Hu v Zheng (No 2)

[2025] NSWDC 416

District Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Hu v Zheng (No 2) [2025] NSWDC 416

Hearing dates:

26 – 30 May, 21 – 25 July 2025

Date of orders:

25 July 2025

Decision date:

25 July 2025

Jurisdiction:

Civil

Before:

Neilson DCJ

Decision:

The plaintiff’s claim is dismissed.

Catchwords:

CIVIL – Australian Consumer Law – Misleading and deceptive conduct – Business investment for purposes of obtaining 888 visa - 17 alleged misrepresentations – Test in Self Care not satisfied.

Legislation Cited:

Competition and Consumer Law Act 2010 (Cth) Sch 2 ('Australian Consumer Law'), s 236

Evidence (Audio and Audio Visual Links) Act 1988, s 5B

Cases Cited:

AonRiskLimitedvAustralianNationalUniversity (2009) 239 CLR 175

Calderbank v Calderbank [1975] 3 All ER 333

DarevPulham (1982) 148 CLR 658 at 664

SchradervBroach [2024] NSWCA 14, [133] - [141]

Self Care IP Holdings Pty Ltd & Anor v Allergan Australia Pty Ltd & Anor [2023] HCA 8, [80] - [82]

Watson v Foxman (1995) 49 NSWLR 315 at 318

Texts Cited:

Nil.

Category:

Principal judgment

Parties:

Plaintiff – Jiani Hu
First Defendant – Yefei Zheng
Second Defendant – Yueling Zhuo
Third Defendant – Jessica Trading Pty Ltd

Representation:

Counsel:
Plaintiff – Mr Hopkins, A.
Defendants – Mr Marshall, R. SC.

Solicitors:
Plaintiff – Longton Blackwell
Defendants – Apex Lawyers

File Number(s):

2023/00322527

Publication restriction:

Nil.

Judgment

Background

1. HIS HONOUR: The current proceedings arise out of an attempt by the plaintiff and her husband to obtain what is known as an 888A visa, which would have enabled them to acquire permanent residency in Australia. Details of what is involved in seeking such a visa can be found on pages 723 to 727 of the Court Book. Those pages are in Volume 3 and form annexures to the affidavit of Mr Wenda Tang (to whom I shall seek to refer by using his English nickname Tom) sworn on 2 October 2024 which is Exhibit 2 in these proceedings. Essentially, to obtain such a visa, the plaintiff and her husband had to invest $500,000 in a business or businesses in Sydney, and to have worked in those businesses for a period which the documents to which I have just referred indicate was two years. The requirement was that the applicant for the visa must be involved in the business or businesses that have been actively operating for at least two years.

2. The plaintiff is Ms Jiani Hu who is generally known as Jenny. I shall refer to her as Jenny. Her husband is Mr Ying Wu who is often referred to in the documentary evidence, mainly transcripts of WeChat messages, as “Wing”. I shall seek to refer to him as Ying. The couple is from Shanghai.

3. The first defendant is Mr Yefei Zheng, a gentleman who is generally known as Phil, and I shall refer to him as Phil. He is married to the second defendant, Ms Yueling Zhuo, who is generally known as Jessie and I shall so refer to her. The third defendant is a company, Jessica Trading Pty Ltd, which appears to have been named after Jessie's English nickname. One of the businesses operated by the third defendant, Jessica Trading Pty Ltd, was known as Sheng Xian Hui, which has generally been translated by official interpreters as "raw and fresh food", but there are other translations of the name given, in particular by Phil. I shall seek to refer to this business as SXH.

4. I seek to commence this judgment by outlining the background which leads to the factual dispute. I am best aided in considering the background of the numerous matters by the affidavit evidence of Phil, which is Exhibit 6 and is corroborated by Exhibit 7, which is the affidavit of Jessie.

5. The third defendant, Jessica Trading Pty Ltd, was incorporated on 21 February 2012. At the time of its incorporation its sole director and sole shareholder was Jessie. The affidavit of Phil, which is Exhibit 6, an affidavit sworn on 9 October 2024, continues thus:

"7. At the time of incorporation, it was intended that Jessica Trading would import and offer for sale medical supplies, such as masks and other hygiene products. Jessie's employment background is as a medical device supply planner and I intended to work in the business to assist her. However, Jessica Trading did not ultimately pursue that business, including because I was concerned that Jessica Trading operating a business of this kind may create a conflict of interest for Jessie with respect to her employment in the medical supply industry.

8. In about 2015, I was approached by a friend Jie Bao, who operated a meat supply business and barbecue restaurant called Nishiki in Crows Nest, and who asked me to help him distribute wagyu beef to his customers, particularly those located in the northern suburbs of Sydney. I started assisting Jie to dispatch meat to his customers after which time he agreed for me to use his suppliers to sell meat to people that I knew.

9. As a result of obtaining Jie Bao's permission to use his suppliers to sell meat, in about 2015, Jessica Trading commenced operating a fresh produce business, initially called 'Suzuki Farm' and which in about 2018 or 2019 changed its name to … (SXH). I was responsible for managing Jessica Trading's operations, which involved customers placing orders via a group on the WeChat messaging platform. The WeChat group grew in size over time as existing members of the group invited new members to it. As WeChat had a limit of 500 members per group, as each group neared or reached capacity I would start a new group, which ran in parallel with the existing groups.

10. From time to time I would post messages in the WeChat groups which informed the members of the groups what products Jessica Trading had for sale, and the group members would either reply in the group as to what order they wished to place, or alternatively would contact me directly informing me of their order. I posted the same content across all the WeChat groups. Once an order was placed I would arrange to pick up the goods from the supplier. Depending on the order, the customer would either come to Jessie and my home to pick up the order that they had placed (at which time they would pay) or I would deliver the goods to the customer and collect payment on delivery. I was also responsible for picking and packing the goods.

11. Over time the customer base of Jessica Trading's business grew, and at one point it was operating 11 individual WeChat groups, through which it offered for sale and sold its goods. In about 2019, Jessica Trading also established an application within WeChat's platform that allowed individual customers to order goods for pickup and delivery. The application was available to the members of each group and was used by them to place orders instead of requesting those orders by writing in the group or by contacting me directly. Prior to ceasing to trade, Jessica Trading had about 6,000 customers.

12. When Jessica Trading commenced its fresh produce business, it initially sold only meat. As the business grew, other foods and related products were offered for sale and sold by it. In about 2015 Jessica Trading would store the goods that it sold in our home's garage, in a single refrigerator. As Jessica Trading's operation gradually expanded it started servicing more customers, such that in about 2016 or 2017 it required three four‑door commercial refrigerators in our garage in which to store goods.

13. In around 2018, Jessica Trading opened a small store in Telopea, which was approximately 70 square metres in size. The store had about six or seven refrigerators and a small cold storage room of about 8 square metres. By about 2018, Jessica Trading was offering for sale and selling goods to more than 1,000 customers.

14. In about 2020, Jessica Trading had grown to a size where the Telopea store was not large enough to store the goods necessary to service the needs of its customers. On about 15 December 2020, Jessica Trading entered into a lease with Medak Investments Pty Ltd for a warehouse at 35 Mary Parade, Rydalmere (the Warehouse) in which it built three cold storage rooms totalling about 60 square metres in size. The Warehouse also had more than 12 refrigerators in which Jessica Trading would store goods before they were shipped to customers….

15. For the entirety of the period that Jessica Trading has operated its fresh produce business, Jessie has been employed in the medical supply industry on a full‑time basis. As a result, I was responsible for the operation of Jessica Trading's business, including procurement, daily operations, after-sales service, strategic planning, supply negotiations and deliveries.

16. From time to time, when she was able to assist me, Jessie would help me with customer service, processing refunds and inventory management. She would also assist me with deliveries to customers, from time to time.

17. In about 2020 (and before 27 December 2020), Jessie and I had a conversation in Shanghainese to the following effect:

Jessie: 'You should add yourself as a director of Jessica Trading because you are running the business. I want you to take responsibility for it. You can remove me'.

Me: 'Okay. There is no difference if I remove you or not as we are a couple and you are the only shareholder'.

Jessie: 'Okay, you can keep me as a director’.

18. On 27 December 2020, I was appointed as a director of Jessica Trading.

19. Until about November 2021, I was responsible for Jessica Trading's operation in addition to my job as a finance manager at an IT company called Citrix Systems. I resigned from Citrix in about November 2021 to work on Jessica Trading's business on a full-time basis.

20. In about early 2022, Jessica Trading had about 6,000 customers to whom it would supply goods."

6. I have quoted that in full because it is important to note the size and requirements of the business being run by the third defendant, Jessica Trading Pty Ltd, and the demands that it placed on Phil's time. That is because Phil had another interest which was in opening a Japanese barbecue restaurant.

7. I have already mentioned Mr Wenda Tang. As I have said, I shall seek to refer to him by his English nickname Tom. Tom's affidavit is Exhibit 2. It was sworn on 2 October 2024. It outlines his relationship with the plaintiff and her husband. It contains this matter:

"3. Ying Wu, who is married to Jiani Hu, is a friend of my close friend, Xu Zhiuyu. I have known Ying Wu since about January 2017. I met Jiani Hu (Jenny) a short time later.

4. Sometime in about 2017, I became aware that Ying Wu had obtained a visitor visa for Australia. I specifically recall that he obtained the visa before the COVID-19 pandemic because of the issues in obtaining visas to Australia during and after the COVID-19 pandemic.

5. In about May 2017, I introduced Ying Wu to a mechanic in Australia called Jimmy. Jimmy operated an auto mechanic shop near Sydney Airport. I introduced Ying Wu to Jimmy because I understand Jimmy was interested in selling his business.

6. In about 2017, I introduced a friend of mine called Yi Feng, who is a migration agent, to Ying Wu.

7. In about 2019, but I cannot be sure of the exact date (though I know it was a date before the COVID-19 pandemic), Ying Wu told me that he had applied for a business visa to move to Australia, with Jenny and their child.

8. In about late 2021 or early 2022, I had a conversation via WeChat application with Phil Xang, in Shanghainese to the following effect:

Tom: 'I have a friend who is coming to Australia with a business visa. They might need to invest into a business. Maybe can you do some business with him.'

Phil: 'Okay. We can talk about that when they come to Australia'.

9. In about April 2022, I provided WeChat contact details of a friend of mine, Ying Wu, to Phil for Phil to add on the WeChat messaging platform.

10. Prior to introducing Ying Wu to Phil, I was aware that Phil was involved in operating a business that sold fresh produce and had previously told me that he had the intention of opening a Japanese barbecue restaurant.

11. In about April 2022, but before I shared Ying Wu's contact details to Phil (described at paragraph 9 below), Phil said to me words to the following effect in Shanghainese:

'Grace Wu offered to invest money into the barbecue business. I don't just need money I also need someone to work together with me. If I'm going to do the barbecue business I need someone to assist me.'

12. I [believed] from what Phil had told me that he could not run both businesses without assistance.

13. On 4 July 2022 at 1.10pm, I had a conversation with Phil via the WeChat application in which words to the following effect were said in Shanghainese:

Phil: 'I'm about to meet Wu Ying. Can you give me some basic information about their background?'

14. The call got disconnected and I left a voice message for Phil.

15. On 1 August 2022, I exchanged messages with Ying Wu about contacting Yi Feng and Phil, before having a meeting with me about Ying Wu's proposed investment in Jessica Trading's business SXH.

16. Sometime in late July or early August 2022, I had a conversation with Ying Wu in Shanghainese to the following effect:

Me: 'According to my previous business in Australia, when we buy a business, a reasonable price to pay for the business is the weekly turnover times by 10.'

Ying: 'That's okay'.

17. On a date that I presently cannot recall, Ying Wu said to me in Shanghainese that he was willing to invest additional funds in Jessica Trading, if necessary, to compensate Phil for the time and experience that Phil would be contributing to the business, so as to ensure that the business would run for at least three years. I knew that the business visa’s requirement that Ying Wu was attempting to satisfy required investment in a business that operated for at least three years.”

8. That is a convenient time at which to stop quoting what Tom said because, by this stage, Tom and Phil had met a number of times. I should indicate that the affidavit evidence and the oral evidence all suggest that the plaintiff and her husband believed that they would have to operate the business not for two years, but for three years. I should also say that Tom has a background as being a migration agent. That is how he initially met with Ying Wu and the plaintiff.

9. I now seek to continue to review the matter chronologically. The first is to recite what Phil said about his dealings with Tom and how he came to meet Ying. Phil’s affidavit of 9 October 2024, Exhibit 6, contains this matter:

“21. In about 2021, while I was still employed at Citrix (but on a date that I cannot presently recall) Wenda Tang (who I’m aware is also known as Tom Tang), and I had a conversation to the following effect in Shanghainese:

Tom: ‘I have a client who is applying for an investment migration visa and they are looking to invest in a business in Australia for visa purposes. The client was running a vehicle repair business in China and had a look at a mechanical repair business in Sydney. My client intended to purchase that business but [it] did not proceed. They are looking for other opportunities and because I have known you for so long I think there is a potential chance for you to work together.’

Me: ‘Okay, we can talk.’

Tom: ‘They might come early next year, I will introduce you.’

22. Although I assumed from my conversation with Tom that his client was a male, the word that he used in Shanghainese to refer to the client was ‘Yi’ being [Chinese] which when spoken, does not indicate gender, and which is why I’ve used ‘they’ at paragraph 21 above.

23. I have known Tom since about 2008. He was introduced to me by a mutual friend. At the time Tom and I had the conversation set out at paragraph 21 above, I was aware that he had been conducting an immigration business in Shanghai, China.

24. On about 20 April 2022, I exchanged recorded voice messages with Tom on the WeChat messaging platform in Shanghainese to the effect of those set out in English below:

Me: ‘How is the friend you mentioned who was intending to invest in the business to come in January or February 2022? There is no update from you. Are they still interested?’

Tom: ‘They are definitely going to come, but due to the COVID restrictions in place in Shanghai at the moment I do not know when they are going to come. They are definitely interested. They were thinking March or April but due to the situation I don’t know. You can talk with them when they come. I will ask them.’

[Phil then exhibited to the affidavit a USB containing a folder in which the recording of each of the voice messages referred to is able to be accessed. This was a common occurrence in Phil’s affidavit and I shall omit further references to such annexation of records to prove what was said]

25. In about 2021, but on a date I do not presently recall I mentioned to Tom that I was intending to open a barbecue restaurant in Sydney. I told Tom, at that time, that I needed someone to help share the workload for the new restaurant, as I was working fulltime managing Jessica Trading.

26. On about 26 April 2022, I had a telephone conversation (through the WeChat application) with Tom to the following effect in Shanghainese:

Me: ‘I had an inspection of one Japanese barbecue restaurant in Eastwood which I have been interested in for many years. Grace Wu is also interested, however, she is only willing to invest capital and will not participate in the actual work required to run the business. You know I am running [SXH] business which is already very busy. I don’t have the capacity to run the restaurant at the same time. If your friend is interested in a restaurant business we can talk about it.’

[Tom then pointed out that Grace Wu was a mutual friend of Tom and his]

Tom: ‘I will share their contact details with you. You can talk to them directly. I will let them know.’

Me: ‘Okay.’

27. On about 26 April 2022, after the conversation set out at paragraph 26 above, Tom sent me a WeChat message which contained the contact details of the person I understood to be his client. Tom's message was in Mandarin, the English translation of which was to the effect of 'I have talked to him that you will contact him' which I understood to mean 'I have talked to him [and told him] that you will contact him'. This was the first occasion on which Tom has provided me with the contact details of any of his clients. …..

28. I later learned that the contact details that Tom had shared with me were for Ying Wu, the husband of Jiani Hu, the plaintiff in these proceedings and who was also known to me as Jenny. Ying Wu is sometimes called 'Wing', which is the name on the WeChat messaging platform.

29. In order to communicate with other users on the WeChat messaging platform, a user must add the other user as a contact. On about 24 May 2022, I added Ying Wu as a contact on WeChat. It appears that in June 2022 the plaintiff and her husband and child arrived in Australia, see exhibit A [13]. On 4 July 2022 there was a meeting held at the Westfield Shopping Centre at Chatswood. It was attended by the plaintiff and her husband and Phil. The plaintiff discusses it in her affidavit, exhibit A, at paragraphs [13] to [15], by her husband in his affidavit, exhibit C, between [5] and [11], but he appears to conflate what occurred at that meeting with what happened at another meeting and is described by Phil in his affidavit, which is exhibit 6, commencing at [30].”

10. Before going further, I should indicate that one of the minor issues raised in the evidence was a quibble, and I use that word advisedly, by the plaintiff's camp as to the use of the word "client" in reference to the relationship of the plaintiff and her husband to Tom. It is merely a quibble. It has no real significance. A client need not be a person who pays money to the patron. The traditional relationship is between a patron and a client. That comes from Ancient Rome, not from China. There was no financial relationship, but it was expected of the patron that he might give money to the client. These days we expect clients to give money to the persons with whom they are dealing. It was originally the other way round. I return to the meeting on 4 July 2022 at Chatswood. The plaintiff said this in her affidavit:

"13. On or about 4 July 2022, my husband Ying…and I, met Phil for the first time in Westfield Chatswood where we introduced ourselves to each other. I recall saying to Phil words to the effect of: 'I am a new immigrant. I only landed in Australia last month. I hold a subclass 188A investment visa [sic] and I need to invest in an Australian company to meet my visa requirements'".

11. In his affidavit Phil commences at [30] by setting out the messages he exchanged with Ying to enable them to meet up in a café near the Target store at Westfield at Chatswood. It even includes a photograph showing where they met up. He also sets out telephone conversations that he exchanged with Tom as he was going to the meeting that had been arranged.

12. At [32] Phil set out a discussion he had with Tom on the way to the meeting at Chatswood. The following message was sent to Phil by Tom in Shanghainese:

"Phil, nothing special. I've told him I have a very good friend who has such a business and is looking for a partnership of any kind of way to cooperate. This all can be discussed [Ying Wu] is looking for a business to invest in, and to do something to make money and then to get a resident visa. That is what he is asking. Nothing complicated. You can talk to him, see if you can transfer some shares to him or any other kind of possibility. You two can talk first."

13. The affidavit goes on to tell me this about the meeting on 4 July:

"33. On 4 July 2022, shortly after 1.17pm, I met with Ying Wu and Jenny at Westfield in Chatswood at the café in front of the Target. Jessie was not present at this meeting. I had not met either Ying Wu or Jenny in person prior to this date.

34. After we ordered coffee, Ying Wu, Jenny and I had a conversation to the following effect, in Shanghainese:

Me: 'My name is Phil, Tom's friend. How are you settling in?'

Ying: 'I am Wu Ying, this is my wife Jenny. We just arrived a couple of days ago. Once we arrive the whole family got sick. I'm not sure if it is COVID or what.'

Jenny: 'We have never been so sick when we were in China. This time we were really sick.'

Me: 'Now that you have recovered, that's good. Sometimes the virus can be very strong. Tom has already told me of your intentions. From what I know you are looking for a business to invest in. Let me tell you what I do, first. Currently I am running an online retail business called SXH. I have been doing this for many years. We mainly sell wagyu, fresh produce, seafood and some other Japanese food. The customers are mainly individual families but we also have a small number of wholesale business customers. I have an intention to open a Japanese barbecue restaurant, about which time I suggest that we can talk to see if we can work together. Because I am doing the SXH business, I have resources for quality food. I worked in a Japanese barbecue restaurant when I first arrived in Sydney for three years and I have the skills. I know a restaurant, that is near where I live, which I have been interested in for many years. The current owner is looking to sell but my difficulty is I do not have the capacity to run both businesses especially as my wife has a full-time job. I need someone to work with to share the workload and Tom suggested to me that you are looking for a business opportunity and you and I may be able to work together.'

Jenny: 'That's great. As we just arrived we don't know where to buy good food. How do you sell your products?'

Me: 'We have a WeChat mini program like an online purchasing platform. We have 11 WeChat groups in which a customer can place order by using the mini program. I can send you a link to the program.'

Ying: 'Tom has already told me about it. I ran an automotive repair business in China. Jenny my wife is a human resources manager for a publicly listed company in Shanghai. I cannot speak English, but my wife is good at English'. [Ying Wu then described to me his automotive repair business and that it had been sold. He also told me that he is the person in his home that cooks and that he likes to keep his house very tidy. Jenny made comments in support of Ying Wu being very clean and keeping the house tidy. She also made comments about Ying Wu being a handyman and that he mentioned other people who were training to become mechanics]

Then a continuation of the direct quote from Ying:

'We have no experience running a restaurant before but we are interested in starting something new. I believe as long as you work hard you can get things done. I can learn to cook in a restaurant. Tom and Solicitor Feng helped us to get our investment visa. Surprisingly it was very smooth and successful. We have heard that a lot of other people struggle to get the visa, but we are lucky that we got it very quickly. We had been preparing this for many years. We were meant to come last year but as you know due to COVID restrictions and the lockdown in Shanghai we couldn't do anything. Finally the restriction has been lifted. We came before COVID and me and Xu Zhi Yuan were looking at an automobile repair workshop near the airport. The owner was asking for $1 million. We agreed and gave a confidential offer to the owner that the owner needed to work with us for six months. However the owner rejected our offer. That's why we didn't proceed.'

Me: 'I heard about this from Tom'.

Ying: 'Now we are here to look for a business to invest in to get permanent residency. I want to get this sorted out as soon as possible, then I can just focus on running the business and get the permanent visa as soon as possible as it is already being significantly delayed by COVID. I am definitely interested in partnership with you. Tom has told me you are a long-term friend and that you are trustworthy. Can you please let me know your warehouse address. We would like to come and have a look. Also where is the restaurant located? Is it possible we can have a look as well?' [At the time of this conversation, I did not know the identity of the person Ying Wu referred to as Solicitor Feng. Xu Zhi Yuan is a mutual friend of Ying Wu and me. I understand Ying Wu when he said 'I want to get this sorted out as soon as possible' to be referring to finding a business to invest in]

Me: I will send you my warehouse address. For the restaurant I will need to ask the current owner for permission first'.

Ying: 'We are able to come to your warehouse tomorrow? We can discuss further'.

Me: 'Sure. Let me know before you come because I am in and out. Ideally after 12 because we are busy in the morning'.

Jenny: 'Can I also have your WeChat?'

Me: 'Sure [I then showed Jenny the QR code on my phone so that she could add me as a contact on WeChat, which she did at 2.35pm].

35. During the conversation set out in paragraph 34, Ying Wu also said to me words to the effect of 'Jenny is the main applicant for the visa'.

36. During the conversation set out at paragraph 34, I noticed Jenny nodding in agreement with things that Ying Wu said. Other than the words attributed to her above and her making comments about Ying Wu's cleanliness, his being a handyman and that he mentioned others, she did not speak to me about the proposed investment, the operation of Jessica Trading's business or my intention to establish a restaurant. Jenny did not say to me the words attributed to her at paragraph 13 of her affidavit affirmed on 4 June 2024 nor at paragraph 7 of Ying Wu's affidavit affirmed 4 June 2024. Further, no-one said the words 'subclass 188A investment visa'.

37. As stated above at the time of this conversation I did not know the person Ying Wu referred to as Solicitor Feng. I assumed that Ying Wu was referring to a qualified Australian lawyer as he used the Shanghainese word for 'solicitor'.

38. At 2.37pm after the conversation set out in paragraph 34 ended:

(a) I sent Ying Wu a message on the WeChat messaging platform with the address of the Warehouse; and

(b) I sent Jenny a message on the WeChat messaging platform with a link to Jessica Trading's application within the WeChat messaging platform.'"

14. Annexed to that were copies of the translated WeChat messages between Jenny and Phil on 4 July 2022. The conversation recorded by Phil is very lengthy, very precise and detailed. The affidavit that he made was affirmed on 9 October 2024, two years and three months later. I would not expect anyone to remember in any great detail the exact conversation that took place two years and three months earlier. Phil did say that the conversation was “to the following effect”, but it is still detailed and very lengthy, and one would not expect such detail to be easily remembered.

15. The substance of this case concerns representations which were said to have been made, which are said to have been false or misleading. It is always important to bear in mind well established principles. I have had cause constantly to quote the decision of McLelland CJ in Equity in Watson v Foxman (1995) 49 NSWLR 315 (‘Watson v Foxman’) in which his Honour said this commencing at 318:

“Where in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously describe as ‘misleading’) within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act) it is ordinarily necessary for the party to prove to a reasonable satisfaction of the Court: (1) what the alleged conduct was; and (2) the circumstances which rendered the conduct misleading.

Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the Court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word of phrase, or condition.

Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlayed, often subconsciously, by perceptions or self-interest, as well as at conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then again often subconsciously constructed. All of this is a matter of ordinary human experience.

Each element of the cause of action must be proved to the reasonable satisfaction of the Court which means that the Court ‘must feel an actual persuasion of its occurrence or existence.’ Such satisfaction is ‘not…obtained or established independently of the nature and consequence of the fact or facts to be proved’ including the seriousness of an allegation made, the ever unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding”: Helton v Allen (1940) 63 CLR 691 at 712.

Considerations of the above kind can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a cause of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), in the absence of some reliable contemporaneous record or other satisfactory corroboration.”

16. Of course, in this case, Phil does not allege that any misrepresentation was made to him. But the fact remains that one must approach his recitation of such a long conversation with the consideration that human memories often fail, and it is highly unusual for anyone to remember after two years and three months the extent of the conversation that he remembers. Obviously, there was some reconstruction involved. However, it is clear that there was a discussion about the business being carried out by Jessica Trading, that is SXH, and of Phil’s intention to seek to open a Japanese barbecue restaurant and, clearly, the import of the meeting was the interest of the plaintiff and her husband in using this opportunity that might be provided by Phil to fulfil the requirement of their investment visa.

17. On 5 July 2022, there was the meeting at the third defendant's warehouse, as had been proposed on 4 July 2022. Phil deposed to this:

"39. On 5 July 2022, Ying Wu and Jenny met me at the Warehouse and I showed them around, at which time Ying Wu and I had a conversation in Shanghainese, in Jenny's presence, to the following effect:

Me: 'I have a plan to build a meat processing room. I'm working on the DA at the moment.' [I showed Ying Wu and Jenny the location of the proposed meat processing room]

Me: 'We have a lot of customers asking for processed meat. At the moment the majority of the meat we sell is packed. Quite often it is over two or three kilograms which is too big for a normal household. Once the processing room is built we then can introduce a new sales model to sell packed smaller portions of meat. That will be very popular with the customers.'

40. At the time of the conversation on 5 July 2022, set out at paragraph 39 above, Jessica Trading had obtained a DA with conditions of consent that it was working to comply with and implement, including installing a grease trap. A processing room was constructed on or about in about February 2023 and Jessica Trading used it to package smaller portions of meat which were popular with its customers."

18. There was at about this time an inspection of the proposed barbecue restaurant which Phil proposed to buy. His affidavit contains this:

"41. On about 5 July 2022 at 3.04pm I sent a message on the WeChat messaging platform to Ying Wu which contained a screenshot of the location of the restaurant Gogijib on Google Maps. Gogijib was the restaurant that I was proposing to purchase from which to operate a Japanese barbecue restaurant…

42. On an evening between 5 and 8 July 2022 Ying Wu, Jenny and I visited Gogijib. While we walked around the restaurant I said words to the following effect in Shanghainese to Ying Wu and Jenny:

Me: 'This is the restaurant. The reason why I like it is because it has a very strong Japanese feeling. It has all the necessary equipment that we need. The size of the restaurant is just about right. Before Gogijib it was a Japanese barbecue and it was very popular. The current owner converted it to a Korean barbecue but we can convert it back to Japanese barbecue with a simple renovation without touching too much infrastructure. This will save us lots of money compared to building a brand-new restaurant.'"

19. I mention the Japanese barbecue restaurant to show that it was perhaps in the forefront of Phil's mind at the time. Furthermore, it is common ground that the Japanese restaurant was opened as a venture between Phil and the plaintiff and her husband and was also the subject of a dispute, but that has been settled and is not before me. However, it must be borne in mind that there was similar work to that done with the third defendant, Jessica Trading Pty Ltd, as was done with the Japanese barbecue restaurant.

20. On 8 July 2022, there was an exchange of messages on WeChat. This is set out by Phil in paragraphs 43 and 44 of his affidavit, Exhibit 6, of 9 October 2024. The reference there is to Ying telling Phil that he had consulted with his immigration lawyer, namely solicitor Feng, and that he wished to further consider a relationship with Phil.

21. On 11 July 2022, there was a further meeting at the Macquarie shopping centre. The plaintiff and her husband were present, as were Jessie and Phil. In his affidavit, Phil said this [at 46]:

"On about 11 July 2022, at around 3pm, Jessie and I met with Ying Wu and Jenny at Macquarie shopping centre at which time we had a conversation in Shanghainese to the following effect:

Me: 'This is my wife Jessie. She is also from Shanghai. I think that it is important for Jessie to meet you and to know what we have talked about.'

Ying: [addressing Jessie] 'Phil and I met a couple of days ago. Phil has told me about the Japanese restaurant proposal. I can see Phil is very enthusiastic about this restaurant.'

Jessie: 'Yes. He has been thinking about opening a restaurant for a long time. We have been to that restaurant many times'. [Jessie was referring to Gogijib] 'Phil is good at cooking'.

Ying: 'We just came not long ago, once we landed we got very sick. This time was probably the most severe flu I have ever had. The whole family was sick. Now that we have recovered, I can believe how strong the Australian virus was'.

Jessie: 'I notice the flu virus is getting stronger and stronger. Do you know if you got COVID or not?'

Ying: 'We tested but it was negative. We have had a feeling that it might have been COVID but it was not detected. I was running automobile repair centres in China. I had a very big mechanic shop in Jinshan and then later I opened one in the city. They were very successful. Unfortunately we had to close both of them before we came to Australia. Jenny has been working as a HR manager in a publicly listed company in Shanghai. Due to Jenny’s job, she is organised and she is good at management. I have heard you need people to help you as you are short of staff, especially in management.

Jenny can certainly help you with that. Her English is good, but I cannot speak any English. Wherever I go, I have to have Jenny with me as a translator. We also sold our property in Shanghai before we came to Australia. We are not like other investment immigrants that only want a visa, our intention is to live here. We are not just short term investors, we are looking at the long term. We sold our house in Shanghai and cannot go back. You can trust Jenny.

I’ll give you an example, we had a fake divorce so that we became entitled to buy a second property due to the policy as you might know. Once the purchase completed we got married again. During the process everything was under Jenny’s name. She didn’t take everything and run away. You can see how trustworthy she is. And also, all of my business is under Jenny’s name. We are interested in the restaurant business and I can see Phil is very enthusiastic about a business and we can certainly partner together.

We have been to your warehouse, if necessary we are open to investing in both businesses but we need to work together with my immigration lawyer to make sure whatever we agreed to do meets the visa requirements, because that is our aim. We don’t just want to invest money, we will participate in the operation of the businesses.’

Me: ‘I want to open a Japanese barbecue restaurant. I have been following up with the owner of the restaurant before the lockdown. I also know there are other potential buyers that are pursuing this opportunity. SXH has all the necessary resources to help us run the restaurant. We have wagyu, we have seafood, we have fresh produce, we have accounts with Japanese food suppliers and I have skills. The restaurant already has equipment including the ducting system which is very expensive to install. So we have everything to run the Japanese barbecue business. Plus, SXH has a big Chinese customer base that will help us to attract customers to the restaurant. I think the restaurant will be successful’.

[When I said ‘I have been following up with the owner of the restaurant’ I was referring to the representative of the owner of Gogijib, Ashley Kim…]

Jessie: ‘I am working fulltime. Phil cannot run the businesses all by himself.’

Ying: ‘I want to organise a meeting with solicitor Feng to review what we talked about and get her opinion about whether this will meet our investment visa requirements and how to meet the requirements. It’s important that what we invest meets the visa requirements’.

Me: ‘Okay’.

Jessie: ‘Okay’.

47. As I had already met with Ying Wu and Jessie on 4 and 5 July 2022, I did not discuss Jessica Trading’s business, SXH, in any detail on 11 July because I had already discussed it in detail with Ying Wu and Jenny on 4 July and taken them on a tour of the warehouse on 5 July 2022. The meeting on 11 July 2022 was to introduce Jessie to Ying Wu and Jenny. I disagree with what is alleged by Jenny in paragraph 14 of her affidavit affirmed 4 June 2024 that I did not tell Ying Wu and Jenny on 11 July 2024 (nor did Jessie tell them in my presence) that:

(a) The business involved the sale of fresh meat and produce to wholesalers, and also directly to businesses and individuals. As stated above, on 4 July 2022, I said words to the following effect to Jenny and Ying Wu, ‘We mainly sell wagyu, fresh produce, seafood and some other Japanese food. The customers are mainly individual families, but we also have a small number of wholesale business customers’;

(b) Jessica Trading’s business, SXH, was a successful business;

(c) Jessie and I would like them to invest in SXH (being Jessica Trading).”

22. The conflict between the plaintiff and the defendants on what was said at that meeting is clearly made evident in paragraph [47] of Phil’s affidavit which I have just quoted. The next relevant meeting was on 21 July 2022. It was a meeting between the two couples and Yi Feng, also known as “solicitor Feng”. Of that meeting, Phil deposed to this:

“54. At about 1pm on 21 July 2022 Jessie and I met with Ying Wu, Jenny and Yi Feng at level 5, 7 Eden Park Drive, Macquarie Park, North Ryde - being the time and place suggested by Ying Wu in his WeChat messages to the group ‘immigration (5)’ on 19 July 2022 at 2.41pm and 2.42pm. Prior to attending that meeting I had not met Yi Feng in person.

55. Ying Wu, Jenny, Yi Feng, Jessie and I had a conversation to the following effect in Shanghainese on 21 July 2022:

Ying: ‘We have solicitor Feng here today. She helped us with the visa application. Now we need to invest in businesses for the next visa. I invited solicitor Feng to this meeting for us to understand the requirements for the permanent resident visa and how we can meet those requirements’.

Feng: ‘Now they have 188 visa [sic], the next step is for an 888 visa. For them [Jenny and Ying Wu] to qualify for an 888 visa they need to make investments into Australian businesses of no less than $500,000, hire local staff and the turnover of the businesses in which they invest cannot be lower than $400,000 per year. They need to actively participate in the operation of the businesses. They need to show the immigration department proof that they are participating by signing documents such as BAS or annual reports or any other form of proof’.

Jessie: ‘What we are looking for is someone to share the workload. We don’t need a capital injection’.

[When Jessie said ‘what we are looking for is someone to share the workload’, I understood that to be a reference to solicitor Feng’s comment that to qualify for the visa an applicant will need ‘to actively participate in the operation of the businesses’. I understood Jessie to be saying that we need someone to actively participate in the businesses as opposed to just making an investment of capital]

Jenny: 'This won't be an issue. It is our business investment, I will for sure participate in the operation. It is also required by the visa’.

Me: 'I understood the $400,000 turnover. Is there any requirement with regards to profitability? As from my view, 400,000 turnover is small'.

Feng: 'No particular requirement on profitability as long as you don't report a loss'.

Ying: 'We are talking about opening a restaurant. Can that be classified as an investment?'

Feng: 'Are you opening a restaurant from scratch or are you buying a business?'

Me: 'Buying a business'.

Feng: 'If you are purchasing a business, as long as you have business purchase agreement, have made a capital investment and holding more than 50% of the shares, that can be recognised as an investment'.

Me: 'When you say "more than 50% of the shares", will it be 51/49 qualify?'

Feng: 'Yes'.

Ying: 'Phil is running a SXH business …. If we invest in two businesses can we still qualify?'

Feng: 'You can invest in two businesses at the most. You need to own more than 50% of one business and the other one no less than 30%. It can be 30%. Both businesses need to be profitable in at least their second year. How are you going to invest in the business? In what form? If you simply buy shares that does not qualify. You need to show Immigration that you actually invested in some physical things, for example that you bought a car for a business, or that you bought equipment for a business, or even that you bought a warehouse. You need to use the warehouse to run the business and at least 50% of the warehouse area must be used for the business, you can't just rent it out. You need to show that your investment is driving the business. So, simply purchasing shares will not qualify. You need to show that you have invested in a company and that the company has used the money for its business'.

Ying: [directed at me] 'What is your assessment of how much investment is required for the restaurant business?'

Me: 'It's about 400,000'. [My estimate of the sum of money required for the restaurant business, including the purchase price of the business, the cost to renovate and upfront operational and setup costs]

Ying: 'Then we will need another investment. I recall Phil saying he is going to invest in a processing room and expansion of the current cool room. If we invest in SXH and SXH invests in this [referring to the processing room and the expansion of the current cool room] can that qualify?'

Feng: 'That will be regarded as an investment that qualifies'.

Me: 'My understanding of this is that we increase the capital by issuing new shares'.

Me: 'How about goodwill? Can that be recognised as an investment?' [When I said this I was asking whether the goodwill of the business can be taken into account when determining the subject matter of the investment]

Feng: 'As long as the goodwill is written in the agreement and is agreed by both parties, it can be recognised'.

56. Until I was informed by Yi Feng on 21 July 2022 as to the requirements for Jenny or Yi Feng to obtain a visa, I did not know what those requirements were."

23. It is to be noted at this point that it came to pass that Ying became a 51% owner of the Japanese restaurant business which, when it was incorporated, had the name of Oishii Yakiniku Pty Ltd and the remaining shareholder was Phil, who had 49% of the shares in that business. The estimate for the input of Jenny and Ying was $400,000; Jenny would become a 30% shareholder in the third defendant, Jessica Trading Pty Ltd and contribute $258,000 to that business.

24. There is a suggestion in the evidence that also involved was a motor car which was sold by Phil to Ying and which Ying then contributed to the Japanese restaurant business, thereby decreasing the amount of cash he needed to give to that company. In other words, things came to pass as predicted, as one could expect given the advice that was provided by solicitor Feng, who is not a lawyer but rather an immigration agent. It would appear that she was called "solicitor Feng" because it was some term of respect.

August 2022 messages

25. The next relevant event was a sending of messages in August 2022. In Exhibit A, the affidavit of Jenny affirmed on 4 June 2024, the following is said at [21]:

"On 2 August 2022, Phil sent a message stating:

a. Acquiring 30% of the shares of Jessica Trading; and

b. Acquiring 51% of the shares of Oishii Yakiniku Pty Ltd … Oishii was another company Phil controlled and operated a Japanese barbecue restaurant."

26. On pages 6 to 7 of Exhibit JH‑1 is a copy of the WeChat messages dated 2 August 2022 and the NAATI translations.

27. There was again an exchange of messages on 7 August 2022. Those messages are these:

"Ying: 'Tom just replied me here and he would have left you with message(s) right. No big problem with regard to the overall plan arrangement as long it is conducive to cooperation and as long as your wife Jessie does not have any big problem. Really you do not have to be hard on yourself for me Jenny is fine and you will get to know this when we cooperate in the future. Jenny sometimes is more magnanimous and more generous than me. Cooperation is about being happy and focus on the future instead of the immediate gain or loss; you only make a gain by losing something. I have no problem here and if you think it is okay we can get on with the process step by step. What do you think, um, um.'

Phil: 'Tom has just talked to me, and I am okay. I've already said that we can chat about the figure(s) later, but I do not want everyone to take part in doing the work without a dividend, which will be demotivating; after all for three years labour and contribution, this disguised plan. Sustainability and growth are what Jessie and I value. I will talk to Jessie tomorrow morning and she in fact does not know details about the chat I had with Tom.'

Phil: 'About the estimate of [SXH] we take our previous turnover as the basis, which was pulled out from bank transaction flow plus the sector of wholesale, all of which are recorded; then this is converted as the business turnover for a week; is it okay to proceed with calculating shares increase and shares expansion by following what Tom said, i.e., one week equals ten weeks? I have also mentioned this with [Tom].'

Phil: 'Good, okay, I really appreciate your help and I really hope that everyone will maintain the two shops properly which is the key; anything subsequent can be negotiated as long as such is conducive to the business' development and other things are not worth mentioning really. If it is okay let us get the process rolling starting next week, I am fine in terms of time next week and will wait for you to arrange, um, um.'"

28. About two days later, on or about 9 August 2022, the plaintiff, Jenny, started a trial of work with the third defendant's business SKH. That is attested to in Phil's affidavit of 9 October 2024 commencing at [104]. I shall now cite the relevant paragraphs:

"104. On about 7 August 2022, I had a conversation with Ying Wu in Shanghainese to the following effect:

Ying: 'If you need help, we can come and help you. We have nothing to do.'

Me: 'You can come to our warehouse for a trial'.

Ying: 'Sure, we have plenty of free time. We can come and help.'

105. On about 9 August 2022, Ying Wu attended the warehouse to assist with deliveries, including with the delivery of mooncakes to the city for SXH.

106. From about 9 August until the end of September 2022, Ying Wu and Jenny frequently attended the warehouse. From about September 2022, Ying Wu and Jenny were at the warehouse of Jessica Trading almost every day.

107. Between 9 August and the end of September 2022, Ying Wu assisted with purchasing and making deliveries, while Jenny was involved in order processing and packing of goods. In the course of assisting me with order processing and packing, Jenny would download orders…that had been placed in the WeChat application, pick and pack the items, perform stocktake and handle both collection of goods from suppliers and deliveries. I also introduced Jenny to Jessica Trading's wholesale client, Judy, on an occasion when Judy attended the warehouse to collect goods she had purchased. At that time, I said to Jenny words to the effect of:

'This is Judy. She is our wholesale client. She buys large quantities of meat from us in bulk. All of the bolar blade goes to her [bolar blade is a cut of meat].'"

29. The plaintiff’s first affidavit, paragraph 25, says this:

“In or around September 2022, I had a conversation with Phil confirming that I would invest in Jessica Trading. On 16 September 2022, Phil gave to Jenny a draft financial statement of the third defendant for the financial year ending 30 June 2022. The receipt of the financial statement was acknowledged by Ying on 17 September at 6.30am. At 8.24am, Phil told Ying in addition that the ‘draft financial statement’ contained the ‘bank account’ but there was also ‘the wholesale part’ which was not included in those figures.”

30. In her affidavit, the plaintiff, Jenny, stated this at [52]:

“To date, I have yet to receive the wholesale records of Jessica Trading. I have been unable to obtain the so-called wholesale records despite issuing a subpoena to Phil.”

31. In Phil’s affidavit of 9 October 2024, the following is stated at [102]:

“On a date between 20 September and 25 September 2022, Ying Wu and I had a conversation in Shanghainese to the following effect:

Me: ‘The annual turnover in the financial statement is $2,499,000 plus an estimated $5,500 per week from wholesale. Considering holidays like Christmas, New Year, Chinese New Year, and the mid‑Autumn Festival, the actual number of working weeks is around 48. Based on these numbers, the average weekly turnover is approximately $57,562. Using a methodology proposed by Tom, the estimated valuation comes to $575,562. If you’re okay with this, I will use this figure to prepare the deed.’

Ying: ‘How much do I need to invest to get a 30% share?’

Me: ‘Around $246,000’.

Ying: ‘Let’s round it up to $600,000 in the deed. It’s better to have more than less’.

Me: ‘Sure.’”

The Deed

32. The next paragraph of Phil’s affidavit is this:

“As Jessie held 100 ordinary shares in Jessica Trading, I used $600,000 as the agreed valuation of Jessica Trading (as requested by Ying Wu) and the number of the issued shares to calculate the number of shares to be issued to Jenny upon her capital injection as well as the share subscription price and inserted these details into the deed of agreement of the shareholders.

Using $600,000 as the agreed valuation of Jessica Trading and applying the same methodology set out in paragraph 102, resulted in a price of $6,000 per share. In order for Jenny to acquire 30% of the shares in Jessica Trading, it would need to issue 43 more shares. The purchase price of the 43 shares was therefore $258,000. I explained the preparation of the deed of agreement to the shareholders in greater detail below.”

This deed of arrangement I shall refer to shortly, but it should be noted that it was sent by Phil to Ying on 28 September 2022 and it is acknowledged by Jenny in [28] of her affidavit of 4 June 2024. The deed in question has been described as "Deed of Agreement of Shareholders". The deed was not made by a lawyer; however, the deed was based on a precedent provided by a lawyer, the deed actually drawn by the lawyers is a deed of agreement of shareholders between Phil and a person known as Jia Ni Hu of Chatswood West and Oishii Yakiniku Pty Ltd, the Japanese barbecue company, which I shall hereafter refer to merely as OY. Using the deed of agreement of shareholders as between the three legal persons I have just named, Phil changed the names, wherever occurring, to the correct names for the transaction for which he wished to draw the deed.

33. It is noteworthy that on the final page of the OY agreement it was proposed that it be signed by Phil as the sole director of OY Pty Ltd at the time that that deed was drawn. That deed can be found commencing at page 579 of the Court Book. The deed involved in the present matter can be found commencing at page 587 of the Court Book but it is reproduced in many places in the voluminous documentation before me.

34. The deed was actually signed on 30 September 2022 by the plaintiff; its having been executed earlier by Jessie. In the meantime, there was a meeting at the warehouse of Jessica Trading for what was referred to as "a hamburger". This is referred to in the affidavit of Jessie affirmed on 9 October 2024 which is Exhibit 7. Annexed to Exhibit 7 are the minutes of a meeting held on 27 September 2022. Those attending the meeting are expressed to be Jenny, Jessie, Phil, Ying and a person known as Xiao Chu, who, I infer, was a member of the staff of SXH. It assigns responsibility for various activities to various people. For example, the responsibility for the system of stocking was assigned to another employee known as Yan Yan and also to Jenny. Invoice verification and management was assigned to Jenny. Other activities were assigned to other members of staff.

35. [37] of Exhibit 7 says this:

"37. Towards the end of September 2022, Phil, Jenny, Ying Wu and I had a meeting at the warehouse. I prepared the minutes of that meeting, which record what was discussed. A copy of the minutes I prepared in the Notes application of my iPhone at the time of the meeting and shortly after it, which records my recollection of what was discussed at the meeting, are behind tab 3 (on pages 7 to 8 of JZ‑1).

38. Jenny and Ying Wu did work for Jessica Trading in the period August to about September 2022 after which I was told by Phil that Jenny invested in Jessica Trading (and which was consistent with my understanding of the deed of agreement of shareholders that I signed at the end of September 2022)."

36. The deed of agreement of shareholders in question commences in volume 2 at page 587 of the Court Book, and is this:

Deed of Agreement of Shareholders dated 30 September 2022 (132 KB, pdf)  

That copy of the deed is an unexecuted one, but there is no suggestion that there was any impropriety in the attestation of the deed. It was delivered in the technical sense on 30 September, the signature of each of Jessie and Jenny being witnessed by Phil. The document was executed by Jessica Trading Pty Ltd by Jessie, whose signature appears as that of the "sole director" of the third defendant, Jessica Trading Pty Ltd, the third party to the deed.

37. Antecedent to the execution of the deed, the plaintiff obtained advice from Yi Feng. The advice that she received from Yi Feng is in Chinese characters and it can be found as an annexure to the affidavit of Tom, affirmed on 2 October 2024, which is Exhibit 2. The annexure can be found on page 700 of the Court Book in Chinese and on page 701 of the Court Book in English. The English translation is quoted in [94] infra.

38. There is much evidence about the deed. It can be found in:

1. The plaintiff's affidavit, Exhibit A, the affidavit affirmed on 4 June 2024, at [34] to [40].

2. Exhibit C, the affidavit of Ying Wu affirmed on 4 June 2024 at [16] to [19].

3. Exhibit 6, the affidavit of Phil affirmed 9 October 2024 between [116] and [130]

4. Exhibit 7, the affidavit of Jessie sworn on 9 October 2024 between [41] to [47].

5. The affidavit of Tom, Exhibit 2, sworn on 22 October 2024 between [21] and [23].

At this stage I will not go into a legal discussion about the deed or the real issues in the case but continue the recitation of relevant facts.

Background continued

39. On 6 October 2022, Jenny was appointed as a director of the third defendant, Jessica Trading Pty Ltd. The $258,000 was paid to Jessica Trading by the payment of $40,000 on 5 October 2022 and by the payment of $218,000 on 6 October 2022, that being the day on which Jenny became a director of Jessica Trading.

40. Phil, in his affidavit affirmed on 9 October 2024, which is Exhibit 6, said this at [133]:

"After Jenny was appointed as a director of Jessica Trading, she was responsible for managing the Warehouse, which included:

(a) Inventory management, including being responsible for receiving goods on behalf of Jessica Trading;

(b) Picking and packing the goods the subject of orders placed by Jessica Trading and its customers;

(c) Processing orders made by Jessica Trading and its customers;

(d) Collecting receipts and inspecting the condition of goods received at the Warehouse;

(e) Managing Jessica Trading’s inventory at the warehouse;

(f) Checking the goods packed by Jessica Trading’s employees matched those the subject of the corresponding order placed by the customer; and

(g) Ensuring that quality standards were met with respect to outgoing orders to Jessica Trading’s customers.”

Falling out between parties

41. As ought be obvious from the fact that this judgment is being given, there was a falling out between the parties. In his affidavit affirmed on 9 October 2024, Exhibit C, Phil attested to this:

“147 On about 4 March 2023, Ying Wu said to me words in Shanghainese to the following effect:

“From today, I will no longer participate in SXH or the barbeque restaurant. I am withdrawing.”

148 On about the evening of 5 March 2023, Jenny met with Jessie and I at OY’s restaurant. During the meeting, we had conversations in Shanghainese to the following effect:

97. I have pondered this for some time. It is critical. In my view it points to the whole of the plaintiff's case being based upon ex post facto rationalisation, rather than correct recollection of things that were actually said. This allegation clearly fails the first step pointed out by the members of the High Court of Australia as the first step in the quotation I have made above, commencing at [80] of Self Care. It is also critical, in my view, to the integrity and reliability of the evidence of the plaintiff and Ying and causes me to approach their evidence with the utmost circumspection.

98. Eighth July to September representation

99. The allegation is that the valuation of Jessica Trading Pty Ltd was based on its turnover, including both turnover recorded in the financial statements and turnover of the wholesale business, which was on average $86,000 per week for the previous financial year. This is a mere variant of the last representation just discussed and meets with the same fate. The draft financial statement for the financial year ending 30 June 2022 sent by Phil to Ying on 16 September 2022 shows for that financial year:

Revenue	$2,499,718.44
Expenditure	(itemised)
Profit before Income Tax	$1,711.81
Profit for the Year	$1,283.89

The “Revenue” shows a weekly turnover of $48,071, which Phil had indicated needed to be increased by $5,500 per week for the Wholesale Trading. The total of these sums approaches nowhere near $86,000.

Ninth July to September representation

101. The ninth alleged representation relied upon in this set, is that the future turnover of Jessica Trading for the following three years, would remain similar to its current financial year turnover.

102. In her first affidavit, that affirmed on 4 June 2024, which is exhibit A, the plaintiff said at [16]f, "The future turnover of Jessica Trading in the next three years would be similar." In her cross-examination she said this, commencing at T105.04:

"Q. Over the page you see at page 49, right at the top, that you say that you were told by Phil and Jessie the future turnover of Jessica Trading in the next three years would be similar. Do you see that?

A. INTERPRETER WOOTTEN: Yes.

Q. When were you told that?

A. INTERPRETER WOOTTEN: This would have been, I believe, the first time that we met because at the time he told me that the company was doing very well?

Q. This is at Chatswood? Is that right?

A. INTERPRETER WOOTTEN: At the time, at the time, he said that the company was doing very well. He probably didn’t mention the next three years."

103. Again, a clear admission that this was a reconstruction. I am not persuaded on the balance of probabilities that any such representation was made. This fails the first step of the steps required to be established by the High Court of Australia.

Tenth July to September representation

104. The next representation in this step can be numbered 10, is that the potential purchaser known as eBest offered to acquire the ownership of Jessica Trading at a price of $800,000 in late 2021 or early 2022, and Phil and Jessie refused such an offer.

105. One annexure to Jessica's affidavit of 4 June 2024 which is Exhibit A, is a letter from her solicitor bearing date 24 March 2023 addressed to the solicitor acting for the defendants. This was when there was a continuing dispute about Jessica Trading and also the company which was incorporated to run the Japanese barbecue restaurant, identified by me above with the letters OY. The first misrepresentation alleged was this:

"That a potential purchaser, known as 'eBay', offered to acquire JT for $800,000 in late 2021 and early 2022, and your client refused such an offer".

106. Even I have heard of eBay, but only for my son because I do not use it myself. There is a big difference between eBay and eBest. In her affidavit, in the affidavit to which that letter is annexed Jenny attempted at [16]g, to depose to that. It is denied by Phil in Exhibit 6 at [177]f, which can be found at page 281 of the Court Book at the end of volume 1. In cross‑examination, Jenny said that the first time she was told about eBest was by Ying who told her Phil spoke to him about eBest when both men went to the Sydney Markets. The next time she says she heard about it was at a location she could not remember. It has been submitted by Mr Marshall SC that the evidence that she tried to give was flawed and should be rejected.

107. Ying  in his affidavit affirmed on 4 June 2024, which is Exhibit C, deposed to a conversation at the Macquarie Shopping Centre meeting about eBest. That is not a version which was accepted by either Phil or Jessie. Jessie was asked about this and did not agree to anything being said about it, but did agree that there had been contact by somebody from eBest with Phil.

108. The submissions of Mr Marshall go on to say this:

"62. The problem with this alleged representation is one common with some others: what was said was between Phil and Ying Wu and not Phil and Jenny. How accurate, inaccurate, fulsome or sparing Ying Wu was in relaying what he was told by Tom or Phil to his wife is not known. On his own admission, Ying Wu cannot recall some things because of the passing of time. It must be likely that Jenny missed some things that were being told to Ying Wu. It appears Ying Wu may have been told something about eBest by Phil when they were at the Sydney Markets. It is not proved to be what was alleged here."

109. What was mentioned by Phil to Ying was that when they were at the Sydney Markets, they ran into a gentleman called Jason who was at the Sydney Markets for eBest, and they had had a conversation in the past about SXH. There was no suggestion by Phil that at any time did any person in authority from eBest make any offer of purchase to Phil of SXH. It appears to me that a person regularly attending the markets such as Jason would hardly be in a position to be offering to purchase any business run by Phil. There is no suggestion that any person with the authority to do so made any suggestion to Phil of making an offer to buy his business.

110. Again, in all the circumstances and bearing in mind other matters that go to credibility, I am not persuaded on the balance of probabilities that this representation was made. It fails the first step in Self Care, the High Court authority to which I have been constantly referring.

Eleventh July to September representation

111. The eleventh representation relied upon in the period between July and September is that Jenny was offered an opportunity to purchase 30% of the shares in Jessica Trading for $258,000. That is the subject matter of the deed. The deed was given to Ying by Phil on 28 September 2022. It was then executed by the plaintiff on 30 September 2022. That is the truth, there is nothing misleading in that.

112. The allegation does not meet the principle that the representation must be misleading or deceptive. If it is in truth what happened, it is in fact the truth. It clearly fails the fourth step in the four-stage process referred to by the High Court of Australia in Self Care.

Twelfth July to September representation

113. The twelfth alleged representation is that through obtaining 30% of the shares in Jessica Trading and also obtaining 51% in OY, Jenny would be eligible to obtain a subclass 888 permanent visa.

114. That was, in essence, the advice given by solicitor Feng, the plaintiff's own migration agent. To the extent that it was repeated by Phil as a conduit was merely a repetition of his understanding of what solicitor Feng's advice had been, including the letter given to her in writing in Chinese on 28 September 2022. At T78.17, Jenny acknowledged that as far as she knew, that was correct. Again, the fourth step in the four steps identified by the High Court of Australia in Self Care is not reached. It can not be a misrepresentation made by Phil on behalf of any of the defendants.

Thirteenth July to September representation

115. The next representation, the thirteenth, is this: Phil and Jenny would be involved in the day to day business of Jessica Trading in the following three years to make sure the business of both companies ran smoothly and to ensure that Jenny obtained a subclass 888 visa in three years' time. In [16]i of her first affidavit Jenny said that, "Phil and Jessie would be in charge of the day to day business of Jessica Trading to ensure that my subclass visa 888 requirements would be met."

116. Ying admitted that at the Macquarie meeting, he was told that Jessie had a full-time job, T187.02. He also testified that earlier at the Chatswood meeting that he was told by Phil that once the barbecue restaurant opened, Phil would not have time to run the two businesses, T186.23. Those admissions are completely in opposition to what Jenny asserted in her affidavit. Phil addressed this issue at [177]h of his first affidavit, that sworn on 9 October 2024, which is Exhibit 6. That accords with the general effect of the evidence. Jenny and Ying were required to help run both businesses because Phil would be busy in the barbecue restaurant.

117. It is patently clear from the evidence which I quoted earlier, that the whole idea was that the plaintiff and her husband would be responsible for SXH, and it would appear that in the short time that the OY barbecue restaurant operated, that Phil and Ying, and Jenny and Jessie, worked in it from time to time. In fact, it is clear that as far as Jenny was concerned, she found doing work in both businesses too much for her to physically handle, and that was one of the reasons why she failed to attend upon SXH after 1 April 2023.

118. It is also clear, from the evidence that I quoted earlier, that from 9 August 2022, Jenny commenced working at the Warehouse of Jessica Trading, where the SXH business was being conducted. Jenny stayed there and took it over after she had signed the deed and become a director of Jessica Trading as soon as she paid the consideration called for in the deed.

119. In light of what actually happened, and in light of why Phil wanted to accept the introduction of Jenny and Ying into the existing business of SXH and the proposed business of OY, the Court cannot be satisfied that the representation relied upon was ever made.

Fourteenth July to September representation

120. The final representation, that numbered 14, was that after three years, Jenny would be able to request Phil and Jessie to repurchase her shares in Jessica Trading at a price not more than, but not significantly less than, $258,000, which is the investment price Jenny spent to purchase her 30% of the Jessica Trading shares. Jenny deposed to that in [16] of her first affidavit. That was denied by Phil at [177] of his first affidavit. In contrast to that which Jenny deposed, Ying agreed that on 28 September 2022, in the phone call with Phil and Tom, Phil spoke about Jessie being able to buy the shares back and 'that it was up to Jessie, as he was told that by Phil'. That is recorded in T180.32. The representation, I do not accept, was made.

Consideration

121. Of the 17 representations relied upon by the plaintiff, the only one that the Court can accept that was made, was a misrepresentation at the end of the deed that Jessie was the "sole director" of Jessica Trading. This can have no bearing on the causation of the loss. It ought be clear from what I said yesterday and today, that the work of Jessica Trading, essentially the SXH business, was being run solely by Phil, with a little input from his wife, who had an outside, full-time job and parental duties to attend to, until attempts were made to introduce Jenny into the business commencing on 9 August 2022, and full-time after she became a director of Jessica Trading.

122. The relevant person, whose position needs to be considered, is Phil because he was doing the work, he knew what the business was about. One would expect him to be a director of Jessica Trading, and he was, albeit that the deed contained the misstatement. As had been submitted by Mr Marshall SC, the misstatement does not appear to have had any influence on Jenny's decision to subscribe to make her investment and obtain the extra 43 issued shares in Jessica Trading. What was motivating her and Ying, was to obtain the 888A visa. That was their motivation, not who was a director of Jessica Trading. As submitted by Mr Marshall SC:

"It is also clear that Jenny was predominantly motivated to invest in Jessica Trading and the Japanese barbecue restaurant, as part [of] a carefully structured package that she was advised by Solicitor Feng would entitle her to a permanent residency visa in three years' time. The overwhelming consideration for any investment Jenny made, was that it must pass Solicitor Feng's test."

123. The advice by Solicitor Feng, which I quoted earlier, that is annexed to the affidavit of Tom, clearly proved that that was the major consideration. It was received by Ying and Ying was, in essence, the plaintiff's agent.

124. Again, in discussing the issue of causation, Mr Marshall SC referred to the fact that the plaintiff signed the deed without obtaining the actual figures as to the cash transactions that had to be included in the financial statements for the year ending 30 June 2022 although she had been provided with an estimate by Phil. She did not press then for any further information before signing the deed. Mr Marshall SC submitted that that demonstrated that either Jenny did not care what she was buying into or at least that she was buying into something about which she had incomplete information. That is consistent with Jenny’s wanting to follow the advice of solicitor Feng to make sure that she would obtain the desired visa.

125. Even if the plaintiff and her husband, Ying, had any difficulty reading the deed, it was read to Ying in Shanghainese by Phil as deposed to in the affidavit of Tom which is Exhibit 2, affirmed on 22 October 2024. During the evidence, there was criticism of the valuation of Jessica Trading in the sum of $600,000. However, each of the plaintiff and her husband and the first and second defendants relied upon the method of calculating the worth of the business that was put forward by Tom. No one demurred to that method of valuation. No one has bothered to think about suing Tom, but the question would arise as to his expertise. He only did it based on what had been done in the past.

126. None of the present parties obtained expert evidence of their own from anybody practicing in the field of valuing companies in Australia. That is probably because everyone wished to save money and did not wish to pay money to local experts, a phenomenon which caused Ying to complain to Tom about paying an amount of money to a solicitor to draft a second Deed of Agreement between Subscribers, causing Tom to copy the deed made for the OY business and giving it to the plaintiff. Sometimes, money can be spent on experts which ultimately saves much greater loss later.

127. Mr Marshall SC finally submitted that whatever misunderstandings the plaintiff may allege she had about the content of the deed that she signed, such ought to have been dispelled by the combination of the written advice in Chinese by solicitor Feng and the tripartite phone call on 28 September 2024 involving Ying on behalf of the plaintiff, Phil and Tom. What Ying was told by Phil and Tom, was information conveyed to Jenny, who allowed her husband Ying to be her agent.

Decision

128. I am not satisfied that there was any relevant misrepresentation that could enliven any part of the Australian Consumer Law as it has been interpreted by the High Court of Australia, in Self Care, which binds this Court.

129. No one wants any further reasons, do they, apart from orders?

CHONG: No, your Honour.

CHEN: No, your Honour.

130. HIS HONOUR: It follows therefore that the plaintiff's case must fail. Mr Marshall SC asked me to dismiss the claim. In my 49th year as a member of the legal profession, 31 of those years as a judge, it has been my practice not to dismiss claims, but to enter verdicts for the successful parties in order to establish an issue estoppel or cause of action estoppel. However, it has become the increasing practice of the Court of Appeal to dismiss unsuccessful claims of this nature. Since that is what Mr Marshall SC asked me to do, I shall do that rather than enter verdicts for each of the defendants. For those reasons, the plaintiff’s claim is dismissed.

Costs

Application for Indemnity Costs

131. On 11 April 2025, the defendants’ solicitors wrote the plaintiff's solicitors a letter without prejudice save as to costs. The defendants made an offer pursuant to the provisions of Calderbank v Calderbank [1975] 3 All ER 333. The offer was that final orders be made giving judgment for the plaintiff for $10,000 inclusive of interest up to judgment. Each party was to pay her or his or its own costs. In addition, the defence offered the plaintiff an option, if she accepted the offer, to purchase her shares in Jessica Trading Pty Ltd for $2,000 inclusive of costs and a mechanism was then set out to achieve that end.

132. On the second page of the letter, the solicitors for the defendants gave reasons as to why they believed that that offer was a proper one. Essentially, the defendants were saying that they will be successful in their defence of the plaintiff's claim. That has proved to be the position. There is no evidence of any positive response to that letter.

133. I order the plaintiff to pay the defendant's costs on the ordinary basis up to 11 April 2025, and thereafter, on the indemnity basis.

Costs of Notice of Motion filed 12 May 2025

134. The only other outstanding issue concerning costs, concerns an order made by Gibson DCJ, on 16 May 2025.

135. On 12 May 2025, the defendants filed a notice of motion seeking an order pursuant to s 5B of the Evidence (Audio and Audio Visual Links) Act 1988, giving permission to Wenda Tang, known as Tom Tang, to give evidence via audio visual link from Shanghai during the hearing set down for four days commencing on 26 May 2025.

136. On 13 May 2025, her Honour, in chambers, granted that leave. Later, on the same day, her Honour ordered that another notice of motion be listed for hearing on Friday, 16 May 2025. On 16 May 2025, her Honour dismissed the first notice of motion and reserved costs to be determined by the trial judge.

137. The second notice of motion was filed by the plaintiff who adduced evidence that it would be illegal to cross-examine a Chinese citizen in China under the law of that polity. That led to her Honour making the order on 16 May 2025. The result, of course, was that Mr Tang delayed his return to China and he gave evidence orally before me on the first day of the hearing, 26 May 2025.

138. Circumstances indicate that the defendants’ lawyers, like the plaintiff’s lawyers, have some familiarity working with Chinese litigants and familiarity with Chinese culture and Chinese language. In the circumstances, it ought perhaps have been obvious to them that what they were asking the Court to do, the Court could not order because it would be committing an illegality under Chinese law and put the proposed witness in a very vulnerable position.

139. There is no date on the notice of motion, nor has it been passed on the seal of the Court, but it is in the court file, is supported by an affidavit sworn by Mr Chen on 12 May 2025. The notice of motion was dated 12 May 2025. In those circumstances, I order the defendants to pay the plaintiff’s costs of the notice of motion filed on 12 May 2025.

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Amendments

20 October 2025 - Standardise capitalisation of 'Court Book'.

Decision last updated: 20 October 2025