Jahani v Qui, in the matter of Ralan Property Services Pty Ltd (receivers and managers appointed) (in liq) (leave to amend pleadings)

Jahani v Qui [2026] FCA 398 is a Federal Court interlocutory decision about amendments to pleadings in a large insolvency and corporations proceeding arising from the collapse of companies in the Ralan Group. The plaintiffs wanted to broaden the case by joining six more corporate plaintiffs and adding a substantial further compensation claim against Mr Qiu linked to an alleged Deposit Release Scheme. The defendants wanted to amend their defence, including by adding a limitation plea.

Cheeseman J granted leave to both sides on terms. The court did not decide the merits of the underlying allegations. It also did not finally decide the limitation consequences of the amendments and joinder. Instead, the court reserved for the final hearing the question of when the joinder and amended pleadings take effect. That procedural point matters because it may affect whether some claims are in time.

The judgment describes the Ralan Group as operating first as a project marketing business and later as a property development business in New South Wales and Queensland. Different developments were carried out through different special purpose vehicles. Apartments were generally sold off the plan before construction. Those sales were commercially important because they were a pre-condition to drawing down finance. The finance arrangements required purchaser deposits to be held in the real estate agent's trust account consistently with the sale contracts until completion.

The plaintiffs alleged that, instead of deposits simply remaining in trust until settlement, purchasers were offered the opportunity to release their deposits as loans in return for interest. The court records allegations that interest accrued at agreed rates of up to 12 to 15 per cent per annum and that repayment occurred at settlement by reducing the amount otherwise payable by the purchaser. The funds were said to be transferred through RPS and, in Queensland, via Ralan Capital Investment, and then advanced to other group companies that needed funds. The plaintiffs alleged that this Deposit Release Scheme generated substantial liabilities and became important to the group's survival.

The plaintiffs' case against Mr Qiu was described as proceeding on the footing that he received proceeds of released deposits and or assisted relevant Ralan entities to conduct the Deposit Release Scheme. The judgment says the plaintiffs alleged he was involved in generating off-the-plan sales, was consulted about the creation and operation of the scheme, promoted it to agents and purchasers, and was remunerated in part by reference to the value of released deposits. The plaintiffs also alleged he had the knowledge necessary for the accessorial and recipient-style claims they advanced.

The case against Ms Liu was different. The judgment says the plaintiffs alleged she was the wife of Mr Qiu and, with him, a trustee of the KMW Trust and the KMW Super Fund, but was not employed by any Ralan company and did not provide goods or services to them. The pleaded case against her was essentially that she was a recipient of payments or benefits, including in relation to specified properties. Importantly, the new knowing assistance claim introduced by the amendments was directed to Mr Qiu rather than Ms Liu.

By the time these applications were heard, the proceeding was already advanced. It had been commenced on 29 July 2022. Service had been deferred while the liquidators obtained litigation funding, and the plaintiffs first served the defendants on 1 March 2023. The court had approved the litigation funding under s 477(2B) of the Corporations Act on 26 June 2023. Pleadings had already gone through earlier iterations. The parties had exchanged lay and expert evidence, and an expert conclave had been held for a joint solvency report. The hearing was listed for late September and early October 2026.

Against that background, the plaintiffs sought another round of amendments. Most were not opposed or were only lightly contested. The real fight concerned what the judgment calls the 20B amendments. Those amendments involved joining six additional corporate plaintiffs and adding a substantial further compensation claim against Mr Qiu in relation to the alleged operation of the Deposit Release Scheme. The defendants argued that these were really new claims by new parties, that they were time-barred, and that allowing them would cause prejudice. The defendants also sought leave to amend their own defence to add a limitation plea and some narrower factual amendments.

The legal issue was not whether the alleged Deposit Release Scheme happened as pleaded. The issue was whether the court should permit substantial amendments to the pleadings and joinder of additional plaintiffs at a relatively late stage of the proceeding. The judgment identifies several linked questions.

First, did the plaintiffs' proposed new claims arise out of the same or substantially the same facts as the existing case? That mattered because the Federal Court Rules draw a distinction between amendments that do and amendments that do not. Secondly, if six new corporate plaintiffs were joined, were they effectively starting their own proceedings only on the date of joinder under r 9.05, as the defendants argued? Thirdly, if so, were some of the proposed claims out of time? Fourthly, had the plaintiffs adequately explained why these matters were not raised earlier? Fifthly, would the amendments cause unfair forensic prejudice to the defendants, or could any prejudice be managed by costs orders, directions and an opportunity to respond?

The defendants' opposition to the plaintiffs' application was grouped by the judge into four themes. They said the 20B amendments were not merely refinements to an existing case but new claims by new parties. They said the claims were time-barred. They argued that s 598 of the Corporations Act was not an appropriate vehicle for a large and complex claim of this kind. They also said the amendments were insufficiently explained and would create prejudice by requiring further pleading, particulars and evidence, potentially putting the hearing timetable at risk.

The plaintiffs' position was that the amendments did not introduce a different controversy. Instead, they said the amendments identified the proper plaintiff companies said to have suffered loss by reason of substantially the same alleged Deposit Release Scheme and brought the pleadings into line with evidence already served. The plaintiffs also relied on the fact that much of the factual matrix was already in the case.

The court also had to deal with the defendants' own amendment application. The proposed further amended defence included a limitation plea in relation to part of the existing claim, with particulars referring to s 14 of the Limitation Act 1969 (NSW), and some narrower accounting and factual amendments concerning undervalue property allegations. At the hearing, the plaintiffs made clear that if they were given leave to amend, they did not oppose leave being granted to the defendants to amend the defence. That meant the real controversy narrowed to whether the plaintiffs' more substantial amendments should be allowed and whether the operative date and limitation consequences should be decided immediately or left to trial.

The judgment refers to rr 8.21 and 9.05 of the Federal Court Rules and the overarching purpose in s 37M of the Federal Court of Australia Act 1976 (Cth). It also relies on the Full Court decision in McGraw-Hill Financial, Inc v Clurname Pty Ltd, which the judge described as supporting caution about finally deciding complex limitation questions on an interlocutory amendment application where there is a reasonable argument that the amended claim may not be statute-barred.

Cheeseman J granted leave to both sides on terms. The orders joined six additional corporate plaintiffs: Ralan Arncliffe Pty Ltd, Ralan Capital Investment Pty Ltd, Ralan Paradise No. 2 Pty Ltd, Ralan Paradise No. 3 Pty Ltd, Ralan Paradise No. 4 Pty Ltd and Ralan Budds Beach No. 1 Pty Ltd. The court also granted leave to the plaintiffs to file a second further amended originating process and a further amended statement of claim in the form identified in the evidence.

The court also granted leave to the defendants to rely on amendments in their proposed further amended defence when filing their defence to the amended statement of claim. The orders then set a timetable for the amended defence, any reply, and any further lay evidence and reply evidence arising from the amendments. The matter was referred to a Registrar for case management until further order.

The most important feature of the ruling was what the court did not decide. Order 4 expressly reserved for determination at the final hearing the date from which the joinder and amended pleadings take effect. The reasons explain that deciding that issue immediately would risk determining, at an interlocutory stage, a question that may bear directly on the availability or scope of any limitation defence and may depend on the proper characterisation of the amendments, the operation of the Rules and potentially the factual footing ultimately established at trial.

That means the court did not finally resolve whether the newly joined plaintiffs' claims should be treated as having started with the original proceeding or only on joinder. It also did not finally resolve whether any limitation defence succeeds. Those issues were preserved for the final hearing.

The judgment also shows the court's approach to prejudice in modern case management. The judge said the relevant prejudice is forensic or procedural prejudice. It is not enough that an amendment may strengthen or weaken a claim or defence, or alter the financial significance of the litigation. The real question is whether the opposing party is placed in an unfair forensic position that cannot be sufficiently addressed by costs, directions or an opportunity to respond. The orders reflect that approach. Each side was ordered to pay the other side's costs thrown away by reason of the amendments it sought, and the costs of the interlocutory applications themselves were reserved to the final hearing.

So the outcome was procedural but significant. Both sets of amendments were allowed. The case could proceed on a broader footing. But the decisive timing and limitation consequences were left open for trial rather than being finally determined on the spot.

For most businesses, this case is not a statement of everyday compliance duties. It is a procedural decision in a large insolvency proceeding. But it still offers a practical reading of litigation risk. If your business operates through multiple companies, the legal identity of the entity that contracts with customers, receives money, holds deposits, advances funds or suffers loss can become critical years later. In a dispute, those distinctions affect who should be a plaintiff or defendant, whether a claim is properly framed and whether limitation arguments arise.

The judgment also shows how customer deposits can become the centre of a much larger controversy. The allegations in this case turned on where deposits were supposed to be held, whether they were released, on what terms, through which entities and for whose benefit. If your business uses trust accounts, deposit release arrangements, project entities or intercompany funding, the documents need to line up. Sale contracts, finance documents, trust account records, accounting entries, board approvals and intercompany agreements should tell the same story.

Another practical point is that litigation can change shape late. Here, the proceeding had already been commenced years earlier, evidence had been exchanged and the matter was listed for hearing. Even so, the court still allowed substantial amendments because the dispute was said to arise from substantially the same factual matrix and because any prejudice could be managed. Businesses involved in litigation should therefore keep reviewing their evidence and legal strategy as the case develops. A claim may broaden. A defence may also broaden. New parties may be added. Limitation points may emerge or be sharpened later than expected.

Just as importantly, this case shows that limitation issues are not always suitable for early final determination. A business owner may think a claim is obviously out of time or obviously safe, but the answer can depend on how the amendment is characterised, whether a new party is being joined, whether the claim arises from substantially the same facts, and when the amended pleading is treated as taking effect. Those are technical questions with major commercial consequences.

This is not a compliance checklist imposed by the judgment. It is a practical risk-management list drawn from the kinds of issues that became important in the case. The central theme is traceability. If money moves through a group, especially money that began as a customer deposit, your records should make it possible to explain who held it, why it moved, on what authority and who ultimately benefited.

For businesses under financial stress, these questions become even more important. Once external administrators are appointed, historical transactions may be examined in detail. If the records are incomplete or inconsistent, later disputes can become larger, more expensive and harder to defend.

The judgment was delivered on 9 April 2026 by Cheeseman J in the Federal Court of Australia. The proceeding itself had been commenced on 29 July 2022. The liquidators had first been appointed as administrators on 30 July 2019. The plaintiffs first served the defendants on 1 March 2023 after obtaining leave to defer service while litigation funding was arranged. The court approved the litigation funding on 26 June 2023. At the time of this interlocutory ruling, the substantive hearing was listed for late September and early October 2026.

The status of this decision is procedural. It resolves amendment and joinder applications, sets a timetable for further pleadings and evidence, and preserves key timing and limitation issues for the final hearing. It does not determine the substantive liability issues in the proceeding.

Source: Federal Court of Australia, Jahani v Qui, in the matter of Ralan Property Services Pty Ltd (receivers and managers appointed) (in liq) (leave to amend pleadings) [2026] FCA 398, judgment dated 9 April 2026.

This page focuses on what can be stated confidently from the published court text: the parties, the procedural posture, the pleaded commercial background described by the court, the issues on the amendment applications, the orders made and the court's express reservation of operative date and limitation questions for the final hearing.