Chen Wei v Na Yu

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S CI 2016 04376

CHEN WEI AND QI YUN XIA	Applicants
v
NA YU	Respondent

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JUDGE:	Daly AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	26 October 2017
DATE OF JUDGMENT:	31 January 2018
CASE MAY BE CITED AS:	Chen Wei & Anor v Na Yu
MEDIUM NEUTRAL CITATION:	[2018] VSC 6

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JUDICIAL REVIEW AND APPEALS – Application for leave to appeal pursuant to Section 148 of the Victorian Civil and Administrative Tribunal (VCAT) Act 1998 (Vic) – Finding by Deputy President that funds advanced by applicants to respondent’s bank account did not constitute a loan – Adverse findings on credibility of applicants’ witnesses by Deputy President - Whether failure of Deputy President to provide a legal characterisation for the transaction constitutes an error of law or amounts to inadequate reasons – Whether an appellate court can entertain or consider arguments on claims not advanced at first instance – Whether Deputy President arguably erred in failing to characterise payments as money had and received - No prima facie case established for an arguable error of law or inadequate reasons – Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331, applied; Gaycel Pty Ltd v Heski Carpenters Pty Ltd [2017] VSC 450, referred to – Casdar Pty Ltd v Fanous [2017] VSC 616, referred to – Cosmopolitan Hotel (Vic) Pty Ltd v Crown Melbourne Limited [2014] VSCA 353 , referred to - Application for leave to appeal dismissed

PRACTICE AND PROCEDURE – Procedural fairness - Self-represented applicants whose native language was not English – Whether translation inadequacies affected Deputy President’s assessment of witness credibility - Whether Deputy President sufficiently accommodated applicants’ circumstances so as to afford natural justice – Whether hearing a six day trial over four months amounts to procedural unfairness – No procedural unfairness - Application of Sections 97 and 98 of VCAT Act 1998 (VIC) – Shaw v Gadens Lawyers [2010] VSC 7, referred to

PRACTICE AND PROCEDURE – Application for removal of affidavit from Court file pursuant to Rule 27.07 of Supreme Court (General Civil Procedure) Rules 2015 – Affidavit filed without leave – Irrelevant to determination of issues in appeal – Scandalous and defamatory material – Application for removal of affidavit from Court file granted

CONTRACT - Whether an IOU document creates or merely evidences a liability from a debtor to a creditor –Thomas v Hollier (1984) 156 CLR 152, applied

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr M Gronow	Victorian Bar Pro-Bono Scheme
For the Respondent	Mr J Selimi	Radebe & Associates

HER HONOUR:

Introduction and Background

This proceeding is the latest event in a long-running dispute between the applicants, Mr Chen Wei and Ms Qi Yun Xia (‘applicants’), and their estranged daughter-in-law, Ms Na Yu (‘respondent’), concerning recovery of two alleged debts said to be owed by the respondent to the applicants. Before the Court is an application for leave to appeal from the decision of a Deputy President of the Victorian Civil and Administration Tribunal (‘VCAT’) pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (‘VCAT Act’) to dismiss the applicants’ claims. On 23 November 2016, Ginnane J made orders to the effect that the application for leave, if granted, be heard together with the appeal itself.

The applicants claimed that the respondent owed them $39,600, comprised of $38,000 alleged to be the unpaid balance of a loan of $60,000 made by them to the respondent in May 2012, and $1,600 said to have been lent by Ms Xia to the respondent in or around August 2012 to fund the purchase of an airfare to China.

The respondent’s position was that the $38,000 was paid to her pursuant to a loan agreement between the applicants and their son, Mr Wen Tao Wei (‘Mr Wei Junior’). The respondent accepted that she received the sum of $60,000 by electronic transfer into her bank account in May 2012, but said that this was done upon the instructions of her husband, Mr Wei Junior, the true borrower. She said that she paid $22,000 to the applicants in early July 2012, again upon Mr Wei Junior’s instructions. The respondent denied requesting or borrowing the original $60,000 from the applicants, and also denied requesting or receiving the sum of $1,600 to purchase an airfare.

For the reasons which follow, I will dismiss the application for leave to appeal, on the basis that the applicants have not established a prima facie case that the decision of VCAT was tainted by any error of law. Even if I had found that there had been any arguable error of law, the applicants have not persuaded me that any error made at VCAT has led to any injustice, as in my view, the outcome of the proceeding would have been no different. Finally, if I am wrong, and leave ought to have been granted, I would have dismissed the appeal.

The parties

The applicants are a retired couple, and English is not their native language. However, evidence given during the course of the hearing at VCAT indicates they are both well‑educated. They are the parents of Mr Wei Junior.

The respondent and Mr Wei Junior married in October 2011 after a brief courtship, and have a son, born in March 2012. The respondent and Mr Wei Junior separated on 17 June 2012 in acrimonious circumstances.

The parties lived together with the respondent’s mother and Mr Wei Junior in the applicants’ home for several months during the period October 2011 and June 2012. Mr Wei Junior became addicted to the drug crystal methamphetamine or ‘ice’, which led to the ultimate breakdown in the marriage between him and the respondent.

It is clear from the various documents on the court file that there is a high level of animosity between the applicants and the respondent.

Procedural History

This is the second time the parties have come before me in relation to this dispute. On 22 December 2015 I granted leave to the applicants to appeal from the orders of Member Sweeney made at VCAT on 7 October 2014, allowed the appeal and remitted the proceeding to VCAT for rehearing according to law. This application for leave to appeal concerns the decision of Deputy President Lulham (‘Deputy President’) in the remitted proceeding, dismissing the applicants’ claims.

The factual background to the applicants’ claims, the subject of both VCAT hearings, are outlined below.

In January 2010, and before meeting the respondent, Mr Wei Junior entered into contracts of sale to purchase two apartments in Doncaster ‘off the plan’. He was the sole purchaser of one of the apartments (‘Apartment 211’) and a joint purchaser, with his friend Mr Yizheng Luo (‘Mr Luo’), of the other (‘Apartment 314’).

Mr Wei Junior funded the deposit for Apartment 211 and his half of the deposit for Apartment 314 with two unsecured loans from the applicants for $54,300 and $32,950 respectively. Upon borrowing these amounts Mr Wei Junior signed two ‘IOUs’ on 25 January 2010, in respect of the loans for the two deposits (‘2010 IOUs’). These payments were made prior to Mr Wei Junior meeting the respondent.

Mr Wei Junior and the respondent married in October 2011. At that time Mr Wei Junior was running a karaoke bar and the respondent was employed as a ‘senior estimator and associate’ for a consulting company, earning approximately $100,000 per annum. In March 2012 the respondent gave birth to a son. The respondent claims that after the wedding she became aware that Mr Wei Junior was addicted to ice, and that he was aggressive and violent towards her. She claims his addiction also led to the demise of his business and him being pursued by numerous creditors.

In April 2012, Mr Wei Junior nominated the respondent in his place as the purchaser of the two apartments. The respondent says that Mr Wei Junior begged her to take his place, as she would have a better chance of obtaining finance, and that if settlement of the purchases did not proceed that he would lose the deposits (which he had borrowed from his parents). Mr Wei Junior and the applicants dispute this version of events, and alleged that the respondent manipulated Mr Wei Junior into nominating her as purchaser. It appears that Mr Wei Junior told the applicants about his intention to nominate the respondent on or about the same day as he made the nomination, and that each of the applicants expressed their disapproval of the nominations being made. In any event, the respondent was nominated as sole purchaser of Apartment 211 and joint purchaser, with Mr Luo, of Apartment 314. The settlement on both apartments was due to occur at the end of May 2012.

According to the applicants, on or about 1 May 2012 the respondent telephoned Ms Xia and asked her to lend her $60,000 to complete the purchase of the apartments, and said that she would repay the sum of $30,000 within three weeks. The applicants did not have that amount of money on hand, so Ms Xia asked her sister-in-law, Ms Wen Tai Wei, if she could lend Ms Xia the money to lend the respondent. Ms Wei agreed, and Ms Xia advised the respondent that she would make the loan.[1] It is common ground that Ms Wei transferred $60,000 directly to the respondent’s bank account on 9 May 2012.
[1]There are some discrepancies in the evidence about precisely when those alleged conversations were held, and who was a party to them, which may have influenced the Deputy President’s assessment of the credibility of the applicants, but it is not necessary for present purposes to detail or reconcile those discrepancies.

The respondent disputes the applicants’ version of events and says that she agreed to Mr Wei Junior’s request to be nominated in his place as purchaser (and in the case of Apartment 314, co-purchaser) of the two apartments and to take a mortgage to settle the purchases so that the deposits were not forfeited. The respondent obtained two loans, secured by mortgages over the apartments, to fund the purchases. However, a shortfall remained between what was required for settlement and what the banks would lend her. She says she discussed this shortfall with Mr Wei Junior, and he told her he would borrow $60,000 from his parents. The respondent asserted that she did not ask Mr Wei Junior to borrow the money from his parents, nor did she ask Ms Xia to lend her $60,000.

Settlement of the purchase of the two apartments occurred on or around 29 May 2012, and shortly thereafter the respondent, Mr Wei Junior and their infant son moved into Apartment 211. This arrangement was short-lived, as Mr Wei Junior and the respondent separated on 17 June 2012.

The applicants say that despite repeated requests, no funds were repaid until early July 2012 when the respondent made payments of $20,000 on 2 July 2012 and $2,000 on 3 July 2012 to them. The respondent says these payments were made at the direction of Mr Wei Junior, as he asked her to pay his parents whatever money she had, and told her that when he sold his business he would reimburse her. However, she was not paid anything by Mr Wei Junior when he sold his business.

On 5 July 2012 Mr Wei Junior signed an ‘IOU’ for $38,000 in favour of his parents (‘5 July IOU’). This document was significant in both VCAT hearings and will be returned to later.

Sometime in or around March 2013 the respondent and Mr Luo decided to sell Apartment 314, and a draft document was prepared by solicitors, naming Mr Luo, the respondent, Mr Wei, Ms Xia and Mr Wei Junior as parties. The document purports to be an ‘Agreement’ and outlines how proceeds of the sale of Apartment 314 are to be applied. Clause 2.2 of the draft agreement contained a broad release by the applicants and Mr Wei Junior of any claims they may have had against the respondent, which was relied upon by the applicants to support their contention that the respondent recognised she had obligations to them. The respondent claims that this document was prepared at Mr Luo’s instructions, while Mr Luo stated that the respondent initiated the preparation of the document and asked him to take it to the applicants. This document was never signed.

In December 2013 the applicants commenced the first VCAT proceeding against the respondent seeking the return of $38,000, plus $1,600 in respect of the airfare.

The first VCAT hearing

The first VCAT hearing took place over two days in August 2014. The respondent was represented by counsel, whilst the applicants were self-represented, and gave evidence with the assistance of an interpreter. At the first VCAT hearing the applicants and the respondent appeared as witnesses, along with Mr Luo. Mr Wei’s and Ms Xia’s evidence was consistent with their version of events as outlined in paragraph 15 above. They gave evidence that Ms Xia had also loaned the respondent $1,600 in August 2012 for the purchase of an airline ticket to China. The respondent’s evidence accorded with her version of events as outlined in paragraph 3 and 16 above.

Mr Luo gave evidence that Mr Wei Junior had persuaded his parents to lend him $60,000 to purchase the apartments. Mr Luo said that he was present when the applicants agreed with Mr Wei Junior to provide the funds. Ms Xia said that she would herself have to borrow the $60,000 from other sources. Mr Luo also said that Mr Wei Junior had told him that he had nominated the respondent as a purchaser mainly because she was more likely to be successful in getting a mortgage from the National Australia Bank.

The applicants relied upon the 5 July IOU, which stated as follows:

IOU
I, Wentao Wei, borrowed $38,000.00 Australian Dollars from the parents for paying 5% of the down payment on 211/8 Berkeley St, Doncaster and making loan repayments. The money has been deposited in the account of Na Yu.
This IOU is hereby given as a proof for the loan.
Borrower: Wentao Wei [Signature]
05 July 2012

and a letter from Mr Wei Junior dated 2 August 2014 stating that:
In May 2012, I didn’t ask my parents to borrow any money, I didn’t know that my wife Na Yu borrowed the money off my parents until my parents told me in July. Na Yu did this behind my back while I was away.

However, the applicants did not call Mr Wei Junior as a witness, and when asked by the Member why he was not at the hearing Mr Wei responded that ‘He got a cold’. The Member responded ‘That is unfortunate. His evidence would be very important today.’ The Member’s observations were no doubt based upon the significance of the 5 July IOU, in particular, whether upon its plain and ordinary reading it amounted to an acknowledgement by Mr Wei Junior that $38,000 was borrowed by him from his parents, or whether, as contended by the applicants, it was proof of a loan to the respondent.

In his reasons, which were delivered orally at the conclusion of the hearing, the Member referred to Mr Wei Junior’s failure to give evidence and stated:[2]

In all the circumstances, Mr Wen Tao Wei, the son of the applicants, the driving force in the purchase of the two units, ‘separating’ husband of Ms Yu and author of the IOU is a person central to the facts and circumstances surrounding the characterisation of the $60,000 and whether or not it might be regarded as a loan to the respondent. Mr Wen Tao Wei was not however called by the applicants to give evidence and no reason was advanced by Mr Chen Wei or Ms Xia for their son’s failure to attend. The witness Mr Luo did give evidence that Mr Wen Tao Wei did not now like to see people and that he was told by the parents that he had a cold, at least on the first day of the hearing. Mr Wen Tao Wei also did not appear at the second day of the hearing conducted around 2 months later.
Mr Wen Tao Wei’s evidence could have assisted the Tribunal in understanding important facts and circumstances concerning the purported loan of $60,000. His evidence could have shed light on why the IOU dated 5 July 2012 did not amount to an acknowledgement by him of a debt owing by him to his parents in the sum of $38,000. His evidence could also have explained how it could be that his later letter dated 2 August 2014, a few days before the hearing, denying he was the borrower could somehow be consistent with the earlier more contemporaneous IOU, as asserted by his father in evidence. The failure to call Mr Wen Tao Wei, apart from the generalised observations of Mr Luo, remains unexplained.
In these circumstances, the Tribunal is entitled to make an inference Jones v Dunkel ((1959) 101 CLR 298) and to infer that the direct evidence of Mr Wen Tao Wei and any evidence in respect of his contemporaneous IOU letter would not have assisted the applicants in their argument that a loan had been made to the respondent or in their interpretation of their son’s IOU letter that it was proof of their being a loan to the respondent. For this additional reason, the Tribunal finds that there is substantial doubt concerning the evidence of the applicants as to their being a loan made to the respondent of which $38,000 is claimed as the outstanding balance.

[2]Wei v Yu (Civil Claims) [2014] VCAT 1500.

Ultimately the Member accepted the evidence of the respondent that the $60,000 was borrowed from the applicants by Mr Wei Junior, and that the balance of $38,000 was the remaining balance of that loan owing by him to the applicants. The Member found that the applicants were unable to present sufficient evidence to meet the threshold required to prove they made a loan to the respondent of $1,600. Accordingly, the applicants’ claims were dismissed.

First Supreme Court Appeal

The applicants’ application for leave to appeal and appeal from the orders made at the VCAT hearing were heard simultaneously before me on 16 November 2015. The applicants had obtained pro bono legal assistance by the time they appeared before me. As such, the proposed notice of appeal, affidavit and submissions in support of the application benefitted from the preparation by lawyers.

The proposed notice of appeal posed five questions of law, as follows:

1.Whether the VCAT erred in law by the Member’s conduct towards the applicants at the hearing on 5 August 2014 and 7 October 2014 giving rise to a reasonable apprehension of bias.
2.Whether the VCAT erred in law by not affording the applicants procedural fairness at the hearing on 5 August 2014 and 7 October 2014.
3.Whether the VCAT erred in law by failing to provide assistance to the applicants who were self-represented litigants, unable to speak English.
4.Whether the VCAT erred in law by taking into account an irrelevant consideration.
5.Whether the VCAT erred in law by failing to take into account a relevant consideration.

I found that grounds 1, 4 and 5 were not made out. However, I concluded that the Member erred in not providing an express Jones v Dunkel warning to the applicants, and that this amounted to a breach of procedural fairness (and potentially a failure to provide adequate assistance to a self-represented litigant)[3] which may have affected the ultimate outcome of the plaintiffs’ claims, consistent with the decision of the Court of Appeal in Downes v Maxwell Richard Rhys & Co.[4] Consequently I granted leave to appeal, allowed the appeal, and remitted the matter back to VCAT for a rehearing under by a different tribunal member.
[3]Wei and Anor v Yu [2015] VSC 726 [27]–[28].
[4](2014) 313 ALR 383.

The Remitted Hearing

The remitted proceeding came back before VCAT for a hearing commencing 14 June 2016.

Again, the applicants were self-represented, while the respondent was represented by counsel. The evidence led in the rehearing was more extensive, with the hearing lasting six days, spread over a number of months.[5] Evidence was given by the applicants, the respondent, Mr Luo, Mr Wei Junior, and Ms Wei (Mr Wei’s sister). Also put into evidence was the 5 July IOU, along with the 2010 IOUs, in respect of the loans for the deposits paid towards the purchase of the two apartments.
[5]On 14-15 June 2016, 20-26 July 2016, and 8-9 September 2016.

The reasons for decision of the Deputy President dated 29 September 2016 (‘reasons’) provides a detailed narration of the evidence provided by each of the witnesses.

The evidence of Mr Wei and Ms Xia largely coincided with the evidence given in the first hearing, being that the respondent had asked Ms Xia to borrow $60,000, and promised to repay $30,000 within three months, and that Ms Xia had borrowed this amount from her sister-in-law, Ms Wei, who transferred the funds directly into the respondent’s bank account. The respondent had repaid $22,000 but a balance of $38,000 remained outstanding. The respondent had also borrowed $1,600 from Ms Xia for the purchase of an airfare. Whilst Ms Xia accepted that the 5 July IOU may be damaging to the applicants’ case if viewed out of context, the applicants maintained that the loan was between them and the respondent, saying that:[6]

This was a loan by Mrs Xia to Na Yu personally. Mrs Xia said the IOU is not ‘completely correct’ in that Mrs Xia asked Wen Tao Wei to sign it, so that in case Na Yu did not repay the money, both of them could repay the money together. If Na Yu did not pay, Mrs Xia wanted both of them to pay, because the money was borrowed when they were still married. When they were still married, the loan was to both of them, so both of them should repay it.

[6]Wei v Yu (Civil Claims) [2016] VCAT 1666 [61].

In cross-examination of Ms Xia it emerged that she and Mr Wei had also sued Mr Wei Junior and the respondent in a separate VCAT proceeding for $87,250 provided to Mr Wei Junior to fund the deposits for the purchase of the apartments, on the basis of the 2010 IOUs, even though the respondent was not married to Mr Wei Junior at the time that those loans were made. This claim against the respondent was ultimately struck out, and Mr Wei Junior consented to an order being made against him to pay $87,250. This amount remains unpaid.

Mr Wei gave extensive evidence at the hearing. However, the Deputy President noted in the hearing that ‘a lot of what he said was based on hearsay evidence and amounted to his summaries of the facts as he understood them’.[7] It was accepted that Mr Wei was not present at material discussions, in particular the crucial conversations alleged to have taken place between Ms Xia and the respondent , leading the Deputy President to conclude that: [8]

Whilst he made submissions, and asserted facts on the basis of his understanding of what other people had done, his evidence was of little value.

[7]Ibid [194].

[8]Ibid [18(e)].

Ms Wei, the applicants’ sister/sister-in-law, gave evidence of her conversations with Ms Xia in relation to lending Ms Xia and Mr Wei Junior $60,000 on the understanding that they were lending the money to the respondent to settle the purchase of the apartment, and that $30,000 would be repaid within weeks. Ms Wei acknowledged having had no conversations with the respondent and had no personal knowledge of what was discussed by the respondent and Ms Xia, save that she believed what her sister-in-law had told her. The Deputy President accepted Ms Wei’s evidence.[9]
[9]Ibid [18(a)].

Mr Wei Junior gave evidence in the rehearing to the effect that he denied borrowing $60,000 or $38,000 from his parents but admitted having signed the IOUs, including the 5 July IOU. Mr Wei Junior denied instructing the respondent to pay his parents the sum of $22,000. The Deputy President was clearly unimpressed and unconvinced by Mr Wei Junior as a witness.[10]
[10]Ibid [18(b)], [108], [115].

Mr Luo gave evidence which significantly contradicted the evidence he had given in the original VCAT hearing. In particular, Mr Luo tried to resile from his evidence in the original hearing that he was present at a meeting in May 2012 when Mr Wei Junior persuaded his parents to lend him the $60,000 to enable him to settle the purchase of the apartments. The Deputy President stated as follows:[11]

In giving his evidence in cross-examination Mr Luo went to extraordinary lengths to try to disown this sworn evidence from the first hearing, and I have no hesitation in rejecting these attempts.

[11]Ibid [156].

The respondent’s evidence was largely the same as that provided in the original VCAT hearing: she did not borrow $60,000 or $1,600 from the applicants; she agreed to stand in Mr Wei Junior’s place as purchaser of the apartments, and received $60,000 into her bank account because Mr Wei Junior was being pursued by creditors and was considering bankruptcy; she paid $22,000 to the applicants at Mr Wei Junior’s instruction and because he said he’d reimburse her upon the sale of his business; and that Mr Luo initiated the preparation of the draft ‘Agreement’ containing a release of the respondent from any liability to the applicants or Mr Wei Junior.

As noted above, the Deputy President provided lengthy and detailed reasons. At paragraphs 3 to 5 of the reasons, the Deputy President summarised the dispute and the competing contentions of the parties, which need not be repeated here.

At paragraph 7 of the reasons, the Deputy President noted (omitting citations):[12]

I made an Order in Chambers on 2 May 2016 and conducted a Directions Hearing on 27 May 2016, to ensure that the parties understood that whilst the remission of the case had expunged the Tribunal’s previous decision so that no part of it survived inconsistencies in the evidence given on oath by the parties and witnesses in the two hearings could be relevant on the issue of credit. At the Directions Hearing I ordered that a complete transcript of the previous hearing be made available at the new hearing, in case either side sought to refer to previous evidence.

[12]Wei v Yu (Civil Claims) [2016] VCAT 1666 [7].

The Deputy President then went on to outline the chronology of events, identifying the facts which were agreed, not agreed, or were in dispute between the parties.

Prior to embarking upon his description of the evidence led before him, the Deputy President made the following observations regarding Mr Wei’s conduct of the case on behalf of the applicants:[13]

As I show below when discussing the evidence, the Applicants’ case is that Mrs Xia had the crucial conversations with Na Yu. Nevertheless, Mr Wei demonstrated that he was in charge of the Applicants’ case. He gave his evidence in the form of a submission, containing propositions of law and ‘facts’ which were based on what others had told him. He did so without notes or reference to documents. It was apparent that he had memorised a version, and an interpretation, of events. I have no doubt that he sincerely believes that version. However, two things must be said about it:
(a)it is highly subjective and illogical. Mr Wei believes Na Yu to be an evil woman who planned to cheat Mr Wei and Mrs Xia out of $60,000.00 / $38,000.00. This belief ignores the facts that Wen Tao Wei became a violent drug addict who abandoned his wife and baby, and who lost his ability to pay for the apartments when it came time to settle. It also ignores the fact that Na Yu is from a wealthy family, who supported her financially for some three years after the birth of her child. It is implausible that Na Yu would plan to marry, become pregnant, and give up her job to raise the baby, in order to obtain $38,000.00 from Mr Wei and Mrs Xia when she was able to borrow some $400,000.00 from her own parents when Wen Tao Wei ceased providing financial support.
(b)Mr Wei’s sincere belief in his theory caused him to misbehave in the hearing, on several occasions. To be blunt, when a witness – including Mrs Xia – gave evidence which was not in accord with Mr Wei’s script, he would loudly interrupt. Having been directed to elements of the transcript of the first Tribunal hearing, I see that he did the same thing there. These interruptions were not ‘objections’ to questions. They were disgraceful attempts to cause the witness to change their evidence. For example, during the cross‑examination of Mrs Xia, she said that Wen Tao Wei had borrowed $87,250.00 which he was still liable to repay, which had been used to purchase apartments, and that she was seeking repayment from Na Yu for the benefit of Wen Tao Wei. She was in the middle of saying that she was upset because she perceived that Na Yu had the benefit of the loan of $38,000.000, which she had received shortly before the separation, when Mr Wei interrupted. I had explained to Mr Wei that he was entitled to object to a question, but that he was not entitled to interrupt witnesses’ evidence, on many occasions and he persisted in doing so. Mr Wei’s conduct in this respect was unfair and inappropriate. To her credit, though, Mrs Xia seemed not to change her evidence in line with Mr Wei’s attempted coaching. Mr Wei’s interruptions of witnesses’ evidence only served to highlight aspects of the evidence which did not support his theory.

[13]Ibid [13].

The Deputy President then referred to the 5 July IOU and the other ‘IOU’ documents tendered at the hearing, then provided the following summary of his findings concerning the credibility of the witnesses who gave evidence at the hearing:[14]
[14]Ibid [18].

(a)I accept the evidence of Ms Wen Tai Wei, that she lent $60,000.00 to Mr Wei and Mrs Xia on 8 May 2012, on the understanding that they would lend it to Na Yu who needed it to settle the purchase of an apartment. Ms Wen Tai Wei expected $30,000.00 to be repaid within weeks. Her understanding was based on what Mrs Xia told her. Ms Wen Tai Wei had no discussions with Na Yu.
(b)Wen Tao Wei’s evidence was of no assistance. He admitted having a drug problem in 2012 but did not see that it had anything to do with the case. He said he was unaware that if he was unable to settle the purchase of the apartments he would lose the deposits of $87,250.00 which he had borrowed from his parents, and I reject that evidence because it is absurd and because it is contradicted by his nomination of Na Yu as purchaser. One of his reasons for nominating Na Yu as purchaser was that he recognised that she had better prospects of getting a bank loan than he did, which shows that he understood the importance of complying with the contracts of sale. He said that he did not know that Na Yu had borrowed money from his parents and would not have consented to her doing so, which ignores the reality of the need to pay for the apartments which he had contracted to buy. Other aspects of his evidence were remarkable: he said that Na Yu had disrespected his parents by not helping with housework, and had embarrassed him in front of his friends, in April and June 2012 (when the baby was 1 and 3 months old). He denied having borrowed $60,000.00 or $38,000.00 but admitted having signed the IOUs. He was sullen, self‑centred and withdrawn when giving evidence and appeared to me to have washed his hands of his loans of $87,250.00 and of his marriage.
(c)Mr Yizheng Luo was a friend of Wen Tao Wei and Na Yu. He was reluctant to be dragged into this family dispute. He gave evidence in the first Tribunal hearing that he had been present when Wen Tao Wei persuaded his parents to lend him the $60,000.00. He literally gave evidence in the hearing before me that this was not the case. The best I could say about Mr Luo is that he probably wanted to help. Objectively though, I conclude that he saw his role of ‘helping’ as being more important than his obligation to give truthful evidence. Mr Luo did not give truthful evidence in the hearing before me.
(d)Mrs Xia is understandably loyal to her son Wen Tao Wei and disappointed in the breakdown of his marriage and the consequent loss of her contact with her grandchild. There are some inconsistencies between the evidence of Mrs Xia and Mr Wei concerning the drafting of the IOU of 5 July 2012, and I prefer her evidence on those matters. There is [an] air of unreality in her evidence about the $60,000.00 loan, as she emphasised Na Yu’s request for the loan in isolation from the effects of Wen Tao Wei’s drug addiction and the options of either settling the purchases of the apartments or losing the $87,250.00 previously lent to Wen Tao Wei. Mrs Xia’s attempts to explain the meaning of the IOU of 5 July 2012, which on its terms does not say that Na Yu was the borrower, and the absence of any IOU or similar document made by Na Yu were illogical and unconvincing, and appear to be the result of a reconstruction of events in order to create a case against Na Yu. She believes Na Yu tricked her into lending $1,600.00 in August 2012. Mrs Xia seems more upset with the relationship issues that [sic] with the alleged loan of $60,000.00.
(e)Mr Wei was not a party to the conversations which are crucial to the Applicants’ case. Whilst he made submissions, and asserted facts on the basis of his understanding of what other people had done, his evidence was of little value.
(f)Na Yu was a credible witness. She has been adversely affected by this litigation. She said Wen Tao Wei’s drug addiction was not predicted, and did not develop until after the marriage, and that it fundamentally changed his personality. Wen Tao Wei did not attend the birth of their child. She was adamant that she did not borrow the $60,000.00. She gave evidence that the litigation, including I gather the Supreme Court appeal, has cost Na Yu approximately $70,000.00 in legal fees, and she is now the respondent in Family Court proceedings issued by Wen Tao Wei at the instigation of Mr Wei. She agreed to be nominated as purchaser of the apartments because Wen Tao Wei was contemplating bankruptcy and was being pursued by creditors. She has serviced the mortgage on Apartment 211 and supported her child with no financial support from Wen Tao Wei, Mr Wei or Mrs Xia. I accept her evidence.

In the reasons, the Deputy President referred to the decision of the High Court in Thomas v Hollier[15] as standing for the proposition that an IOU does not of itself create a liability to repay the amount contained therein, but rather at most an IOU is some evidence of a liability, but not conclusive evidence.
[15](1984) 156 CLR 152.

Following his discussion of the principles emerging from Thomas v Hollier,[16] the Deputy President went on to make the following findings:[17]
[16]Ibid.
[17]Wei v Yu (Civil Claims) [2016] VCAT 1666 [267]-[270].

It follows from Thomas v Hollier that in the current case the mere signing by Wen Tao Wei of the 5 July 2012 IOU did not create a debt to Mr Wei and Mrs Xia. It could only amount to evidence of a liability he already had. Even though Mr Wei and Mrs Xia are self represented, they said that they wanted the IOU as ‘proof’ and it seems that their reasoning was consistent with that of the High Court, whether or not they understood that at the time.
Mr Wei and Mrs Xia have the burden of proof and they have not proven that Na Yu borrowed $60,000.00:
(a)Wen Tao Wei signed the IOU for $38,000.00 but denies having borrowed the $60,000.00. Wen Tao Wei read the IOU before signing it. Wen Tao Wei accepts that his 2010 IOUs evidence a debt, but he disclaimed the July 2012 IOU. Wen Tao Wei has an incentive to say that Na Yu borrowed the $60,000.00, because he has been unable to pay the $87,250.00 which was the subject of not only his previous IOUs but a consent Order, and he knows that Na Yu has wealthy parents. Wen Tao Wei gave no evidence as to how the money needed for settlement was to be raised. I do not consider Wen Tao Wei to be a credible witness. I do not accept his denial of having borrowed the money.
(b)Mr Luo gave evidence in the August 2014 hearing that he was present when Wen Tao Wei persuaded his parents to lend him $60,000.00, and I have found that Mr Luo’s evidence of August 2014 is to be preferred to his misguided and false evidence before me to the contrary.
(c)Mrs Xia says she lent $60,000.00 to Na Yu, which she and Mr Wei themselves had to borrow, but that at the time of the alleged loan she saw Wen Tao Wei as becoming an owner of the apartments (after settlement) and she drafted the IOU which expressly calls Wen Tao Wei the ‘Borrower’, and refers to Na Yu’s ‘account’ but does not call her a ‘borrower’. Mrs Xia also gave evidence that when Wen Tao Wei told her he intended to nominate Na Yu as purchaser, she had said words to the effect, ‘If you swap the name don’t come to us for help’, and I take the word ‘help’ in this context to refer to financial assistance. As such the statement is inconsistent with Mrs Xia lending Na Yu $60,000.00 after the nomination. The fact that Mrs Xia and Mr Wei had to borrow $60,000.00 from Wen Tai Wei, strongly suggests that Mrs Xia would require [any] borrower from her to sign a loan agreement or acknowledgement of some kind. The amount is so great that I cannot accept Mrs Xia’s evidence that she could not ask Na Yu to sign a document if the loan was made. The absence of a document supports the view that Na Yu did not borrow $60,000.00.
(d)In her written statement and oral evidence, Wen Tai Wei did not say that Mrs Xia said that Na Yu was “borrowing” money when Mrs Xia sought the $60,000.00. Wen Tai Wei is a somewhat independent witness and this part of her evidence is significant.
(e)Mr Wei was not present when it is alleged that Na Yu asked for a loan of $60,000.00 and his sincere belief that this occurred, and his belief that Na Yu is evil, does not make it true. Mr Wei is so passionate in his hatred of Na Yu that his credibility is affected. His denial of having interrupted Mr Luo in the 2014 hearing, in the face of a transcript and a recording which showed that he did precisely that, shows his lack of objectivity in this matter. His interruption of Mrs Xia’s evidence in the hearing before me does the same. Mr Wei’s delivery of his evidence/submission suggested that he had memorised a story. To the extent that he purported to give evidence of what other people had done, it was not evidence at all. To the extent that he gave evidence of his own activities, I cannot believe him. The fact that Mr Wei and Mrs Xia sued Na Yu for the $87,250.00, which they had lent Wen Tao Wei before he had even met her, is very damaging to their credit.
(f)Na Yu denied having borrowed the $60,000.00. While it could be said that she has an incentive to deny having borrowed the money, one must look at all the facts in context. By May 2012 Na Yu had left her job, had a young baby and a drug addicted dysfunctional husband. She had been nominated as purchaser, when Wen Tao Wei was being pressed by creditors and contemplating bankruptcy. Wen Tao Wei gave no evidence as to how the money needed for settlement was to be raised, if he did not borrow it. That the $60,000.00 was deposited in her bank account is consistent with her being a nominee or stakeholder in respect of Wen Tao Wei’s borrowing. Na Yu’s payment of $22,000.00 on instruction from Wen Tao Wei is also consistent with being a nominee. Na Yu has not been unjustly enriched by being nominated as purchaser: she was left with the task of obtaining bank finance before the settlement, and has had to support herself and the child since. The $60,000.00 was borrowed before the separation. It was after the separation on 17 June 2012, which Na Yu says occurred after Wen Tao Wei had been bailed on a criminal charge and after he assaulted her, that she ceased to regard Wen Tao Wei as having an interest in the apartments. Given the powers of the Family Court to adjust property interests, there is nothing remarkable in her taking this view.
(g)The draft contract of February – March 2013 does not operate as a contract because it was not executed. That it provided for Mr Wei and Mrs Xia releasing Na Yu is not evidence of an admission that Na Yu had borrowed the $60,000.00 / $38,000.00. If – which has not been proven – Na Yu instructed Fong & Co to draft the contract it would seem to have been after Na Yu obtained the intervention order against Wen Tao Wei in the contested hearing, in which it is apparent Mr Wei considers Na Yu to have given false evidence. It would be understandable that Na Yu would want a release after having a serious falling out with Mr Wei. In any event, Na Yu denied that she had instructed Fong & Co to draft the Contract.

The alleged loan of $1,600.00

Mr Wei and Mrs Xia have the burden of proof and they have not proven that Na Yu borrowed $1,600.00. It is not credible to suggest that Mrs Xia would lend Na Yu this money after the separation.
Their interpretation of the SMS messages as showing that Na Yu lied and tricked Mrs Xia into lending $1,600.00 is not made out. There is no written evidence of such a loan. Na Yu denies it and it is a case of word against word. I am not satisfied on the balance of probabilities that Na Yu borrowed $1,600.00 from Mr Wei and Mrs Xia.

In summary, given the oral nature of the alleged loan agreements, and the relevance of the witnesses’ credibility to that issue, the Deputy President found that the applicants had not met the burden of proof borne by them, and had not proven that the respondent had borrowed either $60,000 or $1,600 from the applicants. Accordingly, the case was dismissed and costs were reserved.

Draft Notices of Appeal

The applicants commenced this appeal without representation and filed a Draft Notice of Appeal on 20 October 2016 seeking review on the following questions of law:

1.   The matter relate to all questions of law.
2.   VCAT suspect:
Misrepresent the fact, falsity the fact. Cover up lying. Cover up deception. Cover up send false declarations. Lost duty of care. Dereliction of duty. Abuse judicial powers. Under foot the law. No fair. No justice.
3.   The respondent suspect:
Lying, deception. Fraud. Scorn Court of law. Provide false evidence, send false declarations.

On 23 November 2016 Ginnane J made orders that the applicants file an amended proposed notice of appeal.

By 21 December 2016 the applicants had once again secured pro bono assistance from the Victorian Bar Pro Bono Scheme, and filed an Amended Draft Notice of Appeal in a more conventional and coherent form, which identified the following questions of law:

1.   Whether it is open as a matter of law to a Tribunal that is obliged to act fairly and in accordance with the substantial merits of the case and the rules of natural justice to find that loan monies that are advanced to a party via her bank account, used by the party to purchase property and partially repaid by her were not monies loaned to that party.
2.   Whether as a matter of law a payment of money made to a person without consideration being given by her that was not a gift, was found not to be a loan and was used by her to purchase a property, should be repayable by her as money had and received.
3.   Whether a Tribunal obliged to act fairly and in accordance with the substantial merits of the case and the rules of natural justice is legally obliged to make clear findings on all the legal and factual questions raised before it that are relevant to its determination of a proceeding, including the legal and factual character and nature of the loan funds that are the subject of the proceeding before it.
4.   Whether a Tribunal that fails to make findings on matters properly raised before it has accorded the parties a fair hearing and determined the matter before it according to the substantial merits of the case as required by its applicable legislation.
5.   Whether a Tribunal is entitled to make adverse findings as to credit against parties whose native language is not English on the basis of inadequacies in translation during the hearing.
6.   Whether as a matter of law an “IOU” document constitutes a record of indebtedness and an acknowledgement of a loan or is merely evidence.
7.   Whether the decision of Thomas v Hollier[18] stands for the proposition that in all cases an IOU document does not constitute a record of indebtedness or an acknowledgment of a loan made, but is merely evidence.
8.   Whether an oral Tribunal hearing running over six days spread over 4 months can be a fair hearing.

[18](1984) 156 CLR 152.

In addition to posing the above questions of law the applicants listed eight corresponding grounds of appeal.

The applicants submitted that the current proceeding requires a two-step process: first, to exercise the Court’s discretion to grant leave and then, if leave is granted, determine the appeal. Relevantly, counsel for the applicants conceded that they are bound by all the findings of fact made by the Deputy President.[19]
[19]Transcript of Proceedings, Chen Wei and Qi Yun Xia v Na Yu (Supreme Court of Victoria, Daly AsJ, 26 October 2017) 5–6.

Section 148(1) of the VCAT Act states, relevantly, as follows:

(1)A party to a proceeding may appeal on a question of law from an order of the Tribunal in the proceeding—
(a)if the Tribunal was constituted for the purpose of making the order by the President or a Vice President, whether with or without others, to the Court of Appeal with leave of the Court of Appeal; or
(b)in any other case, to the Trial Division of the Supreme Court with leave of the Trial Division.

The principles concerning whether leave should be granted under s 148(1) are well settled. The author of ‘Pizer’s Annotated VCAT Act’ has distilled the following principles arising out of the reasons of the Court of Appeal in Secretary to the Department of Premier and Cabinet v Hulls,[20] as follows:[21]
[20][1999] 3 VR 331.
[21]6^th edition, [VCAT.148.160], see also Hogan Transport v Transport Accident Commission [2012] VSC 206, [14], (per Croft J), where his Honour referred to this summary as ‘an accurate and helpful statement of the guidelines and their application’.

1.Whether leave to appeal should be granted must always depend upon the justice of the particular case (and that means justice to all parties, not just the applicant).
2.Although the discretion to grant leave cannot (and should not) be fettered by judicial decision, it is possible to lay down guidelines concerning the exercise of that discretion.
3.These guidelines … may be summarised as follows:
(a)the applicant must identify a question of law arising out of the VCAT’s decision;
(b)the question of law must be relevant to the relief sought on appeal – in other words, the question must be such that, if the VCAT erred in words, the question must be such that, if the VCAT erred in respect of that question, the applicant’s claim to relief will be advanced;
(c)the public or general importance of the question of law may be a relevant consideration. Thus, if the question is one that not infrequently arises, there may be a compelling reason for granting leave so that the point may be exposed on appeal and corrected (if there be an error) before the error becomes entrenched;
(d)the applicant need not establish that the VCAT erred in respect of the question of law: that is for the appeal if leave be granted. Rather, the applicant must establish that there is a “real or significant argument to be put that error exists”. Put another way, it must be shown that the VCAT’s decision is “attended by sufficient doubt” to justify the granting of leave;
(e)it must be just to grant leave; and
(f)an applicant for leave to appeal from an interlocutory order must show, not only sufficient doubt about the correctness of the order, but also that there would be substantial injustice in leaving that order unreversed (see also Bradto Pty Ltd v Victoria (2006) 15 VR 65; [2006] VSCA 89; Dura (Aust) Constructions Pty Ltd v VMIA [2008] VSC 483 at [12]). Where the VCAT’s order is final, however, the injustice of leaving that order uncorrected will often be more readily discernible, although the court might sometimes require persuasion that there would be prejudice if the order below – though tainted by error – were allowed to stand. …

Relevantly, for the purpose of the current application, two recent decisions of the Trial Division of this Court have highlighted the need to avoid overzealous scrutiny of VCAT decisions. In Gaycel Pty Ltd v Heski Carpenters Pty Ltd,[22] Kennedy J observed as follows (omitting citations):[23]

In hearing an appeal, courts are also to be concerned to respect the role of a tribunal and not to seek out error. In particular, a court should avoid an overly pernickety or overly legalistic examination of the reasons.
Additionally, ‘[o]n appeal this Court must recognise the forensic realities of the way in which the case was put to the Tribunal. It is these realities to which a Tribunal must respond in its reasons.’

[22][2017] VSC 450.

[23]Ibid, [38]-[39].

Similarly, in Casdar Pty Ltd v Fanous,[24] Croft J, made the following remarks (omitting citations):[25]

It follows from this provision that any appeal is dependent upon two important qualifications. First, that the appeal be on a question of law, and secondly, that the Court gives leave to appeal. The legislative policy underlying these provisions is that “VCAT decisions should not generally be disturbed where cases have been decided in that forum other than on questions of law and where there is something about the decision bearing upon the question of law which warrants a grant of leave to appeal”. It follows that “[t]his Court is not entitled to enter into the fact finding exercise which the legislature has deliberately entrusted to a specialist tribunal.”

[24][2017] VSC 616, see also his Honour’s discussion in Casa Di Iorio Investments Pty Ltd v Guirguis [2017] VSC 266.

[25]Ibid, [5].

Finally, I note that the applicants have, in their draft Notice of Appeal, relied upon the terms of s 97 of the VCAT Act, which states that:

The Tribunal must act fairly and according to the substantial merits of the case.

While there is authority to suggest that the reference to ‘the substantial merits of the case’ extends the ambit of s 97 beyond imposing a requirement that the VCAT afford procedural fairness to a requirement that the VCAT provide substantive fairness, s 97 does not provide ‘an avenue for merits review’.[26]
[26]Shaw v Gadens Lawyers [2010] VSC 7, [106].

Submissions
Applicants’ Submissions - Overview

In their written outline of submissions, the applicants submitted that the Deputy President found that the sums claimed were advanced to the respondent through her bank account, but that they were not loans by the applicants to the respondent. The applicants claim the Deputy President erred in failing to make clear findings about the legal nature and character of the funds advanced. The applicants claim that such an oversight rendered the reasons of the Deputy President inadequate and amounted to a failure to afford the applicants a fair hearing and natural justice.

Alternatively, the applicants submitted that a claim for money had and received was made out on the factual findings of the Deputy President. The applicants submitted that this is a contention of law, and was not required to be pleaded, as VCAT is not a tribunal of pleadings. Further, the applicants were self-represented and could not be criticised for failing to understand the potential legal consequences of the facts found by the Deputy President. The applicants submitted that once VCAT has jurisdiction to entertain a claim, it is obliged to apply the general law and have regard to ‘the substantial merits of the dispute’.[27]
[27]Section 97 of the VCAT Act.

The applicants point to the Deputy President’s adverse findings concerning the applicants’ credibility as support for their submissions that the Deputy President did not make sufficient allowances for the fact that the applicants were self‑represented and that their native language was not English, and the Deputy President failed to afford them a fair hearing and determine the proceeding according to the merits of the case.

The applicants submitted that the Deputy President erroneously construed and applied Thomas v Hollier,[28] and failed to make any clear finding about the legal significance of the 5 July IOU.
[28](1984) 156 CLR 152.

Finally, the applicants submitted that it was unfair and unsatisfactory to have the trial heard in a disjointed fashion over six days spread over four months, and this amounted to a failure to provide the applicants with a fair hearing.

Respondent’s Submissions - Overview

The respondent submitted that this application for leave to appeal is an attempt to overturn adverse findings on credibility on a simple question of fact, and does not disclose any clearly articulated question of law or vitiating error of law. The respondent also pointed to the conduct of the applicants, which was the subject of reprimands by the presiding members in each of the two VCAT hearings, as a basis for the Court refusing to exercise its discretion to grant leave to appeal.

The respondent submitted that ‘enough is enough’. The applicants were seeking a ‘third bite of the cherry’, having prevailed in their previous appeal and being afforded a re-hearing, and that the paramount objects of the Civil Procedure Act2010 (Vic) militate against the grant of leave. The respondent rejected the applicants’ contentions that the applicants had not been afforded natural justice, and that the reasons were inadequate.

In conclusion, the respondent submitted that the justice of the case demands that the application for leave ought to be dismissed, or, alternatively, if leave was granted, that the appeal ought to be dismissed because it was fundamentally flawed and contrary to authority, as it invites the Court to overturn findings of fact which largely turned on the credibility of witnesses.

Ground 1 – legal characterisation of the sums advanced

The applicants contend that:

The Tribunal erred in finding that the sum advanced to the respondent through the respondent’s bank account by or on behalf of the applicants on or about 9 May 2012, used to purchase real property in her name and partially repaid by her were not a loan to her.

The applicants submitted that the reasons of the Deputy President failed to provide a legal characterisation for the sums advanced to the respondent, given the undisputed fact that the funds were advanced to the respondent’s bank account. The applicants further submitted that there was no evidence upon which the sums advanced could be characterised as a gift or repayment of a previous loan, and therefore, as a matter of law, the sums should have been characterised as a loan to the respondent. Counsel relied on the definition of a loan from Goode on Commercial Law:

A loan is a payment of money to the debtor, or to a third party at the debtor’s request, by way of financial accommodation upon terms that the sum advanced, with any stipulated interest, is to be repaid by the debtor in due course.[29]

[29]McKendrick, Goode on Commercial Law (Penguin London, 4^th ed, 2010) 621.

The applicants submitted that it was not sufficient for the Deputy President to say that the applicants had the burden of proof and that they have not met it. The partial repayment by the respondent to the applicants is also inconsistent with the funds having been a gift to the respondent, or repayment by her of an earlier loan.

The respondent submitted that the applicants have not advanced a proper question of law, but rather seek to reverse the findings of fact made by the Deputy President. On the evidence before him the Deputy President was not satisfied that the applicants had discharged their onus of proof to establish a loan had been made by the applicants to the respondent, as he found the respondent more credible and preferred her evidence. The mere fact that funds were deposited into the respondent’s account does not, of itself, establish that she borrowed money from the applicants.

The respondent submitted that a failure to provide a legal characterisation for the sums advanced does not give rise to a question of law, nor does it amount to a failure to provide adequate reasons. The respondent submitted that the obligation of the Deputy President was to address the real issues presented for his determination by the parties, being whether there was a loan agreement between the applicants and the respondent, and this obligation was met by the Deputy President. The respondent observed that the applicants had not cited any authority to support the proposition that a failure to make a legal characterisation of a payment or transaction constitutes an error of law.

The respondent submitted that, in any event, the reasons did provide a legal characterisation for the sums advanced: that they were a loan to the applicants’ son, Mr Wei Junior. The respondent submitted that while it was not strictly necessary for the Deputy President to make a positive finding of fact with respect to who borrowed the sums advanced, because the only question before him was whether or not the money was lent to the respondent, he nevertheless did so.

The respondent submitted that the authorities mandate a fair and reasonable approach to reading and constructing reasons and advise against taking a nit-picking or ‘pernickety’ approach. Looking at the reasons as a whole, and giving them a fair and reasonable construction, it was clear that the Deputy President characterised the sums advanced as a loan by the applicants to their son, Mr Wei Junior.

The respondent pointed to the applicants’ concession that they did not seek to challenge any finding of fact, and submitted that given that concession, all of the Deputy President’s findings on credibility must be accepted. Further, the respondent said that if all findings of fact are accepted, this includes the finding that Mr Wei Junior was the borrower of the sums advanced by the applicants. In short, the case boiled down to the evidence of Ms Xia and the respondent regarding the existence of an agreement between them for the respondent to borrow $60,000.00 from Ms Xia. The Deputy President simply preferred the evidence of the respondent.

Ground 2 – money had and received

The applicants contend that:

The Tribunal erred in not finding that the payment of money made to the respondent through her bank account by or on behalf of the applicants in or about 9 May 2012 without consideration being given by the respondent that was not a gift and was found not to be a loan, and was used to purchase real property in her name in or about mid 2012 should be repayable by her as money had and received.

The applicants submitted that the Deputy President should have found that the sums advanced were repayable as money had and received by her to her own benefit, for no consideration. Counsel for the applicants conceded that this argument was not advanced before the Deputy President, but this was understandable given that the applicants represented themselves. However, it was submitted that even in spite of the failure of the applicants to advance this argument at the hearing, the Deputy President should have found in their favour because the elements of the action of money had and received were made out. In his written outline of submissions counsel for the applicants submitted as follows:

Here, the evidence (and the Tribunal’s findings) were that:
(a)There were definite and ascertained sums advanced in or about May 2012;

(b) the money was paid and made available on the applicants’ behalf;
(c)the money was paid into the respondent’s bank account and used to purchase a property in her name; and
(d)the sums of money received by the respondent and used to her benefit were from and on behalf of the applicants.

There was in the present case no finding of any consideration having been given by the respondent to the applicants for the sums they arranged to have advanced to her bank account, and the respondent received the benefit of those sums when they were used to purchase a property in her name, and there was in any event no evidence of any such consideration (e.g. repayment of a previous debt).
Nor, as is submitted above, was there any evidence that the advances were intended to be a gift to the respondent.

In response, counsel for the respondent noted that this was not a cause of action pleaded by the applicants, and that it is doubtful whether VCAT has jurisdiction to entertain such a cause of action. Counsel for the respondent noted that VCAT, as a creature of statute, has no jurisdiction in relation to equitable claims.[30] Accordingly, even if the parties had sought to raise a claim in money had and received before the Deputy President, he would not have had the jurisdiction to hear the claim.
[30]See Tucci v VCAT [2010] VSC 425, [41].

Further, the respondent submitted that the applicants are bound by the conduct of their case in the VCAT, and that it is contrary to authority to allow a party to raise new arguments after a case has been decided against them. The respondent referred to Gaycel Pty Ltd v Heski Carpenters Pty Ltd[31] in support of its submission that it is not open to a party to seek to identify a question or point of law on an appeal or proposed appeal which was not raised before VCAT. As stated by Kennedy J, ‘the Court must recognise the forensic realities of the way in which the case was put to the Tribunal’.[32]
[31][2017] VSC 450, [35].
[32]Ibid [39].

Further and in the alternative, the respondent contended that the applicants would not have succeeded in a claim for money had and received because it could not make out all the necessary elements of the cause of action. The respondent submitted that one of the elements of a claim for money had and received is that there must be privity of contract between a plaintiff and defendant, and that the money must be clearly proved to have come into the defendant’s hands.[33] The respondent contended that the Deputy President’s finding that the sums advanced came into the respondent’s hands only as a nominee of Mr Wei Junior preclude a claim of money had and received, as the money did not come to her as a principal in her own right, but rather, on the facts found by the Deputy President, as Mr Wei Junior’s agent or nominee. Further, it was said that the element of privity of contract was not satisfied as the Deputy President expressly rejected the proposition that there was any loan agreement between the applicants and the respondent.
[33]Butterworths, Atkin’s Encyclopaedia of Court Forms in Civil Proceedings, vol 27, (1984) p202-203.

In reply, the applicants disputed the contention that VCAT has no jurisdiction with respect to a money had and received claim. They submitted that there was no dispute that VCAT had jurisdiction over the applicants’ claims, and that once VCAT has jurisdiction over a claim it has to determine the case according to the substantial merits of the case, and apply any applicable law. Once it is established that VCAT has jurisdiction pursuant to the VCAT Act or some other statute, it is required to apply the law according to the substantial merits of the case.

The applicants also submitted that a claim in money had and received is not limited to funds advanced at the recipient’s request. Similarly it was submitted that the element of privity of contract can be constituted in a variety of ways. The applicants contended that it was sufficient to establish the necessary privity by the fact that the funds were paid into the respondent’s bank account and were used to purchase property in her name.

Grounds 3 and 4 – inadequacy of reasons and findings

The applicants contend that:

The Tribunal erred in not making any finding, or alternatively any clear finding, about the factual and legal nature and character of the funds advanced by the first applicant’s sister on behalf of him and the second applicant to the respondent through her bank account on or about 9 May 2012, and used to purchase real property in her name and partially repaid by her in or about May-July 2012.

Further, the applicants contend that:

In failing to make any finding, or alternatively any clear finding, about the legal and factual character of the funds advanced to the respondent by or on behalf of the applicants on or about 9 May 2012, the Tribunal erred in that it failed to afford the applicants a fair hearing and to determine the matter before it according to the substantial merits of the case.

The applicants relied upon the decision of the Court of Appeal in Hunter v Transport Accident Commission,[34] and relied upon sections 97 and 98 of the VCAT Act. The applicants said that part of the obligation to afford natural justice is to give reasons that are sufficient to: [35]

enable the applicants to understand the extent to which their arguments have been understood and either accepted or rejected and to understand the basis of the decision.

[34][2005] VSCA 1, [21].

[35]T 10.

The applicants repeated their submissions concerning the failure of the Deputy President to make findings about the legal character of the sums advanced, given the facts found by the Deputy President, and given that the legal characterisation of the payment was the key issue in the proceeding.

The respondent rejected the submission that the Deputy President’s reasons were inadequate, and indeed described the Deputy President’s reasons as a ‘marvellous example of fulsome reasons’.[36] The respondent maintained that the decision of the Deputy President provided clear reasons as to why the applicants’ claims were dismissed: Ms Xia, Mr Wei Junior, and Mr Luo lacked credibility.[37] The respondent submitted that whilst these findings may have been unpalatable to the applicants, they did not found a basis to properly attack the adequacy of the reasons.
[36]T 44.
[37]T 43.

Counsel for the respondent repeated his earlier submission that the Deputy President did explicitly and implicitly make findings of the legal nature and character of the funds, being that the funds were borrowed by the Mr Wei Junior and deposited into the respondent's bank account.

Ground 5 – adverse findings on the basis of translation inadequacies

The applicants contend that:

The Tribunal erred in making adverse findings as to credit against the applicants, whose native language was not English, on the basis of inadequacies in the English/Chinese translation during the hearing.

The applicants relied upon their written submissions on this question, which, among other things, asserted that the Deputy President failed to allow for the fact that their native language was not English and that they were self-represented, and referred to the well-established principles concerning what assistance ought to be provided to self-represented litigants.

The respondent submitted this ground raised no meritorious question of law, as there was no evidence of any inadequacy of translation at all, or that any such difficulties affected the Deputy President’s assessment of the credibility of the witnesses. The respondent also pointed to the applicants’ concession that they accepted all the findings of fact, so as a matter of logic, this ground of appeal could go nowhere, given that the Deputy President’s findings concerning the credibility of witnesses are quintessentially findings of fact.

The respondent submitted, in response to the applicants’ contentions that they had not received a fair hearing:

the learned deputy president exercised the highest and exhibited the highest qualities of judicial behaviour in the conduct of this matter; he was exceptionally fair to both parties.

Grounds 6 and 7 – IOU documents

The applicants contend that:

The Tribunal erred in construing the IOU documents dated 25 January 2010 and 5 July 2012 as not constituting a record of indebtedness and an acknowledgment of a loan made by the applicants to the respondent but as ‘merely evidence’.

Further, the applicants contend that:

The Tribunal erred in misapplying the decision of Thomas v Hollier as requiring it to construe the IOU documents dated 25 January 2010 and 5 July 2012 as not constituting a record of indebtedness and an acknowledgment of a loan made by the applicants to the respondent but as merely evidence.

The applicants relied upon their written submissions on this point, which stated as follows:

The Tribunal was also in error in construing the IOU documents dated 25 January 2010 and 5 July 2012 as not constituting a record of indebtedness by the respondent to the applicants, and as an acknowledgement of a loan made by the applicants to the respondent but as “merely evidence”.
That is because the Tribunal erroneously construed and applied the High Court decision of Thomas v Hollier as requiring it to construe the IOU documents in that way when that decision is authority for no such proposition.
In fact, the defendant in Thomas v Hollier was held not to be liable on the IOU because the plaintiff had given no consideration for it.
In the present case, the applicants had given consideration, namely the payments on their behalf to the respondent’s bank account that were used to purchase property in her name and partially but not wholly repaid by her, so the decision in Thomas v Hollier was not applicable in the manner in which it was applied by the Tribunal.
There was accordingly no basis in Thomas v Hollier for rejecting the applicants’ contentions based on the IOU documents.
No explanation was given by the respondent about those IOU documents, and the Tribunal failed to make any finding or any clear finding about what they legal significance was, or why they did not assist the applicants in making out their claim to recover the monies they had advanced to the respondent.

The applicants sought to distinguish Thomas v Hollier,[38] because in that case there was an IOU but no consideration, so there was no real debt, as contrasted with the current matter where there was consideration on the part of the applicants and a real debt.
[38](1984) 156 CLR 152.

The respondent submitted that the submissions of the applicants on this point are incomprehensible. The applicants’ contentions that the Deputy President fell into error in construing the 5 July IOU as not constituting a record of indebtedness by the respondent to the applicants overlooks the fact that the respondent didn’t sign the 5 July IOU, and therefore this document could not relate to any record of indebtedness of the respondent. The 5 July IOU could not be construed as bearing the meaning contended for by the applicants. It was correctly construed by the Deputy President: it amounted to an admission that the loan was advanced to Mr Wei Junior rather than the respondent.

Ground 8 – trial split over four months

The applicants contend that:

By spreading the oral hearing over six days spread over four months on 14-15 June, 20-21 July and 8-9 September 2016, the Tribunal failed to accord the parties a fair hearing.

The applicants relied upon their written submissions, as follows:

While it is accepted that it is often difficult for a busy Tribunal to grant consecutive hearing days, in the present case:
(a)the complexity of the evidence and the legal and factual issues involved in the proceeding and
(b)the facts that:
(i)the applicants were self represented and
(ii)their first language was not English,

meant that they were not afforded a fair hearing due to the trial being split in this way.
The trial/hearing should have been heard over consecutive days, and it was unfair and unsatisfactory to hold it in such a disjointed fashion.

The applicants accepted that it was unlikely to have been anticipated by either VCAT or the parties that the re-hearing would take six days, given that the first hearing took one and a half days. The applicants did not seek to ascribe blame for the disjointed way in which the matter was heard, but said that it was very difficult for the Deputy President to make findings and retain in his mind evidence which was given in a hearing which was split over six days spread across four months.

The respondent submitted that this assertion did not give rise to a question of law. The mere fact that the hearing was spread over four months did not render it an unfair hearing.

Conclusion

Prior to turning to the individual grounds of appeal in the draft Amended Notice of Appeal, I will make some general observations concerning the merits of the application for leave to appeal, and, by extension, the appeal.

First, while I would not adopt the rather florid language used by counsel for the respondent in his written and oral submissions, I agree that to the extent that the application seeks to attack the findings of the Deputy President, the applicants are, notwithstanding the assertion that they are not challenging the factual findings of the Deputy President, attempting to impermissibly review the merits of the Deputy President’s conclusions. His decision, as is apparent from the reasons, was based largely upon the credibility of the applicants’ witnesses, such that the applicants had failed to establish that the funds advanced to the respondent’s bank account were a loan from the applicants to the respondent.

Secondly, to the extent that the applicants assert that they have not been afforded natural justice by the Deputy President, on my view, having read the full transcript of the six day hearing, the Deputy President’s conduct was impeccable, in what must have been trying circumstances. Indeed, if any criticism could be made of the conduct of the hearing, it would be on the basis that the Deputy President provided too much latitude to the applicants to conduct themselves in the manner they did, even having regard to their status as self-represented litigants, and tolerated what can only be described as appalling behaviour on the part of Mr Wei.

Finally, the Deputy President’s reasons were more than adequate. It is true that a substantial portion of the reasons deal at length with the evidence of the witnesses, and his observations concerning the credibility of those witnesses, but that is only to be expected in a dispute that was ultimately a contest of fact, rather than a matter involving complicated questions of law.

I shall now turn to each of the grounds of appeal and deal with the parties’ submissions in that regard.

Ground 1 – Legal characterisation of the sums advanced

This question can be dealt with quite briefly: while it would have been arguably open to the Deputy President to find an alternative characterisation for the transaction which was the subject of the dispute, I doubt that he was obliged to do so: in any event, the point is moot, as I agree with the submissions advanced on behalf of the respondent that, on a fair reading of the reasons, he did so. It is clear that the Deputy President concluded that the sums were advanced by the applicants to their son, Mr Wei Junior.

In the reasons, the Deputy President stated, among other things, as follows:[39]

I do not consider [Mr Wei Junior] to be a credible witness. I do not accept his denial of having borrowed the money…
Mr Luo gave evidence in the August 2014 hearing that he was present when [Mr Wei Junior] persuaded his parents to lend him $60,000, and I have found that Mr Luo’s evidence of August 2014 is to be preferred to his misguided and false evidence before me to the contrary…
That the $60,000 was deposited in [the respondent’s] bank account is consistent with her being a nominee or stakeholder in respect of [Mr Wei Junior’s] borrowing. [The respondent’s] payment of $22,000 on instruction from [Mr Wei Junior] is also consistent with being a nominee.

[39]Reasons, [268].

I cannot see how the passages extracted above can be read in any other way than as exposing the Deputy President’s finding that Mr Wei Junior was the true borrower of the $60,000 deposited into the respondent’s bank account. This finding could not be held to be irrational or illogical, on the evidence, and as such, is not amenable to being disturbed on appeal.

Ground 2 – Money had and received

While it is generally the case that a party, upon an appeal, is bound by the case advanced below, there is authority to suggest that this is not an inflexible rule. I also agree with the submission of counsel for the applicants that, once the jurisdiction of VCAT is enlivened, VCAT is, unless an applicable statute otherwise provides, required to deal with matters before it according to law.[40] The question remains, however, if the applicants had framed their claims in restitutionary terms, whether the jurisdiction of VCAT would have been enlivened in the first place. It is not necessary to resolve this question here. Prior to the first VCAT hearing, VCAT determined that it did have jurisdiction to hear the applicant’s claims, and that determination has not been the subject of challenge in either appeal. While the applicants’ points of claim at VCAT were not in evidence before me, it is apparent from the reasons that the applicants merely claimed that they had lent the respondent money. However, there may be instances where an appellate court will entertain or consider arguments on claims not advanced below. In Cosmopolitan Hotel (Vic) Pty Ltd v Crown Melbourne Limited,[41] the Court of Appeal stated that: [42]

While it is imperative to identify and define a question of law, courts will not read a notice of appeal narrowly so as to oust the appellate jurisdiction over a decision of VCAT.

[40]See Tucci v Victorian Civil and Administrative Tribunal [2010] VSC 425, [41], where Cavanough J observed that: ‘…it is open to Parliament to it is open to Parliament to clothe VCAT, to such extent as Parliament sees fit, with the power, or indeed the duty, to recognise and apply equitable doctrines, defences and remedies or to proceed in accordance with, or by analogy with, equitable principles. Parliament might do this expressly or by implication.’

[41][2014] VSCA 353.

[42]At [49].

In the current case, the applicants have identified a question of law. However, the statement of the Court of Appeal could also be read as support for the proposition that this Court, in the exercise of its supervisory jurisdiction, will not allow error to go uncorrected, particularly in the case of VCAT, which is not a court of pleadings, and as such, may often be in the position where it must hear proceedings without the claims and issues being well-defined, especially where parties are self-represented.

However, in the current case, it is clear that the applicants asserted that they loaned the money to the respondent, expecting to be repaid. Further, in any event, it is clear that the Deputy President’s factual findings to the effect that the respondent received the funds as the nominee of Mr Wei Junior is consistent with his ultimate finding that the funds were lent to Mr Wei Junior. If he had made a finding that the respondent had received the funds in her own right, he would no doubt have found in favour of the applicants’ contention that the funds were lent to the respondent.

Accordingly, there is not a real or significant argument that the Deputy President failed to characterise these payments as being moneys had and received. The applicants may have an arguable case that they are the beneficiaries of a resulting trust over the apartments, but I doubt whether such a claim could have been brought at VCAT.

Grounds 3 and 4 – Inadequacy of reasons and findings

As noted above, I do not accept the contention that the Deputy President’s reasons were inadequate, on the basis that they failed to reveal an adequate finding concerning the proper characterisation of the funds deposited in the respondent’s bank account, or generally. I accept the correctness of the legal principles referred to by counsel for the applicants concerning the adequacy of reasons, but consider that the reasons meet the standard established by the authorities. I otherwise repeat the conclusions I have reached in relation to Ground 1 of the Draft Notice of Appeal.

Ground 5 – Adverse findings on the basis of translation inadequacies

As noted above, I have read the transcript of the hearing before the Deputy President. It is evident that there were some issues with the translation of the evidence: however, these difficulties seem to have mostly been experienced by the interpreter rather than the parties or the witnesses, and those difficulties were accommodated by the Deputy President and counsel for the respondent. I accept the submissions made on behalf of the respondent that the applicants have failed to establish how any difficulties in translation affected the Deputy President’s assessment of the credibility of the applicants or the other witnesses called by the applicants. I would go further and suggest that there were many bases upon which the Deputy President was entitled to make adverse findings against the applicants and their witnesses, including the matters referred to in the part of the reasons extracted at paragraph 44 above.

Grounds 6 and 7 – IOU documents

The applicants submitted that the Deputy President erred in construing the 5 July IOU as not constituting a record of indebtedness of the respondent, or of an acknowledgement of a loan made by the applicants to the respondent. The applicants also submitted that, in making the observations that the 5 July IOU as being ‘merely evidence’, the Deputy President erroneously construed or applied the decision of the High Court in Thomas v Hollier.[43]
[43](1984) 156 CLR 152.

I disagree. It is apparent from the reasons that the Deputy President relied upon this decision as authority for the proposition that an IOU document cannot, without more, create an independent source of liability from a debtor to a creditor, in the absence of an underlying agreement, or some consideration passing between the parties. The existence of an IOU may be probative evidence in support of the existence of an underlying agreement, but is not conclusive. In my view, the Deputy President correctly identified and applied the reasoning in Thomas v Hollier,[44] in particular, the following statement of Brennan J (omitting citations):[45]

In the absence of an antecedent account stated or debt, the IOU gives rise to no cause of action upon which a judgment might be recovered. It is some evidence of liability on an amount stated or of a debt, but it is not conclusive evidence. If, upon the whole of the evidence, a defendant who has given an IOU to a plaintiff is shown not to be liable on an account stated or for a debt, the plaintiff fails.

[44](1984) 156 CLR 152.

[45]Ibid, [3].

Furthermore, the Deputy President viewed the 5 July IOU as evidence in support of his conclusion that the applicants lent money to Mr Wei Junior, while recognising that the 5 July IOU could not, of itself, impose any liability upon Mr Wei Junior in the absence of other evidence of the underlying agreement between Mr Wei Junior and his parents. The evidence of Mr Luo at the first VCAT hearing, which the Deputy President preferred over the evidence given by Mr Luo at the hearing before him, and the evidence of the respondent, which the Deputy President preferred over the evidence of Ms Xia, provided additional support for the Deputy President’s findings as to who was the true borrower.

In any event, it is difficult to see how any error on the Deputy President’s part in relation to this issue could assist the applicants. Regardless of whether an IOU document created an independent liability on the part of the maker, or is ‘merely evidence’ of an underlying liability, the 5 July IOU does not support the applicants’ contention that the respondent borrowed money from them.

Ground 8 – Trial split over four months

This ground, to say the least, is a novel ground of appeal. It was unfortunate that the hearing was held in such a disjointed fashion. However, it is difficult to see how the Deputy President, or indeed any judicial officer, could be held to have made an error of law on the basis of difficulties in timetabling hearings which substantially exceed their estimates.

Apart from a reference to the Deputy President having difficulties in recording and retaining a memory of the evidence given in the proceeding (which is of itself mere speculation as to the Deputy President’s capacities in that regard), the applicants could not identify any specific unfairness caused by the hearing being spread over a period of time.

Finally, I note that the detailed nature of the reasons, including the Deputy President’s narration of the evidence, is inconsistent with the assertions made regarding the impact of the delay upon the ability of the Deputy President to accurately recall the evidence. The applicants have had the benefit of the transcript of hearing in preparing their application for leave to appeal, and therefore the opportunity to identify where the Deputy President omitted or mischaracterised any probative evidence, and have not done so. Further, the transcript records an occasion where the Deputy President asked counsel and the respondent to ‘slow down’ to enable him to take a note,[46] which suggests that he was keeping his own record of the evidence. This ground of appeal is entirely misconceived.
[46]T533, 17-18.

Application to remove affidavit from Court file

Counsel for the respondent made an application to have the affidavit sworn by the applicants jointly and filed on 25 September 2017 (’25 September affidavit’) removed from the Court file on the grounds that first, it was filed without leave; secondly, it is irrelevant to the determination of the issues in the appeal; and thirdly, it is scandalous and defamatory of both the respondent and the respondent’s counsel.

Counsel for the applicants was in the unenviable position of having no submissions that could properly be made in opposition to the application, but having instructions from the applicants to oppose the application nonetheless.

In light of this conflict the Court adjourned consideration of the application until the end of the hearing, when the applicants were invited to make submissions in person. Mr Wei addressed the Court and confirmed the applicants’ desire to rely on the contents of the affidavit and to keep it on the Court file, on the basis that it was true.

The Court made an interim order that the application be adjourned to a date to be fixed and that subject to any further order, no one be permitted to inspect the 25 September affidavit.

I shall not go into any details concerning the contents of the 25 September affidavit, as that would defeat the purpose of the application to remove the document from the Court file. It is sufficient for present purposes to provide the following summary of the contents of the 25 September affidavit:

(a) it repeated the contentions made by the applicants in the hearings before VCAT;

(b) it referred to some inconsistencies in the evidence given by the respondent in an affidavit filed in the first Supreme Court appeal, the remitted VCAT hearing, and a discussion said to have taken place between the respondent and Ms Xia at VCAT on 9 September 2016 (the final date of the VCAT hearing);

(c) it asserted (erroneously) that the applicants succeeded in the first Supreme Court appeal because the respondent was lying;

(d) it made allegations concerning a discussion between the applicants and counsel for the respondent outside the VCAT building on 20 July 2016, and between Ms Xia and Mr Selimi during a break in the hearing on 8 September 2016;

(e) it went on to make a number of florid allegations directed at the respondent, Mr Selimi, and members of VCAT which impugn their honesty and integrity;

(f) concluded as follows:

The members didn’t look & research the truth, and made the truth use (sic) a lie. If not fix up this problem, here injustice will arise. It will damage the law of Australia, damage people’s life …
We believe that, Australia’s judicial system is perfect & healthy.
So, correct injustice case, promote justice let Australian Law get dignity. Let evil gets punish.
All information we provide to be true. We take legal responsibility for all statements.

Rule 27.07 of the Supreme Court (General Civil Procedure) Rules 2015 provides as follows:

Where a document for use in the Court contains scandalous, irrelevant or otherwise oppressive matter, the Court may order –
(a) that the matter be struck out; or
(b) if the document has been filed, that it be taken off the file.

I will order that the 25 September affidavit be removed from the file. The contents of the affidavit are largely irrelevant, in that the application is to be determined on the material already before the Court, being the transcript of the hearing, the documents tendered at the hearing, the draft Amended Notice of Appeal, and counsel’s submissions. To the extent that the affidavit refers to inconsistencies in the respondent’s evidence (concerning her contact with the applicants and her visit to China), these matters were ventilated at the hearing before the Deputy President. To the extent that the affidavit goes to the injustice of the Deputy President’s decision (which is relevant to the determination of any application for leave) given that the order subject to the current application was a final order, the injustice of any error would be self-evident. Further, even if the allegations concerning the contents of the alleged conversations with Mr Selimi were true, which I do not accept, any conversations of that nature are irrelevant to the determination of the application for leave to appeal.

Further, a substantial part of the 25 September affidavit is scandalous. While counsel and judicial officers cannot be above criticism, the remarks made concerning the honesty and integrity of the people involved in what was said to be ‘a disgrace’, a ‘fraud’, and (repeatedly) ‘an injustice’ would no doubt be offensive and hurtful to those at whom these remarks were directed. The privilege afforded to litigants’ communications in court proceedings should not be used to provide parties with an unbounded opportunity to make highly defamatory allegations, and engage in abusive conduct, without good cause.

Accordingly, I shall dismiss the application for leave to appeal, and direct that the 25 September affidavit be removed from the Court file. I shall hear further from counsel on the question of costs.

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[2018] VSC 6

31 January 2018