Federal Court of Australia

Target Australia v Smart Trike (withdrawal of admissions) [2026] FCA 1309

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application filed 14 July 2026 be dismissed.

2.    The respondent pay the applicant’s costs of the application, as agreed or assessed.

3.    By 4.00pm on 9 September 2026, the parties are to confer and email the Associate to Cheeseman J agreed proposed short minutes of order for the future preparation of this proceeding up to the completion of evidence.

4.    In the event agreement is not reached as to the proposed short minutes of order, a composite document marked-up to show the areas of disagreement is to be emailed by the time specified in Order 3.

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

REASONS FOR JUDGMENT

CHEESEMAN J:

INTRODUCTION

1    This interlocutory application concerns whether the respondent and cross-claimant, Smart Trike MNF Pte Ltd, should have leave to withdraw two admissions in its Further Amended Defence and to file its proposed second further amended defence. The applicant and cross-respondent, Target Australia Pty Ltd, opposes that relief.

2    Smart Trike made the admissions in three successive iterations of its defence. The first admission is that Smart Trike was a body corporate carrying on business within Australia (paragraph 2(b)). The second is that the sale of the products to Target by Smart Trike (paragraph 12(a)) and to consumers in Australia by Target (paragraph 12(b)) was: (i) the supply of consumer goods in trade or commerce for the purposes of the Australian Consumer Law (paragraph 12(c)); and (ii) conduct in Australia (paragraph 12(d)).

3    Smart Trike submits that the admissions were made in error and are contrary to its instructions and the true facts. Target submits that the admissions reflected a deliberate forensic decision, made with legal advice and upon facts then known, and that permitting their withdrawal would cause substantial prejudice that could not adequately be remedied by an order for costs.

4    Registrar Gronow dismissed Smart Trike’s application on 7 July 2026 and ordered Smart Trike to pay Target’s costs of the application. Smart Trike now seeks review of those orders under s 35A of the Federal Court of Australia Act 1976 (Cth) (the FCA Act). The application was made within the prescribed time.

5    These reasons do not determine whether Smart Trike carried on business in Australia, whether the relevant supply of consumer goods was conduct in Australia, or whether the Australian Consumer Law applies to Smart Trike’s conduct. Those questions arise for final determination only if leave is granted. The apparent significance of the admissions, together with whether the proposed defence is reasonably arguable, bears upon the exercise of the discretion whether to grant leave to withdraw them.

THE SUBSTANTIVE PROCEEDING

6    The background to the substantive proceeding is briefly set out in an earlier judgment of the Court: Target Australia v Smart Trike (Bifurcation Application) [2026] FCA 6 at [3]-[5]. It is sufficient for present purposes to give the following brief overview.

7    Target commenced the substantive proceeding in December 2023. Its Amended Statement of Claim, filed on 17 September 2024, concerns 21 models of “Convertible Tricycle Product” supplied by Smart Trike to Target between December 2009 and July 2018 pursuant to a supply agreement executed in 2007.

8    Target alleges, in substance, that the products did not comply with the “Australian/New Zealand Standard AS/NZS 2088:2000, Prams and strollers – Safety Requirements” (the Stroller Standard) and were thus in breach of warranties given by Smart Trike in the supply agreement between the parties. Target seeks damages under s 236 of the Australian Consumer Law, which is in Schedule 2 of the Competition and Consumer Act 2010 (Cth) (CCA), damages for breach of contract and related declaratory relief, and damages under s 59 of the Goods Act 1958 (Vic).

9    Smart Trike denies that the Stroller Standard applied, pleading that the products were toys, not strollers, and were instead required to comply with the applicable toy standards. It also advances contractual, estoppel, limitation and other defences, as well as a cross-claim against Target.

10    The territorial admissions are significant because Target’s statutory claim relies on s 106 of the Australian Consumer Law. Smart Trike now seeks to put in issue whether its conduct occurred in Australia and whether s 5 of the CCA extends the operation of the Australian Consumer Law to its conduct outside Australia.

APPLICABLE PRINCIPLES IN CONTEXT

Review of the Registrar’s decision

11    A party may apply under s 35A(5) of the FCA Act for review of an exercise of power by a Registrar. On review, the Court may make such orders as it thinks fit with respect to the matter in which the power was exercised: s 35A(6).

12    The review is a rehearing de novo of the application determined by the Registrar, on the material before the Court at the date of the hearing. The Court may receive evidence and submissions that were not before the Registrar, and Smart Trike is not required to establish error in the Registrar’s decision. The Court must determine for itself, on the material before it, whether the discretion to grant leave should be exercised.

The Registrar’s decision

13    Central to the Registrar’s decision was the absence of direct evidence explaining how and why the admissions came to be made. The Registrar considered that the evidence did not disclose what those responsible for giving instructions, drafting and approving the pleadings knew or intended, whether the admissions were made inadvertently or were the product of a forensic decision, or whether they were contrary to the facts. The Registrar treated that evidentiary deficiency as a failure by Smart Trike to discharge its onus, rather than as a basis for drawing an adverse inference. Although accepting that the proposed territorial issue was important and arguable, the Registrar was not satisfied that Smart Trike had provided a sensible explanation for the admissions supported by evidence of a solid and substantial character. The Registrar addressed a debate as to whether the admissions were admissions of fact, law or mixed fact and law, but considered that nothing turned on the distinction. On review, Smart Trike’s case was advanced on the basis that the admissions were erroneous, contrary to its factual instructions and inconsistent with the proper application of the Australian Consumer Law to those facts. No separate basis for withdrawal was developed by reference to the characterisation of either admission as an admission of law.

Evidence on this application

14    The Registrar’s reasons form part of the procedural history and identify the evidentiary deficiency found at that stage. This review is a rehearing of the application which proceeds de novo. The parties have materially enlarged the evidence compared to what was before the Registrar.

15    On review, Smart Trike relies on the following evidence in support of its application:

(1)    three affidavits of Naomi Kate Pearce, the Chief Executive Officer of Pearce IP, sworn 23 March 2026, 23 April 2026, and 9 June 2026, and the annexures to those affidavits; and

(2)    two affidavits of Ofek Baron, Chief of Operations at Smart Trike, affirmed 27 July 2026 and 11 August 2026, and the annexures to those affidavits.

16    Target relies on four affidavits of Liana Janet Witt, Partner of Gilbert + Tobin with primary responsibility for the proceeding, affirmed 21 August 2025, 22 March 2026, 25 May 2026, and 4 August 2026, and the annexures to those affidavits.

17    In broad terms, the principal change from the material before the Registrar is Mr Baron’s evidence concerning the instructions provided on behalf of Smart Trike and the process by which authority was given to file the defences.

18    Target objected to those parts of Ms Pearce’s affidavit of 23 March 2026 and Mr Baron’s affidavit of 27 July 2026 in which they expressed their respective conclusions that the admissions were made in error. I admitted the passages but treated the conclusions expressed in them as submissions rather than evidence. It remains for the Court to determine, on the admissible evidence, whether Smart Trike has discharged its onus, including whether it has established that the admissions resulted from mistake or inadvertence rather than a forensic choice.

19    Ms Pearce’s affidavit of 23 April 2026 was prepared in connection with a dispute arising from Target’s notice to produce unredacted versions of the contemporaneous communications on which Smart Trike relies in this application. Ms Pearce deposes that the material which has been redacted concerns other aspects of the defence and does not concern whether Smart Trike carried on business in Australia or relevantly supplied the products in Australia. The unredacted communications were reviewed by a Registrar in determining the notice to produce dispute. After reviewing the documents in unredacted form, the Registrar dismissed Target’s application for production of the unredacted versions. No reasons for the Registrar’s determination are before me. Smart Trike submits that in these circumstances the extensive redactions should not count against it in the determination of this application. I accept the force of that submission. I therefore do not infer that the redacted material concerns the territorial admissions or would otherwise be adverse to Smart Trike. The relevant issue is whether the limited communications that have been disclosed, considered together with the evidence of Mr Baron and Ms Pearce, adequately explain the process by which the admissions were made and maintained.

20    I approach the application by considering the evidence and submissions now before the Court. I bear in mind that the task on this application is not to conduct an appellate review of the Registrar’s decision.

Leave to withdraw an admission

21    Rule 26.11(2) of the Federal Court Rules 2011 (Cth) provides that a party must not withdraw an admission or other plea benefiting another party unless that party consents or the Court gives leave. Target does not consent. If Smart Trike is granted leave to withdraw the admissions, it will also require leave to file its proposed amended defence under r 16.53. Under r 1.32, the Court may make any order it considers appropriate in the interests of justice. These powers are to be exercised in the way that best promotes the overarching purpose in s 37M of the FCA Act, namely to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible.

22    The applicable principles are summarised by Stewart J in Selvaratnam v St George - A Division of Westpac Banking Corporation (No 2) [2021] FCA 486 at [27]-[28]. The parties do not identify any material dispute about the governing principles. Their dispute concerns the application of those principles to the present facts.

23    The Court has a broad discretion which is exercised by weighing all relevant matters, with the overriding consideration being the interests of justice and to ensure that there is a fair trial: Selvaratnam at [27(1), (4)]. Smart Trike, as the party seeking leave, bears the onus of satisfying the Court that the discretion should be exercised in its favour: SLE Worldwide v WGB and Ors [2005] NSWSC 816 at [56]-[57], [64]-[65] (White J); Wyer v Hunt [2005] ACTSC 15 at [32] (Harper M). It follows that any material uncertainty left by the evidence as to why the admissions were made, whether they resulted from mistake rather than a deliberate forensic choice, or whether they are contrary to the facts, is not neutral. Unless resolved by evidence sufficient to discharge its onus, that uncertainty counts against Smart Trike being granted the leave it seeks: SLE Worldwide at [56]-[57], [64]-[65].

24    Smart Trike must provide a sensible explanation, supported by evidence of a solid and substantial character, for both the making of the admissions and the application to withdraw them: Selvaratnam at [27(2)], [51]. The content of that requirement depends on the circumstances of the particular case. The evidence must permit the Court to determine, with sufficient confidence, how and why the admissions were made; the material facts and instructions known at the time; the persons involved in preparing, approving or authorising the relevant pleading; whether the admissions resulted from mistake, confusion or inadvertence rather than a deliberate forensic decision; and what has occasioned the subsequent change of position. The evidence must also establish a proper basis for treating the admitted matters as genuinely in dispute. A bare assertion that the admissions were made in error, or that the proposed contrary case is reasonably arguable, is insufficient: Stafford v Kekatos (No 2) [2008] NSWSC 1044 at [14]-[15] (Brereton J); SLE Worldwide at [56]-[57], [64]-[65]; Jeans v Commonwealth Bank of Australia Ltd [2003] FCAFC 309; 204 ALR 327 at [18] (Hill, Madgwick and Conti JJ); Bye v Hend [2025] ACTSC 94 at [13]-[16] (McWilliam J).

25    There is no inflexible rule that the explanation must be given by a particular category of witness. Evidence from a solicitor may be sufficient where the solicitor has direct knowledge of the process by which the admission was made and gives a detailed account of the instructions received, the materials considered, the persons involved and how the asserted mistake occurred. Conversely, evidence based principally on reconstruction, information and belief, or documents created by others may not suffice where a proper explanation depends on evidence from those who gave the instructions, settled the pleading or made the relevant forensic decisions. The question is whether the evidence actually enables the Court to determine, rather than speculate about, the circumstances which led to the admission being made: Tamaya Resources Ltd (in liq) v Deloitte Touche Tohmatsu (a firm) [2016] FCAFC 2; 332 ALR 199 at [154]-[156] (Gilmour, Perram and Beach JJ); Chiu v Sheh [2021] NSWSC 19 at [23] (Slattery J); Selvaratnam at [27(2)]; Stafford at [32]-[33]; Bye v Hend at [13].

26    The purpose of civil litigation is to determine the parties’ rights, not to punish a party for an honest mistake in the conduct of its case. A mistake not involving fraud or overreaching should generally be corrected if that can occur without injustice to the other party and if refusing correction would prevent determination of the real matters in controversy: Jeans at [18]; Selvaratnam at [27(3)].

27    The Court will not lightly permit withdrawal where the opposing party has acted in reliance on the admission to its detriment or would otherwise suffer prejudice. Material considerations include whether that prejudice can adequately be compensated by an order for costs, the unavoidable prejudice occasioned by unnecessary delay, and the effect of the withdrawal on the efficient use of the Court’s resources: Jeans at [18]; Selvaratnam at [27(5)], [28(1)-(4), (6)].

28    Other relevant considerations include the nature and importance of the admission and proposed amendment, the circumstances in which it was made, including whether it was deliberate or inadvertent, the reason for withdrawal, the stage reached in the proceeding, whether the admission is shown to be contrary to the facts and the objective that pleadings identify the real issues: Selvaratnam at [27], [28(7)], [57]; Stafford at [35]; SLE Worldwide at [55]-[57], [61]; Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2007] FCA 1390 at [4] (Finn J); Bye v Hend at [19].

29    A clear admission deliberately and formally made after consideration and advice is not withdrawn merely because the party later identifies an arguable alternative position. That consideration assumes greater significance where it has been repeated in successive pleadings, requiring an explanation not only for its original inclusion but also for its continued maintenance. No single consideration is determinative: SLE Worldwide at [55]-[57]; Bye v Hend at [14]-[16].

30    The Court is not required on this application to determine finally the merits of Smart Trike’s proposed territorial defence. It is relevant to consider whether the proposed denials are bona fide and sufficiently arguable, and the significance of the issue to Smart Trike, without assuming the correctness of either party's substantive position.

CONSIDERATION

The explanation for the admissions

31    Applying the principles set out above, Smart Trike must provide a sensible explanation, supported by evidence of a solid and substantial character, as to how the admissions came to be made and why leave should now be granted to withdraw them. The evidence must do more than establish that Smart Trike communicated facts capable of supporting the position it now wishes to plead. It must explain how those facts came to be reflected in three certified iterations of its defence, each of which contained the admissions now sought to be withdrawn. Smart Trike must establish that the admissions were the product of mistake, confusion or inadvertence rather than a forensic decision made upon known facts.

Smart Trike’s factual instructions and the drafting correspondence

32    The primary facts upon which Smart Trike now relies were known to it before filing the first defence. Mr Baron deposes that, on 12 July 2024, he attended a video meeting with Smart Trike’s legal representatives, namely Ms Pearce, Chantal Savage (Special Counsel with principal carriage of the matter), Nathan Kan (solicitor) (all of Pearce IP) and Sonia Stewart of counsel. Ms Pearce’s evidence on this application is that Ms Stewart was responsible for drafting and settling Smart Trike’s defence.

33    Mr Baron says that at this meeting, the preparation of Smart Trike’s defence was discussed and he provided factual instructions to enable its legal representatives to formulate a response to the allegations made against Smart Trike in the statement of claim.

34    Mr Baron says that, at this meeting, he informed Smart Trike’s legal representatives that Smart Trike exclusively sold products to Target in China, that Target imported the products into Australia and then sold the products in Australia. He also gives evidence of his understanding of the significance of those matters. He says that he did not understand how Smart Trike, a company incorporated in Singapore with no business activities in Australia or other connection to Australia, could be held liable under Australian legislation in proceedings in an Australian court when it neither imported products into Australia or otherwise carry on business in Australia. However, he does not say that he communicated this account of his understanding to Smart Trike’s legal representatives.

35    Mr Baron annexes to his affidavit a copy of a file note taken by Ms Savage as a record of the meeting. He deposes that the unredacted part of the file note accurately records his recollection of the discussion concerning whether Smart Trike supplied products in Australia. Ms Savage’s file note records:

Ofek [Mr Baron] – according to AU law, assume there is no agreement at all between ST and Target. All liability is for importer? ST sold product to Target in China and Target sold it in Australia. But it in China and bring it into Australia.

SS [Ms Stewart]: Supply agreement requires ST to comply with Australian law.

Ofek: only thing binding ST in this case is the contract. ST selling goods in China and Target brought goods into Australia.

36    I infer that there is a typo in the third line extracted above and it should read “Buy it in China and bring it into Australia” rather than “But it in China and bring it into Australia”.

37    The fragment of the file note relied upon does not address the broader topic as to whether Smart Trike operated or otherwise carried on business in Australia. That question was the subject of the allegation in paragraph 2(b) of the statement of claim that Smart Trike was a body corporate carrying on business within Australia. Smart Trike’s defence admitted to the whole of this allegation.

38    The distinction made by Mr Baron and recorded in Ms Savage’s file note between Smart Trike’s sale of the products to Target in China and Target’s subsequent sale of those products to consumers in Australia is reflected in the terms of the allegation in paragraph 12 of the statement of claim:

12    In the premises, the sale of the Products:

a.    to Target by Smart Trike; and

b.    to consumers in Australia by Target,

was

c.    the supply of consumer goods in trade or commerce for the purposes of the Australian Consumer Law; and

d.    conduct in Australia.

39    The relevant admission in response to paragraph 12 appears in paragraph 12(a) of the defence whereby Smart Trike admitted that its supply of the Tricycle Products to Target was conduct in trade or commerce in Australia.

40    Smart Trike also repeated earlier parts of its defence in paragraph 12 in which it:

(1)    admitted that the Tricycle Products were “consumer goods” within the meaning of section 2 of the Australian Consumer Law;

(2)    said that the Tricycle Products supplied to the Applicant were toys (namely tricycles) which were required to and did comply with AS/NZS ISO 8124.1 (Safety of toys) (as amended from time to time) (Toy Standard) and Consumer Protection Notice No. 14 of 2003 – Consumer Product Safety Standard: Toys for children up to and including 36 months of age (Toy Mandatory Standard); and

(3)    otherwise denied the allegations in paragraph 12.

41    Mr Baron deposes to Ms Savage emailing to him and other representatives of Smart Trike a draft defence that had been prepared by Ms Stewart and Pearce IP. He says that Pearce IP did not draw his attention to the relevant admissions or explain why they had been made. Neither the email to which Mr Baron refers nor the draft defence is in evidence.

42    Mr Baron’s evidence is that he does not recall reviewing the original draft defence at any stage or reading any of the draft defences.

43    On 23 July 2024, Smart Trike’s then in-house legal counsel, Lidor Bar-Avi, commented on the draft defence. A heavily redacted copy of her email to Ms Savage is annexed to Mr Baron’s affidavit. The subject line of the email reads “Comments on the Draft Defense” and commences by introducing “our comments” on the draft defence. The email is copied to Mr Baron and Ms Pearce, among others. The redactions to the email are substantial and include the section in which the attachments to an email typically appear. The draft defence on which Ms Bar-Avi provided comments is not in evidence on this application.

44    The only substantive section of Ms Bar-Avi’s email that is not redacted is as follows:

We would also like to mention an important matter: ST sell a basic product and add features per the client’s request. We are Manufacturers NOT an importer in Australia and never were. we adjust our manufacturing to meet the client’s local market demands for the mandatory standard. ST has never imported to Australia; Target was the importer. It is the client, Target, who classifies the products as Toy or Stroller and requests tests according to their classification. Please confirm that you understand this.

We should also include in the Defence that Target is responsible for understanding the mandatory standards and regulations. As the manufacturer, selling to over 60 countries worldwide, we fulfil our customers instructions/specifications/testing and compliance.

(Emphasis in original, red text used in original)

45    Mr Baron extracts the above quote from Ms Bar-Avi’s email in his affidavit. He says that he asked Ms Bar-Avi to emphasise the matters addressed in that extract. He says that he did so because he wanted to ensure that Ms Stewart and Pearce IP understood that Smart Trike did not supply products in Australia or otherwise operate in Australia, and to ensure that they made any changes to the draft defence necessary to reflect those facts, which he considered to be very important. The extract of the email on which Mr Baron relies supports the narrower proposition he advances, namely that Smart Trike did not supply products in Australia, but does not support the broader proposition that Smart Trike did not “otherwise operate in Australia”.

46    On 25 July 2024 at 3.24am, Ms Savage forwarded Ms Bar-Avi’s email to Ms Stewart. In her email, she reproduced Smart Trike’s query set out above at paragraph [44] and inserted, immediately below it, a proposed response for Ms Stewart’s confirmation as follows:

[Sonia to confirm] Understood. The difficulty is that there is an agreement in place in which Smart Trike provides warranties to ensure compliance of products with Australian laws and standards. We understand that Smart Trike may have had no ability to amend the contract, however the Court is unlikely to take that into account in the circumstances. For this reason, we have sought to make arguments in the Defence (paragraph 64) and Cross-claim (paragraphs 28 and 29) as to why the warranties in the contract should not be enforced against Smart Trike (based on estoppel) and why Smart Trike should not be liable for any damages in any event (see for example, paragraphs 77 and 78(a) of the Defence).

47    On 25 July 2024 at 6.51am, Ms Stewart responded to Ms Savage’s email copying Ms Pearce and others. She said she was considering the email and would either call or respond with comments. The evidence is silent on what, if any, communication then passed between Pearce IP and Ms Stewart.

48    On 25 July 2024 at 12.06pm, Ms Savage sent a response to Ms Bar-Avi, which bore the signature blocks of both Ms Pearce and Ms Savage and was copied to Mr Baron, among others. The copy annexed to Mr Baron’s affidavit is again heavily redacted, including the section in which the attachments to an email typically appear. The subject line of the email is “AU Proceeding: Target v Smart Trike – Amended Draft Defence and Cross-Claim”. The amended version of the defence referred to in this email is not in evidence.

49    Ms Savage’s response reproduces, in the body of the email to which she responded, the same extract as set out in paragraph [44] above. The only additional substantive and unredacted passage is as follows:

Understood. The difficulty is that there is a contract in place in which Smart Trike provides warranties to ensure compliance of products with Australian laws and standards. We understand that Smart Trike may have had no ability to amend the contract, however the Court is unlikely to take that into account in the circumstances.

For this reason, we have sought to make arguments in the Defence (paragraph 65) and Statement of Cross-claim (paragraphs 29 and 30) as to why the warranties in the contract should not be enforced against Smart Trike (based on estoppel) and why Smart Trike should not be liable for any damages in any event (see for example, paragraphs 78 and 79 of the Defence). The argument is that Target was telling Smart Trike what to do in respect of testing and product compliance and Smart Trike complied.

(Red text in original)

50    The response sent to Smart Trike was substantially the same as the draft response Ms Savage provided to Ms Stewart save that the references to particular paragraphs of the then current draft defence and draft cross-claim differed slightly: each paragraph reference in the response was one number higher than the corresponding reference in Ms Savage’s draft. As I have said, neither version of the draft defence or cross-claim is in evidence. The defence was ultimately filed on 29 July 2024. I infer that the paragraphs referred to in Ms Savage’s response to Ms Bar-Avi were in substantially the same form in the drafts referred to in the email as they appeared in the filed versions. The content of those paragraphs makes sense when read in the context of Ms Savage’s response to Ms Bar-Avi. This approach is consistent with the fact that Ms Savage received instructions to file the defence in response to her email.

The contemporaneous instructions and forensic purpose

51    The references in the email to the defence and statement of cross-claim identify the forensic response formulated by Smart Trike’s legal representatives to the matters raised in its instructions. The defence directly pleaded to Target’s claim for damages under the Australian Consumer Law. At paragraph 22, Smart Trike admitted that the products were consumer goods of a kind for which safety standards were in force, but denied that the Stroller Standard applied. It alleged that the products were toys which complied with the applicable toy standards, that Target had obtained independent third-party testing and satisfied itself that the products complied with those standards, and that, from at least 1 January 2015, the products were supplied and sold with labels stating that they were not to be used as strollers and did not comply with the Stroller Standard. Smart Trike also relied expressly, in this part of its defence to the claim under the Australian Consumer Law, on the estoppel pleaded at paragraphs 49 to 65.

52    At paragraphs 22 and 23, Smart Trike amongst other things denied that the sale of the products contravened s 106(1) of the Australian Consumer Law or s 65C(1) of the Trade Practices Act 1974 (Cth) (prior to the commencement of the Australian Consumer Law). It maintained that Target was estopped from asserting a contravention of either provision. The defence therefore joined issue on the alleged statutory contraventions by reference to the classification and compliance of the products and the asserted estoppel. Nevertheless, in paragraph 12, Smart Trike admitted that its supply of the Tricycle Products to Target was conduct in trade or commerce in Australia.

53    The estoppel case was elaborated at paragraph 65 of the defence and paragraphs 29 and 30 of the statement of cross-claim. Smart Trike alleged that Target’s own testing, inspection, labelling, marketing and dealings with the Australian Competition and Consumer Commission demonstrated a common understanding that the products were toys rather than strollers, and that Smart Trike relied upon that understanding to Target’s knowledge. On that basis, Smart Trike alleged that Target was estopped from asserting that the products were strollers, were represented to consumers as strollers, or were unsafe or did not comply with Australian laws and standards.

54    Paragraphs 78 and 79 of the defence addressed Target’s entitlement to relief. Smart Trike alleged that relief should be denied by reason of delay, laches or acquiescence or, alternatively, that relief should be refused or limited in the exercise of the Court’s legal or equitable discretion. The matters relied upon included Target’s independent enquiries into compliance with the toy standards, the parties’ asserted common understanding, Target’s knowledge of Smart Trike’s reliance on that understanding, the conduct and scope of the recall, Target’s alleged failures to mitigate, its alleged negligence and breach of contract, its delay, and the prospect of unjust enrichment.

55    Whether the pleaded estoppel is capable of ultimately providing a complete answer to the alleged statutory contravention does not fall to be determined on this application. What matters presently is that the defence did advance a substantive response to the claim under the Australian Consumer Law. It disputed the applicability of the Stroller Standard, asserted compliance with the toy standards, invoked an estoppel and denied, or sought to limit, Target’s entitlement to any relief. It did not allege that the Australian Consumer Law did not apply on the basis that Smart Trike did not carry on business in Australia or because its supply of the products occurred outside Australia.

56    The correspondence and resulting pleadings therefore support the inference advanced by Target. They show that the subject matter of Smart Trike’s factual instructions was received and given forensic treatment in the defence and statement of cross-claim. One available inference is that Smart Trike’s legal representatives understood the factual instructions but selected a response directed to product classification, compliance, estoppel, causation and relief, while nevertheless making the territorial admissions. Smart Trike’s competing inference is that, although those other responses were formulated, the distinct territorial significance of its instructions was overlooked or misunderstood. The absence of any express reference in the disclosed correspondence to the territorial operation of the Australian Consumer Law makes that inference available, but it does not establish that it is other than possible.

57    The documentary record does not permit the Court to determine which explanation is correct. The defence and statement of cross-claim state that they were prepared by Ms Stewart and Pearce IP. No evidence has been given by Ms Stewart explaining how she understood Smart Trike’s factual instructions, whether she considered their possible territorial significance, why the admissions were included, or why they were maintained through successive amendments to the pleadings. Nor is there any direct evidence from another participant in the drafting and settling process which supplies that explanation.

58    The documents are consistent both with the territorial significance of Smart Trike’s instructions having been overlooked and with those instructions having been understood but addressed through a different forensic response. The evidence does not permit a reasonable and definite inference to be drawn in favour of either explanation. A choice between competing inferences of equal probability does not rise above conjecture: Luxton v Vines [1952] HCA 19; 85 CLR 352 at 358 (Dixon, Fullagar and Kitto JJ); Jones v Dunkel [1959] HCA 8; 101 CLR 298 at 305 (Dixon CJ). That uncertainty weighs against Smart Trike because it bears the onus of establishing the explanation upon which its application depends.

59    The subsequent instruction to file does not support an inference that authority was given in ignorance of, or without appreciation of, the manner in which the defence answered Target’s Australian Consumer Law claim. On 26 July 2024, Michal Zohar, VP Global Sales of Smart Trike, thanked Pearce IP for its feedback and for “understanding our position”, added comments in green to the email chain and instructed Pearce IP to “proceed for submission”. The email chain included the lawyers’ explanation that the defence addressed Smart Trike’s position through pleas relating to the contractual warranties, estoppel and relief. Mr Baron was copied to the email. Although Mr Baron does not recall the discussion in which he gave his authority, his evidence is that Ms Zohar lacked authority to instruct external lawyers without his prior approval and that, in accordance with his ordinary practice, she would not have instructed Pearce IP to file the defence without that approval. The evidence does not establish that Mr Baron or Ms Zohar understood the particular legal effect of the territorial admissions, or whether either of them had read the entire defence; Mr Baron’s evidence concerning his approval is a reconstruction based on his ordinary practice rather than a recollection of the particular decision. What the evidence does establish is more limited: Smart Trike, through Ms Zohar, received the explanation given by its lawyers of the approach reflected in the defence, was provided with successive versions of the defence incorporating that approach, and responded by conveying its acceptance of it in terms of acknowledging its lawyers’ understanding of its position and an instruction to “proceed for submission”. The evidence does not disclose whether Smart Trike sought or received any further clarification of that advice, and no finding is made either way on that question. It is to that limited extent, and no further, that the evidence bears on Smart Trike's appreciation of the approach taken in the defence.

The evidence explaining the admissions

60    I accept that Mr Baron’s evidence establishes that Smart Trike communicated to its lawyers, before the first defence was filed, that it was not an importer and had not directly imported the relevant goods into Australia, but instead acted as a manufacturer that delivered the goods it manufactured to Target in China. Those facts were not discovered later. The evidence also establishes that Mr Baron regarded these matters as important and that Smart Trike’s external lawyers acknowledged them. The difficulty for Smart Trike is that the evidence does not explain how, in light of those instructions, the admissions came to be made.

61    Mr Baron was the senior Smart Trike officer responsible for providing the relevant factual instructions. He relied on other officers of Smart Trike to communicate with Pearce IP after the meeting on 12 July 2024. His evidence on this application materially enlarges the material that was before the Registrar. It is direct evidence of the instructions that he says were given and of his own understanding of Smart Trike’s operations. It is not, however, direct evidence of the process by which the pleadings were drafted and settled. On the evidence on this application, it was Ms Stewart who was responsible for drafting and settling the defence. Ms Pearce says that directly. Ms Pearce says further that she has not discussed the issue with Ms Stewart. Smart Trike has not called evidence from Ms Stewart.

62    Smart Trike briefed senior counsel in December 2025. At a conference on 26 February 2026, Mr Baron again explained the factual matters upon which Smart Trike now relies, including the goods that were supplied to Target in China on Free on Board (FOB) terms (as that term is understood by the International Chamber of Commerce Incoterms 2010), that Target was the importer and that Smart Trike was the manufacturer. Mr Baron deposes that it was during and after that conference that he became aware of the effect of the admissions in paragraphs 2(b) and 12(a) of the defence. Smart Trike filed its application to withdraw those admissions on 24 March 2026.

63    This evidence explains when Mr Baron appreciated the effect of the admissions and why Smart Trike brought the application when it did. It does not, however, establish how or why the admissions were originally made or repeated.

64    Mr Baron does not recall reviewing any version of the defence before it was filed. Naturally enough, he does not know whether Ms Stewart or Pearce IP considered the territorial implications of his factual instructions. Mr Baron’s evidence is that he would not have authorised the pleadings had he understood the effect of the admissions. He says that he did not gain that understanding until the conference with senior counsel in February 2026. That evidence records only his retrospective account of his own understanding. It is a reconstruction, not a contemporaneous account of what he understood from the correspondence on which he was copied or the draft defences sent to him. It does not identify who made the asserted mistake, what that person misunderstood, or how the misunderstanding resulted in the admissions.

65    Mr Baron also deposes to the usual chain by which Smart Trike’s instructions were communicated. Ms Bar-Avi ordinarily communicated his instructions to Pearce IP but was on sick leave when the original defence was filed. Ms Zohar gave the instruction to file. Mr Baron does not recall discussing that instruction with her and has no written record of doing so. He infers from the scope of Ms Zohar’s authority and his usual practice that she must first have obtained his approval.

66    The position is similar in relation to the later defences. Mr Baron does not recall any particular discussion with Ms Bar-Avi concerning their filing. Neither his files nor Ms Bar-Avi’s files contain any written record of his approval. The email of 15 November 2024 records Ms Bar-Avi approving the filing of the further amended defence. It does not disclose whether the admissions were reconsidered, what advice she received about them, or why she approved the filing of a further pleading in which they remained. The fact that the admissions remained in the defence through two rounds of amendment increases the need for an explanation that addresses their continued inclusion.

67    Ms Pearce’s evidence does not fill that gap. She was copied into relevant communications and as solicitor on the record has certified each of the defences which Smart Trike has filed. Each defence was accompanied by a certificate in which Ms Pearce certified to the Court that the factual and legal material then available to her provided a proper basis for each allegation, denial and non-admission in the pleading. The certificates did not expressly address admissions and do not establish that Ms Pearce personally considered the territorial effect of the defence to paragraphs 2(b) and 12(a). They nevertheless form part of the context in which the admissions appeared in three formally prepared and certified pleadings. Ms Pearce’s affidavits place the contemporaneous records before the Court and explain the circumstances in which further instructions were sought in February 2026. They also record her later conclusion that the admissions were made in error.

68    The historical process is not, however, a matter about which Ms Pearce gives a detailed account from personal recollection. On the evidence, Ms Savage had principal day-to-day carriage, while Ms Stewart was responsible for drafting and settling the defence. Ms Pearce does not give evidence from her own recollection of what occurred at the 11 July 2024 conference, whether she read the relevant emails on which she was copied, or whether she considered Ms Savage’s responses to the client’s comments on the draft defence following conferral with Ms Stewart. Rather, her evidence that Ms Stewart was responsible for drafting and settling the defence is consistent with Ms Pearce having left that task to Ms Stewart. Much of Ms Pearce’s account is based on her later review of file notes and communications prepared by others. For the purposes of this application, she acknowledges that she has not discussed the asserted error with Ms Stewart, and her inquiry of Ms Savage elicited no further recollection.

69    Ms Pearce does not identify any person who says that the admissions were drafted, settled or approved in error. Nor does she identify the content or source of the asserted misunderstanding. Her conclusion that the admissions were made in error is an assessment formed after the event. It is relevant as Smart Trike’s later explanation of its position, but it is not direct evidence of the reasoning, advice or decision-making that produced the original or subsequent defences.

70    No affidavit has been provided by Ms Stewart, who drafted and settled the original defence, or by Ms Savage, who had principal carriage at Pearce IP. Nor has an affidavit been provided by Ms Bar-Avi, who reviewed the draft on Smart Trike’s behalf, conveyed the client’s comments, received the lawyers’ response and later approved the filing of an amended pleading. There is also no affidavit from Ms Zohar, who communicated the instruction to file the original defence.

71    I recognise that, on an application such as this, there is no inflexible rule requiring evidence from any particular person. The significance of the absent evidence is not that the Court should infer that it would have been adverse to Smart Trike. I draw no such inference. Rather, its significance lies in the limits of the explanation advanced in the context of Smart Trike’s affirmative onus. The asserted error concerns the process by which known facts were translated into a pleading that admitted the territorial predicates of Target’s statutory claim. The persons who participated directly in preparing, settling, reviewing and approving that pleading may have been able to give evidence about that process. The evidence called by Smart Trike does not do so.

72    The contemporaneous records do not themselves resolve the difficulty. Smart Trike’s interpretation of the correspondence is reasonably available. The absence of any express reference in the disclosed response of 25 July 2024 to the territorial operation of the Australian Consumer Law gives some support to the possibility that the significance of the factual instructions was overlooked. Target’s competing interpretation is also available. It contends that the relevant facts were understood and addressed by a considered response through the contractual, estoppel and no-damage pleas identified in the email correspondence and reflected in paragraphs [78] and [79] of the defence.

73    The draft defence upon which Ms Bar-Avi was commenting, and the revised draft to which the lawyers’ response referred, were not adduced in evidence. The Court cannot compare the drafts before and after the instructions or determine from them how the factual matters raised by Smart Trike were treated in the drafting process. The available evidence shows that the instructions produced a response in the pleading concerning contractual enforcement, estoppel and the denial of Target’s entitlement to relief, including any damages. It does not disclose whether the territorial allegations were separately considered and deliberately admitted, or were instead overlooked while those other responses were formulated. The specificity of the pleading in paragraphs 2(b) and 12(a) in each iteration of the defence suggests that the precise issue was adverted to, deliberately admitted and would have been plain to officers of Smart Trike who read the draft defences. Paragraph 2 of the statement of claim separately and in plain terms makes the relevant allegation that Smart Trike was a body corporate carrying on business within Australia as one of three allegations. Smart Trike’s response is to admit paragraph 2. The admission in paragraph 12 from which Smart Trike seeks to resile is similarly precise. The statement in paragraph 12(a) of the defence is that Smart Trike “admits that the supply of the Tricycle Products to the Applicant was conduct in trade or commerce in Australia”. The specificity of the pleaded admissions weighs against inferring that these matters were included in error or as a result of oversight.

74    The word “Understood” in the email of 25 July 2024 (extracted above at paragraphs [44] and [49]) confirms that Smart Trike’s point was received. It does not establish whether the territorial issue was overlooked, considered and rejected, or subsumed within a broader forensic strategy. The contractual and estoppel response may indicate that the lawyers did not appreciate the potential territorial consequence of Smart Trike’s point. Alternatively, it may reflect a considered legal response to that point. The evidence does not permit the Court to select one explanation over the other.

75    The redactions to parts of the communications place a further limit on the conclusions which may be drawn. I do not infer that the redacted material would be adverse to Smart Trike. The Court simply cannot determine whether the undisclosed material would strengthen or weaken the proposed explanation or provide relevant context for the advice, approval and filing instructions.

Conclusion on the explanation

76    Considered as a whole, the evidence establishes that the primary facts concerning supply in China, Target’s role as importer and Smart Trike’s characterisation of its role was limited to that of a manufacturer that delivered the goods to Target in China, were known and communicated before the first defence was filed. That geographical demarcation is reflected in the way in which paragraph 12 of the statement of claim is drawn – the product sale to Target by Smart Trike is not alleged to be “in Australia” whereas the product sale to consumers by Target is alleged to be “in Australia”: contrast paragraphs 12(a) and (b). The evidence also establishes that Smart Trike authorised the filing of the defence and approved the later defences, although Mr Baron’s evidence concerning his own authority to approve their filing depends materially upon reconstruction from his ordinary practice.

77    What the evidence does not establish is the critical connecting explanation. It does not identify how the known facts were treated by those responsible for the pleadings, whether the territorial issue was overlooked, misunderstood or consciously resolved, why the admissions were framed as they were, or why they were retained in two later defences. Ms Pearce and Mr Baron characterise the result as an error, but neither is in a position to give direct evidence of the reasoning which produced the alleged error, and there remains a lacuna in the evidence as to whether, and if so how, anyone on Smart Trike’s behalf read and considered the draft defences before giving instructions for the documents to be filed, notwithstanding that Ms Pearce certified each of the three iterations of the defence. The contemporaneous records support both the inference of oversight for which Smart Trike contends and the inference of a considered response to known facts.

78    It was not for Target to prove that the admissions resulted from a deliberate forensic choice; it was for Smart Trike, which bears the onus, to establish by evidence of a solid and substantial character how the asserted mistake occurred. The evidence does not permit a finding that the admissions resulted from mistake or inadvertence rather than a forensic choice. Smart Trike has not discharged its onus on this issue.

Importance, arguability and whether the admissions are contrary to fact

79    The admissions are important. Their withdrawal would introduce substantive questions concerning whether Smart Trike carried on business in Australia, whether the relevant supply constituted conduct in Australia, and whether the Australian Consumer Law therefore applied to Smart Trike’s conduct. Those matters may materially affect Target’s statutory claim under s 106 of the Australian Consumer Law.

80    Smart Trike relies on Mr Baron’s evidence that Smart Trike and its predecessors were not registered in Australia, had no related entity, office, business premises, employees, assets, bank accounts or tax liabilities in Australia, and supplied Target in China on FOB terms. It also relies on the supply agreement and order documents concerning delivery to Target’s nominated freight forwarder and the passing of property and risk.

81    For the purposes of this application, I accept that those matters provide a bona fide and reasonably arguable basis for Smart Trike’s proposed position. The proposed territorial case is not frivolous, and its potential significance weighs in favour of permitting Smart Trike to advance it.

82    That conclusion does not establish that the admissions are contrary to the actual facts. Target identifies other matters which it submits form part of the statutory inquiry, including Smart Trike’s dealings with Target and other Australian retailers, its registered Australian intellectual property, the contractual requirements for compliance with Australian laws and safety standards, and the nature and extent of its activities connected with supplying products for sale in Australia.

83    Target submits that whether Smart Trike carried on business in Australia is a broad and fact-sensitive inquiry which is not determined solely by FOB delivery, the passing of title in China or Target’s role as importer. It relies on The Owners – Strata Plan No 87231 v 3A Composites GmbH (No 10) [2026] FCA 351 at [849], where Anderson J rejected the proposition that the place at which title passed was determinative, and on Re TCL Airconditioner (Zhongshan) Co Ltd (No 2) [2019] FCA 257; 369 ALR 192 at [36], where McKerracher J held that the statutory question whether a foreign corporation carried on business could not be determined by the terms of a private agreement alone. Although the contractual terms were relevant, the inquiry required broader consideration of the business activities and arrangements between the parties and the commercial reality of the foreign corporation’s activities in Australia.

84    In oral reply, Smart Trike accepted that the ultimate inquiry is multifactorial and that many matters would bear upon it. The parties therefore agree on the general character of the inquiry. It is neither necessary nor appropriate to determine the territorial questions on this application. The proper characterisation of Smart Trike’s activities remains disputed and would require consideration of a broader factual matrix than the place of delivery or the transfer of title alone. The proposed denials are bona fide and reasonably arguable, but the evidence does not demonstrate that the admissions are false. The importance and arguability of the proposed case therefore weigh in Smart Trike’s favour, but with less weight than they would if the admissions had been shown affirmatively to be contrary to fact.

85    The importance of the proposed defence does not relieve Smart Trike of the need to explain why the contrary position was admitted in three pleadings. Nor is the reasonable arguability of the proposed case, without more, a sufficient basis for withdrawal. In SLE Worldwide at [57], White J accepted that the position sought to be advanced was reasonably arguable, but held that this did not provide a sufficient reason to permit the withdrawal of admissions which had been deliberately and formally made. His Honour returned to the point at [65], holding that it was not enough to show that the proposed issue was reasonably arguable, or that it had been an open question before the admission was made. What was required was an explanation on oath as to why the admissions were made and why their withdrawal was sought. I accept Smart Trike’s submission that SLE Worldwide involved the complete absence of evidence explaining why the admissions were made, whereas some explanatory evidence has been adduced in this case. Nevertheless, the reasoning in SLE Worldwide remains applicable because there remains a fundamental and unexplained gap at the heart of Smart Trike’s evidence as to how and why the admissions came to be made. Smart Trike has therefore not discharged its onus.

86    The same distinction appears in Stafford at [17]. There, Brereton J observed that For the Good Times Pty Ltd v Coltern Pty Ltd [2007] NSWSC 108 at [3] (Young CJ in Eq) referred to an erroneous admission, not one which might merely be arguably erroneous, and that it was insufficient for the party seeking withdrawal merely to establish that it was reasonably arguable that the admission was wrong (referring to SLE Worldwide at [57]). At [30] and [35]-[36], his Honour considered that the failure to show that the admission was erroneous, together with the failure to demonstrate inadvertence and the existence of prejudice to the opposing party, informed the refusal of leave.

87    Those principles are material here. Smart Trike has identified a bona fide and reasonably arguable territorial case. It has not shown that the admissions are demonstrably false. More importantly, the arguability of that case does not supply the missing explanation as to how the known factual instructions resulted in the admissions being made and repeated. To treat the availability of an arguable alternative position as sufficient to justify withdrawal would diminish the significance of formal admissions and leave unresolved whether the proposed amendment would correct a genuine mistake or instead reflects a later change of forensic position. In these circumstances, while I recognise that cases should, so far as justice permits, be decided on the real issues, the evidence on this application does not establish that the admissions are demonstrably false so as to require that course. Permitting withdrawal on the strength of an arguable but unproven alternative case, without a satisfactory explanation for how the admissions came to be made, would not be in the interests of justice, nor consistent with the overarching purpose in s 37M of the FCA Act to facilitate the just resolution of the real issues in dispute as quickly, inexpensively and efficiently as possible.

Delay and prejudice

88    Smart Trike filed the original defence on 29 July 2024, and repeated the admissions in its amended defence filed on 15 October 2024 and the further amended defence filed on 27 November 2024. It did not seek leave to withdraw them until it filed its interlocutory application on 24 March 2026.

89    During the period in which the admissions have stood, the parties participated in mediation, exchanged a notice to admit and a notice of dispute, litigated applications concerning bifurcation and security for costs and Target has prepared and exchanged its lay evidence.

90    Target served its lay evidence in chief between 28 July and 5 August 2025. Smart Trike has therefore had that evidence for more than a year. On Target’s case, its affirmative evidence is complete, subject to any evidence in reply arising in the ordinary course. Smart Trike submits that the proceeding nevertheless remains at the evidence stage, that the preparation and service of further evidence has been held in abeyance pending determination of the present application, and that no trial date will be lost. During that period, Smart Trike obtained successive extensions of time within which to serve its evidence. The deadline was extended from 1 August 2025 to 1 October 2025, then to 5 December 2025, and ultimately to 18 February 2026. Smart Trike did not comply with that deadline. On 26 March 2026, the Court vacated the relevant timetabling orders pending determination of the present application.

91    The absence of a fixed trial date reduces the immediate case management disruption which withdrawal would cause. It does not, however, remove the prejudice arising from requiring Target to revisit the evidentiary process which it has completed in reliance on the admissions, or from the further delay in progress towards a final hearing.

92    Part of the delay arose while Smart Trike pursued an application to bifurcate the proceeding, filed on 3 October 2025 and dismissed with costs on 16 January 2026. The application proceeded on the anticipated consequence that Smart Trike might not be required to prepare all of its lay evidence. Following its dismissal, the timetable was extended again. Smart Trike filed the present withdrawal application on 24 March 2026.

93    I do not treat Smart Trike’s earlier applications or the extensions it obtained as disentitling it from seeking leave. They are, however, relevant as part of the procedural setting in which the present application is made. This is not a case in which the proposed issue was raised before the parties had committed themselves to an evidentiary course. Target prepared and served its evidence on the footing that the admitted matters were not in issue. Smart Trike has since had an extended period within which to prepare its evidence in answer.

94    Ms Witt is Target’s solicitor with primary responsibility for the proceeding. Her evidence describes work actually undertaken and is supported by contemporaneous records. She identifies searches conducted across Target’s internal drives and the mailboxes of four former employees, the collection and processing of more than 5,500 additional documents, and a targeted review of documents within a repository containing more than 11,600 documents.

95    Ms Witt estimates that withdrawal would require the review of approximately 11,600 documents through a different forensic lens, involving at least 70 hours of work at an estimated cost of $30,450, excluding GST. She also identifies the need to search additional custodians and repositories of documents, renewed efforts to identify witnesses, re-engagement with seven present or former employees, and possible compulsory process directed to Smart Trike and third parties.

96    Those estimates involve professional judgment and are necessarily prospective. Ms Witt also acknowledges that she cannot state with certainty what Target would have done had the admissions not been made. I therefore do not treat the estimates as proof of the precise cost or extent of the additional work which would result. I accept, however, that substantial further review, investigation and preparation of evidence would probably be required if the admissions are withdrawn at this stage.

97    Ms Pearce expresses the view that the issue is discrete and primarily documentary, and that Target’s estimate overstates the likely duplication. Her evidence on that question is not based on personal knowledge of Target’s document holdings, the searches previously undertaken, the witness enquiries made or the evidence prepared. It does not provide a substantial basis for rejecting Ms Witt’s evidence that significant further work would be required.

98    The new inquiry would not necessarily be confined to the place of contractual delivery or the passing of title. It may extend to Smart Trike’s broader dealings with Target and other Australian retailers, as well as the practical conduct of its commercial activities connected with Australia.

99    The underlying transactions occurred between December 2009 and July 2018. Ms Witt identifies a risk that documents may no longer be available, witnesses may be more difficult to locate, and recollections may have diminished. Although the evidence does not identify any particular document has been lost or a particular witness has become unavailable, it illustrates that there is a forensic risk associated with introducing, at this stage, an issue concerning events that are now between eight and seventeen years old that may not have materialised had the issue been investigated back at the time the admissions were made.

100    Some of the financial prejudice could be addressed by an order for costs or other procedural conditions. That does not exhaust the prejudice. The residual prejudice includes delay, deterioration in the quality of evidence, the loss of an opportunity to pursue lines of inquiry when their relevance was more readily apparent, the expenditure of additional time by the parties, the prolongation of the litigation, and the consequent burden on the Court’s resources. Although none of those matters is determinative alone, their cumulative effect is material, particularly when considered together with the age of the underlying events, Target’s preparation and service of its evidence, the repetition of the admissions, and the period during which they have stood.

Exercise of discretion

101    The considerations favouring leave are significant. The proposed territorial issue may materially affect Target’s statutory claim. Smart Trike communicated the underlying factual matters before the first defence was filed, and Mr Baron has now given direct evidence of the instructions he provided. The territorial case Smart Trike now seeks to advance is bona fide and reasonably arguable.

102    Those considerations must be weighed against the deficiency in the explanation. The primary facts now relied upon were known when the first defence was prepared. The admissions were then made formally and repeated in two later pleadings. The evidence does not explain the process by which the known facts resulted in those admissions or why they were maintained. Mr Baron does not recall reading the pleadings and reconstructs the process by which he authorised the filing of the draft defences by reference to his ordinary practice. Ms Pearce’s account is substantially based upon later review of the file and does not describe her own involvement in the relevant events at the time. No direct evidence is given by those who drafted, settled or reviewed the pleadings. The contemporaneous records support competing explanations and do not bridge the evidentiary gap.

103    Because Smart Trike bears the onus, the unresolved uncertainty counts against it. The evidence shows that the admissions may have resulted from a mistake. It does not establish, by evidence of a solid and substantial character, how the asserted mistake occurred or that the admissions were the product of inadvertence rather than a forensic choice.

104    Target has acted in reliance upon the admissions in preparing and serving its evidence. Withdrawal would require substantial further work, cause additional delay and expose Target to forensic risks which could not be fully remedied by costs or procedural conditions. Those matters are not individually decisive, but their cumulative effect reinforces the significance of Smart Trike’s failure adequately to explain why the admissions were made and maintained.

105    Considering the matters as a whole, and having regard to the purpose in s 37M of the FCA Act, I am not satisfied that Smart Trike has discharged its onus. The importance and arguability of the proposed defence do not outweigh the deficiency in the explanation, the formal repetition of the admissions, Target’s reliance upon those admissions in preparing its case, the stage reached in the proceeding, and the additional work, cost and delay which withdrawal would cause. The interests of justice do not favour the grant of leave.

106    The application filed on 14 July 2026 for review of the Registrar’s orders is therefore dismissed. The orders made by Registrar Gronow on 7 July 2026, by which the Registrar dismissed Smart Trike’s application for leave to file and serve the proposed second further amended defence and ordered Smart Trike to pay Target’s costs, will stand.

107    Target, having succeeded in its opposition to this application, is entitled to its costs.

CONCLUSION

108    The progress of the proceeding has been delayed while Smart Trike’s interlocutory applications have been determined. I will make orders requiring the parties to confer and seek to agree upon a timetable for the filing and service of Smart Trike’s evidence. In formulating that timetable, the parties should have regard to the substantial period that has elapsed since Target served its evidence and to the need for the proceeding to progress towards final hearing without further delay.

109    I will make orders in accordance with these reasons.

Associate:

Dated:    4 September 2026