C & M Duran Pty Ltd v Zhong Bao Liu

[2007] NSWSC 893

CITATION:	C & M Duran Pty Ltd v Zhong Bao Liu & Ors [2007] NSWSC 893
HEARING DATE(S):	12 March 2007; 13 March 2007; 14 March 2007; 15 March 2007; 16 March 2007; 19 March 2007; 20 March 2007
JUDGMENT DATE :	15 August 2007
JURISDICTION:	Common Law
JUDGMENT OF:	Simpson J
DECISION:	Orders to be made to achieve the following result: (1) As against the first defendant: Judgment for possession of his interest in the land at 43 Fairview Road, Canley Vale (Folio Identifier B/411192); (2) As against the second defendant: The Second Further Amended Statement of Claim is dismissed; (3) As against the third defendant: The Second Further Amended Statement of Claim is dismissed; (4) The first cross-claim is dismissed. It will be necessary to hear the parties with respect to the form of orders that will give effect to that intention. It will be necessary to hear submissions on the question of costs.
CATCHWORDS:	Contract for sale and purchase of land and business – second mortgage security on real property – first and second defendants registered proprietors of security property – registration of mortgage – indefeasibility of title – default under mortgage by purchaser – plaintiff claims for possession of security property – forgery by first defendant of second defendant’s signature on mortgage documents – whether plaintiff complicit in forgery – false attestations by third defendant on mortgage documents – false representations – duty of care – whether plaintiff entitled to succeed in respect of claim against second defendant in respect of forged mortgage documents – director of plaintiff aware of forgery – registration as regard second defendant procured by fraud – indefeasibility of title defeated – competing versions of facts – cross-claim by first defendant against plaintiff – onus of proof not discharged
LEGISLATION CITED:	Contracts Review Act 1980 Evidence Act 1995 Fair Trading Act 1987 Real Property Act 1900 Trade Practices Act 1975
CASES CITED:	National Commercial Banking Corporation of Australia Ltd v Hedley (1984) NSW Conv R 55-211
PARTIES:	C & M Duran Pty Ltd (Plaintiff) Zhong Bao Liu (First Defendant) Wei Hou (Second Defendant) Siew Yin Woo (Third Defendant)
FILE NUMBER(S):	SC 12876 of 2002
COUNSEL:	D L Warren (Plaintiff) S L Bell (First Defendant) C Stomo (Second Defendant) in person (Third Defendant)
SOLICITORS:	Peter Zipkis & Associates (Plaintiff) Lloyd Truman Sadiq (First Defendant) Sankoson Lawyers (Second Defendant) N/A (Third Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
POSSESSION LIST

Simpson J

15 August 2007

12876/02 C & M Duran Pty Ltd v Zhong Bao Liu & Ors

JUDGMENT

1 HER HONOUR: In these proceedings the plaintiff, C & M Duran Pty Ltd, claims a variety of orders against each of three named defendants. The defendants are Zhong Bao Liu and Wei Hou (who is the wife of Mr Liu) and Siew Yin Woo (who is a solicitor). The orders sought include, as against Mr Liu and Ms Hou, orders for possession of land and leave to issue a writ of possession thereof; orders for the payment of specified sums of money; and, as against Mr Woo, damages, both under the Fair Trading Act 1987, and “at law”.

2 All claims arise out of a transaction, or a series of transactions, that took place in 2001, between a company (Australia World Trading Pty Ltd, to which I will refer as “AWT”) of which Mr Liu was the sole shareholder and director, which entered into (and eventually, on 26 September 2001, completed) a contract to purchase land at Wyangala, and a fish farming business (“the Wyangala Trout Farm”) conducted thereon, then owned by the plaintiff.

3 Simultaneously with the completion of the contract, second mortgages, signed by Mr Liu and purportedly signed by Ms Hou, were provided to the plaintiff over two parcels of real estate of which Mr Liu and Ms Hou were registered as joint proprietors; as well as a Deed of Guarantee, also signed by Mr Liu and purportedly signed by Ms Hou; and a Deed of Loan, naming AWT as borrower, and Mr Liu and Ms Hou jointly as guarantor, but signed only by Mr Liu.

4 These transactions have given rise to a plethora of claims. It is convenient at this point to outline the allegations made in the various pleadings.

THE PLEADINGS

5 The operative initiating process is a Second Further Amended Statement of Claim filed on 14 August 2006.

6 Defences have been filed on behalf of each defendant: the operative defences are: (i) a “Defence to Further Amended Statement of Claim” filed on behalf of Mr Liu in court on 12 March 2007; (ii) a “Defence to Second Further Amended Statement of Claim” filed on behalf of Ms Hou on 1 September 2006; and (iii) a “Notice of Grounds of Defence to a Further Amended Statement of Claim” filed by Mr Woo on 23 September 2005. Mr Liu and Ms Hou have filed cross-claims (respectively, the first and second cross-claims) each naming the plaintiff as cross-defendant; and Ms Hou has filed a third cross-claim naming Mr Woo as the third cross-defendant. Mr Woo has filed a fourth cross-claim, naming Mr Liu as cross-defendant. Defences have been filed to each of the cross-claims.

7 The substance of the allegations made in these pleadings may be outlined as follows:

Second Further Amended Statement of Claim

· As against Mr Liu and Ms Hou:

(1) that, by (second) mortgage dated 26 September 2001, Mr Liu and Ms Hou granted a mortgage in favour of the plaintiff over real estate at 43 Fairview Road, Canley Vale;

(2) that that mortgage secured a loan of $360,000 (“the principal sum”) from the plaintiff to Mr Liu and Ms Hou, which, by the terms of the mortgage, was to be repaid in two equal instalments of $180,000 respectively on or before 1 December 2001, and on or before 1 February 2002, and that Mr Liu and Ms Hou agreed, according to the terms of the mortgage, to pay interest at specified rates on the principal sum;

(3) that Mr Liu and Ms Hou have failed or refused to repay the principal sum or any part thereof and that, other than a sum of $50,000 attributable to interest, they have failed or refused to pay interest due under the terms of the mortgage;

(4) that, by Deed of Guarantee and Indemnity dated 26 September 2001, Mr Liu and Ms Hou guaranteed to the plaintiff the performance of certain obligations of AWT in respect of the purchase by it of the Wyangala Trout Farm;

(5) that AWT defaulted in payment under a mortgage to the plaintiff and that the plaintiff had demanded payment pursuant to the Deed of Guarantee and Indemnity, but that Mr Liu and Ms Hou had failed to make any payment;

(6) that, by Deed dated 26 September 2001 Mr Liu guaranteed payment to the plaintiff of moneys owing to it by AWT (being a capital sum of $20,000, together with capitalised interest of $14,400) pursuant to the terms and conditions contained in a Deed of Loan;

(7) that AWT defaulted in its obligations under the Deed of Loan; and that Mr Liu had failed and refused to pay the interest due thereunder;

The plaintiff accordingly sues Mr Liu on the Deed of Loan, and both Mr Liu and Ms Hou on the mortgage and the Deed of Guarantee and Indemnity.

· As against Mr Woo:

(1) that Mr Woo was at all material times a solicitor of the Supreme Court of NSW and held himself out to the plaintiff as acting in that capacity on behalf of Mr Liu and Ms Hou in respect of the mortgage over the Canley Vale land, and in respect of the Deed of Guarantee and Indemnity mentioned above;

(2) that Mr Woo, in his capacity as solicitor acting for Mr Liu and Ms Hou, represented to the solicitor for the plaintiff that certain documents relevant to the transactions mentioned above had been duly executed by Mr Liu and Ms Hou and that Mr Woo had given advice to Mr Liu and Ms Hou about the loan and security documents;

(3) that Mr Woo represented to the plaintiff that Mr Liu and Ms Hou had executed the mortgage and Deed of Guarantee and Indemnity in his presence and that he had witnessed their signatures to those documents;

(4) that, relying on the representations of Mr Woo, the plaintiff completed the sale and purchase transactions and accepted the mortgage and Deed of Guarantee and Indemnity proffered by or on behalf of Mr Liu and Ms Hou as security for moneys owing to it by AWT;

(5) that Mr Woo owed the plaintiff a duty of care in the execution and witnessing of the loan and security documents and that he acted in breach of his duty of that duty of care and was negligent;

(6) that Mr Woo had acted fraudulently in tendering to the plaintiff’s solicitor documents that he knew to have been falsely attested.

The pleading against Mr Woo acknowledges that Ms Hou denies having signed the mortgage or the Deed of Guarantee and Indemnity, and denies that she had received advice from Mr Woo; on the hypothesis that these denials are found to be true, the plaintiff sues Mr Woo in negligence, for fraudulent misrepresentation, and under the Fair Trading Act 1987 . The plaintiff claims damages.

Defence of Mr Liu

8 In his defence, Mr Liu:

(1) pleads that the plaintiff demanded the sum of $50,000 to remove a caveat and/or a mortgage over another property but that otherwise no interest payments are due by him to the plaintiff;

(2) admits the Deed of Guarantee and Indemnity;

(3) admits the Deed of Loan agreement but denies that sum of $20,000 was advanced by the plaintiff to AWT;

(4) pleads that the Deed of Guarantee and Indemnity ought to be set aside and the mortgage and the Deed of Guarantee/Loan ought to be set aside on the grounds set out in his amended cross-claim.

Defence of Ms Hou

9 In her defence, Ms Hou:

(1) denies that the signature appearing as hers on the mortgage was there placed by her and pleads that it is a forgery;

(2) denies that the signature appearing as hers on the Deed of Guarantee and Indemnity was placed there by her and pleads that it is a forgery;

(3) denies liability under the mortgage or Deed of Guarantee and Indemnity;

(4) pleads that she was a volunteer and obtained no direct financial benefit from the transaction;

(5) pleads that, in the relevant circumstances (see (6) below) it would be unconscionable for the plaintiff to seek to enforce the mortgage or the Deed of Guarantee and Indemnity as against her;

(6) pleads that she was under a special disability in dealing with the plaintiff by reason of her limited command of the English language, limited education and limited familiarity with experience of financial transactions, and that the plaintiff knew or ought to have known of those circumstances.

Defence of Mr Woo

10 In his defence, Mr Woo:

(1) admits that he represented to the plaintiff that Mr Liu and Ms Hou had executed the mortgage and Deed of Guarantee and Indemnity in his presence and that he had witnessed their signatures to the document and pleads that Mr Liu’s signature was affixed in his (Mr Woo’s) presence and that, although he (falsely) purported to have witnessed Ms Hou’s signature, he was authorised by her so to do after she had received advice from him;

(2) pleads that Ms Hou’s signature was on the loan and security documents prior to his executing those documents as witness, and that the execution by him was done with her knowledge.

First cross-claim: Mr Liu’s cross-claim against the plaintiff

11 In his cross-claim, Mr Liu:

(1) pleads that, in trade, Miguel Duran (a director of the plaintiff) falsely represented to him that the plaintiff had purchased the Wyangala Trout Farm for the sum of $395,000 when, in fact, it had been purchased for the sum of $206,910;

(2) pleads that, relying on the representation, he caused AWT to purchase the property for the sum of $420,000 (being $340,000 for the land, and $80,000 for the business); signed a mortgage over the Canley Vale property; signed the Deed of Guarantee and Indemnity; signed a mortgage over another property at Cabramatta; signed the Deed pursuant to which he guaranteed performance of the obligations of AWT under the Deed of Loan; and paid or caused to be paid certain sums to the plaintiff;

(3) pleads that the representation was false and misleading within the meaning of s 42 of the Fair Trading Act, and s 52 of the Trade Practices Act 1975.

He claims orders setting aside the mortgage, the Deed of Guarantee and Indemnity, the Deed of Loan (and Guarantee), an order for payment of money and a declaration that he is not indebted to the plaintiff.

Second cross-claim: Ms Hou’s cross-claim against the plaintiff

12 In her cross-claim against the plaintiff, Ms Hou pleads that (by reason of facts and circumstances set out in her Defence) the mortgage and Guarantee of Indemnity were unjust within the meaning of s 7 of the Contracts Review Act 1980. She claims declarations that she is not liable under the mortgage or the Deed of Guarantee and Indemnity, an order that the mortgage be set aside (as against her), and relief under s 7 of the Contracts Review Act.

Third cross-claim: Ms Hou’s cross-claim against Mr Woo

13 Ms Hou brings claims against Mr Woo in negligence, and under the Fair Trading Act 1987, arising out of his purporting to have witnessed the signatures (purporting to be hers) on the mortgage and Deed of Guarantee and Indemnity.

Mr Woo’s defence to third cross-claim

14 Mr Woo pleads that Ms Hou represented that the signature(s) was (were) hers until the commencement of these proceedings by the plaintiff, and claims that she is now estopped from denying that fact.

Fourth cross-claim: Mr Woo’s cross-claim against Mr Liu

15 Initially, Mr Woo filed a cross-claim naming both Mr Liu and Ms Hou as cross-defendants. In the first amended fourth cross-claim, he abandons the claim against Ms Hou, and proceeds against Mr Liu only. He pleads that, if it is the case that Ms Hou’s signature on the mortgage and loan documents was, as Ms Hou pleads, forged, then the forgery was perpetrated by Mr Liu, and amounted to fraud, and that as a result thereof, he (Mr Woo) “may … suffer loss and damage”. He claims complete indemnity and/or contribution in respect of “any judgment, loss or damage” awarded against him in favour of Ms Hou.

Mr Liu’s defence to fourth cross-claim

16 In his defence to the fourth cross-claim (as amended) Mr Liu denies liability and pleads that any liability of Mr Woo to Ms Hou “is solely caused by and attributable to his own actions” and that Mr Woo was responsible for placing his own signature on any document.

** ** ** ** ** ** **

17 The factual matrix is, to put it mildly, confusing. Three principal witnesses – Mr Duran (a principal of the plaintiff company), Mr Liu and Mr Woo gave evidence. There was only minimal convergence among the accounts. Other than where there existed documentary or other objectively verifiable evidence to confirm what any of these witnesses said, I am hesitant to accept any account, or, indeed, any single fact, asserted by any of them. Putting it as neutrally as I can, I am not satisfied that any was telling, or attempting to tell, the truth. I would not be prepared to act upon the evidence of any of the three unless it were corroborated by evidence of the kind I have mentioned – documentation, or some other objectively verifiable source. Not only am I not satisfied that these witnesses were not telling the truth. I am affirmatively satisfied that each was positively untruthful. I am quite satisfied that the correct version of events has never seen the light of day in these proceedings.

18 (I should add that Ms Hou also gave evidence. Her evidence was uncontroversial and I accept it. It is appropriate that I explicitly exclude Ms Hou from the comments above.)

19 This leaves me in a particularly awkward position. I must attempt to establish the facts upon the basis of evidence that I regard as inherently unreliable and, indeed, in many respects, glaringly implausible. This view is not principally based upon my assessment of the demeanour of the witnesses, but upon the patent improbability of the accounts they gave, and, in some cases, admitted liability of matters to which they had previously deposed.

An outline of such facts as are uncontroversial

20 The plaintiff was a company owned and controlled by Mr Miguel and Ms Cynthia Duran. Early in 2000 the plaintiff became the registered proprietor of the land known as the Wyangala Trout Farm. It was also the owner of a business conducted thereon under the same name.

21 Mr Duran was acquainted, through business dealings, with Mr Liu. Mr Liu was the director of AWT. He was involved, through AWT, in a business of the supply of poultry and meat to retailers and restaurants.

22 Through his business Mr Liu and his wife, Ms Hou, were the joint registered proprietors of real estate at 43 Fairview Road, Canley Vale (“the Canley Vale property”). This was their domestic residence. They were also the joint registered proprietors of another parcel of real estate, at 250 Railway Parade, Cabramatta (“the Cabramatta property”). These were commercial premises. The evidence does not disclose whether they held these properties as joint tenants or as tenants in common.

23 Mr Liu became acquainted with Mr Duran. In 2001, in circumstances that will need to be mentioned again, Mr Duran and Mr Liu agreed that the plaintiff would sell the trout farm, both the real estate (“the Wyangala property”) and the business. Although it was implicit in the agreement that the purchaser would be Mr Liu or an entity associated with him, I infer that they gave no consideration to, and had no discussions about, the precise entity that would purchase the Wyangala property and the business.

24 A solicitor, Mr Peter Zipkis, prepared a contract for sale. It (mistakenly) showed Miguel Duran and Cynthia Duran as vendors, and AWT as purchaser. On or about 14 June 2001 the common seal of AWT was affixed to the contract, which was signed by both Mr Liu and Ms Hou (although, so far as the documentary evidence shows, Ms Hou was not a director or shareholder of AWT).

25 The contract was made “conditional upon and interdependent with” an agreement for sale of the trout fishing business; it provided that the purchase price of the Wyangala property was $340,000, and of the business $80,000. It further provided that, of the total sum of $420,000, $60,000 was to be paid on completion of the two contracts and the balance, of $360,000, was to be payable by two instalments, each of $180,000, on or before 1 October 2001 and 1 December 2001 respectively; that, as security for the outstanding moneys, AWT would provide “a duly executed mortgage” over the Wyangala property, and a collateral first mortgage over the Cabramatta property, and a registered bill of sale over the trout farm business. The contract showed “S Y Woo and Co Solicitors” as the solicitor for the purchaser. Despite the term that AWT would secure the moneys owing by a first mortgage over the Cabramatta property, by the time of exchange of contracts that property was subject to a first mortgage in favour of the Illawarra Mutual Building Society Ltd, granted on 24 April 2001.

26 Contracts were exchanged on 14 June 2001. Well before that date Mr Liu gave Mr Duran two cheques totalling $60,000. According to Mr Duran, this occurred late in March or early April, and the cheques were post-dated. The first cheque was dated 15 May 2001 and was drawn on an account in the name of AWT and was for the sum of $40,000. The second cheque, for $20,000, was dated 30 May 2001 and drawn on the same account. Both cheques were dishonoured. The first was subsequently replaced – according to Mr Liu, by a cash payment; according to Mr Duran, in the form of a bank cheque, personally delivered by Mr Liu and Ms Hou, and paid into the account of the plaintiff.

27 On 7 August 2001 Mr Woo sent a letter to Mr Zipkis, enclosing a series of documents which he said were “duly executed”. These included mortgages over the Wyangala property and the Cabramatta property (a second mortgage), a Declaration by Borrower signed by Mr Liu on 12 July, a “Declaration by Third Party Mortgagor, Guarantor, Surety Mortgagor or Indemnifier for the Borrower” signed by Mr Liu and purportedly signed by Ms Hou; an Acknowledgement of Legal Advice by Proposed Borrower, signed by Mr Liu and purportedly signed Ms Hou; a second Acknowledgment of Legal Advice by Proposed Guarantor, purportedly signed by Ms Hou; a “Consent by Borrower/Guarantor to Legal Advice” signed by Mr Liu and another purportedly signed by Ms Hou.

28 Settlement of the contract for sale took place on 26 September 2001, probably at the office of Mr Zipkis.

29 A number of ancillary transactions occurred simultaneously, evidenced by the following documents:

(i) “a Deed of Loan Agreement”: the parties to the Deed of Loan Agreement were named as the plaintiff (identified as “the Lender”), AWT (identified as “the Borrower”), and Mr Liu and Ms Hou (identified jointly as “the Guarantor”). This document recited that, on 14 June 2001, AWT had entered into the two contracts for the purchase of the Wyangala property and the trout farm business, that AWT had insufficient funds to pay the balance of deposit of $20,000 and interest (totalling $14,400) “on other moneys borrowed from [the plaintiff] for the period 1 April 2001 to 30 September 2001”; that the plaintiff had agreed to lend AWT the sum of $34,400 “to assist [AWT] to complete the purchase of the business and property”.

The agreement provided that AWT would repay to the plaintiff the principal sum or so much thereof as remained unpaid by one payment of $14,400 on or before 30 November 2001, and the principal sum at any time. It further provided that AWT would grant to the plaintiff a charge over each of Wyangala property, the Cabramatta property, and the Canley Vale property. The document contained other, conventional, agreements and covenants of which it is only necessary to mention that contain in cl 10. This was a guarantee jointly and severally by Mr Liu and Ms Hou of “the due payment” by AWT of all moneys and obligations imposed upon AWT pursuant to the Deed, and was expressed to be:
“In further consideration of the granting of the loan by [the plaintiff] … at the further request of [Mr Liu and Ms Hou].”


(ii) a Mortgage (No 8883911A). This showed the plaintiff as mortgagee and Mr Liu and Ms Hou as mortgagors. The property the subject of the mortgage is the Canley Vale property. This document bears a signature of Mr Liu, and another purporting to be that of Ms Hou. The attestation clause, which in the usual way asserts that the document was signed in his presence by the mortgagor “who is personally known to me”, bears the signature and address of Mr Woo. Annexure A to the mortgage contains an acknowledgment by “the mortgagor” of receipt from the mortgagee (the plaintiff) of the sum of $360,000, and an agreement to repay that sum, by one instalment of $180,000 on or before 1 December 2001, and as to the remaining sum of $180,000, on or before 1 February 2002. This document, on each page, bears the handwritten name of Mr Liu and Ms Hou; on the last page are written the same names, and a similar attestation clause, signed by Mr Woo.

(iii) a Mortgage (No 8640847P), showing the plaintiff as mortgagee, and Mr Liu and Ms Hou as mortgagors. The property the subject of this mortgage is the Cabramatta property. The mortgage is expressed to secure the same money as the mortgage referred to above (over the Canley Vale property). This document also bears the signature of Mr Liu and a signature which purports to be that of Ms Hou. It contains an identical attestation clause, again bearing the signature of Mr Woo. Annexure A contains the same acknowledgement and agreement as the mortgage over the Canley Vale property.

(iv) a Mortgage (unnumbered), showing the plaintiff as mortgagee and AWT as mortgagor. The property the subject of this mortgage is the Wyangala property. This mortgage also is expressed to secure the payment of $360,000, to be paid in two equal instalments of $180,000, on or before 1 December 2001 and on or before 1 February 2002. It is signed only by Mr Liu. His signature is witnessed by Mr Woo.

(v) a “Deed of Guarantee and Indemnity”. This document names the plaintiff as “lender”, AWT as “borrower”, and Mr Liu and Ms Hou jointly as “guarantor”. The salient recital is that the guarantor (Mr Liu and Ms Hou) had requested the lender (the plaintiff) to advance money and/or provide other facilities or financial accommodation to one or more of the “debtors” (defined as “jointly and severally the borrower [AWT] the guarantor [Mr Liu and Ms Hou]”).

The Deed of Guarantee and Indemnity provided that Mr Liu and Ms Hou guaranteed to the plaintiff the due and punctual performance of all the obligations undertakings and provisions of AWT to the plaintiff and indemnified the plaintiff against any losses incurred by it as a result of any failure in payment; they were to do this as specified in the document or, where not specified, upon demand by the plaintiff. The document further provided that the guarantee and indemnity were continuing and irrevocable and that the obligations undertaken by Mr Liu and Ms Hou were “absolute and unconditional in all circumstances”.

30 There is no acceptable direct evidence (and very little of any kind) concerning what occurred at the settlement. However, it is reasonably clear that, on that occasion, the apparently duly executed mortgage over the Canley Vale property and the Deed of Guarantee, also apparently duly executed, were produced and handed to Mr Zipkis. Despite the apparent attestation by Mr Woo that both Mr Liu and Ms Hou had signed the documents in his presence, it is now common ground that Ms Hou never signed either document. Her signature was, in each case, forged by Mr Liu. Mr Woo’s attestation that Ms Hou signed the documents in his presence and his declaration that she was previously known to him, were both false.

31 AWT defaulted on its obligations under the mortgage. The plaintiff entered into possession of the Wyangala property and it has been sold and the proceeds applied to the discharge of the moneys owing by AWT to the plaintiff. The proceeds were insufficient to cover the debt. Thus, the plaintiff now sues upon the mortgage over the Canley Vale property and the Deed of Guarantee and Indemnity.

32 To complete this part of the historical picture: on or about 14 August 2002 AWT made a single payment of $50,000 to the plaintiff. As a consequence, the plaintiff agreed to discharge its mortgage over the Cabramatta property, and did so. On 13 August 2002 Mr Liu and Ms Hou signed a “Deed of Confirmation of Guarantee”, acknowledging the discharge of the mortgage, that the discharge was in consideration of the payment of $50,000, and charging their interest in the Cabramatta property with payment of any moneys owing then or in the future by AWT to the plaintiff.

33 The explanation for this turn of events appears to lie in an encounter Mr Liu had with the NSW Crime Commission, details of which never clearly emerged. However, it seems that officers of the Crime Commission seized from premises in Coogee a sum of almost $800,000, to which Mr Liu claimed to be entitled. The Crime Commission agreed to release the funds to Mr Liu for the purpose of discharging the existing first mortgage on the Cabramatta property and substituted itself as first mortgagee.

34 The mortgage over the Canley Vale property has been registered.

35 S 42 of the Real Property Act 1900 provides:

“ 42 Estate of registered proprietor paramount
(1) Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud , hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded except:
[a series of exceptions not presently applicable]” (italics added).

36 There is no question that the mortgage is duly registered. What is at issue is whether the registration was brought about by fraud. If so, then the indefeasibility of title provided by s 42 is itself defeated.

37 It is in respect of the evidence going to this issue that the accounts of the three witnesses to whom I have referred diverged markedly. This is central to the determination of the proceedings.

The background to the contract for sale and purchase

Mr Liu’s account

38 The evidence concerning the formation of the agreement for sale and purchase of the trout farm is as follows. Mr Liu’s initial account was given in affidavit form. He claims (affidavit 19 August 2003) that Mr Duran approached him in about October 2000, telling him that he was concerned about his son, who was working at the fish farm but was addicted to smoking a prohibited drug. Mr Duran therefore asked Mr Liu to buy the fish farm, with the promise that if, in the future, he did not like it, he (Mr Duran) would repurchase it for the same price. Mr Liu also claimed that Mr Duran told him that he was offering the property for sale at the same price ($395,000) for which he had purchased it. According to Mr Liu, he initially demurred because he had no knowledge of how to operate such a venture.

39 Mr Liu said that, in about January 2001, Mr Duran again approached him, applying greater pressure for him to purchase the farm, again because of concerns about his son and also his wife. He repeated the offer to sell “at a good price”, $395,000, from which he would make no profit. He offered:

“I will also arrange your loan through my finance company and I would also pay for all expenses related to the purchase of my fish farm including the solicitors costs and all costs resulting from the loan.”

40 Mr Liu deferred providing a response. He said Mr Duran again approached him in early March, with a repeat of the offer. Mr Liu again demurred, protesting that he did not have experience in running a fish farm. Mr Duran therefore said:

“It is very easy to run a fish farm. If you agree to buy my fish farm, I will coach you for six months in the running the farm and feeding the fish. If you do not want to run the fish farm in the future, I promise I will buy it back from you at the same price I sold it to you.”

41 Mr Liu said that in about mid-March Mr Duran again approached him, looking and sounding worried, and saying that his son had “got into some trouble” at the farm. He asked Mr Liu to accompany him to the fish farm, which Mr Liu agreed to do.

42 In early April 2001 Mr Duran again approached Mr Liu, expressing the hope that Mr Liu could help him. This time he offered the fish farm at a price of $420,000, made up of $340,000 for the real estate plus $80,000 for the business. He repeated that he had originally purchased the farm for $395,000 many years earlier, but had improved the land, spending $30,000. Mr Duran said:

“I do not want to make any money from you, we are good friends and that I will not lie about the price. All I am making is $30,000 because I have spent this $30,000 to improve the land. Altogether the purchase price would be $420,000. The price I have offered you is a very good price. The real value of my farm is worth over $500,000. You will definitely make a profit out of this farm because I have been making profits from this farm. Should you not make a profit I will help you out of it.”

He offered to help with any problems in paying the loan, and repeated his offer to repurchase the farm if Mr Liu did not find it satisfactory.

43 According to Mr Liu, Mr Duran sounded “very desperate” because of his concern about his son.

44 Mr Liu deposed:

“In or about mid-April 2001, I decided to purchase the fish farm from Miguel and Cynthia as I felt very sorry for Miguel and his family and was willing to help him with his son. I believed what Miguel had told me about the price he had purchased the farm for and the amount he had spent on improvements. I thought the farm was going to be sold to me at a very good price. I also thought it was safe because Miguel said he would buy the farm back from me at the same price.”

45 He said that, had he known the true price Mr Duran had paid for the farm (which he claimed to have later learned was $206,910) he would not have agreed to purchase it. He said that he told Mr Duran that he had agreed to buy the farm as a favour, to help out Mr Duran and his family.

Mr Duran’s account

46 In an affidavit sworn on 1 February 2006 Mr Duran responded. He denied the conversations to which Mr Liu had deposed. He said that in January 2001 he had a conversation with Mr Liu, asking him if he knew anybody who could help his (Mr Duran’s) cousin remain in Australia. He said that at the end of February 2001 there was a power failure at the fish farm lasting about 11 hours and causing the death of many fish. He and his wife, who had previously considered selling the fish farm, now firmly decided to do so. He said that he recounted this to Mr Liu.

47 He said that the friendship between himself and Mr Liu became closer, to the point where Mr Liu suggested that they may jointly purchase some investment property. It was in these circumstances that he met Ms Hou.

48 Mr Duran said that on or about 20 March 2001 he had a conversation with Mr Liu in which he (Mr Duran) said that he was definitely selling the farm, that he had advertised it with a sale price of $420,000 and that he had three parties interested in purchasing. He said that in the afternoon of 24 March 2001 Mr Liu telephoned him, to ask if he was still intending to sell the farm and, when he received a positive response, expressed a wish to inspect it that day. Mr Duran agreed to take him, although it would be very late when they arrived. He said that Mr Liu asked many questions about the operation of the business and that they held lengthy discussions. These conversations took place in the presence of three persons of Chinese appearance, who had arrived at the meeting with Mr Liu and to whom Mr Liu appeared to translate the content of the discussions.

49 On about 27 March 2001 Mr Liu telephoned Mr Duran, saying that he wished to buy the farm and that he would go to his bank to arrange finance. He said that Mr Liu came to his shop that afternoon, and asked how much he wished for the sale of the farm. Mr Duran told him $420,000. Mr Liu asked how much he had paid for it, to which Mr Duran replied “$280,000”. He explained the difference in price by saying that the farm was run down and that he had effected repairs, purchased fish and new pumps and paid for employees. He said that he advised Mr Liu that if he were to purchase the farm he would need a manager who could speak good English because he would need to ring the power company and others during power failures. He said that Mr Liu said he had a university graduate who would be working on the farm.

50 In oral evidence Mr Duran affirmed his affidavit evidence that the first approach with respect to the purchase had come from Mr Liu. However, he also gave some evidence concerning the pre-exchange transactions which is, to say the least, surprising. It will be recalled that Mr Liu had, well prior to exchange of contracts, handed Mr Duran two cheques, one in the sum of $40,000, and one in the sum of $20,000. Both were returned dishonoured, although the first was subsequently replaced by either a bank cheque or cash.

51 Mr Duran was asked to explain why Mr Liu would have given him this sum of money, prior to exchange of contracts. He said that this was because he needed the sum of $60,000 to clear a then existing mortgage on the property to Westpac. It was put to him that it was unnecessary to do that prior to settlement, and that, in the normal course, an existing mortgage would be cleared at the time of settlement. He explained what had happened by saying that it was Mr Liu’s suggestion that he pay $60,000 without waiting for exchange of contracts. He said:

“Yeah but this is extraordinary, you know. The buyer wanted it that way, you know.”

52 He also said that it was Mr Liu who volunteered mortgages on the Cabramatta and Canley Vale properties in order to secure the debt owing on the trout farm.

53 Mr Duran also claimed, under cross-examination by counsel for Mr Liu, that, early in 2001, Mr Liu volunteered to undertake the payment of the outgoings, or some of them, on the property, notwithstanding that contracts had not been exchanged and settlement had not taken place.

54 As I have said above, I would not prepared to act on any of Mr Duran’s evidence unless it is otherwise corroborated. His account entirely lacks plausibility.

55 Mr Liu’s evidence is not any more satisfactory. He claimed (in oral evidence under cross-examination) that he had repeatedly asked Mr Duran for a balance sheet or a profit and loss statement for the business but that these had not been forthcoming.

56 The transcript records Mr Liu saying, under cross-examination by Mr Woo, the following:

“No, because the very reason why I bought this farm, because Duran approached me and asked for help. He said he need some help and he promised that I will make fortune and profits out of this farm. He told me that – he promised me that I will make money from the farm and I will never suffer any loss and he told me the price of the farm was $500,000. The reason I gave him $40,000 before the contract was signed. This dates back to the beginning of May. At the beginning of May he came to me and said he needs money. He needs $60,000. And he told me his restaurant, his take-away restaurant, which located at Stockland at Wetherill Park, at that time he told me his restaurant was about to close in June and the shopping centre requires the take-away restaurant to be refurnished (sic – refurbished). Then he came to me and said to me whether I can give him some help to pay for the money (as said) and he also told me, when we settle the farm, finish farm issue, that he can deduct the payment right from the final payment of the fish farm and this was the very reason why I didn’t pay for the 10 percent deposit when we exchanged the contract.”

He also said:

“… Duran contacted me for the purchase of the fish farm, and until April 2001, under the full conditions they implied for me and under the guidance by Duran, I have decided to help him by way of purchasing this fish farm because if I bought the fish farm it is going to resolve some of the difficulties his family was experiencing at that moment. His wife was under tremendous pressure and Duran's son was going to return to Sydney.”

57 Concerning the payment of the sum of $60,000, prior to exchange of contracts, Mr Liu said:

“Mr Duran told me he needed that amount of money to renovate his shop and he asked me for help. He also said such amount of money can be deducted later from purchasing amount for the fish farm.”

58 Neither of these accounts is plausible. Mr Liu was a businessman who had acquired a number of properties. It is improbable to the point of incredibility that he would, as Mr Duran asserted, have volunteered, without any security at all, even the security of an exchanged contract, to pay either $60,000 or $40,000, whether for the purpose of clearing Mr Duran’s mortgage prior to settlement, or for renovation of his restaurant. It is improbable to the point of incredibility that he would have volunteered to pay the outgoings on the trout farm prior to settlement. It is improbable to the point of incredibility that he would, as he alleged, have agreed to purchase the trout farm out of pity or sympathy for Mr Duran. It is improbable to the point of incredibility that he would have acted on an oral promise by Mr Duran that, if he found the fish farm unsatisfactory, Mr Duran would repurchase for the same price. He must, among other things, have known of the costs associated with real estate transactions. Even if Mr Duran had made a promise of the kind asserted, Mr Liu must have known that, unless it were incorporated in the contract, it would be unenforceable; and he must have known that, in the unlikely event that he sought and achieved performance of that promise, he would have been significantly out of pocket in respect of stamp duty and conveyancing fees. I do not believe that Mr Liu acted upon any representations made by Mr Duran about either the value or the profitability of the trout farm.

59 The only reasonable explanation for events that can, objectively, be shown to have occurred is that Mr Duran and Mr Liu engaged in the behaviour and the transactions they did for some (mutual) reason that has not been exposed in the evidence.

60 Prima facie, the plaintiff has established its case for possession of the Canley Vale land. It has proved the mortgage, registration thereof, and default under the mortgage.

61 Other than by way of the issues raised in his cross-claim, Mr Liu has no answer to the plaintiff’s claim. I will return to the issue of the cross-claim in due course. No argument was advanced on his behalf that, by reason of the fraud (perpetrated by him) on Ms Hou, the plaintiff was disentitled to enforce the mortgage so far as it secured the debt to the plaintiff on his interest of the property. In any event, National Commercial Banking Corporation of Australia Ltd v Hedley (1984) NSW Conv R 55-211 is authority for the proposition that the plaintiff can do so.

62 The first question that arises for determination is whether the plaintiff can rely upon the registration of the mortgage as giving it an indefeasible title against Ms Hou. I have set out above the relevant provisions of s 42 of the Real Property Act. Unless relevant fraud is established, the plaintiff is so entitled. Counsel for the plaintiff urged that, even in the circumstances, that is, where it is now beyond question that Mr Liu forged her signature on the mortgage, the principle of indefeasibility overrides that fact. (Counsel also sought to ameliorate the apparent harshness of this position by referring to the existence of the Torrens Assurance Fund, established under Pt 14 of the Real Property Act, and designed to provide compensation for persons who suffer loss or damage as a result of the operation of the Real Property Act.)

63 In my opinion, the answer to this question depends upon the determination of a question of fact: the level, if any, to which Mr Duran (acting as director or agent of the plaintiff) was complicit in the forgery and registration of the forged mortgage.

64 The evidence relevant to this question was that of Mr Liu, Mr Duran, and, to a lesser extent, Mr Woo.

65 Under cross-examination by Mr Woo, Mr Liu admitted that he had forged his wife’s signature on the mortgage, and on the Deed of Guarantee and Indemnity. He had not made these admissions in his affidavit evidence and did so in oral evidence under the protection of a certificate issued under s 28 of the Evidence Act 1995.

66 Mr Liu gave evidence of how this came about. He said (T 163) that he did this at the suggestion of Mr Duran. He said that this occurred in Mr Woo’s office, and that Mr Duran said:

“Let's make the documents ready as soon as possible and then he suggested that he sign for his wife and I sign for my wife. That's why I signed for my wife on the documents."

He repeated this (T 184).

67 He said that all this took place in Mr Woo’s office (T 190) and that Mr Woo was present, but Mr Liu was uncertain whether Mr Woo was in sufficiently close proximity to have heard what was said by Mr Duran (T 204).

68 In cross-examination by counsel for the plaintiff (T 193) Mr Liu said that Mr Duran had told him that this was “standard procedure”, and that he (Mr Duran) would “fix it up afterwards”.

69 Mr Liu agreed (again under the protection of a s 128 certificate) that he had, on a previous occasion that did not involve the plaintiff or Mr Duran, forged his wife’s signature on a mortgage (T 199). This was a first mortgage over the Canley Vale property. This time he blamed his solicitor (not Mr Woo, but another solicitor, his name he could not recall) for the suggestion that he might do so.

70 I preface my review of Mr Woo’s evidence by the following.

71 As a solicitor, he was well aware that, on any view of the evidence, he would be exposed as having falsely witnessed Ms Hou’s purported signatures on two documents. With that recognition he was at pains to present himself in the best light possible. His evidence throughout was littered with self-justification, evasions, irrelevance and non-responsive answers. Inconsistencies abounded. I was (and remain) satisfied that Mr Woo was prepared to say anything that would minimise the degree of his impropriety throughout these transactions. I set out some examples:

T 233: In response to a question from me, Mr Woo said that he was familiar with s 128 of the Evidence Act . Later, at T 256, it became apparent that he was not so familiar; he said he thought he understood “the nature” of the provision. When handed a copy he said that this was the first time he had read it.

T 244: Mr Woo said that, during his pre-contract consultations with Mr Liu, he (Mr Woo) was concerned that no deposit was to be paid on exchange. This was despite the fact that he was acting on behalf of the purchaser; one would expect a concern about non-payment of a deposit to be that of the vendor’s solicitor.

T 245: Mr Woo said he had doubts about whether he wanted to act on the contract and was therefore delaying the procedure. He said this was because his instructions “were not clear enough”.

T 247: Mr Woo had given evidence that he had been telephoned by Mr Duran, who put “great pressure” upon him. He was then asked if it were “proper practice” for him to deal with the vendor instead of the vendor’s solicitor, to which he replied:

“Well, we can advance that argument, but we can see, and we have seen, that this is not a normal case. I try not to speak to the vendor, but I can't help it if I get a call from him.”
He was then asked if he had told Mr Duran that he could not speak to him. It was only then that he seized the opportunity presented and claimed to have said something to that effect.

T 252: It was pointed out to Mr Woo that the registered proprietor of the Wyangala Trout Farm property was the plaintiff (company) but that the contract identified Miguel and Cynthia Duran as vendors. He replied:

“I think I detected that straightaway, but it didn't matter to me because I knew that my client's position was protected (a) by the nexus and the proximity of the title description, and also the fact that they were represented by a solicitor.”
He maintained that, even though Miguel and Cynthia Duran had no title to the property:
“They would have to give good title regardless, pursuant to the contract. I know that for a fact. I didn't have to do anything more than that.”
He gave further answers (T 254) to the effect that Miguel and Cynthia Duran were “the brainchild” of the company, and that they would still have to give good title. He said:
“If they don't control, they can't, but I had, at that time point in time, probably considered that the purchaser would still get good title. I had formed that notion.”

T 261: Mr Woo was referred to his affidavit, in which he had deposed (on oath) that Ms Hou had attended at his office, with her husband with the contracts on or about 13 June and that he had then witnessed the Directors’ Guarantee accordingly. This is now known to be false. As to this, Mr Woo said (T 261):

“No, but again it clearly set out my recollection at that stage.”


T 266: Mr Woo claimed that Mr Liu swore that his wife had signed the documents and that Mr Duran was still there with him.

T 274: Mr Woo denied that the events of 26 September constituted “a settlement”; he called it “a settlement conference”. Plainly, settlement took place at this event, and the meeting was a “settlement”. Nevertheless, Mr Woo said:

“Well, if you like, in this instance, it was more like a date to be set in terms of realigning his loan prior to the actual settlement.”


T 292: Mr Woo was asked about the affidavit verifying his defence to the initiating process which pleaded a case against him. In that defence Mr Woo pleaded that Mr Liu was authorised by Ms Hou to place her signature on the document and that she did so after having received legal advice from him (Mr Woo); that Ms Hou’s signature on the document was already present when he attested the signatures; and repeated that Ms Hou had received legal advice from him and that Mr Liu had placed her signatures on the document with Ms Hou’s full knowledge.

T 293: When asked if he had witnessed the documents after Ms Hou’s name had been there placed, he said:

“Like I said, I have said that that is so in my defence, but, now that my mind is focused, I'm not even sure if the first one is correct, or the second one, because all I can remember is that I witnessed at least Mr Liu's signature. Whether or not it was signed when the second signature was in the document - I think it's unclear, basically, yes, you know. I thought that he had signed before me and. If he signed before me. It naturally follows that I would be witnessing only his signature and not the wife's.”

I am unable to place any weight on anything Mr Woo said.

72 In his evidence Mr Woo denied that Mr Liu placed his wife’s “signature” on the documents in his (Mr Woo’s) presence, labelling the suggestion “preposterous”. In this he was attempting to present himself as an honourable solicitor. He gave evidence of a meeting with Mr Liu (T 232) on 12 June when the contract was signed. He said that it was necessary for Ms Hou to sign the documents, and that Mr Liu told him she was unable to attend the office to do so (T 232).

73 He said that Mr Liu left the office with the documents, and later returned, with the documents bearing a signature (apparently) that of Ms Hou; and that he asked Mr Liu to confirm that that was his wife’s signature, which Mr Liu did. He agreed that his attestation had been falsely appended to the document.

74 He gave evidence of the meeting with Mr Liu at Mr Woo’s office on 25 September 2001, which was the meeting when Mr Liu signed the mortgage documents. He said that both Mr Liu and Mr Duran were present but that, as it was not his practice to allow strangers into his office during consultations with clients, he thought it probable that Mr Duran was “in my office but not in my room”, and was in the waiting room.

75 He said that Mr Liu signed the mortgage in his presence, that he witnessed Mr Liu’s signature, and Mr Liu then took the document away, returning it later with the purported signature of Ms Hou. Mr Woo did not re-sign, or re-witness.

76 He gave similar evidence about a meeting on 12 July. It is difficult, from the oral evidence, to determine which documents were signed on which day. Mr Woo’s evidence casts no light upon the question.

77 That leaves only the competing evidence of the two protagonists – Mr Liu and Mr Duran. As I have said, neither is any more credit worthy than Mr Woo, and neither is any more credit worthy than the other. I am forced to do my best to determine the facts by reference to the objective probabilities, and in a virtual vacuum of acceptable evidence.

Mr Duran’s credit

78 Some aspects of Mr Duran’s evidence were simply glaringly improbable. Some illustrations:

T 50: when asked about the payment by Mr Liu of $40,000 prior to exchange of contracts, Mr Duran claimed that that had been done at Mr Liu’s suggestion;

T 52: he said that the pre-exchange payments were made because he needed $60,000 to clear the Westpac mortgage (I have already commented upon the illogic inherent in this explanation);

T 58-59: when asked about the removal of a “caveat” (sic – ? mortgage) on the Cabramatta property, Mr Duran claimed that Mr Liu proposed to give him $150,000 or $160,000;

T 66: Mr Duran claimed that Mr Liu had offered to start paying the outgoings on the Wyangala Trout Farm on 1 April 2001, well before exchange of contracts. These were outgoings which, since the plaintiff’s purchase of the property in February 2000, had exceeded $100,000.

Mr Duran’s evidence was also characterised by irrelevancies; he was anxious to volunteer information not responsive to the questions, and to reiterate and reinforce evidence he had already given that he perceived to be in his favour.

79 Mr Duran’s evidence on the issue of the forgery of the documents was given only in additional evidence, after all other witnesses had been examined and cross-examined. This was for the obvious reason that Mr Liu’s account was given for the first time in his cross-examination and Mr Duran had had no previous opportunity of responding to it.

80 He said that he visited Mr Woo’s office on only two occasions (“maybe two times” – T 317), and not five times, as asserted by Mr Woo.

81 At T 327 he denied having heard any conversation about the necessity for Ms Hou to sign certain documents and described as “rubbish” the suggestion that he had proposed to Mr Liu that he (Mr Liu) sign for his wife as he (Mr Duran) would sign for his. He denied having seen Mr Liu writing on a document in Mr Woo’s office.

82 Notwithstanding the highly unsatisfactory state of the evidence, I have, on balance, come to the view that it is more probable than not that Mr Duran did indeed know of the forgery by Mr Liu of Ms Hou’s signatures, and that he initiated those forgeries or encouraged Mr Liu in them. It was clearly in Mr Duran’s interest that the transactions proceed to a conclusion; I infer that he knew that Ms Hou would not willingly have mortgaged her home on the speculative purchase of a business venture in which she and her husband were entirely inexperienced.

83 As against Ms Hou the plaintiff therefore cannot take advantage of the indefeasibility of title provided to registered instruments by s 42 of the Real Property Act. Its claim against her – to the extent of her interest in the Canley Vale property – must fail.

84 The findings that Mr Duran at least knew of, and instigated, the forgeries, has its own inevitable consequence in relation to the plaintiff’s claim against Mr Woo. Notwithstanding the gross defalcation on the part of Mr Woo, the plaintiff cannot establish that it in any way relied upon Mr Woo’s representations; or that it suffered any damage by reason of any breach of duty by Mr Woo; nor that it suffered any loss attributable to Mr Woo’s false representations. That is, no causal connection between Mr Woo’s conduct (however characterised) and the failure of the plaintiff’s claim against Ms Hou has been established.

The cross-claims

85 There are four cross-claims.

(i) First cross-claim: Mr Liu’s claim against the plaintiff

86 In his cross-claim against the plaintiff, Mr Liu pleads that Mr Duran represented to him that the plaintiff had purchased the Wyangala Trout Farm for the sum of $390,000; that this representation was made in trade; and that the representation was false and that the plaintiff had in fact purchased the Trout Farm for $206,900; that, in reliance on the representations he (Mr Liu) had caused AWT to purchase the property and business for the combined sum of $420,000 and had signed the mortgages over the Canley Vale and Cabramatta properties, and the Deed of Guarantee and Indemnity and had paid or caused to be paid certain sums to the plaintiff.

87 He accordingly claims orders that the various documents be set aside; that the plaintiff give to him and Ms Hou the sum of $114,365.27; and a declaration that he is not indebted to the plaintiff. (Although it is not specifically pleaded, implicit in the pleadings is that Mr Duran was acting on behalf or as agent, of the plaintiff).

88 That $206,910 was the purchase price paid by the plaintiff for the Wyangala Trout Farm (in February 2000), appears to be established by Exhibit 1D1, which is a transfer (under power of sale) to the plaintiff; but is consistent with Exhibit 1D2, a settlement statement of 25 February 2000 showing a purchase price of $285,000. In either case, the purchase price was considerably less than $420,000, or even $340,000 if allowance is made for the settlement for the business.

89 However, I am unable to be satisfied that Mr Duran did make representations as alleged. In reaching this, I place no weight on his denials; but, equally, I place no weight on Mr Liu’s assertions that he did. In the end, Mr Liu has failed to discharge the onus of proof which he bears, on this issue.

90 The first cross-claim will be dismissed.

(ii) Second cross-claim: Ms Hou’s claim against the plaintiff

91 In the second cross-claim Ms Hou claims the Guarantee was unjust within the meaning of the Contracts Review Act 1980, and ought therefore be set aside, or not enforced. The cross-claim is predicated upon orders adverse to Ms Hou having been made in the principal proceedings. Having regard in relation to the failure of the plaintiff’s claim against Ms Hou it is unnecessary further to consider the cross-claim. I make no order in relation to the second cross-claim.

(iii) Third cross-claim: Ms Hou’s claim against Mr Woo

92 In the third cross-claim Ms Hou alleges against Mr Woo breach of duty of care, misleading or deceptive conduct within the meaning of s 42 of the Fair Trading Act, and claims damages. However, this cross-claim is also predicated upon the success of the plaintiff’s claim against her as pleaded in the Second Further Amended Statement of Claim. It is, accordingly, not necessary to determine this cross-claim. I make no order on the third cross-claim.

(iv) Fourth cross-claim: Mr Woo’s claim against Mr Liu

93 This cross-claim is predicated upon allegations made by Ms Hou against Mr Woo in the third cross-claim. Although the factual basis of those claims is established I have made no finding in relation to that cross-claim. Mr Woo claims against Mr Liu indemnity against and/or contribution towards any damages awarded against him (Mr Woo). No such damages have been awarded. It is unnecessary therefore to determine this cross-claim. I make no order in relation to the fourth cross-claim.

94 I propose to refer this judgment to the appropriate authorities for further investigation in relation to the forgeries by Mr Liu, and the false attestations by Mr Woo.

95 I propose to make orders that will achieve the following result:

(1) As against the first defendant:

Judgment for possession of his interest in the land at 43 Fairview Road, Canley Vale (Folio Identifier B/411192);

(2) As against the second defendant:

The Second Further Amended Statement of Claim is dismissed;

(3) As against the third defendant:

The Second Further Amended Statement of Claim is dismissed;

(4) The first cross-claim is dismissed.

96 It will be necessary to hear the parties with respect to the form of orders that will give effect to that intention. It will be necessary to hear submissions on the question of costs.

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