Plaintiff v Defendants

1 By the defendants' oral application made on 29 April 2025, said to be made pursuant to liberty to apply, the defendants sought orders that the trial date be vacated and that the proceeding be re-fixed for trial on a date after 8 August 2025 (Application).

2 The Application was made in the context of the procedural history, events and circumstances referred to later below,[1] including:

1. the proceeding being commenced by a writ filed on 1 October 2021;

2. the proceeding being set down for trial by order made on 7 August 2024 to commence before me at 10:30am on 13 May 2025 (Trial Date);

3. the interlocutory steps leading to trial the subject of previous orders and extension orders having almost been completed and the proceeding being essentially ready for trial;[2]

4. the Court first becoming aware of the defendants' desire to have the Trial Date vacated by the terms of an email sent directly by the second defendant, Mr Murphy, to my Associates on 7 April 2025;[3] and

5. directions having been made on the papers on 11 April 2025 for the filing and service of materials and submissions, and an urgent hearing of the Application being scheduled before me on 29 April 2025.

3 For the reasons that follow, I have determined that the Trial Date should not be vacated, and that the trial should not be re-fixed for hearing on the first available date after 8 August 2025. I have also determined that liberty to apply, by no later than 4:00 pm on 22 May 2025, should be reserved to the defendants to apply for orders that the trial be adjourned part-heard to enable the giving of any evidence by Mr Gu, and the hearing of closing submissions, to take place on the first available date after 8 August 2025.

4 The defendants relied upon affidavits of the second defendant, Mr Murphy, sworn on 9 April 2025 (First Murphy Affidavit) and 17 April 2025 (Second Murphy Affidavit), and an affidavit of the defendants' solicitor, Mr Yujie (Jason) Shen, sworn 17 April 2025. The defendants also relied on an outline of submissions filed on 28 April 2025 (Defendants' Written Submissions).[4]

5 The plaintiff relied upon the affidavit of its solicitor, Ms Regina Tan, affirmed on 24 April 2025, and an outline of submissions filed on the same date.

6 As mentioned, the proceeding was commenced by a writ filed 1 October 2021 in respect of events prior to that time.

7 Very briefly, the plaintiff's claims made in its lengthy second further amended statement of claim dated 17 March 2025 relate to, among other things:

(a) four alleged short-term loans totalling $700,000 said to have been made to the first defendant (RAPL) in its own right and as trustee of what is defined as the RAPL Trust;

(b) three alleged short-term loans totalling $1,000,000 said to have been made by Zixiao Li to RAPL, or for which it is alleged RAPL is liable,[5] which loans are alleged to have been assigned to the plaintiff;

(c) claims under alleged guarantees of the said loans alleged to have been given by the second and third defendants;

(d) alleged misleading and deceptive conduct by the second and third defendants in connection with the alleged loans; and

(e) alleged fraudulent misrepresentations by the fourth defendant in connection with the alleged loans from the plaintiff.[6]

8 By their amended defence filed 29 July 2024,[7] the defendants each deny that they are liable as alleged on the various grounds set out in their defence, to which I refer, but the detail of which need not be set out. The allegations made by the defendants include allegations that any funds advanced were, or became, equity investments.

9 A review of the procedural history of the proceeding by reference to the Court file and the affidavits relied upon reveals that numerous procedural orders have been made over an extended period, including many being made by consent in relation to the timetable for the interlocutory steps in the proceeding and extensions of time for the taking of various steps. It is evident from the procedural history, the previous directions hearings before me, and the orders made during the period 19 November 2021 to date, that the parties have not advanced the progress of the proceeding as swiftly as they might have done. I refer, for example, to the terms of the many orders made between 19 November 2021 and 14 March 2025.

10 By order made 7 August 2024 the proceeding was set down for trial on the Trial Date before me. At that time, orders had been made on 26 July 2024 further extending the dates for various interlocutory steps so as to ensure that the interlocutory steps were completed and the matter was ready for trial by mid-November 2024 in case the trial could be heard in late 2024 or early 2025.

11 By email from the Court to the parties dated 27 February 2025, the Court informed the parties that it expected to be in a position to hear the proceeding commencing on 18 March 2025 and indicated that it proposed to bring the directions hearing date forward to 4 March 2025 to facilitate that course. By email from the plaintiff's solicitors dated 28 February 2025, the Court was informed that counsel for all parties were unavailable in March 2025 and that the plaintiff's key witness, Mr Wang, would be overseas at that time. Following receipt of this email, no order was made bringing forward the Trial Date, noting also that, upon a review of the file, it became evident that the parties had not met the timetable for the interlocutory steps set by the orders of 26 July 2024, or the extension dates for those steps set by the further orders made on 21 November 2024.

12 At a directions hearing on 14 March 2025, concern was again expressed by the Court regarding non-compliance with orders, further extension orders were again made, and additional directions were given in relation to the hearing of the trial, and an order made confirming that the trial of the proceeding remained fixed to commence on the Trial Date. At that time no application to vacate the Trial Date was made or foreshadowed by any party.

13 By an email from Mr Murphy directly to my Associates dated 7 April 2025, but not copied to the plaintiff, Mr Murphy requested that the Trial Date 'be postponed until 12 August 2025', referring to, among other things, the unavailability of a witness, Mr Gu, and funding challenges.

14 My Associates responded, copying all parties, by email the same day, noting that the matter remained fixed for trial and that if any application was to be made to vacate the trial date it should be made in the usual way. By an email from the defendants' solicitors later that evening, Mr Shen apologised regarding Mr Murphy's email being sent directly to the Court without his solicitor's knowledge and stated that they had spoken with their client and reiterated the importance of ensuring that all correspondence with the Court is conducted exclusively through legal representatives.

15 By email dated 9 April 2025, from the defendants' solicitors to the plaintiff's solicitor, Mr Shen stated that he had been instructed to seek to vacate the Trial Date to a date after 8 August 2025 subject to the availability of the parties and the Court, '... due to funding issues and the unavailability of our witness, Mr Gu'. The email stated that the details were set out in the attached affidavit of Mr Murphy, being the First Murphy Affidavit.

16 By reply email later the same day, the plaintiff's solicitors informed Mr Shen that they were instructed not to consent to the adjournment on the basis that the reasons cited for the adjournment were unsatisfactory. Reference was also made to various other matters, including: the Trial Date having been set in August 2024; arrangements for overseas witnesses having been made by the plaintiff; and a willingness to allow Mr Gu to appear and give evidence by audiovisual link.

17 By email dated 10 April 2025 the defendants' solicitors informed the Court that they were instructed to make an application, pursuant to the liberty to apply provision under the orders dated 14 March 2025, seeking to vacate the Trial Date and re-fix the matter for trial on a date after 8 August 2025. It was said in the email that the application was made for the following reasons:

1. Our crucial witness, Mr. Gu, is unable to attend the trial due to a fire incident that came to our attention only after the directions hearing on 14 March 2025. As a result of the incident, Mr. Gu is currently subject to an ongoing investigation by the relevant authorities and is restricted from traveling. We submit that Mr. Gu's absence would significantly impact our client's prospects of success in these proceedings.

In the interest of ensuring a fair and just trial, we submit that giving evidence via audio-visual link is not an appropriate alternative in this instance. This is due to jurisdictional complexities, potential technical issues, and concerns regarding the overall integrity of the testimony. These concerns are consistent with the principles outlined in Haiye Developments Pty Ltd v The Commercial Business Centre Pty Ltd [2020] NSWSC 732.

1. Our client has encountered delays in securing funding for the trial due to issues with their mortgage applications. They have advised that sufficient funding is not expected to be available before the currently scheduled trial date.

The email also attached the First Murphy Affidavit.

18 By email dated 11 April 2025 the Court informed the parties, among other things: that if the application was to be pressed it would be heard at 10:30am on 29 April 2025; of the recent decision of Dawn v Carlisle Homes Pty Ltd (Dawn v Carlisle),[8] in which the Court of Appeal provided recent and succinct insight regarding broader considerations relevant to adjournment applications, which had also been underscored in numerous other authorities; of the Court's observations regarding the absence of evidence regarding the position under Chinese law in respect of audiovisual evidence; and that any further material from the defendant was to be filed and served by 17 April 2025, with material in response to be filed and served by 24 April 2025.

19 The email from the Court also informed the parties that:

The trial remains fixed to commence on 13 May 2025, as it has been for many months. The parties are required to continue with their trial preparation so that the trial can proceed on that day if the defendants' late trial date vacation application is not successful. In this context the parties should also proceed on the basis that, if his Honour concluded that some adjustment to the trial date or plan was needed due to the inability to take Mr Gu's evidence audio-visually, his Honour will wish to hear from the parties as to whether there is any material reason why all other elements of the trial could not proceed except for deferring Mr Gu's evidence and closing submissions to a date in August 2025.

20 In the First Murphy Affidavit, Mr Murphy referred to, among other things: the financial burden of the proceedings; his personal contribution of a large proportion of the funds for legal fees in the past, and his need to continue to provide funding; the work he has been required to undertake; steps taken in relation to borrowing money; and aspects of what was said to be the procedural history of the matter.

21 As to the basis upon which the vacation of the Trial Date was sought, Mr Murphy stated that Mr Gu, one of the founders of the first defendant, who was said to be a critical witness, was unable to travel to Australia due to Mr Gu's factory in China recently suffering a major fire incident, and Mr Gu being required to remain in China to manage the situation, also stating that Mr Gu is not expected to be available until 8 August 2025. In support of that position a letter from a firm said to be Mr Gu's legal representatives in China was exhibited, the translation of which was in the following terms:

To: The Supreme Court of Victoria/ Relevant Authorities

Our firm is the legal representative of Mr. WeiPing Gu in China.

We confirm that Mr. WeiPing Gu is currently involved in managing a manufacturing plant in China, which recently experienced a fire incident. He is presently undergoing a comprehensive investigation by the local Emergency Management Bureau and Public Security authorities, and is also involved in related civil proceedings. In accordance with applicable local regulations, Mr. Gu is temporarily restricted from leaving the country.

This restriction is administrative in nature and is not based on any criminal charges. Mr. Gu will cooperate fully with the investigation and comply with all requirements of the relevant authorities.

As a result, Mr. Gu is unable to attend court in Australia as scheduled. It is anticipated that the restriction may not be lifted until after 8 August 2025 at the earliest.

We respectfully ask the Court to understand the current exceptional circumstances. Should further official documentation be required, we will fully cooperate.

Sincerely,

Zhejiang Haixing Law Firm

22 Mr Murphy stated that, given the circumstances referred to in the First Murphy Affidavit, he requested that this matter be postponed until 12 August 2025. It was said that this adjournment would allow the defendants sufficient time to secure the necessary funds for their legal defence and ensure the availability of a key witness, thereby enabling a fair and just hearing of the matter.

23 In the Second Murphy Affidavit, Mr Murphy referred to some additional matters said to be relevant to the Application, and made additional allegations in relation to aspects of the proceeding. Although it is not necessary to recite all of the detail of these matters in these reasons, the matters referred to included the following:

1. The first defendant wishing to bring a claim against the plaintiff and Mr Wang.

2. An alleged 'enormously detrimental effect' of the litigation on the first defendant's business, including an allegation that the litigation had sucked money out of the business to pay for the litigation, and the existence of the litigation contributing to the business being unable to access finance from the Tasmanian State Government and multiple banks.

3. It being in the interests of the defendants that the proceeding be brought to finality as soon as possible, but that an adjournment was required in the circumstances.

4. Statements by Mr Murphy about the future of the business being 'extremely bright' and assertions regarding it being sabotaged by the conduct of Mr Wang and the plaintiff.

5. Information regarding the production capacity of the business, supply and demand, and the funding needed for 'additional dryers' that were said not to be able to be funded due to the litigation expenses and funding constraints as a result of the litigation. Reference was made to what was said to be additional revenue that could be generated. Mr Murphy also stated that the production constraints caused by the proceeding and the ability to quantify its emerging loss had only 'recently become apparent'.[9]

6. In paragraphs 17 to 22 of the Second Murphy Affidavit, Mr Murphy addressed his belief and opinions regarding alleged fiduciary duties said to be owed by the plaintiff and Mr Wang to 'fellow investors', and directors' duties owed to the first defendant. Reference was also made to Mr Murphy's beliefs regarding alleged removal of partnership investment funds, alleged inconsistent claims in the proceeding, and Mr Murphy's observations regarding what was said to be the falsity of the claims made by Mr Wang in the proceeding.

7. Mr Murphy's belief that Mr Wang had breached his obligation to prevent insolvent trading by the first defendant if the plaintiff's claims about the alleged loans are correct.

24 In paragraphs 24 to 26 of the Second Murphy Affidavit, Mr Murphy stated that the first defendant wished to pursue Mr Wang and the plaintiff by way of counterclaim, and in this regard deposed as follows:

25. The counterclaim will seek, among other relief:

1. A declaration and compensation orders pursuant to s 1317E & 1317 H against Mr Wang, for breach of director's duties under the Corporations Act 2001 (Cth). The damages will centre on the loss to the Business, which is ongoing and will be substantial.

2. Equitable compensation for the Business's lost opportunity against Mr Wang and the Plaintiff (i.e. estimated lost net profit loss).

3. Compensation for misleading and deceptive conduct against Mr Wang and the Plaintiff.

4. I understand that this counterclaim is sought to be brought late in the proceedings, however, until recently, the quantum of the Business's loss resulting from this litigation from the Plaintiff did not become apparent. Further, until recently as late as April 7 we did not know critical facts in this matter, which have made it clear that the behaviour of the Plaintiff has been totally dishonest. The most recent claims in the Plaintiffs 25 March amended claim and subpoena response date April 7 have revealed new factual and legal assertions that have placed new light on the case at hand and has led to the defendant seeking a counterclaim.

5. I understand that the Defendants are liable for costs thrown away as a result of any adjournment.

6. I also understand the need to consider the effect on other litigants and the Court system of a late adjournment, however in the circumstances, I believe it in the interest of justice for the Defendants, that there be an adjournment.

25 Mr Shen's affidavit addressed aspects of the procedural history of the proceeding, exhibiting some relevant correspondence, and addressed issues in relation to disputed discovery, the recent issue of subpoenas on behalf of the defendants, the alleged failure to complete the Court Book and chronology in a timely fashion, the position of Mr Gu in China, and related matters. With respect to the position of Mr Gu, Mr Shen also exhibited a further letter from Mr Gu's legal representatives in China, the translation of which was in the following terms:

STATEMENT OF CIRCUMSTANCES

To: The Supreme Court of Victoria/ Relevant Authorities

Mr. Wei Ping Gu is currently located in [Jiaxing City, Zhejiang Province], People' s Republic of China. His principal manufacturing facility has recently been subject to a critical incident that has triggered a formal investigation by Chinese authorities.

The matter is now under official investigation by local departments, including the Fire Safety Bureau and Public Security Bureau. As the legal representative and principal responsible person of the facility, Mr. Gu has been required to fully cooperate with the ongoing inquiries.

Mr. Gu has received both verbal and written instructions advising that he must not participate in any overseas legal proceedings, nor provide evidence via telephone or video, during the course of the investigation. This is to avoid potential interference with the integrity of the Chinese proceedings or unintended disclosure of sensitive information.

Mr. Gu wishes to stress that he is not refusing to provide testimony, but that he is currently subject to legal and administrative restrictions that prevent him from attending court or giving evidence remotely. He solemnly confirms his intention to cooperate fully with the Supreme Court of Victoria and provide evidence as soon as the Chinese investigation concludes.

Mr. Gu and his legal team will continue to support the Court's process in good faith and reserve his right to give testimony formally at a later stage of the proceeding.

This statement is provided in support of the Defendants' application to adjourn the trial to ensure that critical witness evidence may be received under fair and complete conditions.

Sincerely,

Zhejiang Haixing Law Firm

26 In Ms Tan's affidavit affirmed 24 April 2025, Ms Tan addressed a number of matters including the plaintiff's preparation for trial; the defendants' communications regarding the proposed adjournment application; the defendants' complaints about discovery; the defendants' complaints about witness statements; and the status of trial preparation.

27 With respect to trial preparation, emphasis was placed upon the date at which orders were made fixing the matter for trial and the arrangements made by the plaintiff's legal practitioners, counsel and witnesses, including the plaintiff's witnesses purchasing flight tickets to travel from China to Australia for the 13 May 2025 trial. It was also said the plaintiff had incurred significant expenses in preparing for trial.

28 As to the communications between the parties regarding the Application, Ms Tan stated that it was not until 7 April 2025 that they were notified for the first time of the proposed application. Ms Tan also addressed and exhibited correspondence between the parties regarding the same, aspects of which have been earlier referred to and the further detail of which is not necessary to recite.

29 In relation to the defendants' complaints about discovery, Ms Tan stated that the plaintiff's position was, in short, that it had provided all discoverable documents. This was said to be made clear in the plaintiff's solicitor's letter of 24 January 2025, noting also that in that letter it was made plain that if the defendants wanted to pursue discovery then they should have brought an application for particular discovery much earlier in time. It was further noted that the defendants have not brought any application for particular discovery, and that the defendants had waited until 17 March 2025 to seek leave to issue subpoenas.

30 As to the defendants' complaints about the plaintiff's witness statements containing some inadmissible content or material, Ms Tan made reference to the orders made on 14 March 2025 by which the Court ordered that the witness statements filed and served in the proceeding would stand as witness outlines only, with evidence in chief to be given orally.

31 Regarding the status of trial preparation, Ms Tan referred to her instructions from the sole director of the plaintiff, Mr Wang, that he is concerned that the proceeding should be brought to trial as soon as can be achieved, and that she was instructed that the proceeding has had a significant impact on the plaintiff's finances. In this context reference was made to the fact that the loan amounts claimed in the proceeding were paid to the defendants approximately five years ago and have still not been repaid. It was also said that the plaintiff had done everything within its ability to be ready for trial, and Ms Tan made reference to various steps taken, including the filing of various trial aides, submissions and authorities.

32 In response to the defendants' criticism that the plaintiff had failed to provide a copy of the Court Book with hyperlinks, Ms Tan stated that it was not a 'complete summary' of the correspondence and she referred to and exhibited correspondence between the parties regarding the preparation and finalisation of the Court Book. I also note in this context that the Revised Court Book was provided to the Court in the evening of 28 April 2025.

33 By the Defendants' Written Submissions filed on 28 April 2025, the defendants submitted that there were five outstanding issues which impacted upon the ability of the trial to proceed, with those issues said to be as follows:

1. The Plaintiff had not filed and served a revised court book (due 31 March 2025).
2. One of the Defendants' critical witnesses Weiping Gu is unable to travel to Australia to be a witness in the trial.
3. The Defendants are unable to properly fund the proceedings and require further time to secure funding.
4. The Plaintiff had failed to discover critical documents in the form of communications between the Plaintiff/Mr Wang and Zixiao Li, and the Plaintiff/Mr Wang and Tao Zhang, on critical issues.
5. The first defendant's wish to bring a claim against Mr Wang for damage to the business, caused by breach of Mr Wang's director's duties; the damages for which claim have only recently started to crystalise.

34 With respect to the Court Book, the defendants submitted that the plaintiff has at no time produced a Court Book in accordance with the orders, being in PDF text-searchable form nor had it produced a Revised Court Book. It was submitted that the absence of a Court Book made it very difficult to prepare for trial, and that the importance of the Court Book being provided in a timely manner was ventilated in these proceedings at the directions hearing, on 14 March 2025. It was further submitted that while waiting for the provision of the Court Book from the plaintiff, the defendants requested the inclusion of two additional documents. However, it was said that the request to include additional documents was only made as the Court Book had not been completed and that it does not explain the plaintiff's failure to provide the Court Book in a timely way, which remained outstanding at that time.

35 Regarding Mr Gu's unavailability to travel to Australia, it was submitted that Mr Gu was one of the business partners of the first defendant, a Chinese speaker, and a critical witness in the proceeding. It was emphasised that it was through no fault of the defendants that Mr Gu was unable to travel to Australia and give evidence. The defendants acknowledged that no admissible evidence had been produced regarding Chinese law and the inability of Mr Gu to give evidence by audiovisual link, but submitted that the defendants are concerned, based on correspondence from Mr Gu's Chinese lawyer, that Mr Gu is, as a matter of fact, unavailable to give evidence by audiovisual link.

36 So far as funding was concerned, the defendants submitted that they have still not secured funding to enable them to fund the litigation and that they require further time to secure such funding.

37 As to discovery and the issue of subpoenas to produce, the defendants made the submissions set out in paragraphs 10 to 22 of the Defendants' Written Submissions, to which I refer but are not necessary to set out. These submissions included contentions that the defendants sought detailed and particular discovery from the plaintiff with respect to, among other things, communications between Mr Wang and Mr Tao, and Mr Wang and Mr Li, being requests made in correspondence dated 13 September 2023, 20 May 2024, 26 September 2024, 7 November 2024, 21 January 2025, 5 February 2025, 28 March 2025 and 31 March 2025. Reference was also made to the subpoenas issued to third parties, service of the same, and the responses received.

38 With respect to principles relevant to trial date vacation and adjournment applications, reference was made to the recent decision of the Court of Appeal in Dawn v Carlisle.[10]

39 By way of conclusion, the defendants acknowledged that the late adjournment application would inevitably involve a waste of court resources and consideration of modern case management principles as articulated by the High Court in AON Risk Services Australia v Australian National University (AON).[11] However, it was submitted that nevertheless, in particular, the absence of Mr Gu's availability, the lack of adequate funding, the absence of a Court Book and inadequate discovery, were matters which have arisen and are not the fault of the defendants. It was contended that the matters that have arisen raise significant prejudice and harm to the defendants, and any prejudice to the plaintiff from an adjournment can be addressed by a costs order. Weighing up all of the competing factors, it was submitted that it is in the interests of justice that the trial date be vacated and be adjourned to a future date.

40 I have also had regard to the defendants' oral submissions which included submissions to the following effect.

41 Reference was made to the five matters referred to in the Defendants' Written Submissions and it was noted that, because the Court Book had been filed (late) on 28 April 2025, this was no longer an issue that the Court needed to consider.

42 During exchanges with the Bench, the defendants' counsel also informed the Court that:

1. The defendants accepted that the possibility of a claim or counterclaim being sought to be made in the future against the plaintiff and Mr Wang would not be sufficient to motivate the Court to give an adjournment of the Trial Date in the circumstances, although it was indicated that, if the trial date was vacated and an adjournment was granted, then further consideration would be given to this issue. Counsel also confirmed that there was no current application on foot, or any draft pleading for the Court or the plaintiff to consider.

2. The possibility of Mr Murphy obtaining work during the trial period in May 2025 would not materially impact on the Court's consideration in the circumstances, and that this was no longer pressed as an issue in support of the Application.

3. It was accepted by the defendants that the discovery and subpoena issues were not matters that would prevent the trial proceeding as scheduled in the circumstances, and that the defendants could not go beyond what they had been informed regarding the responses to the subpoenas. In this context reference was also made to the absence of travel records of Mr Wang with respect to meetings referred to in the pleadings and witness statements, although it was acknowledged that Mr Wang is not a party to the proceeding and that there was currently no basis on the material before the Court for supporting a contention that such documents (if they exist) would be in the possession, power or control of the plaintiff. Counsel for the defendants confirmed that the Court could proceed on the basis that the discovery/subpoena issues were not pressed in support of the Application.

4. The primary reason for the Application is the position of Mr Gu, but noting that funding was an issue that the defendants also relied upon.

In the circumstances, and having regard to the evidence and submissions before the Court, relevant principles, and the Court's obligations under the Civil Procedure Act 2010 (Vic) (CPA Act), the above position appeared to me to be a responsible and appropriate position for counsel for the defendants to take on the Application. It was also evident why the position of Mr Gu was seen by the defendants as being the primary consideration.

43 With respect to the position of Mr Gu, it was submitted that he was a critical witness and that the evidence showed that he could not be in Australia to give evidence. Counsel stated that it was possible that Mr Gu may be able to participate by audiovisual means at some point, but this was not likely to be so before at least 8 August 2025. The Court was informed that the defendants proposed to "push further" with Mr Gu to establish whether or not his evidence could be taken or brought forward, and make further enquiries as to whether he could or would be able to give evidence audiovisually from China and, if so, when this might occur.

44 With respect to funding, during submissions in reply counsel for the defendants informed the Court that the provision of funding was expected to be provided 'far sooner' than in August 2025, and that it was understood that finance for funding was expected to be received in a relatively short time but not necessarily before the commencement of the trial. Counsel mentioned that there had been some issue with the formal documentation for further funding, and that it was now expected in a four- to six-week period from the date of the hearing of the Application (29 April 2025).[12]

45 When addressing the defendants' position regarding the possibility of Mr Gu's evidence being deferred until after the evidence of all other witnesses and before closing submissions, counsel for the defendants responsibly informed the Court that there was no evidence of any prejudice to the defendants if this occurred, and that he could not point to any particular prejudice that would be suffered by the defendants if such a course was adopted.

46 Regarding audiovisual evidence from China and the position of Mr Gu, counsel for the defendants confirmed that no application was being made by the defendants for the evidence to be given audiovisually at this point, and that, given the evidence of Mr Gu's solicitor, it was open to the Court to infer that Mr Gu would not be willing to give audiovisual evidence from China because, on the evidence, the circumstances were such that Mr Gu was not able or permitted to do so.

47 In response to the plaintiff's contentions regarding the nature of the orders sought being uncertain, or being akin to an application for an indefinite adjournment of the trial, during exchanges with the Bench counsel for the defendants confirmed that they were seeking that the Trial Date be vacated and that it be re-fixed for a hearing on a date convenient to the Court after 8 August 2025. In so doing the defendants accepted that there was uncertainty as to whether or not Mr Gu would be available at such a time, and informed the Court that if the matter was re-fixed at a date after 8 August 2025 and Mr Gu was then not available at that time, the trial would have to proceed in any event without Mr Gu's evidence. In this context, and when asked whether the defendants were seeking an adjournment of the trial to a date to be fixed as soon after Mr Gu becomes available to give evidence, the Court was informed, and it was confirmed, that this was not so, but that the defendants were seeking an adjournment to a date as soon after 8 August 2025 as is possible.

48 The plaintiff relied upon its written submissions, which were supplemented orally by counsel. The plaintiff submitted that the application should be refused with costs.

49 By way of opening, in its written submissions it was submitted that the defendants' proposal was entirely unclear by reason of the following:

1. Initially, the defendants sought an adjournment until 12 August 2025 - ostensibly to secure funding and the availability of 'key witnesses'.

2. It now appeared that the first defendant seeks to bring a counterclaim. The counterclaim, now three and a half years out of time,[13] would also join a new party.

3. It was unclear if and when the proposed counterclaim will be brought. It is currently purely hypothetical: leave has not been sought to file a counterclaim; no draft had been provided for the Court to consider; and the bringing of a prompt application would (presumably) also be affected by the defendants' apparent funding difficulties.

4. In the event an application is made to bring a counterclaim and the application is successful, that would necessarily further delay the trial of the proceeding - as orders would need to be made for pleadings, discovery and further evidence.

50 The above was submitted to leave the plaintiff and the Court in an unsatisfactory position. It was contended that, in substance, what was being proposed was an indefinite adjournment of the trial, where the plaintiff and Court must wait for the defendants to obtain further funding and decide whether to bring a counterclaim, which would then determine the further progress of the proceeding.

51 Further, and in any event, it was contended that none of the reasons advanced by the defendants justified an adjournment of the Trial Date, and that the prejudice to the plaintiff caused by the proposed adjournment could not be cured by costs given the obvious financial difficulties of the defendants. The plaintiff acknowledged that the Court had express and inherent jurisdiction to adjourn a trial, submitting that the principles relevant to the same were well established, also referring to the recent observations of the Court of Appeal in Dawn v Carlisle.[14]

52 The plaintiff referred to the various reasons advanced by the defendants for the adjournment, observing that it appeared that Mr Murphy's work arrangements were no longer a matter being pressed.

53 With respect to the proposed counterclaim, it was submitted that this was not a sufficient basis for an adjournment. In this context it was submitted as follows. First, that the proposed counterclaim was purely hypothetical. Leave had not been sought to file a counterclaim, and no draft had been provided for the plaintiff and the Court to consider. It was also said not to be a case which engages the well-established principles regarding applications to amend pleadings (including those requiring an adjournment).[15] Instead, it was contended that the Court was being asked to grant an indefinite adjournment for a counterclaim that may never be made.

54 Second, it was said to be far from clear that a counterclaim will be brought. It was submitted that the defendants' evidence did not disclose when any application might be made and that no admissible evidence was given of the first defendant's intention to bring a counterclaim. In this context it was submitted that Mr Murphy, as a former director, cannot give evidence of the state of mind of the first defendant. The bringing of any counterclaim was also said to be presumably impacted by the defendants' apparent funding difficulties.

55 Third, it was submitted that the proposed counterclaim application was objectively hopeless. Because no draft pleading had been provided, the Court was said to be in no position to consider whether there is an arguable case.[16] The counterclaim was said to be three and a half years out of time, with no satisfactory explanation for that delay.

56 Fourth, it was submitted that there will be significant prejudice to the plaintiff and to the administration of justice if a counterclaim is brought. The counterclaim, which will seek to join a new party, was said to inevitably lead to significant delay due to further pleadings and interlocutory steps.

57 Fifth, it was contended that there is no identifiable prejudice to the defendants if the first defendant is prevented from making its proposed claims via counterclaim, further submitting that there is no apparent reason why those claims could not be brought by separate proceeding.

58 With respect to the defendants' alleged funding challenges, the plaintiff contended that the evidence of funding difficulties was vague and unpersuasive. It was also submitted that it was unclear why the defendants delayed until April 2025 to raise the issue, noting that on the evidence the funding issues were clearly not a new matter, and that it was not a surprise that the trial would require the payment of legal expenses. The plaintiff submitted that, importantly, the evidence as to when and whether funding will be secured was inadequate. In addressing Mr Murphy's evidence that additional funds were unlikely to be approved before trial, it was submitted that there was no basis upon which the Court could be satisfied that funds would become available by August 2025 in any event, and in the circumstances an adjournment should not be granted on such a basis.

59 With respect to Mr Gu's availability, the plaintiff submitted that it was not a persuasive reason to grant the adjournment. The plaintiff submitted that the evidence regarding Mr Gu's availability was unsatisfactory. It was contended that the defendants rely on third-hand hearsay to the effect that: (i) Mr Gu is restricted by unspecified local regulations from leaving China due to an investigation and civil proceedings resulting from a 'fire incident'; and (ii) Mr Gu has told his Chinese lawyers that he has received 'verbal and written instructions' from undisclosed persons telling him that he must not participate in any overseas legal proceedings.

60 The plaintiff contended that this is not a sound basis to conclude that Mr Gu is unable to attend trial. It was also submitted to suffer from the same vice as the evidence on funding - that is, that there is no evidence on when (or whether) Mr Gu will become available. Rather, it was said to be asserted that Mr Gu's travel restrictions 'may not be lifted until after 8 August 2025 at the earliest'.[17] The defendants submitted that there is no basis for that assertion, nor any evidence on when the investigation might end, the consequences on Mr Gu's ability to travel if there are adverse findings, or the status of the extant civil proceedings against Mr Gu in China.

61 The plaintiff also submitted that the defendants had not established that Mr Gu is unable to give evidence remotely. There was said to be a number of cases in which Australian Courts have considered the availability of Chinese witnesses to give evidence remotely (including cases in which leave has been granted to do so).[18] These cases were said not to assist the defendants, and to turn on the evidence of Chinese law admitted in each case. Despite the defendants being invited to put on admissible expert evidence on Chinese law by the Court, it was noted that no such evidence had been filed.

62 On the topic of discovery, the plaintiff submitted that the defendants' complaints about discovery did not assist them. It was said that the to the extent the defendants seek to blame the plaintiff for the state of the preparation of the matter for trial, it was factually wrong for the reasons referred to in Ms Tan's affidavit. It was further contended that, in any event, the complaints about discovery were not to the point. In this context emphasis was placed upon the fact that the discovery issue had been raised since 13 September 2023, and that if the defendants had legitimate concerns that they required further documents, they should have made a prompt application for specific discovery. It was noted that there was no explanation for their failure to do so, observing also that the defendants delayed until 17 March 2025 to apply for leave to issue subpoenas. It was further noted that an application for discovery had still not been made and was not foreshadowed.

63 With respect to prejudice to the plaintiff and the position regarding costs orders, the plaintiff contended that it is well-established that adjournment applications are not solely considered by reference to whether any prejudice can be compensated by costs.[19] It was further submitted that there are two particular reasons why the payment of costs is particularly inadequate in this case. First, that the adjournment sought by the defendants appears to be indefinite and, in addition to the inherent prejudice of delay,[20] the plaintiff has been out of its money for over five years. Given the significant financial difficulties of the defendants' business, it was submitted that there is a real risk that the recoverable value of the defendants' assets will continue to erode. Second, it was said that any order that the defendants pay the plaintiff's costs thrown away would be worthless in circumstances where the defendants on their own evidence cannot pay such an order.[21]

64 Oral submissions were also made by counsel for the plaintiff, which included submissions to the following effect.

65 In commencing his oral submissions counsel for the plaintiff observed that the reasons for seeking the adjournment had now been confined through the defendants' oral submissions to two matters, namely: the position regarding Mr Gu, and the defendants' litigation funding challenges.[22]

66 During the course of the plaintiff's oral submissions:

1. Attention was drawn to the claimed absence of clarity regarding the nature of the Application, and whether it was seeking, in effect, an indefinite adjournment.

2. Emphasis was placed upon the uncertainty regarding whether or not, and if so, when, Mr Gu might become available to give evidence.

3. Attention was drawn to what was said to be uncertain, vague, and insufficient evidence regarding the availability of Mr Gu to give evidence, with reference being made to, among other things, limited information in the letters from Mr Gu's solicitors, the uncertainty regarding the timing, and the failure to identify who was said to have instructed Mr Gu that he was restricted from giving evidence.

4. It was accepted that it was open to the Court to infer from the evidence that, at least at this stage, Mr Gu would not be willing to give evidence by audiovisual means from China.

5. It was submitted that, given the lack of detail in the evidence, the defendants had not discharged their onus to establish that Mr Gu would not be available to give evidence.

6. It was accepted that, on the material before the Court, the Court was not in a position to be satisfied that it was permissible or appropriate for an order to be made allowing Mr Gu to give evidence by audiovisual means in China even if Mr Gu was willing to do so.

7. Although the plaintiff's primary position was that the trial should proceed, it was submitted that an alternative would be to defer the hearing of the evidence of Mr Gu until a date as soon as possible after 8 August 2025, with closing submissions to be heard shortly thereafter.

8. The evidence regarding funding was unsatisfactory and vague, and that the Court could not be satisfied that funding would be available, whether in August 2025 or at any time thereafter.

9. It was not correct that any prejudice could be addressed by costs orders. It was also submitted that taking this issue into account is no longer the primary consideration, and in any event, any costs order would not cure the prejudice given the defendants' stated financial challenges.

10. It was further contended that the defendants had not satisfied the Court that Mr Gu was a 'critical witness'. In this context reference was made to statements in paragraphs 10 and 12 of Mr Gu's witness statement regarding the existence or otherwise of agreements, which were said to be no more than conclusory statements that were not admissible. That said, and although it was contended that the Court could not be satisfied that Mr Gu was a critical witness, counsel for the plaintiff appropriately acknowledged that if Mr Gu was to give admissible oral evidence regarding facts and circumstances relevant to the existence or otherwise of agreements the subject of the dispute, then the plaintiff would not be contending that Mr Gu was not a material witness.

67 In the end the plaintiff's position remained that the Application should be refused or, alternatively, any orders should go no further than deferring the evidence of Mr Gu and the hearing of closing submissions.

68 There is no doubt that this Court has express and inherent authority to vacate or adjourn a trial date, and it was not contended otherwise. The sources of express power include ss 47, 48, 49 of the Civil Procedure Act 2010 (Vic) (CP Act), and rr 48.06 and 49.03 of the Supreme Court (General Civil Procedure) Rules 2015 (Rules).[23]

69 The nature of the Court's discretion when considering whether or not to vacate a trial date or allow an application for an adjournment of a trial date has been addressed in numerous authorities.[24] A review of many authorities unsurprisingly reveals that the outcome of cases in which the principles relevant to trial adjournment or vacation applications have been considered are very much fact-specific, and dependent upon the facts in question. That said, with respect to general observations regarding the nature of the Court's discretion, it is convenient and helpful for present purposes to refer to the following.

70 In Eaton v ISS Catering Services Pty Ltd,[25] their Honours observed as follows regarding hearing adjournment applications, after making reference to and setting out the terms of ss 7 to 9 of the CP Act:

1. His Honour took account of the matters in s 9, to the extent that they were relevant to the adjournment applications. In particular he referred to the proportionality requirement in s 9(1)(g) of the Act and remarked that the appellant's claim was for pain and suffering alone and that pre-trial argument had already extended over three days.
2. In the past, appellate courts more readily accepted that an adjournment should be granted if its refusal would prevent a party making out his or her case.[26] That predisposition must now be qualified in light of the importance which is now accorded to case management principles, following the High Court's decision in AON,[27] the subsequent enactment of the Civil Procedure Act 2010, and the further authorities mentioned below. Although the 'overarching purpose' of the Act and the rules includes the fair and just resolution of disputes, it also includes the efficient and timely resolution of disputes. So parties cannot casually ignore case management orders or directions. As Gummow, Hayne, Crennan, Kiefel and Bell JJ observed in AON:

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.

In the past it has more readily been assumed that an order for the costs occasioned by the amendment would overcome injustice to the amending party's opponent. In Cropper v Smith Bowen LJ described an order for costs as a panacea that heals all.[28] Such a view may largely explain the decision of this Court in Shannon v Lee Chun,[29] which upheld a decision allowing the plaintiff to raise a new case at the second trial, but which imposed a condition as to costs. The modern view is that even an order for indemnity costs may not always undo the prejudice a party suffers by late amendment.[30] In the present case it is difficult to see that such an order could be sufficient compensation, given that AON would be required to again defend litigation which was, effectively, to be commenced afresh.

The views expressed by Lord Griffiths in Ketteman v Hansel Properties Ltd,[31] that justice cannot always be measured in money and that a judge is entitled to weigh in the balance the strain the litigation imposes upon litigants, are also now generally accepted.[32] In Bomanite Pty Ltd v Slatex Corporation Aust Pty Ltd,[33] French J said of Bowen LJ's statements in Cropper v Smith:

... That may well have been so at one time, but it is no longer true today ... Non-compensable inconvenience and stress on individuals are significant elements of modern litigation. Costs recoverable even on an indemnity basis will not compensate for time lost and duplication incurred where litigation is delayed or corrective orders necessary.[34]

1. The importance of case management principles in guiding the Court's discretions in exercising case management powers has been reinforced by recent pronouncements of the High Court and this Court. In Expense Reduction Analysts Group Pty Ltd & Ors v Armstrong Strategies Management and Marketing Pty Ltd & Ors,[35] the High Court explained the importance of the 'overriding purpose' under the Civil Procedure Act 2005 (NSW) in the exercise of its powers under that Act or Court rules. The High Court referred with approval to the doubts expressed by Lord Woolf MR in Biguzzi v Rank Leisure PLC,[36] that 'authorities decided under the old procedure could continue to be binding or even persuasive'.[37] Later, the High Court summarised the purpose of the Civil Procedure Act 2010 in the following terms:

The evident intention and the expectation of the CPA is that the court use these broad powers to facilitate the overriding purpose. Parties continue to have the right to bring, pursue and defend proceedings in the court, but the conduct of those proceedings is firmly in the hands of the court. It is the duty of the parties and their lawyers to assist the court in furthering the overriding purpose.

That purpose may require a more robust and proactive approach on the part of the courts. ...[38]

1. In Yara Australia Pty Ltd v Oswal,[39] this Court gave similar emphasis to the importance of the overarching purpose, and to the overarching obligations on parties and their lawyers under the Civil Procedure Act 2010. The Court re-stated that such obligations on parties and their lawyers to this general effect have always existed.[40]
2. The application for an adjournment of the trial in this case needed to be considered in the above context. The overarching purpose applies to the Court 'in the exercise of any of its powers', however they may arise - including all powers arising under 'any procedural rules or practices of the Court'.[41] The Court's power to adjourn proceedings or to refuse an application for an adjournment is therefore subject to the Court's obligation to give effect to the overarching purpose.[42]

...

1. His Honour considered whether any prejudice to the respondents could be compensated by making an appropriate order as to costs. Moreover the passage from AON cited above indicates that this is not determinative. As French CJ observed in AON:

In the proper exercise of the primary judge's discretion, the applications for adjournment and amendment were not to be considered solely by reference to whether any prejudice to AON could be compensated by costs. Both the primary judge and the Court of Appeal should have taken into account that, whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. Moreover, the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system. Given its nature, the circumstances in which it was sought, and the lack of a satisfactory explanation for seeking it, the amendment to ANU's statement of claim should not have been allowed. The discretion of the primary judge miscarried.[43]

1. In exercising his discretion, his Honour properly had regard to the absence of any affidavit from the appellant's solicitors explaining the failure to comply with Judge Davis's order or the reasons why the appellant, having already filed the report of Dr Short after the agreed deadline for serving expert reports, then sought an adjournment to obtain a supplementary report from him. As Gummow, Hayne, Crennan, Kiefel and Bell JJ observed in AON:

Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules.[44]

71 In the context of an appeal adjournment application, in Dawn v Carlisle,[45] the Court of Appeal recently addressed observations regarding the exercise of a discretion to vacate or adjourn a hearing date, which as each of the parties accepted, are relevant in the current context. In that case their Honours relevantly observed as follows:

1. On behalf of Mr Dawn, Mr Epstein applied for an adjournment of the hearing to allow his client an opportunity to reassess the grounds of appeal and consider whether they needed to be amended. Mr Epstein submitted that Mr Dawn could not adequately represent himself. He submitted that Mr Dawn would be impaired by mental difficulties he was suffering. He submitted that Mr Dawn should pay Carlisle's reasonable costs thrown away and this would adequately address any prejudice to Carlisle. The application was opposed by Carlisle.
2. An application of this kind in a civil proceeding must be determined in light of the overarching purpose of the Civil Procedure Act 2010, 'to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute'.[46] This includes consideration of any explanation for the need for the adjournment, the balancing of potential prejudice and harm, and the interests of justice.[47]
3. Adjournment applications are not to be considered solely by reference to whether any prejudice to the opposing party can be compensated by costs. The time of the court is a publicly funded resource, and inefficiencies in the use of that resource are to be taken into account, as well as the need to maintain public confidence in the judicial system.[48] The effect of adjournments on other litigants using the court has long been regarded as relevant.[49] What 'might be perceived as an injustice to a party' when viewed in isolation 'may not be so when considered in a context which includes the claims of other litigants and the public interest in achieving the most efficient use of court resources'.[50] The 'need to avoid disruptions in the court's lists with consequent inconvenience to the court and prejudice to the interests of other litigants waiting to be heard' are 'pressing concerns to which a court may have regard'.[51]
4. Where the lateness of an adjournment application would make it inevitable that an adjournment would involve waste of court resources and inefficiency in the legal system overall, '[m]odern case management principles, as articulated in Aon, and as reflected in the Civil Procedure Act, support the refusal of leave to adjourn'.[52]
5. This was not an appropriate case for an adjournment.

...

1. On the evidence as a whole, we were satisfied that Mr Dawn's lack of legal representation until virtually the last moment was essentially a choice made by Mr Dawn. We were also satisfied that the delay in changing his mind about legal representation and acting on that decision was not properly explained.
2. Further, in light of Mr Dawn's evidence of his adequate financial capacity, the absence of any offer of an undertaking by him to pay the outstanding judgment debt arising from VCAT's order weighed against granting an adjournment.
3. For all these reasons, we decided to refuse the adjournment, but we did so on the basis that Mr Dawn would be permitted to make further submissions in writing after the hearing in support of his proposed amended application, and for Carlisle to respond. That course balanced the need to avoid wasting the hearing date whilst giving Mr Dawn the opportunity to provide further submissions, with legal assistance if he so chose, and ensuring that the opportunity was not used to expand the case beyond his existing grounds. It should not be thought that such an opportunity will always be required or appropriate. In the usual case, the listed hearing date remains the occasion when argument is to be fully and finally developed.

72 For the reasons that follow, and taking into account the submissions, the evidence, the principles and observations referred to above, and the Court's obligations under the CP Act, I have determined as follows:

1. The defendants' application for orders that the Trial Date be vacated and the trial be re-fixed on a date so soon after 8 August 2025 as the business of the court allows, should be dismissed.

2. The trial should commence before me on 13 May 2025, as fixed by orders made on 7 August 2024.

3. The defendants should have liberty to apply to adjourn the trial part-heard to enable the giving of any evidence by Mr Gu, and the hearing of closing oral submissions, to take place on a date as soon after 8 August 2025 as the business of the court allows.

73 I observe at the outset that the proceeding was commenced in October 2021, has been set down for trial to commence on 13 May 2024 since 7 August 2024, and is estimated to run for 10 to 11 days. As authorities such as those referred to earlier address, the time has long since passed where applications for adjournments of hearings are considered solely or largely by reference to the question of whether any prejudice to be suffered can be addressed by orders for costs.

74 I also note Mr Murphy's unsurprising evidence in paragraph 7 of the Second Murphy Affidavit that it is certainly in the interests of the defendants that these proceedings be brought to finality as soon as possible - but I also observe that, notwithstanding this position, Mr Murphy considers that an adjournment is required in the circumstances.

75 I turn first to the evidence and submissions regarding the unavailability of Mr Gu.

76 Although the evidence regarding Mr Gu's availability, predicament and restrictions is not as complete or detailed as it might have been, for present purposes there is evidence before me on this Application that Mr Gu is considered by the defendants to be at least a material witness and that, due to the circumstances referred to in the affidavit material and addressed above, Mr Gu is not at this stage in a position to give evidence at the trial. The evidence from Mr Gu's solicitors reveals that at this point he is prevented or restricted from giving evidence, from leaving China, or giving evidence by audiovisual means from China, as a result of or in connection with the investigation and proceeding in China referred to in the evidence.

77 I also accept that, on the evidence before me, Mr Gu's circumstances are beyond the control of the defendants.

78 In this context I note, as each of the parties accepted, that it is not open to the Court on the evidence before me to conclude that it would be permissible under Chinese law for Mr Gu to give evidence by audiovisual means from China, even if he was in a position to be willing to do so. I add that I infer that, at least at this stage, Mr Gu is not willing to do so given the restrictions and prohibitions he is said to be subject to, as referred to in his solicitor's letters. I note also that the Court was informed by counsel for the defendants that they propose to continue to 'push' to see if Mr Gu can be in a position to give evidence, whether audiovisually or otherwise, noting also the statements in Mr Gu's solicitor's letter that he is willing to give evidence in the proceeding when free of his restrictions.

79 As was understandably accepted by the defendants, and revealed by the evidence in any event, in the circumstances as currently known, there is at least real uncertainty as to whether restrictions on Mr Gu giving evidence in person or by audiovisual means from China will be eased after 8 August 2025, and if so when. I refer in this regard, for example, to Mr Gu's solicitor's letter dated 8 April 2025, including the statement that it is anticipated that the restrictions might not be lifted until after 8 August 2025 at the earliest. Given the limited evidence regarding the nature and extent of the restrictions, and the possible time that the inquiry and other investigations may take, it is very difficult for the Court or the parties to reach an informed view regarding the likelihood of Mr Gu being in a position to give evidence on or after 8 August 2025, and if so when.

80 As was appropriately acknowledged by counsel for the defendants, if the Trial Date was vacated and the matter was re-fixed in August, September, October or November 2025, even if a judge was available, neither the parties nor the Court can at this stage proceed with any confidence that Mr Gu will be available to give evidence given the limited state of the evidence.

81 That said, having regard to the evidence, and although it could have been more detailed, I am satisfied for present purposes that Mr Gu is currently unable to give evidence at the trial for the reasons referred to. To the extent that the plaintiff submitted that I could not be so satisfied, I do not accept that submission.

82 Although the plaintiff submitted that the defendants had not established that Mr Gu is a critical witness, I accept on the material and submissions before me that those representing the defendants consider him to be at least a material witness, as the evidence also establishes is Mr Murphy's belief. Although I have taken into account the passages of the witness statement of Mr Gu referred to by counsel for the plaintiff, there is limited force in these observations given that the witness statements are to stand as outlines of evidence, and it appears that there is every likelihood on the material before me that the defendants will seek to lead oral evidence from Mr Gu regarding the agreements referred to in his witness statement. For present purposes I am satisfied that the defendants consider Mr Gu to be a material witness and that on the material before the Court the Court is not in a position at this point to conclude otherwise.

83 I have observed that the agreed trial plan of the parties provided to the Court on 28 March 2025 reveals that there are a number of lay witnesses to be called by the parties and no expert witnesses. Relevantly, the trial plan records that Mr Gu is proposed to be called by the defendants, and that he will be the last witness to be called in the proceeding. The total anticipated time for his examination in chief, cross-examination, and re-examination, is estimated to be two hours and 45 minutes.

84 Putting the question of the defendants' funding to one side for the moment, on the evidence before me there appears to be no material impediment to the steps contemplated by the trial plan taking place as scheduled, except for the giving of evidence by Mr Gu, and the filing and hearing of closing submissions if Mr Gu is to give evidence. So much was submitted by counsel for the plaintiff, who also submitted it would avoid the two weeks of court time that has been set aside being lost or potentially lost to the administration of justice. I also observe that proceeding with the trial in this way would also go a considerable way to minimising disruption and wasted expenditure, when compared with the defendants' proposal that the Trial Date be vacated entirely.

85 It is plain on the evidence and from the trial plan that, if Mr Gu was not subject to restrictions, the defendants currently propose to call him as a witness. Although in all the circumstances, and taking into account the Court's obligations under the CP Act and the principles and observations to the effect earlier referred to, I have concluded that it is not appropriate to vacate the Trial Date and re-fix it on the first available date after 8 August 2025, I consider it just, fair and appropriate to reserve liberty to apply to the defendants to later seek orders adjourning the trial part-heard to enable the giving of evidence by Mr Gu, on the first available date after 8 August 2025, and the hearing of closing submissions shortly after. In this context I make the following further observations.

86 First, although the defendants did not at this point make an application in the alternative for such an order, counsel for the defendants appropriately acknowledged that if Mr Gu's evidence was deferred to such a date at this point then, as things stand, there was no evidence before the Court pointing to any material prejudice, and no submissions were made regarding the existence of any particular prejudice if such a course was adopted.

87 Second, notwithstanding the general prejudice by reason of delay, the evidence did not reveal any material prejudice that would be suffered by the plaintiff if any such evidence and the hearing of closing submissions were deferred to the later date.

88 Third, because it is not currently known what the position may be at or towards the end of the trial regarding Mr Gu, and noting the limited evidence on the topic, I consider it to be preferable, efficient, just and fair, and consistent with the Court's obligations under the CP Act, for this issue to be considered in the light of the then prevailing circumstances should the defendants wish to make use of such liberty to apply, rather than making an order deferring any evidence of Mr Gu or the hearing of closing submissions at this point.

89 Should liberty to apply later be exercised by the defendants, there will have been an opportunity for the defendants to seek to obtain further information regarding Mr Gu's position, and to adduce such further evidence about the same as they can. In addition, the defendants will have the opportunity to consider the significance of Mr Gu's evidence at a time when most (if not all) of the other evidence has been heard, thereby also enabling the parties and the Court better to consider the materiality or otherwise of the evidence proposed to be led from Mr Gu. The Court will also be in a position to be appraised of what further proactive steps the defendants have in fact taken to ascertain the likelihood or otherwise of Mr Gu becoming available after 8 August 2025, or at some earlier time, which, among other things, will facilitate the just and timely hearing and determination of any application to adjourn the trial part-heard at that time should such an application be made.

90 Fourth, in approaching the matter in this way neither the defendants' nor the plaintiff's positions are materially (if at all) prejudiced, with each party being able to make such submissions as they wish if the application the subject of liberty to apply is pursued at that time, and in the light of the circumstances then prevailing.

91 Fifth, I observe that, given the limited time allocated for the evidence of Mr Gu in the trial plan, if such an application was made and was successful, the trial judge would only need to find about half a day of court time to hear Mr Gu's evidence, and to allocate some time for the hearing of closing submissions. As things stand, given other Court listings, this is more readily achievable than the current inability to adjourn the entire trial to a date in August, September, October, November or December of this year.

92 I add for completeness that it is also the case that, as things stand, I am not in a position to hear the trial if it is adjourned until August or later in 2025, and I understand that, at least currently, there is no other judge in the Commercial Court who would be able to do so, even if it was determined that this matter warranted being given priority over other matters at that time.

93 Sixth, if a later application is proposed to be made, and it is then evident that Mr Gu is not or may not be in a position to give evidence for an extended period, then that will be a matter relevant to the consideration of the defendants as to whether or not they pursue the application, and if they do, to the Court and the parties on the hearing, consideration, and determination of any such application.

94 As I have said, I consider the course I have described to be preferable, and more just, efficient and fair, than determining and directing at this point that the trial should be adjourned part heard to a fixed date after 8 August 2025 at the conclusion of the evidence of witnesses other than Mr Gu.

95 With respect to the evidence of the funding challenges said to be experienced by the defendants, whether this is considered alone or together with any other circumstances in any combination, it is sufficient to say that on the evidence before the Court these are not matters that warrant the vacation of the Trial Date and re-fixing the trial as soon as possible after 8 August 2025. It may also be noted in this context that: the evidence provided is very limited and lacks relevant details; the Application is made at a late stage in circumstances where the Trial Date has been fixed for an extended period of time; the proceeding is essentially ready for trial and will commence on or about the day scheduled for its commencement; and the Court was informed by counsel for the plaintiff that the defendants' funding was expected much sooner than August 2025, and in the next four to six weeks. I add for completeness that, although there was no application to adjourn the trial for a four to six-week period, this could have not been accommodated by the Court, and in the circumstances would not have been appropriate or consistent with the Court's obligations under the CP Act in any event.

96 Although counsel for the defendants understandably did not press the other matters in support of the Application referred to in the Defendants' Written Submissions, (including regarding discovery, subpoenas, the possibility of a fresh claim or counterclaim against Mr Wang and the plaintiff, delays in Court Book preparation, and Mr Murphy's prospect of obtaining some work in May 2025), if one or more of these matters been pressed it would have made no difference to the outcome of the Application in the circumstances. Given the defendants' position it is not necessary to elaborate further, and it is sufficient to say that none of these matters, whether alone or in combination with any one or more of any other circumstances, would have warranted the discretion of the Court being exercised in a manner different to the way in which I have determined it should be exercised.

97 As to some of the other matters raised by the parties, I make the following brief observations.

98 I accept that each of the parties have incurred costs and taken steps in preparation for the trial, including, on the evidence, making arrangements for attendance by overseas witnesses of the plaintiff and the purchasing of airfares.

99 Although the Application was made late, I note Mr Shen's evidence that he only became aware of the position on 7 April 2025. Although it is not clear on the evidence when Mr Murphy first became aware of the issue, it is plain that the defendants' solicitors acted promptly after first becoming aware of the position of Mr Gu.

100 To the extent that reference was made in the Defendants' Written Submissions or affidavit material to the plaintiff not explaining why they are not calling particular witnesses, and the plaintiff including some allegedly inadmissible content in their witness statements, these matters are of no relevant assistance to the defendants in the current context. The witness statements have been directed by order to be treated as witness outlines and evidence will be led orally, meaning each party will have the opportunity to take such objections as are appropriate to take in relation to the oral evidence. As to the choice of witnesses, it is trite to say that it is open to a plaintiff (or any other party) to call such evidence as they consider appropriate, subject to any valid objections or matters raised by the Court in the management of the proceeding.[53]

101 Although I have taken into account the plaintiff's submissions regarding costs and the funding position of the defendants, when considered in the context of proceeding with the trial and reserving liberty to apply in the way I propose, and noting that the Court has been informed that funding is expected within the next four to six weeks, the costs order submissions of the plaintiff are of limited force.

102 Finally, and for the avoidance of doubt, if at a later point in time an application is made by the defendants in relation to Mr Gu's evidence, it will be open to each of the parties to make such submissions as they wish regarding the materiality or otherwise of such evidence in the light of the then prevailing circumstances, including the nature of the evidence given in the trial of the proceeding up until that time, and the evidence proposed to be led from Mr Gu.

103 The end point is that the defendants' application to vacate the trial date and have the trial date re-fixed on the first available date after 8 August 2025 will be dismissed.

104 Subject to hearing from the parties regarding the precise form of orders and the question of costs, I also propose to order that the defendants have liberty to apply for orders adjourning the trial part-heard to enable any evidence to be given by Mr Gu, and the hearing of closing submissions, to take place as soon after 8 August 2025 as the business of the Court allows.

105 It may be also noted that, after delivering my oral reasons ex tempore, addressing with counsel for the parties the form of orders, hearing from counsel regarding the costs of the application, and addressing some trial-related matters, authenticated orders were made as follows:[54]

1. The defendants' oral application for orders that the trial date be vacated and the trial be refixed to commence on a date as soon after 8 August 2025 as the business of the Court allows is dismissed (Application).

2. The defendants have liberty to apply, by no later than 4:00pm on 22 May 2025, to adjourn the trial part-heard, to enable the giving of any evidence by Mr Weiping Gu and the hearing of oral closing submissions to take place on a date as soon after 8 August 2025 as the business of the Court will allow.

3. The defendants shall pay the plaintiff's costs of and incidental to the Application, to be taxed on a standard basis if not agreed.

4. Subject to further order, the trial of this proceeding fixed to commence on 13 May 2025 is to commence the following day at 10:30am on 14 May 2025 before Justice Connock on an estimate of 10 to 11 days.

5. The mediation referred to in paragraph 11 of the March Orders is to take place before the Honourable Associate Justice Efthim at 10:00am on 15 May 2025, after the conclusion of oral opening submissions on 14 May 2025.

6. The date in paragraph 17(a) of the March Orders (by which, following conferral between the parties, the plaintiff is to serve on the defendant and provide to the Court a dramatis personae in respect of the companies and individuals involved in the proceeding) is extended from 11 April 2025 to 4:00pm on 30 April 2025.

7. The date in paragraph 10 of the March Orders (by which the defendants are to file and serve an outline of opening submissions in respect of the claim) is further extended from 21 April 2025 to 4:00pm on 1 May 2025.

8. The date in paragraph 18 of the March Orders (by which the parties are to each provide the judge a list of authorities and the authorities, in an electronic form, with each in PDF and in text-searchable format, with the passages relied upon highlighted in-text and the relevant paragraph numbers noted on the front page of each) is further extended from 21 April 2025 to 1:00pm on 5 May 2025.

9. The directions hearing listed on 2 May 2025 is adjourned to 10:30am on 14 May 2025 before Justice Connock.

[1] And addressed in the affidavit material and submissions, which I have read, heard and considered.

[2] Subject to the contentions raised on the Application by the defendants.

[4] Including the attached affidavits of service regarding subpoenas to produce documents.

[5] The first 'Li Loan' of $500,000 is alleged to have been made to 'Old RAPL' but transferred to RAPL.

[6] Although it appears that this claim is no longer to be pressed.

[7] During the hearing on 29 April 2025, counsel for the defendants confirmed that they have not and do not intend to file a defence to the second further amended statement of claim, but rely on their earlier filed defence, noting that the amendments in the said further amended claim were very limited. See also r 36.06(2) of the Rules which provides, in part, that a party who does not plead to an amended pleading within 30 days is taken to rely on any previous pleading made in response to the pleading prior to its amendment.

[8] [2025] VSCA 58, [30]-[33].

[9] In this context Mr Murphy stated that the first defendant 'intends to issue proceedings' against the plaintiff and Mr Wang to recover these alleged losses.

[10] [2025] VSCA 58.

[11] [2009] HCA 27; (2009) 239 CLR 175.

[12] Upon enquiry from the Bench, counsel for the plaintiff confirmed that the plaintiff did not object to this information being taken into account, but it was contended that it was a matter for the Court as to what weight should be given to the information, noting that it was, in effect, evidence from the Bar table.

[13] Supreme Court (General Civil Procedure) Rules 2015, r 10.04. Orders were made on 19 November 2021 for the defendants to file and serve their defence and any counterclaim by 9 December 2021.

[14] [2025] VSCA 58, [30]-[33] (Niall CJ, Emerton P and Gray AJA).

[15] Reference was made to Business Service Brokers Pty Ltd v Optus Mobile Pty Ltd (No 3) [2022] VSC 283 [24]-[25] (Connock J).

[16] Cf Business Service Brokers Pty Ltd v Optus Mobile Pty Ltd (No 3) [2022] VSC 283 at [24] (Connock J).

[17] First Murphy Affidavit, Exhibit SM-1 at p 2.

[18] Reference was made by way of example to Liu v Option Funds Management Limited [2022] FCA 444 at [32]- [36].

[19] Reference was made to Dawn v Carlisle Homes Pty Ltd [2025] VSCA 58 at [32] (Niall CJ, Emerton P and Gray AJA) and AON Risk Services Australia v Australian National University [2009] HCA 27; (2009) 239 CLR 175 at [5] (French CJ).

[20] AON Risk Services Australia v Australian National University [2009] HCA 27; (2009) 239 CLR 175 at [5] (French CJ).

[21] Reference was made to Butler & Ors v JSL Racing Pty Ltd & Ors [2016] VSC 22 at [23] (John Dixon J).

[22] Which Mr O'Connor of counsel appropriately confirmed was the defendants' position.

[23] Rule 48.06 provides that at any time after a date has been fixed for the trial of a proceeding, the Court may vacate the date so fixed and give further directions for the conduct of the proceeding. Rule 49.03 provides that the Court may adjourn a trial on such terms as it thinks fit. As to the Court's inherent authority see, for example, R v Callaghan [1966] VicRp 4; [1966] VR 17, 18-19 (Winneke CJ, Scholl and Pape JJ concurring).

[24] See, for example, Neil J Williams, LexisNexis Butterworths, Civil Procedure Victoria (online at 30 April 2025) [49.03.0]-[49.03.40], and the cases there cited.

[25] [2013] VSCA 361; (2013) 42 VR 635, [45]-[53] (Neave JA and Hargrave and Dixon AJJA).

[26] See, for example, Queensland v JL Holdings (1997) 189 CLR 146; Opeka Pty Ltd v Mackie Group Pty Ltd [2003] VSC 183 [32]-[35].

[27] AON Risk Services Australia Pty Ltd v ANU [2009] HCA 27; (2009) 239 CLR 175.

[28] Cropper v Smith [1884] UKLawRpCh 91; (1884) 26 Ch D 700, 711.

[29] [1912] HCA 52; (1912) 15 CLR 257. See the reasons of Barton J at 262-263, O'Connor J at 264 and Isaacs J at 266.

[30] The Commonwealth v Verwayen (1990) 170 CLR 394, 464.

[31] [1987] 1 AC 189, 220, referred to in The Commonwealth v Verwayen (1990) 170 CLR 394, 464.

[32] Berowra Holdings Pty Ltd v Gordon [2006] HCA 32; (2006) 225 CLR 364 at 376-377 [37], Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ; GSA Industries Pty Ltd v NT Gas Ltd (1990) 24 NSWLR 710, 715, Samuels JA; Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894.

[33] [1991] FCA 536; (1991) 32 FCR 379, 392.

[35] [2013] HCA 46.

[37] Expense Reduction Analysts Group Pty Ltd & Ors v Armstrong Strategies Management and Marketing Pty Ltd & Ors [2013] HCA 46, [39].

[38] Ibid [56]-[57] (emphasis added).

[39] [2013] VSCA 337.

[40] Ibid [19], citing A Team Diamond Headquarters Pty Ltd v Main Road Property Group Pty Ltd & Ors [2009] VSCA 208; (2009) 25 VR 189, [15].

[41] Civil Procedure Act 2010, s 8(1); see also s 7(1) ('the overarching purpose of this Act and the rules of Court in relation to civil proceedings ...').

[45] [2025] VSCA 58.

[46] Civil Procedure Act 2010 s 7.

[47] See, eg, Sali v SPC Ltd (1993) 67 ALJR 841; (1993) 116 ALR 625; [1993] HCA 47; Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 ('Aon'); Eaton v ISS Catering Services Pty Ltd [2013] VSCA 361; (2013) 42 VR 635, especially 647-648 [48]-[50] (Neave JA and Hargrave, Dixon AJJA); [2013] VSCA 361; Mackenzie v Head, Transport for Victoria [2021] VSCA 24, especially [44] (Tate and Kennedy JJA).

[48] Aon [2009] HCA 27; (2009) 239 CLR 175, 182 [5] (French CJ); [2009] HCA 27.

[49] Ibid [26], citing Sali v SPC Ltd [1993] HCA 47; (1993) 67 ALJR 841, 843-844 (Brennan, Deane and McHugh JJ); 116 ALR 625; [1993] HCA 47.

[50] Sali v SPC Ltd [1993] HCA 47; (1993) 67 ALJR 841, 844 (Brennan, Deane and McHugh JJ); 116 ALR 625; [1993] HCA 47.

[52] Mackenzie v Head, Transport for Victoria [2021] VSCA 24, [44] (Tate and Kennedy JJA).

[53] It will of course remain open for the defendants to make submissions in due course regarding adverse inferences for not calling witnesses should they be so advised, but that is a different matter, and a matter for another day.

[54] The adjustment of the commencement of the trial from 13 to 14 May 2025 was to facilitate a judicial mediation taking place on 15 May 2025 after opening submissions on 14 May 2025. See orders 4 and 5 below.