Federal Court of Australia

True EV Distribution Pty Ltd v Shenzhen Xiaopeng Motors Supply Chain Management Co Ltd (No 3) [2026] FCA 1136

ORDERS

THE COURT ORDERS THAT:

1.    Unless the solicitor for the applicants files and serves an affidavit deposing to the fact that by 10 am on 19 August 2026 the applicants have paid into court the second tranche of security for costs of $628,430, the proceedings will be dismissed with costs (including reserved costs) at 10 am on 19 August 2026, such costs to be assessed by lump sum order.

2.    The applicants pay the respondents’ costs of today.

3.    The proceedings be listed for case management on 20 August 2026 at 9.30 am.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Delivered ex tempore

JACKMAN J:

1    On 30 March 2026 I dismissed an application by the applicants (True EV) for an interlocutory injunction against the respondents (XPeng), principally on the insufficiency of the undertaking as to damages: True EV Distribution Pty Ltd v Shenzhen Xiaopeng Motors Supply Chain Management Co Ltd [2026] FCA 380. I fixed the hearing of the proceedings to commence on 6 October 2026 for an estimate of three weeks.

2    On 30 April 2026, I ordered that True EV provide security for XPeng’s costs by way of two tranches, namely:

(a)    $628,430 by 31 May 2026; and

(b)    $628,430 by 31 July 2026.

(See True EV Distribution Pty Ltd v Shenzhen Xiaopeng Motors Supply Chain Management Co Ltd (Security for Costs) [2026] FCA 541).

3    True EV failed to make the first payment. On 10 June 2026, XPeng filed an interlocutory application for dismissal of the proceedings. On the same day, True EV’s solicitor said that True EV needed until 22 June 2026 to pay the first tranche. In light of their stated position, I listed the interlocutory application for dismissal on 29 June 2026. On 26 June 2026, True EV paid the first tranche. In those circumstances, I dismissed XPeng’s interlocutory application but ordered True EV to pay the costs of the interlocutory application: True EV Distribution Pty Ltd v Shenzhen Xiaopeng Motors Supply Chain Management Co Ltd (No 2) [2026] FCA 866.

4    The second tranche was not paid by 31 July 2026, and has not been paid to date. In an affidavit of 28 June 2026, True EV’s then solicitor, Mr Temby of Maddocks, said that he was informed by Mr Wakim of True EV that the funding required to pay the second tranche of security by 31 July 2026 had been secured by True EV and it would be paid into court by that date.

5    On 10 August 2026, XPeng filed an interlocutory application seeking dismissal of the proceedings pursuant to s 56(4) of the Federal Court of Australia Act 1976 (Cth) and r 19.01(c) of the Federal Court Rules 2011 (Cth). Such an application was expressly foreshadowed at the hearings on 30 April 2026 and 29 June 2026, and again on 3 August 2026.

6    Twelve days have now elapsed since the due date for the payment of the second tranche, despite True EV having solemnly stated that it had funding to pay that tranche by 31 July 2026. That follows the delay of about four weeks in payment of the first tranche.

7    At today’s hearing, senior counsel for True EV relied upon an affidavit of Mr David Mathews, a finance broker, affirmed today. He proves that he is the finance broker for True EV in these proceedings and was responsible for arranging the first tranche of security for costs for True EV. Mr Mathews says that the investors for the first tranche and the second tranche are different with different terms and he is not expecting the same delay as was experienced with the first tranche. Mr Mathews says that the investor for the second tranche was “disengaging” towards the end of July and there was a delay in obtaining funding as the investor required a sale of a major asset which was intended to complete on 10 August 2026. Mr Mathews says that the reason for the disengagement was that there was a change in legal representatives in late July by True EV and the investor was concerned about the uncertainty of the proceedings. Mr Mathews says that the sale transaction has now completed, and the final stage of having the funds released is now in progress. Mr Mathews also says that the investor’s concern with respect to the change of legal representatives has now been resolved. He also says that he has a back-up plan on funding with two other investors who both have capacity to assist True EV to secure the second tranche of the security on similar commercial terms. Mr Mathews expects the second tranche of funding to be available to be deposited with the Court by 17 or 18 August, and expresses confidence that that proposed timing can be met.

8    I am satisfied that there is a sufficiently concrete plan and a sufficient explanation for the delay to date that I should not dismiss the proceedings today. Rather, I should allow True EV the opportunity of meeting its obligation to pay the second tranche of security into court at some time in the next seven days.

9    Senior counsel for True EV has proposed a self-executing order whereby if the second tranche of security is not provided by 10 am on 19 August 2026 then the proceedings will be dismissed with costs as at that time. In broad terms, I am satisfied that that order is appropriate. But for Mr Mathews’ affidavit, I would have had no hesitation in dismissing the proceedings here and now. On the evidence adduced on the initial application for security, XPeng will shortly incur recoverable costs of more than the amount of the first tranche. Accordingly, if the proceedings are to continue, XPeng will be incurring costs without the benefit of sufficient security to meet a costs order in its favour. It will shortly have to begin intense pre-trial preparation, if it has not already done so. In my view, that would be an irremediable prejudice to XPeng which appears unlikely to be able to recover its costs in the event that the proceedings are allowed to continue and XPeng is ultimately successful, beyond the amount of the first tranche. However, as I have said, I am persuaded by Mr Mathews’ evidence that I should permit True EV a further and final opportunity to provide the second tranche of security. If that second tranche is provided, then some consideration will need to be given late next week to adjustments that may be necessary for the pre-trial timetable.

10    It appears that True EV are currently in default of that timetable in terms of filing and serving the further affidavits on which they rely. I expect that default to be remedied over the next seven days so as not to cause further delay in the proceedings. If it turns out that the proceedings are simply unable to be heard in the three weeks commencing 6 October 2026, then I will give further consideration to the question whether the proceedings should be dismissed.

Associate:

Dated:    12 August 2026