Yang v Option Funds Management Limited

1. The hearing listed on 2 to 6 February 2026 be vacated.
2. The matter be listed for hearing on 23 to 27 February 2026, 16 March 2026, and a half day on 24 March 2026.

1. Order 6 of the orders made on 31 October 2025 be varied such that the Respondents are to file and serve a written outline of submissions on or by 11 February 2026.
2. Order 7 of the orders made on 31 October 2025 be vacated.

Factual and Legal Issues for Determination and Objections

1. Order 5 of the orders made on 12 December 2025 be varied such that by 19 February 2026, pursuant to s 37P(2) of the Federal Court of Australia Act 1976 (Cth), counsel briefed for the parties (or if no counsel are briefed, then the solicitor appearing for the party) are to confer, and the parties to file and serve:

(a) a document entitled "Agreed Background Facts" which, in narrative form, identifies relevant facts in respect of which there is agreement or no bona fide contest between the parties;

(b) an agreed document entitled "Factual and Legal Issues for Determination" which document:

(i) each substantive contested factual issue in respect of which the parties consider it is necessary for the Court to make findings; and

(ii) each contested legal issue in respect of which the parties consider it is necessary for the Court to determine at the hearing; or

failing agreement, a document with areas of disagreement clearly marked.

(c) a document which:

(i) identifies each objection that each party has to any affidavit or document proposed to be adduced in evidence by the other party or parties;

(ii) sets out the detailed basis for the objection including a reference to authority or legislation relied on; and

(iii) sets out the other party's detailed response to the objection, including a reference to any authority or legislation relied on.

1. Order 6 of the orders made on 12 December 2025 be varied such that the parties are to file and serve, and provide by email to Chambers, a Court Book in electronic form, prepared so that each page opens at a zoom of 125%, is text searchable and formatted in Format 1 in accordance with cl 4 of the Court's eBooks Practice Note (GPN-eBOOKS) on or by 19 February 2026.
2. Order 7 of the orders made on 12 December 2025 be varied such that the parties are to file and serve, and provide by email to the Chambers, a Joint Bundle of Authorities in electronic form, prepared so that each page opens at a zoom of 125%, is text searchable and formatted in Format 1 in accordance with cl 7 of the Court's eBooks Practice Note (GPN-eBOOKS) on or by 19 February 2026.

1. Order 8 of the orders made on 12 December 2025 be varied such that the parties jointly provide by email to Chambers an agreed Trial Plan, which contemplates the timing of evidence and submissions at final hearing, by 19 February 2026.
2. Pursuant to s 53A of the Federal Court of Australia Act 1976 (Cth), the proceeding be referred to the New South Wales District Registrar for mediation in accordance with Pt 28 of the Federal Court Rules 2011 (Cth) by him or by another Registrar or Deputy Registrar nominated by him for that purpose on 18 February 2026.

1. The First, Fourth and Fifth Respondents to pay the Applicant's costs thrown away by reason of vacating the hearing dates, and the Applicant's costs of this interlocutory application.

1. Liberty to apply on two days' notice by email to the Associate of Needham J.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Delivered ex tempore, revised from transcript

1. These proceedings were commenced on 8 May 2023 by way of Originating Process and Concise Statement and concern a $3.5 million investment made by the applicant in January 2016 into a Fund, of which Option Funds Management Limited, the first respondent, is the trustee. The investment was made in the context of the applicant's "significant investor visa".
2. In very broad compass, the applicant alleges that he was misled by the first respondent as to the terms on which his $3.5 million investment were made, including representations made on behalf of the first respondent that:

(a) the applicant's investment would be repaid promptly upon request after two years;

(b) the interest payments and repayment of the applicant's principal investment were guaranteed; and

(c) the Fund was a very safe investment.

1. He says that he was unable to read or speak English and that the investment documents were in English. He says that the investment manager of the first respondent, Ms Hu, did not explain significant aspects of the terms of the investment to him, including conditions as to redemption of his units.
2. The applicant further alleges that the second, fourth and fifth respondents, as the directors of the first respondent, breached their equitable and statutory duties by, amongst other things, causing and/or approving the third respondent's redemption requests in the amount of $15,920,000 to be paid from the Fund in circumstances where the third respondent had only paid $3,465,010 for the ordinary units in the Fund at a face value of $1.00 per unit. The third respondent is a company owned and controlled by the second respondent.
3. The applicant seeks various remedies including a refund of his original investment, damages or compensation, as well as interest against the first respondent and orders against (relevantly) the fourth and fifth respondent pursuant to ss 12GF and/or 12GM of the Australian Securities and Investments Commission Act 2001 (Cth), and that the trust fund be restored.
4. The matter is listed for hearing next Monday, 2 February 2026, having been listed for hearing on those dates after the parties agreed to vacate the hearing listed for October 2025. The first, fourth and fifth respondents, to whom I will refer as the active respondents, have now filed an interlocutory application seeking the vacation of next week's dates. When granting a hearing of that interlocutory application, I indicated to the parties that I had recently acquired free dates later in February 2026 due to a settlement. While the applicant consents to the matter being set down in the last week of February, the active respondents maintain their application to have the trial vacated and foreshadow various possible applications for amendment of their Third Further Amended Concise Statement in response, and to bring further evidence (including expert evidence).
5. The matter has had a long history, having been re-allocated into my docket on 10 July 2024, and first listed before me in August 2024. The applicant's evidence in chief had been filed and served on 8 May 2024. Part of that evidence were statements from qualified translators in Mandarin of (inter alia) WeChat messages between the applicant and other persons in relation to the investment which the application seeks to be returned. The fourth and fifth respondents are directors of the first respondent. The second and third respondents are respectively another director, Mr Cao, (who was apparently an active player in the arrangements for the applicant to make the investment) and a company controlled by him. On 19 August 2024, I made orders extending the time for the respondents to file and serve any witness statements to be relied upon at hearing, to 4pm on 28 August 2024.
6. On 8 November 2024, I made a guillotine order in relation to the first, second and third respondents' statements, to the effect that they not be able to rely on any statements not filed and served by 4pm on 6 December 2024, without leave.
7. The fourth and fifth respondents, Mr Gilmore and Mr Meares, were joined to these proceedings on 28 April 2025, when the applicants sought to file a Further Amended Originating Application and a Third Further Amended Concise Statement, as well as the respondents seeking leave (which was granted) to rely on two statements (of Mr Cao and Mr Meares) as required by the 8 November 2024 guillotine order.
8. The matter was originally listed for a three-day hearing in October 2025. On 30 June 2025, I made orders for further evidence to be served in relation to the Third Further Amended Concise Statement and for trial preparation orders including submissions, identification of agreed facts, factual and legal issues for determination, and objections to evidence. I ordered that a Court Book be filed by 21 October and a trial plan be provided to my chambers. Those orders were extended by orders of 5 September 2025 (which included orders for supplemental discovery) and, on 31 October, as noted above, the October hearing dates were vacated.
9. Mr Cao had sequestration orders made against him in this Court on 30 October 2025.
10. On 12 December, the respondents sought leave to file their evidence by 5pm that day, and I made a further guillotine order in relation to the respondents' evidence. The applicant was to file and serve evidence in reply on or before 27 January 2026, which was the day of the interlocutory application hearing. Other trial preparation orders were also extended, and the matter was listed for pre-trial mediation on 28 January 2026 (the date of these reasons).
11. All five respondents were represented by the same firm of solicitors, United ACL, from the inception of the matter or their joinder, respectively, until 14 January 2026, when Colin Biggers & Paisley was instructed by the active respondents. This was apparently subsequent to the active respondents' insurance broker notifying their insurer, Liberty Specialty Markets, of the claim constituted by the Third Further Amended Concise Statement, which happened on 1 December 2025. An affidavit from Mr Gigliotti, a solicitor in the previous solicitors' firm, noted that as at 10 December 2025 Liberty Specialty Markets had not yet determined to indemnify the active respondents, and advised that they should "act as prudent uninsureds". The insurance company instructed Colin Biggers & Paisley, on 14 January 2026, to assume the carriage of the defence of the proceedings on behalf of the active respondents. Colin Biggers & Paisley has not yet received the file from United ACL, because of that latter firm retaining the file subsequent to its lien.
12. Mr Konstantinidis, solicitor, who affirmed an affidavit for the active respondents, said that he was concerned that with the change of solicitors and counsel for the active respondents there was not sufficient time to prepare the matter for hearing. In particular, there were concerns arising from the circumstances of not having the previous firm's file, a need to obtain documents produced under subpoena and on discovery, identifying further issues such as whether there were a conflict between the first respondent on the one hand, and the fourth and fifth respondents on the other, whether they should obtain an expert report from a linguist, Dr Wang, as to the meaning of Mandarin words which are asserted by the applicant to have a particular meaning and translated by interpreters who have put on evidence, whether they should issue further subpoenas or notices to produce, and whether they should seek further lay evidence from Ms Hu (who is a former employee of the first respondent) or Mr Li (a migration agent), or alternatively to seek to address any Jones v Dunkel inference if they are unable to do so.
13. The active respondents submit that they are not currently seeking leave to take any of those proposed actions, but foreshadowed that, on receiving the file and getting further into the preparation of the matter, they may seek leave to do so.
14. Additionally, Mr Mitchell, who appeared with Mr Short for the active respondents, submitted that there was a lacuna in the evidence brought by the applicant in relation to the quantum of damages.
15. The applicant does not oppose vacation of the hearing dates per se, recognising the difficulties that new representation faces, but seeks that it be on the following terms:

(1) that the matter be set down for a week later in February with a further two days for submissions in March, which later days were originally contemplated;

(2) that the active respondents pay the costs of the applicant thrown away; and

(3) that the active respondents pay the applicant's costs of the application.

1. The active respondents do not wish to be heard on the second and third conditions, but resist a hearing in February.
2. The question to be determined is whether the active respondents should have more time on the basis that they need to prepare the current case, or whether they should have more time to undertake what was characterised by Mr Mitchell as taking steps to ensure that the insured respondents were acting appropriately in relation to mitigating their damage and taking all actions which would improve or preserve their position in relation to the proceedings. In effect, the further time is needed to guard against further litigation, whether against the insurance company for indemnification or against the previous solicitors.
3. The active respondents stressed that the allegations against the first respondent, a trustee, and its directors, were serious, and that they should be given the opportunity to defend them as they may be advised. Mr Mitchell noted that the fourth and fifth respondents were only joined in April last year, and they should not be held responsible for delays prior to that point.
4. Mr Hewitt SC, who appeared with Mr Goldberg for the applicant, submitted that the active respondents were seeking to revisit forensic judgments made by the former solicitors for the active respondents. In particular, he noted that there was currently no application to amend, and that there was no explanation of the forensic decisions taken which now seek to be investigated by the current solicitors - for example, there were multiple opportunities for further lay evidence during which Ms Hu or Mr Li could have been contacted, but either they were, (and their evidence was not put into a statement) or they were not (for whatever reason). Either way, a forensic decision in relation to the relevance of Ms Hu and Mr Li must have been made, because each of those persons is mentioned by name in the Third Further Amended Concise Statement of the applicant. Mr Hewitt also noted that if there were issues with valuation, then that matter could be determined after the decision on liability.
5. The applicant relied on an affidavit of Ms Zhang, a solicitor, who set out the "substantial prejudice" that would be suffered by the applicant were the proceedings to be delayed beyond the end of February. In particular, she relied on the stress and inconvenience which, it can be inferred a personal applicant suffers when undertaking complex litigation of this kind. Ms Zhang also noted that the accuracy of the translations had not previously been put in issue by the active respondents. Her firm had approached Dr Wang in 2024 seeking to engage him if the translations were in issue. She said in her affidavit that, "When it became apparent that the respondents did not dispute the translation of the Chinese words, the applicant did not proceed with putting on any expert evidence from Dr Wang or any other linguistics expert". Now, it appears Dr Wang has been retained by the active respondents and is unavailable to the applicant because of that conflict.
6. I note here that one of the relevant words transcribed as "an quan" and translated as "safe" (in reference to the original investment), was the subject of evidence and findings in In the matter of Atlas Advisors Australia Pty Ltd (2022) 162 ACSR 509; [2022] NSWSC 705. Mr Hewitt submitted that as two qualified translators were giving evidence of the fact of the translation of the applicant's statement and the various documents (including text exchanges) from Mandarin to English, the active respondents were not prejudiced and could cross-examine them as to the meaning of any disputed words.
7. In response, Mr Mitchell submitted there was no real prejudice to the applicant, and no specific financial prejudice noted in Ms Zhang's affidavit, were the matter to be vacated and relisted (which the parties acknowledged could not be before the second half of 2026 due to the pressures of my court commitments). He submitted that the translation/expert linguist evidence issue was a real one, and that if he did not have an expert report to back up any assertions as to the meaning of the words used then cross-examination could only go so far. He did not shy away from the fact, fairly, that the "case has been run how it has been run", but noted that the principles of Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175 were not a "one size fits all" solution, echoing where the plurality (Gummow, Hayne, Crennan, Kiefel and Bell JJ) said at [98] that "a just resolution of proceedings remains the paramount purpose" of the relevant section. Mr Hewitt also relied on that paragraph in Aon Risk, placing emphasis upon the "but" which follows: "but what is a just resolution is to be understood in light of the purposes and objectives stated". In particular he drew my attention to the limits on repleading and the restrictions inherent in seeking to manage prejudice merely by an order for costs espoused in that decision.
8. Having taken into account these submissions and with sympathy for the position of solicitors and counsel who are acting in a matter with over two years of history without access to the original solicitor's file, I have determined to allow a vacation and a relisting of the matter on 23 February 2026, on the basis of a costs order against the active respondents for costs thrown away and for the cost of this application. The basis of that determination is, as the plurality said in Aon Risk at [102]: "There may be cases where it may properly be concluded that a party has had sufficient opportunity to plead their case and that it is too late for a further amendment, having regard to the other party and other litigants awaiting trial dates".
9. I was taken, of course, to s 37M of the Federal Court of Australia Act 1976 (Cth) which requires me to have regard to the overarching purpose of civil practice: that the just resolution of disputes be achieved both according to law and as quickly, inexpensively, and efficiently as possible. Here, the matter has been on foot for some two and a half years; the fourth and fifth respondents have been parties since late April 2025 (and Mr Meares, the fifth respondent, was giving instructions to the previous lawyers at that point as evidenced by a statement of his being filed after the end of the first guillotine order period mentioned above, after seeking leave to do so).
10. I am also influenced in this decision by the words of the plurality in Aon Risk at [102]: "Invariably the exercise of the discretion will require an explanation to be given where there is a delay in applying for amendment".
11. Mr Mitchell says that the delay in applying for the vacation of the hearing dates is explained by the notification to the insurer of the claim in December 2025, and then the insurer taking until mid-January to indicate that it would instruct solicitors pursuant to the policy, noting that the policy is not in evidence. Mr Konstantinidis set out in his affidavit the steps he took, including recalling counsel from summer holidays, in order to establish the path forward for the active respondents in this litigation. Clearly, the active respondents' new representation have acted as promptly and efficiently as they can. However, there was no explanation for the delay from the time the fourth and fifth respondents were joined in their seeking indemnity from their insurer (or indeed from the first respondent not seeking to make a claim from May 2023 when the proceedings were commenced), or as to why the other witnesses or the expert evidence issue were not previously investigated. I acknowledge that part of the answer to those questions is that they do not have the solicitor's file, but as Mr Hewitt points out, they could have had instructions from the active respondents as to those matters, and have not sought to put those matters before me.
12. It seems to me that to seek, now, to vacate a hearing date with no proposed relisting of the hearing in mind, in order to investigate matters many of which, on the face of the various iterations of the Concise Statements, were in issue between the parties from their filing is not consistent with a "just resolution" of the proceedings. "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": Aon Risk at [98].
13. I will order that the hearing on 2 February 2026 be vacated, and I will list the matter for hearing on 23 to 27 February 2026 and for submissions on 16 and the morning of 24 March 2026. I will make consequential orders.

I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Needham.