Recent Cases

Gan v Xie [2023] NSWCA 163 (17 July 2023) (White JA at [1]; Simpson AJA at [126]; Basten AJA at [127])


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