Michael and believe that he did not provide Mr Ma with the emails at page 163 to 164 of Exhibit MH-1 to the Ma Affidavit, referred to at paragraph 52 of the Ma Affidavit.

40 In considering this evidence, it is significant that in the reasons delivered in respect of the Preliminary Discovery Application, Lansdowne AsJ in Ma v Hickory Building Systems Pty Ltd & Ors[28] ('Preliminary Discovery Reasons') held as follows:

Documents sought from the third respondent

Right to obtain relief: r 32.05(a)

1. The applicant contends that he has an additional potential right of relief against the third respondent, Mr Michael Argyrou. This potential right to obtain relief is confined to the third payment made by the applicant in the sum of $5 million made by Mr Ma to the third respondent's personal bank account on 20 October 2015. Mr Ma says that he made this payment on the basis of a representation made by the third respondent that the payment was due and needed to be paid and that if it was not paid the first to sixth respondents had 'many other potential cooperation partners in China. [citation omitted] The applicant contends that this representation was false and misleading because under clause 4.5(e) of the Heads of Agreement the third payment was not in fact due. [citation omitted] Further he says that he relied upon it to his detriment, and accordingly has suffered loss.

2. The third respondent accepts that Mr Micharl Argryou said words to this effect; that Mr Ma then made this payment; and that clause 4.5(e) of the Heads of Agreement is the relevant clause. The third respondent does dispute that the payment was not yet due that that clause. [citation omitted] The third respondent also disputes that Mr Ma relied on the representation, and submits that this would be the critical issue in any claim based on the representation.

...

Documents sought from the first to sixth respondents (the Hickory Parties)

...

Category 8

1. The documents identified in Category 8 are sought to identify which of the Hickory Parties has the obligation to reimburse the payments made by Mr Ma. I consider that these are reasonably required to assist Mr Ma in deciding which of the Hickory Parties to sue in respect of them. The evidence on that issue is inconclusive, and it is plainly critical to any suit.

2. Mr Ma has two receipts for the payments. The first receipt, for the first two payments, is on letterhead of the first respondent and son on its face suggests receipt by the first respondent alone. [citation omitted] However, the second receipt, in respect of the third payment, while also on the letterhead of the first respondent uses the plural to refer to the party or parties acknowledging receipt. [citation omitted] Further, the first respondent was not the only Hickory party to the Transaction Agreement; Mr Ma paid the first two instalments to accounts as directed by Mr Qin, not to Hickory accounts; and he paid the third instalment to Michael Argyrou's personal account.

3. The uncertainty is not clarified by the evidence for the Hickory Parties. Ms Kiosses does not identify which of the first to sixth respondents has received the payments, deposing only that the Hickory Parties collectively have received them. [citation omitted]

110. The applicant has satisfied the requirements of the Rule for Category 8.

41 Before me, Counsel for Mr Ma contended that it was apparent from Lansdowne AsJ's Preliminary Discovery Reasons that the Hickory Defendants admitted before Lansdowne AsJ that Mr Ma's Payment was made in discharge of the "Qin Investment Obligation" while denying that Mr Ma had any tenable cause of action against Hickory. Counsel for Mr Ma further contended that, as against Mr Argyrou, it is clear that the Hickory Defendants asserted that the critical questions were whether the third instalment was in fact due (which they have since admitted in paragraph 40 of the Defence that it was not), and whether Mr Ma had relied on Mr Argyrou's representation. I accept that those submissions accurately reflect the matters recorded in the Preliminary Discovery Reasons.

42 On 20 December 2018, Lansdowne AsJ ordered the Hickory Parties to give discovery of documents including records of the payments received as the first to third instalments under the Heads of Agreement, and how those payments were accounted for - being the documents that were reasonably required to assist Mr Ma in deciding whether to commence a proceeding against the Hickory entities and, if so, which one(s) ('December 2018 Orders').

43 Ms Kiosses subsequently made an affidavit of discovery in response to the December 2018 Orders. Among the documents discovered were items 291 and 292 (referred to in the Leibler Affidavit) which, in response to category 8, evidenced Mr Ma's payment of RMB ¥27million (or the Payment) to Mr Argyrou on 20 October 2015.

44 It is against that backdrop that the Hickory Defendants seek to withdraw certain admissions. All of the admissions in question relate to the Payment, which the Hickory Defendants previously admitted Mr Ma paid to Mr Argyrou on 20 October 2015, for the benefit of Hickory.[29]

45 Specifically, the Hickory Defendants previously admitted Mr Ma's allegations that:

(a) Mr Ma made the Payment as Instalment No 3 under the Heads of Agreement;[30]

(b) as at 17 October 2015, Instalment No 3 was not then due under the Heads of Agreement, because the Jiaozuo factory had not yet been set up or commissioned;[31] and

(c) pursuant to the Heads of Agreement, in consideration of Ma's payment, the "Qin" parties became entitled to a further shareholding in Hickory.[32]

Hickory Defendants' explanation for change in position

46 The Hickory Defendants' explanation for their change in position was set out at paragraph 22 of the Leibler Affidavit, which is in the following terms:[33]

(a) Following the discovery process, a review took place of documents discovered by each of the parties to the proceeding.

(b) Documents were discovered that were relevant to the allegations in paragraphs [40] and [42] of the FASOC. Paragraph [42] was amended as part of the first round of amendments to the Statement of Claim (resulting in the Amended Statement of Claim).

(c) The documents illustrate the unexpected and costly challenges involved in progressing the Jiaozuo factory. The documents also show that no share transfers took place in connection with the payment made by Mr Ma on 20 October 2015. Examples of such documents from the discovery are at pages 219 to 269 of RYL-2. Electronic translations of the documents provided by the Plaintiff [sic] in Mandarin are included at pages 264 and 269 of RYL-2.

47 The Hickory Defendants otherwise contend that following discovery of the further documents referred to in paragraph 22(b) of the Leibler Affidavit, further conferences with relevant persons were held and instructions received.[34]

48 Mr Ma's primary position was that leave ought not be granted to the Hickory Defendants to withdraw their admissions and the amendments proposed by the Hickory Defendants should not be allowed (or struck out as the case may be) for four primary reasons:

(a) first, because of the prejudice that withdrawing the admissions would cause to Mr Ma, coupled with the central and longstanding nature of those admissions;

(b) second, because to allow the admissions to be withdrawn would undermine the utility of the preliminary discovery process; both the specific process that occurred before this case but more generally;

(c) third, because the case sought to be advanced through the proposed amendments has no reasonable prospect of success, principally because of inconsistency with the contemporaneous business records; and

(d) fourth, the amendment pleading is deficient and would be liable to be struck out.

Grounds 1 and 2 - Prejudice and the effect of the Preliminary Discovery Application

49 Before me, Mr Ma contended, through his Counsel, that the prejudice to him was self-evident - that he made his decision to sue the Hickory Defendants for restitution of the Payment in reliance on the evidence that the Hickory Defendants gave, together with their submissions and subsequent discovery, in response to the Preliminary Discovery Application.

50 Mr Ma's position was that he applied for preliminary discovery in order to ascertain whether to sue the Hickory parties and if so, to determine which party or parties to sue.[35] He submits that on the basis of the stance taken by the Hickory Defendants to the Preliminary Discovery Application, including the two affidavits of Ms Kiosses, he has pleaded and run a case against Hickory principally on the basis of restitution for the Payment, in circumstances where the Payment being made under the Heads of Agreement has consistently been admitted by the Hickory Defendants since at least 2018.[36] Mr Ma relies on the Kiosses Affidavit. He contends that only inconsistency between the Kiosses Affidavit and the disputed paragraphs in the PFAD which is the subject of this application is Ms Kiosses' categorisation of the Payment as the third instalment. To this end, Mr Ma submitted that the Payment was recognised by Hickory in the 2015 Hickory Letter, a letter that was written by Hickory less than two months after Mr Ma made the Payment.[37]

51 Mr Ma further submitted that if a defendant were permitted to resile from admissions made in the circumstances of the Preliminary Discovery Application, it would make a mockery of the preliminary discovery mechanism.

52 In Alex Fraser Pty Ltd v Minister for Planning,[38] Riordan J considered the purpose and jurisdictional threshold for applications for preliminary discovery, determining that (citations omitted):[39]

Accordingly, the jurisdictional threshold under r 32.05 is low. This is consistent with the following:

(a) The primary purpose of the rule is to advance the administration of justice by allowing a prospective plaintiff to make an informed decision on proper material about whether or not to bring a claim. The importance of this rule to the advancement of the administration of justice has been accentuated by the certification requirements on filing of civil proceedings under Part 4.1 of the Civil Procedure Act 2010. It is well established that the rule should be interpreted benevolently.

53 In BJ Bearings Pty Ltd v Whitehead,[40] Hargrave J considered the scope of r 32.05 observing that (citations omitted):[41]

(3) An applicant for preliminary discovery is entitled to be cautious before making a decision to embark upon costly litigation. This approach is consistent with the policy underlying the rule. It is also, of course, consistent with the policy underlying the Civil Procedure Act 2010 generally, and the 'proper basis certification' requirements in s 42 of that Act in particular.

54 I respectfully adopt the analysis of both Riordan J and Hargrave J.

55 Counsel for Mr Ma urged upon me that one of the purposes of r 32.05 of the Rules was to enable a plaintiff to make an informed decision on proper material whether or not to sue. In that context it, was submitted that preliminary discovery has an important function in avoiding the commencement of ill-founded litigation. Counsel for Mr Ma further submitted that preliminary discovery also informs a party of the likely costs and risks of litigation and whether it will be a worthwhile exercise to take those forensic risks.[42] Mr Ma submits that being able to rely on the outcome of a preliminary discovery application is important to the advancement of the administration of justice and the conduct of litigation, particularly determining the real issues in dispute.[43] I accept these submissions, with which I note the Hickory Defendants did not cavil.

56 Whilst no affidavit was sworn by Mr Ma directly in support of this application, he submitted through his Counsel that it would be prejudicial if the Hickory Defendants were allowed to run a new case which traverses, in respect of paragraph 40 of the Further Amended Defence and/or the PFAD, more than a page of particulars referencing vaguely pleaded sub-issues not previously raised in the proceeding where the relevant time period dates back more than ten years. Those allegations will, it was submitted, necessarily result in a wide ranging evidence gathering exercise in order to respond to the new allegations which concern obtaining local government approvals in China, temporary factories being established elsewhere in China, alleged labour unrest and disputes which caused issues with the development of factory in China. As a consequence of the proposed amendments (including the withdrawal of admissions), Mr Ma say that there will inevitably be another round of discovery which would likely include seeking documents in the Chinese language. That process, he contends, is not without significant cost. Mr Ma submitted that the obvious prejudice which arises from allowing the withdrawal of the admissions is that he would have to circle back and investigate a new and, it was alleged, spurious defence in late 2023 which if it had been raised properly, Mr Ma would have taken into account before 2020 in considering whether to sue the Hickory Defendants at all.[44] The Hickory Defendants did not dispute that the amendments contemplated would not necessitate further discovery, the need for investigations by Mr Ma, delay to the proceeding, or the incursion of costs.

57 As to the third and fourth grounds raised by Mr Ma, the key issues upon which he relies are:

(a) the inconsistencies between the Hickory Defendants' own contemporaneous business records (in particular the 2015 Hickory Letter and accompanying receipt dated 14 December 2015 and the internal accounting record dated 20 October 2015[45]) and the position now sought to be advanced, namely that the Payment by Mr Ma on 20 October 2015 was not on account of instalment number 3 but rather was for some other purpose;

(b) the inconsistencies between the Kiosses Affidavit and the position now sought to be advanced;

(c) the proposed amendments to paragraphs 40, 42 and 43 of the PFAD are, even if permitted, inconsistent with matters that are still admitted without qualification at paragraph 45 of the Defence; and

(d) the proposed amendment to paragraph 40(c) of the PFAD lacks proper particulars.

58 Mr Ma's position is that these inconsistences, which are unexplained in the Leibler Affidavit, together with the pleading deficiencies, render the amendments sought to be made lacking in any reasonable prospect of success such that they should not be permitted. He otherwise reiterates that the Amended Defence and/or the PFAD, if allowed, would generate additional delay and entirely avoidable and unnecessary expenses.

59 The Hickory Defendants contend that they have shown good cause. They say, having regard to the fact that the events to which this proceeding relate date back a decade, it is entirely unsurprising that the Hickory Parties have sought to amend following the discovery and review process outlined in the Leibler Affidavit.

60 The Hickory Defendants further contend that the admissions have stood since May 2022, being the time of the pleading, and not 2018, being the time of the Preliminary Discovery Application.[46]

61 In relation to the Preliminary Discovery Application, the Hickory Defendants say that the only inconsistency between the matters deposed to in the Kiosses Affidavit and the position now contended for in the PFAD is the characterisation of the Payment made by Mr Ma on 20 October 2015.[47] The Hickory Defendants urge that the Kiosses Affidavit should be considered in context - namely that it was sworn by a General Counsel in the context of the Preliminary Discovery Application when no proceedings were on foot.[48]

62 Further, the Hickory Defendants submit that the position taken in respect of this application, namely an application to amend and withdraw admissions, does not undermine the preliminary discovery process. They contend when the true nature and character of the preliminary discovery process must be considered - it being an application of limited scope, for a particular purpose and framed by the applicant for preliminary discovery,[49] and in respect of which decisions are made as to how much time and money ought to be invested in responding to the application.[50]

63 As to any suggestion of delay or the conduct of the proceeding more broadly, they point to the fact that Mr Ma has amended his SOC twice since filing it, introducing a claim of deceit and new factual allegations.[51]

64 The Hickory Defendants otherwise contend that, despite their invitation, Mr Ma has identified no prejudice caused by the Hickory Parties' proposed amendments.[52]

65 There was no dispute between the parties that the events to which this proceeding relate date back a decade. The Heads of Agreement was dated 21 March 2014. On 14 December 2015, Hickory acknowledged, in the 2015 Hickory Letter receipt of the Payment from Mr Ma. In 2018, the Hickory Defendants, via Ms Kiosses, provided two affidavits in the context of the Preliminary Discovery Application on which Mr Ma submits he relied. On 6 May 2022, the Hickory Defendants filed the Defence. Thereafter, from August 2022 to May 2023, discovery took place.

66 It is an uncontroversial proposition that it is common for parties to be permitted to withdraw admissions after discovery or similar process. A number of examples were cited by the Hickory Defendants, including:

(a) Mercieca v SPI Electricity Pty Ltd (No 2) ('Mercieca')[53] where Dixon J permitted withdrawal of an admission by SPI Electricity Pty Ltd ('SPI') as to the cause of the ignition of a fire after disclosure of evidence by other parties on the basis, inter alia, that (i) SPI was entitled to review the assumptions that resulted in the admission; (ii) the cause of ignition of the fire was the critical question in the proceeding; and (iii) there was ample opportunity for the plaintiffs to respond;

(b) Bodycorp Repairers Pty Ltd v Maisano (No 3)[54] ('Bodycorp') where Elliot J permitted the defendants to withdraw an admission that the plaintiff was a franchisee even though the statement of claim had been filed some 10 years earlier. The defendants explained that upon reviewing the documents in the court book in trial preparation, the issue became apparent. The plaintiff could identify no prejudice. In assessing the application, Elliott J observed that:[55]

As we can all appreciate this may happen from time to time in a case involving a large number of documents. In particular, this may occur in circumstances where the relevant facts are not within the knowledge of counsel's clients but are solely within the knowledge of the opposing party or parties. That is the case here. The AAMI Defendants' principal means of ascertaining the true position between Bodycorp and its franchisees, or purported franchisees, would be from the records of Bodycorp.

Accordingly, although the timing of the application is not ideal it is understandable and, in the circumstances, not unreasonable.

(c) Hornsby Shire Council v The Valuer General (NSW)__[56] where Garling J allowed withdrawal of an admission following review of "voluminous" material and the preparation of a joint advice from new Counsel on the basis, inter alia, that (i) the question to which the withdrawal of an admission related (whether a duty of care was owed) was complex; (ii) there was no irremediable prejudice; (iii) the litigation should not be fought on a false legal basis; and (iv) proceedings had not reached a stage at which it would be unjust to permit withdrawal.

67 Notably in Mercieca, what was offered was a detailed and comprehensive explanation for the change in position. Whilst an explanation was advanced before me, it was not, in the circumstances, detailed or comprehensive.

68 First, the Leibler Affidavit did not address how and why the original admission was made by Ms Kiosses, on information and belief from Mr Argyrou, concerning the third instalment payment firstly in the Preliminary Discovery Application and secondly in the original Defence filed in May 2022. Ms Kiosses' evidence before Lansdowne AsJ is unexplained. Unlike the circumstances in Bodycorp, the relevant facts concerning the categorisation of Payment were not only within the knowledge of Mr Argrou but he informed Ms Kiosses of those facts, and she in turn swore two affidavits in the course of the Preliminary Discovery Application on information and belief. Neither Mr Argrou or Ms Kiosses have sworn affidavits in support of this application offering an explanation for the change in position.

69 Senior Counsel for the Hickory Defendants urged that the characterisation of the Payment made eight years ago was at the heart of the dispute between Mr Ma and the Hickory Defendants. They point to the fact that evidence is yet to be filed. The Hickory Defendants contended that they should be permitted to put forward their account of the Payment to ensure adjudication of the real matters in controversy between the parties. The alternative, they contend, would result in an unjust outcome and is inconsistent with the overarching purpose of the CPA.

70 However, and unlike the position in Bodycorp, I was not taken to any documents which indicated to me that there was a real question about the status of the Payment. The documents referable to this point, being the contemporaneous accounting entry made by Hickory in October 2015,[57] the 2015 Hickory Letter and the Kiosses Affidavit sworn in 2018, all suggest that the Payment was on account of the third instalment.

71 Second, and related to the first issue, the Leibler Affidavit deposes that from August 2022 to May 2023, discovery took place which included a manual review by the Hickory parties of some 14,653 documents. Those statements are proffered it would seem, to attempt to explain the change in position as often occurs in cases involving a large number of documents. However, and as set out in the Second Cash Affidavit, a critical review of the 'recent' discovery reveals that:

(a) of the 22 documents which are exhibited at pages 219 to 269 of exhibit RYL-2 to the Leibler Affidavit, six of them (those at pages 227, 229, 236, 238, 241 and 252) have not been discovered by the Hickory Defendants in this proceeding;

(b) those six documents were each discovered in 2019 by the respondents (including Hickory) in the Preliminary Discovery Application (and were included in part 2 of schedule 1 to the plaintiff's list of documents dated 29 August 2022);

(c) 10 documents (those at pages 219, 221, 225, 226, 231, 235, 257, 258, 260 and 261 of exhibit RYL-2 to the Leibler Affidavit) were discovered by the Hickory Defendants by their original list of documents dated 26 August 2022 (and also in their amended list of documents dated 2 September 2022);

(d) four documents (those at pages 245, 247, 250 and 255 of exhibit RYL-2 to the Leibler Affidavit) were discovered by the Hickory Defendants by their further supplementary list of documents dated 28 April 2023;

(e) the documents at pages 262-263 and 266-267 of exbibit RYL-2 to the Leibler Affidavit were discovered by Mr Ma by his list of documents dated 29 August 2022; and

(f) excluding the documents at pages 262-263 and 266-267 of exhibit RYL-2 to the Leibler Affidavit:

(i) Mr Argyrou, was the sender or a recipient of all but two of the 20 emails;

(ii) George Argyrou, who is also a director of Hickory, was the sender or a recipient of 12 of those 20 emails; and

(iii) Hickory's General Counsel, Poly Kiosses, was the sender or a recipient of seven of those 20 emails.

72 The evidence of Mr Cash concerning the discovery attached to the Leibler Affidavit was not challenged.

73 Third, in Gregorich, Nichols J, in refusing leave, found that the justice of the case did not favour a grant of leave determining that the proposed amendments represented a substantive change of case in the face of directly contradictory evidence sworn earlier in or in connection with the proceeding by one defendant who was the principal player in the events the subject of the claim. Nichols J observed that the circumstances called for an explanation and that which was advanced was neither cogent nor persuasive.[58]

74 In this matter, whilst the Hickory Defendants did not make their admissions in pleadings until May 2022, the admissions embodied the position the Hickory Defendants had (via Ms Kiosses) explicitly and consistently taken since the Preliminary Discovery Application in 2018. Ms Kiosses' admission was made on oath in a sworn affidavit relied upon by the Hickory Parties to opposed the grant of preliminary discovery. It would seem a perverse outcome if a party to litigation were not entitled to rely on the sworn evidence given in respect of an application before the Court. In my view, it is not novel that a Court would have regard to the date when that admission was made, when assessing the duration for which the admission has stood, despite the admission arising outside of the pleadings, particularly when that admission arises on oath. Indeed, in Gregorich Nichols J makes reference to a substantive change of case in the face of directly contradictory evidence sworn earlier 'in or in connection with' the proceeding.

75 In those circumstances, I find the explanation for the change in position by the Hickory Defendants which is predicated on 'a review taking place following discovery' and 'documents being identified which supported the amendments', wanting. As Senior Counsel for the Hickory Defendants responsibly submitted, the issue as not that the Hickory Defendants did not have the documents exhibited to the Leibler Affidavit in their possession - this issue was that they may not have been considered and, extracted from them, relevant information.[59]

76 In the circumstances, I am not persuaded that the explanation proffered in the Leibler Affidavit is adequate, comprehensive or persuasive.

77 Fourth, I accept Counsel for Mr Ma's submission that the proposed amendments to the Defence will, if the admissions are withdrawn, only expand the issues in dispute. Whilst I accept that there is no trial date, which was urged upon me by the Hickory Defendants as being a relevant factor, the issue I am required to consider is what, if any, prejudice the proposed amendments cause Mr Ma and relatedly, what, if any, effect the amendments will have on the conduct of the proceeding, cognisant of the overarching purpose and overarching obligations in the CPA.

78 In Mercieca, Dixon referred J referred to two earlier decisions of Gillard J in Jeanes v The Commonwealth ('Jeanes')[60] and McKenzie v The Commonwealth ('McKenzie'),[61] including the following extract from Jeanes:[62]

It is not the law that a defendant is not permitted to resile from an admission unless it is shown the admission was made inadvertently or through error; justice is the determinant.

79 Dixon J then observed that the principles that apply are not controversial. An amendment to withdraw an admission is in essence no different from any other pleading amendment.

80 Relevantly, the decision in McKenzie pre-dated the introduction of the CPA. McKenzie also predated Amcor v Australian Corrugated Box Co,[63] where the Court of Appeal held, in respect to applications for amendment (citations omitted):[64]

On an application to amend the party opposing amendment bears an evidential onus of adducing evidence on the question of prejudice, while the applicant for amendment bears the burden of persuasion that the amendment will not cause irremediable prejudice to the other party.

Of course the prejudice to the applicants if the amendment is not permitted is obvious. But the question is whether the possibility of injustice or prejudice to the respondents has been excluded. If not the application must be refused. It must also be refused if the Court concludes that it cannot decide whether or not it is just to allow the amendments.

81 Before me, the Hickory Defendants submitted it was striking that Mr Ma had not gone on oath, arguing that Counsel for Mr Ma's submissions were entirely without an evidentiary basis.

82 That submission ignores the First Cash Affidavit which exhibited both the Ma Affidavit, and the Preliminary Discovery Reasons of Lansdowne AsJ. Mr Ma it was submitted, was entitled, to be cautious before making a decision to embark upon costly litigation. Having embarked on that litigation, and against the backdrop of the Preliminary Discovery Application, where the procedural prejudice now asserted by Mr Ma is apparent on its face, the fact that Mr Ma has not sworn an affidavit directly in support of the application is not a matter to which I would give significant weight in the exercise of my discretion. He contends, through his Counsel, that he will suffer prejudice. So much is evident from looking at the procedural steps which have been taken.

83 In order to permit the amendment, I must be satisfied that the possibility of injustice or prejudice to Mr Ma has been excluded. I not am not satisfied.

84 Fifth, the Hickory Defendants have not explained how the particulars to paragraph 40 of the PFAD can be properly advanced given Hickory's own business records, in particular the accounting records and 2015 Hickory Letter.

85 In Qin Qin Hou v Westpac ('Qin Qin Hou')[65] as per Warren CJ:[66]

At the outset I note that the appellants responded to and admitted the validity of the writs by the filing of the defences and, in particular, in not seeking to strike out the writs before entering an appearance. [citation omitted] Further, in the defences the appellants admitted the incorporation of Westpac, the first and second loan and the first and second mortgage. In order to resile from the admissions the appellants would need to seek leave to amend their defence. Such a grant of leave, after a trial has begun, is not given lightly and the party seeking the amendments must demonstrate good reason. [citation omitted] In this case, the appellants have not provided any evidence to the Court to support such an application. The defences were drafted by solicitors and have not provided any stood for a significant period of time. [citation omitted] To allow such an amendment would prejudice the position of the respondent. Furthermore, this proceeding is an appeal from an Associate Judge, it is not a trial at first instance. What the appellants have sought to do is to run a different case on appeal that is in conflict with its position at trial. The Court will only allow such a departure in exceptional circumstances [citation omitted] and only where the Court is satisfied that it is "expedient in the interests of justice". [citation omitted] The same factors listed above stand against allowing the appellants to change their position on appeal. Thus, at this point, it is not open to the appellants to make the assertions as to validity and illegality as they do to underpin the second subpoena. Thus, the reasons put forward to support the second affidavit are baseless. The documents sought are not relevant in the circumstances.

86 Adopting the language of Warren CJ in Qin Qin Hou, the Hickory Defendants have not provided adequate evidence to the Court to support the application. The defences were drafted by solicitors and have stood for a significant period of time. The same solicitors acted in respect of the Preliminary Discovery Application where evidence was given in 2018 which is consistent with the admissions contained in the original defences.[67] Moreover, Hickory's General Counsel remains, as it has since the time of the Preliminary Discovery Application, Ms Kiosses.

87 Whilst the Hickory Defendants sought to distinguish the factual circumstance of this case with those in Collie v Merlaw Nominees[68] and Qin Qin Hou, I do not accept Senior Counsel for the Hickory Defendants' submission that the relevant time for the admission is May 2022 or that I am confined to admissions made in the pleadings as opposed to those arising, on oath, outside the pleadings. Adopting the analysis of Nichols J in Gregorich, the absence of a formal pleading before May 2022 does not alter the position in relation to prejudice. The relevant admission in this matter arises firstly in the Kiosses Affidavit in 2018, which was then confirmed in the Defence. The Kiosses affidavit was sworn, voluntarily, in answer to Mr Ma's Preliminary Discovery Application. Mr Ma ought to be entitled to rely on the evidence filed in respect of an application for preliminary discovery - the very point of which is to assist a party to determine whether to commence litigation and against whom.

88 Finally, and not to diminish from its relevance, the Hickory Defendants have not adequately addressed how the withdrawal of admissions conforms with their obligations under the CPA.

89 In my view, the Hickory Defendants have not discharged the burden of showing that Mr Ma would not suffer irremediable prejudice by the amendment. Given the lengthy history of the dispute, the prior Preliminary Discovery Application and having regard to the overarching obligations of the CPA, it is my view that the prejudice is of a kind that cannot be satisfactorily remedied by the grant of an adjournment or an award of costs.

90 In my view, the possibility of prejudice or injustice to Mr Ma has not been excluded. The justice of the case does not favour the withdrawal of the Hickory Defendants' admissions made by paragraphs 40, 42 and 43 of the Amended Defence. Accordingly, the application must be refused. I direct the parties to confer and provide a minute to my chambers giving effect to this Ruling.

[1] The 'Hickory Parties' included Michael Argyrou (the fourth defendant), George Argyrou, Hickory Group Pty Ltd (ACN 091 236 912), Hickory Building Systems Pty Ltd (ACN 132 548 468) (the third defendant) ('Hickory'), Sync Building Systems Pty Ltd (ACN 161 999 024) ('Sync Building Systems'), SMATA Pty Ltd (ACN 165 436 573) ('SMATA') and 'entities yet to be incorporated': paragraph 15(a) of the further amended statement of claim filed on 19 May 2023 ('FASOC'). The 'Hickory Group' included Hickory, Hickory Group Pty Ltd (ACN 091 236 912), Sync Building Systems and SMATA: particulars to paragraph 4(c) of the amended statement of claim filed on 24 March 2023.

[2] Affidavit of Raphael Yehudah Leibler affirmed on 17 July 2023, [17], Exhibit RYL-2 pages 215-218 ('Leibler Affidavit').

[4] Mercieca v SPI Electricity Pty Ltd (No 2) [2011] VSC 656, [12] (Dixon J) ('Mercieca'); Chan v Valmorbida (No 2) [2020] VSC 633, [3], [8] (Delany J).

[6] Gregorich v Khouri [2020] VSC 5 ('Gregorich').

[9] Civil Procedure Act 2010 (Vic) s 8(1).

[10] Ibid, s 7(1).

[11] Ibid, s 23.

[12] Ibid, s 25.

[13] [2009] HCA 27; (2009) 239 CLR 175.

[14] Ibid, 210 [90] (Gummow, Hayne, Crennan, Keifel and Bell JJ).

[15] Ibid, 213 [98]. See also [5], [7], [30] (French CJ) and [119], [156] (Heydon J).

[16] [2020] VSCA 319 (Tate, Sifris and Osborn JJA).

[18] Ibid, [56]-[58] (Tate and Sifris JJA, Osborn JA agreeing) (emphasis added).

[19] Ma v Hickory Building Systems Pty Ltd & Ors [2018] VSC 813, [60] ('Ma').

[22] Affidavit of Peter Edmund Cash affirmed on 13 July 2013, Exhibit PEC-11 page 13 ('First Cash Affidavit').

[28] Ma (n 19), [79]-[80] and [107]-[110].

[29] See Further Amended Defence, [42(a)].

[30] See Statement of Claim, [42] and the corresponding admission (emphasis added).

[31] See Statement of Claim, [40] and the corresponding admission.

[32] See Statement of Claim, [43] and the corresponding admission.

[35] Transcript of Proceedings (11 October 2023) 23.24-23.26.

[37] First Cash Affidavit, Exhibit PEC-11 page 82.

[38] [2018] VSC 391.

[40] [2016] VSC 44.

[42] Transcript of Proceedings (11 October 2023) 26.2-26.5.

[45] First Cash Affidavit, Exhibit PEC-11 page 83.

[46] Transcript of Proceedings (11 October 2023) 45.29-45.30, 46.1-46.6.

[47] First Cash Affidavit, Exhibit PEC-11 page 19.

[48] Hickory Defendants' Submissions filed on 7 August 2023, [14] ('Hickory Defendants' Submissions').

[49] Transcript of Proceedings (11 October 2023) 67.10-67.17.

[51] Hickory Defendants' Submissions, [15].

[54] [2013] VSC 244.

[56] [2012] NSWSC 894.

[57] Affidavit of Peter Edmund Cash affirmed on 24 July 2023, PEC-13 page 58, Hickory cash receipts general ledger.

[59] Transcript of Proceedings (11 October 2023) 65.27-66.5.

[60] [2005] VSC 488 ('Jeanes').

[61] [2001] VSC 361.

[63] [2013] VSCA 223.

[65] [2014] VSC 606.

[67] Collie v Merlaw Nominees [2001] VSC 39; (2001) 37 ACSR 361, 379 [97] ('Collie').