BCEG International (Australia) Pty Ltd v Xiao (No 2) [2022] NSWSC 1102

Supreme Court New South Wales

Medium Neutral Citation: BCEG International (Australia) Pty Ltd v Xiao (No 2) [2022] NSWSC 1102 Hearing dates: 17 August 2022 Date of orders: 17 August 2022 Decision date: 17 August 2022 Jurisdiction: Equity - Commercial List Before: Rees J Decision: Vary judgment and orders under rule 36.16, Uniform Civil Procedure Rules 2005 (NSW). Catchwords: JUDGMENTS AND ORDERS – variation – rule 36.16(1), rule 36.16(3A), Uniform Civil Procedure Rules 2005 (NSW) – Autodesk – no issues of principle. Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 BCEG International (Australia) Pty Ltd v Xiao [2022] NSWSC 972 Rock Cote Enterprises Pty Ltd v FS Architects Pty Ltd (No 2) [2008] NSWCA 205 Category: Consequential orders Parties: BCEG International (Australia) Pty Ltd (Plaintiff) Yu Xiao (First Defendant) Yanying Chen (Second Defendant) Interlink Laboratory Pty Ltd (Third Defendant) Interlink Wagga Central Pty Ltd (Fourth Defendant) West Wyalong Marketplace Pty Ltd (Fifth Defendant) Representation: Counsel: Mr DL Williams SC / Mr ND Riordan (Plaintiff) Mr FP Hicks SC / Mr B Le Plastrier (Defendants)

Solicitors: Thomson Geer (Plaintiff) HWL Ebsworth (Defendants) File Number(s): 2019/310768

Judgment 1. HER HONOUR: In April 2022, I heard a three-week fraud trial brought by the plaintiff, BCEG International (Australia) Pty Ltd (BCEG) against its former director, Yu Xiao, wife Yanying Chen (who I found was a de facto director of BCEG) and the couple's three companies, Interlink Laboratory Pty Ltd, Interlink Wagga Central Pty Ltd and West Wyalong Marketplace Pty Ltd. 2. As detailed in my judgment given in July 2022, the fraudulent activity engaged in by Mr Xiao and Ms Chen was extensive, taking place over several years, several property developments, numerous transactions and involving considerable sums: BCEG International (Australia) Pty Ltd v Xiao [2022] NSWSC 972. (I have adopted defined terms from my primary judgment in what follows.) BCEG sought a variety of forms of relief against each of the defendants, some of which was sought in the alternative and some of which required BCEG to elect between equitable compensation and an account of profits. BCEG made an election in respect of some claims before or during the trial and, in respect of other claims, deferred making an election until after my judgment. 3. On delivering judgment, I made orders, directions and notations requiring BCEG to attend to various matters, including calculating interest, ascertaining the Australian dollar equivalent of payments made in US dollars, providing a copy of my judgment to the liquidators of two non-party companies pending the proposed rescission of contracts between BCEG and those companies, and orders for the taking of accounts. In addition, I directed the parties to notify any errors or omissions within 14 days. Having published my reasons, I raised the following matter with counsel: HER HONOUR: The second matter that I wanted to raise is that I've directed the parties to notify any errors or omissions within 14 days. Now in that respect, I have tried very hard to track through each of the causes of action and the relief sought against particular defendants and I hope I've got it right. But if I've missed something, then please feel free to inform me, if you think I have. I might not agree with you, within the errors or omissions, in particular the omissions aspect of that order. You'll see in particular that most of the misappropriation of funds in respect of the sham subcontractors, West Wyalong payments and Beijing Dragon, all seem to filter in through the Varsity Lakes account. So to the extent that that account has been repaid, those misappropriations have also appeared to me to have been repaid, but I may have missed something. I don't think I have, I've tried to be very careful, but I'd hate to have missed something. If I have, please let me know and no doubt Mr Hicks will do the same. 1. Rather than exercise this liberty, BCEG has filed a motion under rule 36.16(3A) of the Uniform Civil Procedure Rules 2005 (NSW), seeking to vary an order. In doing so, BCEG apprehended that the scope of the 'slip' rule may not encompass the variation sought. I agree that the rule identified by BCEG is the correct head of power.