District Court New South Wales Medium Neutral Citation: Wang v Chea (No 2) [2015] NSWDC 161 Hearing dates: 5 February 2015 Date of orders: 05 February 2015 Decision date: 05 February 2015 Jurisdiction: Civil Before: P Taylor SC DCJ Decision: I allow the plaintiffs to file the proposed Further Amended Statement of Claim. Order the plaintiffs pay any costs thrown away by reason of the amendment. The costs of the notice of motion be costs in the proceedings. Catchwords: PRACTICE AND PROCEDURE – application to amend statement of claim Category: Procedural and other rulings Parties: Shikuan Wang (first plaintiff) Fenlian Jin (second plaintiff) Rui King Pty Ltd ACN 156 351 441 (third plaintiff) Pauline Yi Bin Chea (first defendant) Kevin Cheang Meang Chea (second defendant) Golden Tower Enterprises Pty Ltd ACN 130 397 634 (third defendant) Representation: Counsel: Mr B Lloyd (defendants) Solicitors: Hu Solicitors (plaintiffs) Jason Li Lawyers (defendants) File Number(s): 2013/335053 Publication restriction: None Judgment 1. The plaintiffs seek to amend paragraphs 8 and 48A in the Amended Statement of Claim. 2. The amendment to paragraph 8 is to add a sentence about the second defendant being the vendor of the business and the location of the business. That matter does not appear to be in issue, and is pleaded elsewhere and not disputed. That seems to be a reason why the amendment should be allowed, even if it may be unnecessary. 3. The second amendment raises a broader issue. Paragraph 48A of the proposed Further Amended Statement of Claim states: "The conduct of the first defendant and the second defendant (on their own account and/or as persons 'involved' within the meaning of section 2 of the Australian Consumer Law ('the ACL'), in the conduct of the third defendant) in: … (l) selling the Restaurant for $460,000 in circumstances where the rent payable under the Lease after the sale was $145,600 per annum plus outgoings in circumstances where by virtue of second defendant having been the vendor of the Restaurant business, the first defendant and send [sic. Presumably, second] defendant having been directors of the 3rd defendant & running the restaurant business together, the third defendant having been the proprietor of the Restaurant shop prior to the sale, a. they knew what the income and expenditure of the Restaurant was prior to the sale, and, b. they knew or ought to have known what the likely income and expenditure of the Restaurant would be after the sale, such that the Restaurant had no prospect of commercial success, constituted: iii. unconscionable conduct in trade or commerce within the meaning of the unwritten law from time to time contrary to section 20 of the ACL, iv. unconscionable conduct in trade or commerce in connection with the supply or possible supply of services contrary to section 21 of the ACL." The underlined portion of this paragraph is that portion which the plaintiffs seek to add. At present there is no trial date set in respect of the matter. 1. The defendants oppose the amendment on the basis that it will require a number of further steps which they say will take around eight months to complete, that it will substantially increase the costs of carrying out interlocutory steps, and that it involves a repetition of a process already completed thereby wasting costs. They also rely upon the stress of the proceedings to the first defendant, Pauline Yi Bin Chea. 2. The proposed amendment raises questions about the knowledge of the defendants and the profitability of the business prior to the sale. The profitability of the business prior to the sale has already been raised in the current pleadings. There is alleged to be in the pleadings a representation, though not by the defendants, about the gross turnover of the business, the time it would take to recover the capital cost from the business (presumably from profit), and the absence of any risk of loss of capital (see paragraph 14). These representations are alleged to be false in that: "a. the turnover of the Restaurant…was approximately $10,215 per week b. the Restaurant did not make a profit, c). the Restaurant made trading losses of approximately $3800 per week," (see paragraph 34). 1. These matters are not admitted in the pleadings. Thus, the plaintiffs are entitled to seek to prove these matters, including by requiring production of relevant documents from the defendants. 2. Accordingly, the amendment proposed in paragraph 48A in respect of the income and expenditure of the restaurant prior to sale does not add anything of substance to that which is already alleged and should not substantially increase the time and costs in the matter. 3. The other component of the proposed paragraph 48A is an allegation about the knowledge of the defendants. The knowledge of the defendants is elsewhere in issue (see, for example, paragraph 48). And an allegation that the defendants knew about the profitability of a business they owned and were conducting immediately prior to the sale is not a matter that should substantially delay the defendants in defending the action. 4. I also take into account the fact that a hearing date has not been set down and thus, there is no prospect of a hearing date being vacated by reason of the amendment. 5. I also take into account that both parties say they are ready for the matter to go to trial. All the evidence is already on, at least by the plaintiffs. No application has been made by the plaintiffs to file further evidence. 6. The proceedings are the cause of "inconvenience, stress and significant financial strain" to at least one of the defendants. Unfortunately, that is a product of most litigation. It seems to be unconnected to the proposed amended claim, except perhaps to the extent that the amended claim might lengthen the period before which this litigation will be concluded. It is not a persuasive reason as to why the amendment should not be allowed. 7. Questions of costs can be dealt with in an order for costs. Orders for costs do not generally compensate for all the prejudice that arises from amendments. But in this case the amendment does not lengthen the proceedings substantially and concerns issues that seem to have been largely raised by other allegations in the pleadings. Accordingly, the financial strain imposed by the amendment can be dealt with fairly by appropriate costs orders. 8. I say nothing about the utility of all of the allegations in the plaintiffs' proposed Further Amended Statement of Claim. There are allegations about representations by persons other than the defendants, which raise a question as to what is the relevance of those matters and whether they should be allowed to be part of the pleadings, but they are presently in the pleadings and no objection is taken. 9. I allow the plaintiffs to file the proposed Further Amended Statement of Claim and order the plaintiffs pay any costs thrown away by reason of the amendment. In view of the doubt which I retain about the ultimate utility of the particular pleading and other aspects of the Statement of Claim, the appropriate costs order should be that the costs of the notice of motion be costs in the proceedings. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 13 August 2015