Gan v Xie [2023] NSWCA 163

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Gan v Xie [2023] NSWCA 163 Hearing dates: 7 February 2023 Decision date: 17 July 2023 Before: White JA at [1]; Simpson AJA at [126]; Basten AJA at [127] Decision: (1) If and to the extent necessary, extend the time for service of the notice of appeal to 24 May 2022. (2) Allow the appeal. (3) Set aside the orders and judgment of the District Court of 25 February 2022. (4) Order that the proceedings be remitted to the District Court for a new trial before the Court, differently constituted. (5) Order that the respondent pay the appellant's costs of the appeal. (6) Order that the costs of the proceedings in the District Court be reserved for consideration of the judge determining the new trial. Catchwords: CONSUMER LAW – Unfair practices – Pyramid schemes – Characteristics of pyramid schemes – Virtual platform involving exchange of legitimate currency for variety credits – Where new members of scheme required to purchase from existing members of scheme – Where recruitment of new members resulted in payment of bonuses to other members of scheme – Where primary judge found scheme not to be pyramid scheme because new members received virtual benefits and recruitment benefits were conferred by mechanics of platform – Whether scheme bore statutory characteristics of pyramid scheme – Held that scheme meets description of pyramid scheme in Australian Consumer Law, s 45(1) CONSUMER LAW – Where respondent alleged to have made series of misrepresentations to recruit appellant and others into investing in scheme – Where misrepresentations said to have conveyed legitimacy, profitability, and safety of scheme – Where respondent acted as conduit for investments in scheme EVIDENCE – Tendency evidence – Civil proceedings – Tendency to make misrepresentations about legitimacy, profitability, and safety of investing in pyramid scheme – Where appellant sought to lead evidence at trial from other investors in pyramid scheme recruited by respondent – Where evidence of respondent making similar misrepresentations to other investors as those alleged to have been made by respondent to appellant – Where primary judge ruled evidence inadmissible on grounds that no tendency notice had been served and tendency evidence lacked significant probative value – Whether lack of service of tendency notice ought to have led to rejection of evidence – Whether evidence from other investors had significant probative value – Held that tendency evidence ought to have been admitted by primary judge APPEALS – Evidence – Credibility findings – Basis and scope for appellate intervention upon primary judge's findings of fact and credit – Where primary judge's credit findings based on witnesses' inability to recall verbatim conversations said to have occurred years earlier – Where witnesses only professed to recall substance or gist of conversations – Whether appellate court entitled to infer error from manner in which primary judge treated evidence – Held that new trial required by reason of primary judge's treatment of evidence and credit findings Legislation Cited: Competition and Consumer Act 2010 (Cth), Sch 2 Evidence Act 1995 (NSW), s 135 Evidence Regulation 2020 (NSW), cll 5, 6 Cases Cited: Australian Competition and Consumer Commission v BlueScope Steel Ltd (No 3) [2021] FCA 1147; (2021) 157 ACSR 77 Australian Competition and Consumer Commission v Yazaki Corp (No 2) [2015] FCA 1304; (2015) 332 ALR 396 Cantarella Bros Pty Ltd v Andreasen [2005] NSWSC 579 Connex Group Australia Pty Ltd v Butt [2004] NSWSC 379 Ford v Ingham Enterprises Pty Ltd ABN 20 008 447 345 (No 3) [2020] FCA 1784 Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 IMM v The Queen (2016) 257 CLR 300; [2016] HCA 14 Kane's Hire Pty Ltd v Anderson Aviation Australia Pty Ltd [2023] FCA 381 Lithgow City Council v Jackson (2011) 244 CLR 352; [2011] HCA 36 Nominal Defendant v Smith [2015] NSWCA 339; (2015) 73 MVR 257 R v Dann [2000] NSWCCA 185 R v Harker [2004] NSWCCA 427 Re Kit Digital Australia Pty Ltd (in liq) [2014] NSWSC 1547 RH v R [2014] NSWCCA 71; (2014) 241 A Crim R 1 Rogic v Samaan [2018] NSWSC 1464 Szeto v Situ (No 2) [2019] NSWSC 1312 Toben v Jones (2003) 129 FCR 515; [2003] FCAFC 137 Watson v Foxman (1995) 49 NSWLR 315 Texts Cited: Schacter et al, 'The Cognitive Neuroscience of Constructive Memory' (1998) 49 Annual Review of Psychology 289 Judicial Council on Cultural Diversity, 'Recommended National Standards for Working with Interpreters in Courts and Tribunals' (2017, http://jccd.org.au/wp-content/uploads/2018/02/JCCD-Interpreter-Standards.pdf) Category: Principal judgment Parties: Youxian Gan (Appellant) Eileen Xie (Respondent) Representation: Counsel: S Zhao (Solicitor) (Appellant) L T Livingston SC with L P Cavell (Respondent)