Background
Lina Fang and companies she controls allege that, in 2016, she transferred about AUD$78 million gifted by her then husband from China to Australian accounts held by Wenliang Yao and his mother, Lianru Zhao. Fang says Yao falsely represented that he was a lawyer and would hold the funds in a law-firm trust account. She alleges that funds were instead paid into Yao’s and Zhao’s personal accounts, used partly to acquire Australian property, and otherwise remain unaccounted for. About AUD$28 million was later garnisheed by the Commissioner of Taxation.
The Yao and Zhao defendants deny liability. They contend Fang was not the legal or beneficial owner of the funds, the alleged gift documentation was not genuine, and the transfers were intended to move money from China unlawfully and support visa applications for which Fang was ineligible. Shortly before a six-week trial, they sought further and better disclosure from the plaintiffs across seven categories, including legal and immigration advice, ATO communications, electronic communications, financial records, marriage documents and documents withheld on privilege grounds.
The Court’s Holding
Muir J dismissed the disclosure application except for a limited order concerning category 5 financial documents. By 16 October 2026, the plaintiffs had to identify where documents concerning rental income, property ownership and related benefits were listed in their disclosure, including any privilege claims, or disclose them if they had not already done so.
The Court rejected the remaining requests. The defendants had not established the required special circumstances, direct relevance, or an objective basis to infer non-compliance with disclosure obligations. Their claims that legal professional privilege had been waived, or displaced by the iniquity exception, were unsupported: references to the existence or nature of legal work did not reveal the substance of advice, and the material did not establish a prima facie case that advice was obtained to further an improper purpose. The late challenge to the plaintiffs’ privilege claims over category 7 documents also did not justify requiring a substantial privilege affidavit on the eve of trial.
Key Takeaways
- A broad request for documents is not enough; an applicant must show direct relevance and satisfy the UCPR threshold for further disclosure orders.
- Referring to legal work or advice generally does not waive privilege unless the substance, gist or conclusion of the advice is deployed.
- The iniquity exception requires more than allegations of wrongdoing: there must be prima facie evidence that the communications furthered an improper purpose.
Why It Matters
The decision underscores the Queensland Supreme Court’s reluctance to permit expansive, late-stage disclosure disputes to disrupt imminent trials. It also confirms that privilege challenges must be properly and promptly framed under the Uniform Civil Procedure Rules 1999 (Qld).
For litigators, the case illustrates that document-management practices do not remove the need to identify genuinely relevant material, but neither does inclusion within a disclosed document family itself concede relevance or waive privilege over every attachment.