Xu v Cao & Du Management Pty Ltd (No 4)

Category: Consequential orders

Parties: Jiaqing Xu (Plaintiff)
Cao & Du Management Pty Ltd (First Defendant)
Howard Hao Ting Cao (Second Defendant)

Representation: Counsel:
A J McInerney SC, N Kabilafkas (Plaintiff)
J Tomaras (Defendants)
Solicitors:
Juris Cor Legal (Plaintiff)
Acme Consulting Lawyers (Defendants)

File Number(s): 2022/78620

Publication restriction: No

ex-tempore JUDGMENT - revised

1. The hearing today is the next step in the plaintiff’s endeavour to recover the verdicts in his favour arising from my judgments against the defendants (Xu v Cao & Du Management Pty Ltd [2025] NSWSC 1077*;* Xu v Cao & Du Management Pty Ltd (No 2) [2025] NSWSC 1148 and Xu v Cao & Du Management Pty Ltd (No 3) [2025] NSWSC 1520*)**.*

2. Mr Cao has made a claim for legal professional privilege over, literally, thousands of documents. The plaintiff says that the claim has not been established. The plaintiff accepts that amongst the documents there will inevitably be some documents to which a claim for privilege properly exists. But, submits the plaintiff, Mr Cao has simply not established his entitlement to make the claim.

3. The requirements for establishing a privilege claim were summarised by Muston J in Dexus Capital Investment Services Pty Ltd atf Dexus Diversif**ied Infrastructure Trust A v Australia Pacific Airports Corporation Ltd [2026] NSWSC 125, at [9]:

The defendants say that, to sustain their privilege claim, the plaintiffs are required to prove all facts needed to establish that the claim is properly made: Hancock v Rinehart [2016] NSWSC 12 at [7]. This is correct. As the Full Federal Court observed in Barnes v Commissioner of Taxation (2007) 242 ALR 601; [2007] FCAFC 88 at [18]:

“The authorities emphasise the need for focused and specific evidence in order to ground a claim for legal professional privilege. In Kennedy v Wallace (2004) 142 FCR 185 at 189, Black CJ and Emmett J reiterated the principles that verbal formulae and bare conclusory assertions of purpose are not sufficient to make out a claim for privilege: see also National Crime Authority v S (1991) 29 FCR 203 at 211 (per Lockhart J); Grant v Downs (1976) 135 CLR 674 at 689 (per Stephen, Mason and Murphy JJ). Where possible the Court should be assisted by evidence of the thought processes behind, or the nature and purpose of advice being sought in respect of, each particular document. The fact that generalised evidence is not challenged in cross-examination does not mean that such evidence must be accepted, particularly when it is as manifestly inadequate as it is in this case. As in Kennedy v Wallace, mere general assertions of the purpose of creation of the documents are insufficient to discharge this onus. Even though in that case some evidence as to the purpose of particular records was adduced, Allsop J at 216 considered that the onus had not been discharged because the evidence did not permit a conclusion to be drawn as to the dominant purpose of the creation of any particular document or entry in a document. Simply to show that one purpose for creation of the document was to obtain legal advice or assistance is not good enough.”

4. Mr Cao has provided three affidavits (16 February 2026 and two of 6 March 2026). In these affidavits Mr Cao has set out the breadth of the documents that are concerned, and put the Excel sheets that describe the documents in a USB. I should add here that my use of the word “documents” encompasses emails, text messages and WeChat communications.

5. Mr Cao was cross-examined on his affidavits. He said that the system that was employed to identify the privileged documents was that a keyword, like a lawyer’s name, would be inserted in the search engine and then any document identified was examined to decide if a claim for privilege should be made. The exercise was carried out with his lawyer.

6. What Mr Cao did not do was to say anything about any of the documents identified in the manner just described. Mr Tomaras, on behalf of Mr Cao, frankly conceded that the affidavits of Mr Cao do not establish the sort of matters described in the above passage from Dexus.

7. Mr Tomaras said that it was beyond the capacity of the legal resources available to him to go through the many thousands of documents to provide the information that would satisfactorily establish a privilege claim.

8. Because I recognised that amongst all of the documents there would unquestionably be some that were privileged, I gave Mr Tomaras the opportunity to think of a mechanism, or form of order, which would allow him to identify the privileged documents.

9. Mr Tomaras, over a short break, came up with some proposals, such as the independent solicitor reviewing the documents and making a decision. Bearing in mind the number of documents, that would be an extremely expensive task for the independent solicitor to undertake, either on his own or in consultation with Mr Tomaras, making the exercise impractical.

10. It is to be remembered that Mr Cao is bankrupt, and the plaintiff is chasing a good deal of money, so far unsuccessfully, and really does not need to be burdened by further expenses. Mr Tomaras also suggested effectively having another go to identify the documents, but that seems to me to be a never-ending exercise.

11. Ultimately, I do not think I have any choice but to reject the claim for professional privilege, but in order to give the defendants some comfort, I asked learned senior counsel for the plaintiff whether an undertaking could be given which would, to some degree at least, help in documents which are obviously privileged not being examined.

12. The undertaking was given, which I note in these terms. An undertaking is given on behalf of the plaintiff that in examining the documents, any document that appears to be privileged will be set aside and not further examined or disclosed to any person who is not a legal representative of the plaintiff.

13. As to Mr Cao’s claim for legal professional privilege, the claim is rejected

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