Huang v Muse Beauty Salon Waterloo Pty Ltd (No 4); Muse Beauty Salon Waterloo Pty Ltd v Huang (No 4)

[2022] NSWDC 106

District Court

New South Wales

Medium Neutral Citation:

Huang v Muse Beauty Salon Waterloo Pty Ltd (No 4); Muse Beauty Salon Waterloo Pty Ltd v Huang (No 4) [2022] NSWDC 106

Hearing dates:

7-11 June 2021; 15-16 June 2021; 24-25 June 2021; 28 June 2021-2 July 2021; 27-28 July 2021; 5-8 October 2021; 11-13 October 2021; 18-22 October 2021; 17 December 2021 (written submissions); 13 January 2022 (written submissions); 10 February 2022 (oral submissions)

Date of orders:

7 April 2022

Decision date:

07 April 2022

Jurisdiction:

Civil

Before:

Dicker SC DCJ

Decision:

(1)   In matter 2018/00117938, judgment for the plaintiff against the defendants.

(2)   The parties are to bring in proposed short minutes of order within 7 days consistent with these reasons.

(3)   In matter 2018/00117938, the defendants are to pay the plaintiff’s costs of the proceedings as agreed or assessed.

(4)   In matter 2018/00364820, judgment for the defendants against the plaintiffs.

(5)   The parties are to bring in proposed short minutes of order within 7 days consistent with these reasons.

(6)   In matter 2018/00364820, the plaintiffs are to pay the defendants’ costs of the proceedings as agreed or assessed.

(7)   Liberty in both matters for the parties to apply for a costs order different to that in (3) and (6) above.

Catchwords:

CONTRACT – whether a binding agreement was entered into between the parties in relation to an investment for the acquisition of shares in a company – whether moneys paid by a party constituted refundable deposits or part payments pursuant to a binding contract – whether party entitled to repayment of moneys said to be deposits – whether, if binding contract found, there was an anticipatory breach entitling damages – Masters v Cameron

TORTS – injurious falsehood – whether elements satisfied – whether loss as alleged proved - causation

CONSUMER PROTECTION – whether misleading or deceptive conduct in relation to business investment

Legislation Cited:

Australian Consumer Law

Australian Securities and Investment Commission Act 2001 (Cth)

Competition and Consumer Act 2010 (Cth)

Fair Trading Act 1987 (NSW)

Cases Cited:

A v B [2021] NSWDC 491

ANZ Banking Group Ltd v Westpac Banking Corporation [1988] HCA 17; (1988) 164 CLR 662

ANZ Banking Group v Karam (2005) 64 NSWLR 149; [2005] NSWCA 344

Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14; (2014) 253 CLR 560

Barton v Armstrong [1973] 2 NSWLR 598

Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2014] NSWCA 369

Braam v BBC Hardware Ltd [2020] VSCA 164

Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60

Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25

Chalik v Wales [2005] NSWSC 877

Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447

David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353

Dickinson v Chapman [2022] NSWCA 2

Ecosse Property Holdings Pty Ltd v Gee Dee Nominees Pty Ltd [2017] HCA 12

Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7

Fox v Percy (2003) 214 CLR 118; [2003] HCA 22

GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631

Kakavas v Crown Melbourne Ltd [2013] HCA 25; (2013) 250 CLR 392

Mentink v Olsen [2020] NSWCA 182

Mobis Parts Australia Pty Ltd v XL Insurance Company SE [2018] NSWCA 342

Moffatt Property Development Group Pty Ltd v Hebron Park Pty Ltd [2019] QCA 60

Newell v De Costi [2018] NSWCA 49

Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69

Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221

Robinson v Robinson [2020] NSWCA 4

Saravinovska v Saravinoski (No 6) [2016] NSWSC 964

Stubbings v Jams 2 Pty Ltd [2022] HCA 6

Yangdo Pty Ltd v Equiti Group Pty Ltd [2017] NSWDC 277

Category:

Principal judgment

Parties:

2018/00117938
Yi-Ching Huang (Plaintiff)
Muse Beauty Salon Waterloo Pty Ltd (First Defendant)
Kailing Xie (Second Defendant)
Yuling Bai (Third Defendant)

2018/00364820
Muse Beauty Salon Waterloo Pty Ltd (First Plaintiff)
Kailing Xie (Second Plaintiff)
Yuling Bai (Third Plaintiff)
The Muse Beauty Salon Pty Ltd (Fourth Plaintiff)
Yi-Ching Huang (First Defendant)
Yu Mun Nam (Second Defendant)

Representation:

Counsel:
2018/00117938
F Santisi (Plaintiff)
G Campbell (Defendants)

2018/00364820)
G Campbell (Plaintiffs)
F Santisi (Defendants)

Solicitors:
2018/00117938
Goh Lawyers (Plaintiff)
W B Legal (Defendants)

2018/00364820
W B Legal (Plaintiffs)
Goh Lawyers (Defendants)

File Number(s):

2018/00117938
2018/00364820

Publication restriction:

No

Judgment

1. These reasons for decision relate to two proceedings before the court for final hearing and determination. The proceedings together, in general summary, relate to the alleged acquisition of a shareholding in Muse Beauty Salon Waterloo Pty Ltd (“Muse Waterloo”). In one proceeding, Ms Yi-Ching Huang (“Ms Huang”) sues Muse Waterloo and two individuals, Ms Yuling Bai (“Ms Bai”) and Ms Kailing Xie (“Ms Xie”), for money paid and damages relying on various causes of action including for money had and received in restitution, for misleading or deceptive conduct and for unconscionability/estoppel. Any liability is denied. In the second set of proceedings, The Muse Beauty Salon Pty Ltd (“Muse City”), Muse Waterloo, Ms Bai and Ms Xie sue Ms Huang and her husband Mr Yew Mun Nam (“Mr Nam”) for damages for alleged breach of contract by not paying an alleged third instalment in the sum of $70,000 under a contract which included the purchase of 25 shares in Muse Waterloo, as well as for damages for the tort of injurious falsehood. Other damages for breach of contract are also sought. Muse City and Muse Waterloo operated at various times beauty salons in Sydney.

2. The proceedings involved the parties reading and relying on voluminous affidavit evidence with extensive annexures and exhibits. In addition, there was very extensive oral evidence and cross-examination of the witnesses. Very few factual matters were agreed between the parties. Almost every meeting and telephone conversation was disputed in whole or in part. Affidavits responded in detail to factual assertions by the other parties. The court was therefore placed in the position of having to decide between substantially different and inconsistent versions of the facts.

3. Evidence was also given by one other witness who was involved in relation to the affairs of Muse Waterloo and Muse City, Ms Lo. Her evidence, where relevant, in substance supports the evidence of Ms Huang and Mr Nam and is contrary on certain issues to the evidence of Ms Xie and Ms Bai.

4. The proceedings were very lengthy and hard fought. The length of the final hearing was highly regrettable having regard to the amount of money in issue between the parties. This factor was raised with the parties on a number of occasions by the court.

The pleadings

Proceedings 2018/117938

5. Ms Huang commenced proceedings in the Local Court of New South Wales by filing a Statement of Claim on 13 April 2018. The proceedings are brought against Muse Waterloo, Ms Xie and Ms Bai. The Statement of Claim seeks the recovery of $68,000 together with interest. Causes of action are pleaded in restitution for money had and received, for misleading or deceptive conduct and for unconscionable conduct under the Australian Consumer Law. Damages are also sought under s 236 of the Australian Consumer Law.

6. In summary, it is pleaded that Ms Huang paid over $68,000 at the request of Ms Bai and Ms Xie by themselves and on behalf of Muse Waterloo as refundable deposits pending due diligence being conducted by Ms Huang. It is said that various representations were made in relation to the existing business conducted by Muse City and as to intellectual software used by that company which was proposed to be shared for a new business to be conducted by Muse Waterloo. It is also pleaded that representations were made by Ms Bai and Ms Xie as to the profitability of the Muse City store and its customer base.

7. It is pleaded that following Ms Huang not being satisfied in her observations of the Muse City store and by the failure to provide access to the promised intellectual property, she decided not to proceed with negotiations for the acquisition of a 20% shareholding in Muse Waterloo for the sum of $138,000. She sought the recovery in the Statement of Claim of the sum paid of $68,000 which was said to be a refundable deposit and, in the alternative, sought damages under the Australian Consumer Law. Important conferences were alleged to have occurred between the parties on 9 December 2017, 24 December 2017, 15 January 2018, 20 January 2018 and 28 January 2018. It is pleaded that on 29 January 2018, given the inability of the parties to reach an agreement, a refund of the $68,000 was sought by Ms Huang of the defendants by way of a “solicitor’s letter”. On the evidence, this seems to be incorrect as the letter seeking the refund was an email letter sent by Mr Nam, Ms Huang’s husband. Alternative causes of action for misleading or deceptive conduct and unconscionability are pleaded. There is some suggestion of a claim in estoppel but it is not clearly pleaded.

8. In a Defence filed on 14 September 2018, the defendants deny liability and say that a final agreement was reached to pay $138,000 in consideration for 20% of the shares in Muse Waterloo with Ms Huang agreeing to be employed by Muse Waterloo as its store manager on a weekly salary. It is said that the $68,000 was paid as part payments of the purchase price of $138,000. It is pleaded that the agreement was reached on 24 December 2018 and, with a slight variation, was confirmed on 15 January 2018. It is pleaded that the plaintiff sought not to proceed with the agreement because she was pregnant and her husband did not wish her to work whilst pregnant. No evidence was placed before the court that Ms Huang was actually pregnant at this time. The representations alleged by Ms Huang were denied.

9. By an Amended Defence filed with leave on 11 June 2021, the defendants deny any unjust enrichment and plead that they have changed their position by paying for the fit-out to the Muse Waterloo store partly with the $68,000 paid to them by the plaintiffs: see paragraph 25.

Proceedings 2018/364820

10. By a Further Amended Statement of Claim filed on 17 July 2020, Muse Waterloo, Muse City, Ms Xie and Ms Bai sue Ms Huang and Mr Nam for damages for breach of the contract which they say was entered into by the parties on 24 December 2017 and confirmed following a variation on 15 January 2018. It is pleaded that the payment of $68,000 was in part performance of the contract. The plaintiffs sue Ms Huang and Mr Nam for breach of contract and seek to recover the outstanding $70,000 together with interest. It is pleaded that a 20% shareholding in Muse Waterloo was acknowledged and registered.

11. In addition, the plaintiffs sue in the tort of injurious falsehood for damages said to have resulted from alleged malicious statements made by Ms Huang about the business of the plaintiffs. It is pleaded that substantial losses were incurred as a result of the statements: see paragraph 28.

12. In an Amended Defence filed on 14 September 2020, Ms Huang and Mr Nam deny that there was any breach of contract, refer to their pleading in the other proceedings that there was no binding contract and deny the claim for damages for the tort of injurious falsehood.

13. In opening, counsel for the Xie interests, Mr G Campbell, stated that it would be submitted that the tort of injurious falsehood was established even if the factual version propounded by Ms Huang of the negotiations concerning the contractual claim was accepted. Counsel for Ms Huang and Mr Nam, Mr F Santisi, submitted that there was no tort of injurious falsehood but even if malicious statements were established, there was no satisfactory evidence that any losses had been sustained as a result of any statements which could be attributed to Ms Huang.

The parties’ names

14. The various parties in the proceedings and a number of persons referred to in their affidavit evidence are persons of Chinese heritage. One party lives in China. In the following table is set out the names of the parties and various persons who will be referred to. Where relevant, the Anglicised names by which the persons are or were also known are referred to.

Chinese name	Anglicised name	Position
Yi-Ching Huang	Jessie	Wife of Mr Nam. Person who had most dealings with Ms Xie and Ms Bai
Yew Mun Nam	Husband of Ms Huang. Attended a number of significant meetings with Ms Huang and Ms Xie or Ms Huang, Ms Xie and Ms Bai.
Wanqing Liu	Cindy	Investor in Muse Waterloo and Muse City. Became friendly with Ms Bai.
Yuk Yee Lo	Kitty	Beautician who worked in the stores at Muse City and Muse Waterloo. Was alleged to have given training to Ms Huang at the Muse City store in January 2018.
Kailing Xie	Coco	Party to the proceedings and person who had most dealings with Ms Huang.
Yuling Bai	Party to the proceedings and business partner of Ms Xie. She attended a number of important meetings.
Elaine Wang	Elaine	Friend of both Ms Huang and Ms Xie who introduced them.

Background facts

15. As stated above, most of the facts in this case are strongly disputed. On many issues, there are diametrically opposed versions, particularly of relevant meetings and conversations. The proper meaning and relevance of many documents, including WeChat exchanges, are also disputed. However, on the affidavit evidence and the documentary evidence, some background facts may be stated. Unless indicated to the contrary, what follow are the court’s general findings of fact in the matter.

16. In early 2015, Ms Xie and Ms Bai who were friends and who came to Australia from China to study at universities in Sydney, opened a beauty studio in Zetland in Sydney. Both had undertaken short beautician courses in China but had no equivalent formal qualifications in Australia.

17. Ms Huang and her husband had an online business importing South Korean made beauty products for customers in Australia. Mr Nam, Ms Huang’s husband, was also an accountant.

18. The evidence establishes that Ms Xie ordered beauty products from Ms Huang who was one of her suppliers for both personal and probably commercial use. It is claimed by Ms Xie that Ms Huang delivered the products to the Zetland studio and later to the Muse City store. Ms Huang states that the products were delivered by her husband, Mr Nam, but not to the Muse City store but only to the Zetland store. In a later affidavit, Ms Xie states that the products were delivered by either Ms Huang or Mr Nam: Exhibit A page 391 paragraph 30(c). Mr Nam said in his oral evidence that he did deliver products to Ms Xie in Pitt Street in Sydney on a few occasions. In the light of the altered evidence of Ms Xie, the oral evidence of Mr Nam and having assessed the witnesses on this issue and considered the evidence, I accept the evidence of Ms Huang and Mr Nam that the products were delivered by Mr Nam. Having regard to the evidence that the Muse City store was opened in about April 2017, and Mr Nam’s oral evidence, I think it likely that Mr Nam delivered some beauty products to that store after its opening, during 2017, on several occasions.

19. On 22 November 2016, The Muse Beauty Salon Pty Ltd was registered as a company. There were at the relevant time, 100 recorded shares in the company with Ms Xie holding 51 shares and Ms Bai holding 49 shares. In April 2017, Muse City started operating a beauty salon in Pitt Street in Sydney. The store provided beautician services to clients. As stated above, Ms Huang provided Korean beauty products as one of the suppliers to Ms Xie at Muse City.

20. There was differing evidence about how Ms Xie became aware of Ms Huang and her business. It seems that they had a common friend, Ms Elaine Wang. Initially, Ms Wang had ordered beauty products from Ms Huang and then that role was taken over by Ms Xie. Ms Xie claims it was in 2015 and Ms Huang claims it was in 2016 but the difference is not significant in the proceedings.

21. There is also a difference in the evidence of Ms Huang and Ms Xie about when they had the initial conversation relating to the possibility of Ms Xie opening a new beauty salon. Ms Xie places the first conversation in August 2017 when she states that Ms Huang indicated that she wished to join Muse City to help in the shop and also raised the possibility of opening another shop in relation to which Ms Huang wished to invest and manage the shop: Exhibit A page 249, paragraph 11. Ms Huang places the first conversation on 25 November 2017. She states that she told Ms Xie that she was interested in opening a new salon herself after she attended a beauty therapy course in South Korea in early 2018: Exhibit A page 105, paragraph 10.

22. The date suggested for the initial conversation by Ms Huang is problematic. She claims the conversation occurred on 25 November 2017 but she relates that Ms Xie stated that she and Ms Bai owned Muse Beauty Salon Waterloo Pty Ltd: Exhibit A page 105, paragraph 10. However, that company was first registered as a company on 28 November 2017, three days later, with the application for registration as a proprietary company also being received on 28 November 2017: Exhibit A page 91. Accordingly, if Ms Huang’s account is to be accepted, it is likely that a conversation occurred (whether in person or by way of WeChat) a little later following the registration of Muse Waterloo. I will consider further below which version of the disputed account relating to contractual negotiations is to be preferred. Ms Xie denied the contents of Ms Huang’s version of the alleged 25 November 2017 conversation but did not dispute that a conversation occurred on that day: Exhibit A page 389, paragraph 17. In cross-examination, Ms Huang appeared to accept that the conversation set out in her first affidavit said to have occurred on 25 November 2017 did not occur in the terms set out but was much shorter. I consider that more likely and that detailed discussions between Ms Xie and Ms Huang did not occur until December 2017. Ms Xie also states that detailed conversations did not occur until December 2017. A WeChat exchange on 4 December 2017 between Ms Huang and Ms Xie establishes to my satisfaction that at that time Ms Huang wished to open her own shop when she returned from a trip to South Korea but Ms Xie was seeking to persuade her to join in opening “a new shop in Waterloo”. The WeChat exchange suggested earlier conversations between them had occurred: Exhibit A page 119. Thus, contrary to Ms Xie’s evidence (Exhibit A page 249, paragraphs 11-14), Ms Xie was seeking to persuade Ms Huang to join her in a new shop rather than Ms Huang seeking to be involved at that time.

23. Earlier, in mid-2017, Ms Cindy Liu had become a client of Muse City and attended its store for beauty treatments. She was known to Ms Bai. At about this time, Ms Xie had attended massage therapy treatments undertaken for her by a Ms Kitty Lo at another store in the city of Sydney. In due course, Ms Xie persuaded Ms Lo to commence working at the Muse City store. Ms Lo was a qualified beautician with an Australian qualification. Ms Lo also entered into contracts with Muse City, Ms Xie and Ms Bai on 29 November 2017 to be issued shares in Muse City: Exhibit 3. The precise circumstances in which these contracts were entered by Ms Lo will be considered further below.

24. In late 2017, probably between August 2017 and November 2017, Ms Qiqi Li was interested in the beauty business of Ms Bai and Ms Xie. She was interested in opening a new shop with Ms Xie and Ms Bai. I accept the evidence of Ms Xie and Ms Bai that Ms Li existed and was willing in December 2017 to pay $180,000 for 20% of the shares in the new company which became Muse Waterloo. However, it appears that she wished to be a silent investor only.

15. At about this time (late 2017), having regard to the limitations in the size of the shop at Muse City in the city of Sydney, Ms Xie and Ms Bai were looking for a suitable larger site for a new shop. I accept that Ms Bai located what she regarded as a suitable site in Waterloo. Eventually steps were taken in relation to planning for the fit-out of a shop at the site. A lease was entered into by Muse Waterloo for the Waterloo shop site on 8 December 2017: Exhibit 1. This date later became of some importance in the proceedings. The commencement date of the lease was 18 January 2018. Clearly a shop at Waterloo was proposed by Ms Xie and Ms Bai sometime prior to 8 December 2017: see Exhibit A page 119.

16. In late 2017, Ms Bai had discussions with Ms Cindy Liu in relation to the intention of Ms Bai and Ms Xie to open another beauty shop in Waterloo. At some stage, it is clear that Ms Liu showed an interest in investing in the new company. There is a difference in the evidence whether this was in December 2017 or January 2018 but the difference is not significant. In due course, Ms Liu signed agreements to purchase shares from Ms Xie and Ms Bai in both Muse City and Muse Waterloo.

17. On 9 December 2017, Ms Xie met with Ms Huang and her husband Mr Nam together with Ms Huang’s small child at Zilver Restaurant in Haymarket. Initially, Ms Huang said that Ms Bai was also present at this meeting and was introduced as Ms Xie’s mother. Later, Ms Huang states in an affidavit that Ms Bai was not at this meeting. Mr Nam in his oral evidence confirmed that Ms Bai was not present at the meeting. I find that Ms Bai was not at the meeting. I also think it highly unlikely that Ms Bai was introduced as Ms Xie’s mother at any stage having regard to her age. However, in her oral evidence Ms Xie conceded that her actual mother was also present at the meeting and was introduced to Ms Huang and Ms Nam as her mother. This was not mentioned in Ms Xie’s affidavit evidence.

18. What was discussed at the meeting is disputed. This will be considered further below. It seems to be clear that the Xie interests do not submit that any contract was entered into at this meeting.

19. On 24 December 2017, Ms Xie, Ms Bai, Ms Huang and Mr Nam met at a cafe in Chatswood to discuss the new shop to be opened by Muse Waterloo. The child of Ms Huang and Mr Nam was also present. What occurred at this meeting is strongly disputed and will be considered further below. The Huang interests claim in summary that a price for 20% of the shares of Muse Waterloo in the sum of $138,000 was agreed at this meeting subject to a due diligence and the Huang interests being happy with a contract relating to the acquisition of the shares. It is said that the sum of $138,000 was agreed following a counter-offer being made by Ms Huang to the initial share price of $180,000. The Xie interests claim no price was agreed at the meeting itself.

20. During or immediately following this meeting, Ms Huang transferred the sum of $8,000 into a Westpac bank account nominated by Ms Xie in the name of Ms Xie’s mother. The description of the transfer on the receipt was “Shop 2 Deposit”: Exhibit A page 64. As stated above, there is an issue between the parties as to whether the transfer of the money was a transfer of an agreed refundable deposit or was a part payment for the purchase of 20% of the shares in Muse Waterloo by Ms Huang (whether placed in her name or in the name of Mr Nam). Ms Huang states in her evidence that it was agreed that the $8,000 would be a refundable deposit depending on whether Ms Huang and Mr Nam went ahead with the transaction: Exhibit A page 56, paragraph 19. Mr Nam confirms this. Ms Bai and Ms Xie claim the transfer was eventually treated as a part payment of the purchase price of $138,000 pursuant to a binding agreement and would by agreement be used for legal fees: Exhibit A pages 250-251 paragraphs 15-19. In paragraph 5 of the Defence filed on 14 September 2018 in the proceedings commenced in the Local Court, which was later transferred to the District Court, the Xie defendants plead: “The plaintiff transferred $8,000 via electronic funds transfer to the account nominated by the second defendant and further say that $8,000 was to be paid as the first initial part payment for 20% shares of Muse as agreed”. This was not changed in the Amended Defence.

21. Later, in the affidavit evidence, this sum is referred to by Ms Xie not as a part payment of the purchase price by Ms Huang but as a “deposit”: Exhibit A page 250, paragraph 15; page 392, paragraph 31; page 396, paragraph 59. Whether the $8,000 transferred was a refundable deposit or a part payment pursuant to a binding agreement shall be considered further below. It appears from the Xie primary written submissions that there may in fact be no issue that the $8,000 was initially a deposit: see paragraph 11. It is claimed that it was later treated by the parties as a part payment pursuant to a concluded agreement reached over the telephone: Xie primary submissions paragraphs 9 and 12. By 9 December 2017 and 24 December 2017 (the dates of the important two meetings), the lease for the Muse Waterloo shop had already been entered into so there was no future expense relating to the lease preparation at that time: Exhibit 1. However, a draft contract needed to be prepared for the parties for consideration. There is no evidence as to the legal fees estimated to or charged to the Xie interests to prepare a draft agreement between the parties: cf the last sentence in paragraph 12 of the Xie interests’ primary written submissions; Bai second affidavit Exhibit A page 670, paragraph 20 ($6,000 – this is a different figure to Ms Xie and Ms Huang).

22. As stated, what occurred at the 24 December 2017 meeting is disputed. Ms Xie claims that she had a telephone conversation with Ms Huang after the meeting in which Ms Huang made an offer of $138,000 for 20% of the shares in Muse Waterloo as well as working as the manager in the new shop to be established by Muse Waterloo and providing the beauty supplies to the new shop to be established at wholesale prices. In substance, Ms Xie and Ms Bai claim that they discussed the alternative offers of Ms Qiqi Li and Ms Huang and preferred the Huang offer as Ms Huang was willing to work in the shop as the manager and provide the supplies at wholesale prices. Ms Huang claims that there were only initial discussions as set out in her affidavits involving a payment of $138,000 for 20% of the shares in Muse Waterloo with there being no final agreement reached and Ms Huang stating that she wanted to come in to the Muse City shop to inspect the books and records of the company, its trade results and the WeChat accounts and software used at the Muse City store which was to be licenced to Muse Waterloo: see Exhibit A page 108 paragraph 14. In substance, Mr Nam supports his wife’s account.

23. Between early January 2018 and 14 January 2018 Ms Huang was in South Korea to study beauty treatment techniques. I am satisfied from WeChat text records in evidence that she returned to Australia on the morning of 15 January 2018. Prior to this, I am satisfied and find that instructions were given by Ms Xie to her solicitor, Mr James Li of Sun Lawyers, to prepare an appropriate draft agreement in relation to the investment by Ms Huang (but initially in the name of Mr Nam): Exhibit A page 498 (the email refers to “some rough ideas” not agreed terms and does not refer to the price or the investor).

24. It is claimed by Ms Xie that a draft of the agreement was provided by Ms Xie to Ms Huang at a meeting between the parties in late December 2017, on 28 December 2017: 8 June 2021 affidavit paragraph 5; Exhibit A page 396, paragraphs 61-62. Having considered the submissions and the evidence, I am not satisfied that this meeting occurred as claimed by the Xie interests. There is no independent contemporary persuasive evidence to support its occurrence. The email records at Exhibit A pages 497-8 do not refer to a meeting on this date. See also Exhibit A page 144 which does not refer to a meeting. The submissions made by the Xie interests in chief at paragraphs 20-21 and in response at paragraphs 16-19 supporting such a meeting occurring are rejected.

25. I do not accept that the WeChat messages relied upon support the submission that a meeting occurred between the parties on 28 December 2017. First, there is no reference in emails or WeChat messages to such a meeting. Secondly, there is no reference in later emails or WeChat messages to the errors in the draft Agreement. It is likely these would have been noted or raised or at least mentioned if a draft agreement was provided in the form suggested on 28 December 2017: the reference to the wrong address for Mr Nam (Rosebery) and the reference to Ms Lo (clause 5.1). Thirdly, there is no correspondence expressly seeking or discussing the payment by the Huang interests of the remaining share purchase price. Fourthly, there is no correspondence between the parties relating to the issue of the shares. Fifthly, there is no evidence that the Xie interests had provided Ms Huang with a copy of the lease (Exhibit 1) or other details relating to the fitout of the Muse Waterloo store as one would expect if a binding contract had been entered into. It must be recalled that Mr Nam and Ms Huang were a young couple allegedly making a significant investment. I accept the Huang interests’ primary written submissions on this issue. The WeChat messages are at the least unclear and equivocal. I think it likely that there would be express reference to a meeting in the WeChat messages or emails if such a meeting had occurred as asserted on 28 December 2017. I prefer the evidence of Ms Huang and Mr Nam on this issue. This is discussed further below. Accordingly, the next meeting between the parties occurred on 15 January 2018 when Ms Huang returned from South Korea. Prior to 15 January 2018, I find that Ms Xie and Ms Bai had not provided a draft contract for the purchase of the shares to Ms Huang and Mr Nam.

26. Ms Huang gives evidence in her affidavits that she thought the lack of contact with Ms Xie between 24 December 2017 and her return from South Korea on 15 January 2018 was potentially due to the fact that Ms Xie and Ms Bai may have been considering other offers for investment in Muse Waterloo. She confirmed this in her oral evidence. She was therefore keen to meet again with Ms Xie and they arranged the meeting for the day of her return from South Korea. The WeChat messages in evidence satisfy me that it was Ms Xie who took the initial steps to arrange the meeting. Ms Xie gives evidence that she had discussions with Ms Bai about an alternative offer of an investment from Ms Qiqi Li for $180,000 but this did not involve Ms Li working in the shop. She states that a decision was made to prefer Ms Huang because of her willingness to work in the new Muse Waterloo store as store manager and to contribute to the supply of beauty products at wholesale prices. In any event, I am satisfied that the meeting occurred at Ms Huang’s home in Colebee, an outer suburb of Sydney, in the late morning and early afternoon of 15 January 2018. This was not disputed by the parties in their evidence and submissions.

27. As stated, Ms Xie claims that a draft of the share subscription and accession agreement was provided to Ms Huang well before this alleged meeting, on 28 December 2017. I have found that such a meeting did not occur. I do not regard the correspondence between Ms Xie and her solicitors referred to at Exhibit A pages 497-8 as indicating or establishing that this meeting occurred. See also the references in paragraphs 20-21 of the Xie primary written submissions. The WeChat message at Exhibit A page 144 (third block of messages, agreed to have been sent on 28 December 2017) does refer to making “the changes” but it is unclear what this is referring to. Further, if there had been a meeting on 28 December 2017 between the parties, it would seem to have been unnecessary to provide information by way of WeChat on that day – it could have been provided at the meeting itself. I find that a draft of the agreement was not provided by Ms Xie or Ms Bai to Ms Huang and Mr Nam before the meeting on 15 January 2018. I prefer the evidence of Ms Huang and Mr Nam on this issue, particularly in the light of the email and WeChat evidence which does not refer to such a meeting. I found them overall to be far more impressive witnesses on most issues, although I do not accept all of their evidence. I will discuss this further below.

28. I do accept and find that at the meeting on 15 January 2018, Ms Huang paid $60,000 in cash to Ms Xie and Ms Bai. The Xie interests claim that this was a further part payment of the $138,000 purchase price for the 20% shares in Muse Waterloo. The Huang interests claim that this payment was made as a further refundable payment to show the commitment of Ms Huang to the transaction subject to her due diligence and agreement to a written contract. Ms Xie claims that Ms Huang actually offered them the full $130,000 in cash outstanding at that time but Ms Xie decided not to accept it because she did not want to carry that amount of money in cash but was willing to accept $60,000 in cash. Ms Xie claims that Ms Huang later said that she would supply the balance of $70,000 from the sale of beauty products: Exhibit A page 400, paragraph 71. Ms Huang denies that such an offer was made and said she did not have $130,000 in cash at the time at her home.

29. There is thus a distinction between the parties’ cases as to whether the $60,000 cash paid by Ms Huang on 15 January 2018 was agreed as a further payment of a refundable deposit or a part payment towards the $138,000 amount for the shares pursuant to a concluded and binding agreement. This will be considered further below.

30. The evidence shows that at 2:25pm on 15 January 2018, Ms Xie forwarded by email a copy of the draft share subscription and accession agreement to Mr Nam. Ms Xie says this was the wrong version of the agreement (it was in Mr Nam’s name as opposed to Ms Huang’s name) as a later draft had been received by her from her solicitor: Affidavit dated 8 June 2021 paragraph 10. Having regard to the annexures to Ms Xie’ affidavit, this appears to be correct. Despite the contents of Ms Xie’s 8 June 2021 affidavit, having regard to the time this draft was sent and the time of the meeting, I reject the suggestion that Ms Huang and Mr Nam had any real practical opportunity to review the agreement in detail during the meeting or before they left the house on that day to travel to Waterloo to inspect the premises. I prefer the evidence of Ms Huang and Mr Nam on this issue. Ms Huang and Mr Nam had to make preparations for their small child before they travelled by car to Waterloo. I find there was not sufficient time for them to have reviewed the agreement and accepted it as claimed by Ms Xie. Ms Xie also had a number of opportunities to provide her version of the 15 January 2018 meeting in her earlier affidavits. Her second affidavit substantially altered the version in her original affidavit: Exhibit A page 252 cf page 399, paragraph 70 and following. The third 8 June 2021 affidavit appears to me to set out a version in paragraph 11 of the meeting which has been reconstructed by Ms Xie to fit her case. If correct, she would have inserted it in earlier affidavits prepared well before her latest affidavit.

31. It appears accepted by all parties that a receipt was prepared and signed by Ms Xie and Ms Bai on 15 January 2018: see Exhibit F. There is an issue whether it was handed to Ms Huang on that day or merely left on a table in Ms Huang’s residence. The receipt refers to the $60,000 in cash as follows: “Kailing Xie and Yuling Bai hereby received cash of $60,000 on 15 January 2018 as the balance payment for the Waterloo Agreement Share Subscription.” There is no reference to the sum being a refundable deposit. Ms Huang’s final evidence was that she did not read the receipt until later, and if she had read it on 15 January 2018, she would have asked for it to be reissued so as to refer to the payments as refundable deposits. The agreed contents of the receipt appear to be inconsistent with both parties’ cases while recognising that $68,000 had been paid by Ms Huang. The translation refers to the $60,000 in cash being “the balance payment for the Waterloo Agreement Share Subscription” whereas on both cases it was not the balance payment and an additional $70,000 was to be paid, depending on whether the agreement was binding or not. See for example the Xie interests’ written submissions in chief at paragraph 27.

32. In my view, it is likely the receipt was not reviewed in detail on 15 January 2018 by Ms Huang or Mr Nam but was likely reviewed sometime in the next week or so and before 28 January 2018. They did not appear to have had the time to review it carefully on 15 January 2018. However, I reject Ms Huang’s evidence that she did not review it until April 2018: see paragraphs 32-39 of the Xie responsive submissions. I agree with the Xie responsive submissions that Mr Nam must have reviewed it by 29 January 2019 if not before: paragraph 36 and Exhibit A page 82. If he had reviewed it, it is likely that Ms Huang would also have reviewed it. It seems that on any view the receipt was inaccurate.

33. I accept the evidence that all parties then travelled by separate motor vehicles for an inspection of the Muse Waterloo premises. However, the premises were not available to be inspected at this time.

34. Ms Xie gives evidence in her affidavits that she instructed Muse Waterloo’s accountant to register the new shares said to have been issued to Ms Huang. She states that this instruction was given well before the end of January 2018. From the date on the share document lodged with ASIC, it is unclear when the instruction was given. Why this instruction would be given by Ms Xie before the balance of $70,000 was paid by Ms Huang for the shares on Ms Xie’s case, is unclear. There are aspects relating to the share lodgement form which raise issues as to its accuracy and the reliability of Ms Xie’s evidence. The accountant did not give evidence in the proceedings. This matter will be considered further below.

35. Ms Xie and Ms Bai give evidence about Ms Huang being involved in reviewing pricelists and suggesting products for the Muse Waterloo store as indicating that there was a concluded agreement for Ms Huang/Mr Nam to invest in Muse Waterloo and there being part performance by her of the alleged agreement. See also paragraphs 43-44 of the Xie interests’ submissions in chief. I do not accept that Ms Huang’s involvement in looking at the pricelists and making suggestions establishes or supports the existence of a concluded agreement or constitutes part performance. They were sent to her. Her conduct was equally consistent with making observations and recommendations when asked for her opinions prior to deciding not to proceed with the transaction. I do not regard the evidence, including the WeChat messages on these aspects, as indicating or establishing a binding agreement. Similarly, some involvement by Ms Huang in assisting with the opening planning for the Muse Waterloo shop and in possibly using language such as “our shop”, is, in my opinion, equally consistent with a desire to proceed provided a draft contract and Ms Huang’s investigations proved to be satisfactory to her (see Xie submissions in chief at paragraphs 45-46).

36. There are WeChat exchanges between Ms Huang, Ms Xie and Ms Bai in relation to a business card being prepared for Ms Huang at Muse Waterloo. This is relied on by the Xie interests as being further evidence of a concluded agreement (submissions in chief paragraph 47). In my view, that evidence does not establish that and is equally consistent with continued discussions between the parties and the Xie interests wanting to obtain a concluded agreement. The evidence partly relied on by the Xie interests was WeChat messages made before Ms Huang’s attendances had concluded at the Muse City shop.

15. Ms Xie states in her first affidavit that on 18 January 2018 Muse Waterloo signed a lease for the new shop in Waterloo: Exhibit A page 389, paragraph 15. That is inconsistent with Exhibit 1 which shows the lease was signed on 8 December 2017. The latter is clearly to be preferred as it is the primary document.

16. Between 17 and 25 January 2018, Ms Huang attended the Muse City shop on a number of occasions. Ms Xie claims that this was in order for at least Ms Bai to provide training to Ms Huang in relation to beauty treatment skills and techniques. Ms Xie and Ms Bai claim that Ms Bai provided Ms Huang with access to her confidential “tutorial clips” in relation to techniques and beauty treatments. Ms Huang states that she attended to review the shop’s operation and customer base as an observer and to undertake due diligence. Some significant support for that version is provided by Ms Lo who was working in the shop at the time. Ms Xie gave inconsistent evidence on this issue as to what training was given by her to Ms Huang. Overall, I prefer the evidence of Ms Huang and Ms Lo on this point that the primary focus of Ms Huang was observation although it appears from WeChat exchanges, as submitted by the Xie interests, that some instruction (or even training) was given to Ms Huang by Ms Bai. Ms Lo was working in the shop at the time and would have been aware of what she herself did. Ms Xie was not often in the Muse City shop during this period.

17. Reliance was placed by the Xie interests in their submissions on a number of WeChat messages as establishing training being given by Ms Xie and particularly Ms Bai to Ms Huang to prepare her as manager for the Muse Waterloo shop: see the Xie interests submissions in chief at paragraphs 32-40. There is some force in the Xie interests’ submissions that the WeChat messages establish at the least that some instruction (or perhaps even training) was given to Ms Huang, particularly by Ms Bai (see primary submissions paragraphs 33-40). Ms Huang herself admitted in her oral evidence that she was shown certain equipment. However, there is a difference between being shown equipment and techniques and being given limited instruction on the one hand and being given training pursuant to a concluded agreement to be the manager of the new shop on the other. Whilst I find that the Xie interests wanted Ms Huang to be the manager of the Muse Waterloo shop, this was a matter to be determined as part of a final agreement in the context of Ms Huang having a young child to care for. Having some instruction is not the same as having detailed training to perform an agreed role under a concluded agreement. In the end, the evidence of Ms Lo and Ms Huang establishes to my satisfaction that no detailed training as opposed to limited instruction or training was given to Ms Huang for an agreed contractual role during her time attending the Muse City shop.

18. Ms Xie also claims that at night in this period, Ms Huang went to Ms Xie’s home to learn beauty treatment skills and techniques. Ms Huang denies this and points to the fact that she had a small child to care for, she did not drive at the time and her home was an extensive distance from Ms Xie’s home. Ms Xie did not mention this training in her oral evidence when asked about any training she provided to Ms Huang: T49.30-.43. The matters referred to by Ms Huang in her evidence as indicating her evening attendance to be very unlikely in my view are persuasive and I reject Ms Xie’s evidence that she provided any substantial training in beauty treatment skills and techniques to Ms Huang in this period, including at her home.

19. The Xie interests rely on there being a lack of any evidence of an inspection by Ms Huang or a request to see relevant documents, including financial records: written submissions in chief at paragraphs 31 and 42; oral submissions. In my view, whilst this is a matter properly to take into account, the lack of a formal request to have an inspection or contemporaneous evidence relating to an inspection is not decisive. The interaction between the parties at all times was fairly informal. There were no detailed emails between the parties setting out what was discussed or agreed at the important meetings which did occur. Most interaction appeared to be by WeChat, telephone or in person. Further, there is no evidence Ms Huang had retained a solicitor by this time for the purposes of the proposed purchase: see second Huang affidavit Exhibit A page 108, paragraph 14. In addition, the need to attend the Muse City store was allegedly referred to by Ms Huang on 24 December 2017 at the meeting on that day.

20. It is clear that Ms Huang attended the Muse City store on a number of occasions in January 2018. Her presence at the shop gave her an opportunity to observe the business and its customer attendance in the course of a day. This would have provided significant guidance to her on the customer turnover in light of what was alleged to have been said about the business. Thirdly, the fact that attendance occurred at the Muse City shop as opposed to the Muse Waterloo shop is not conclusive (Xie submissions in chief paragraph 31(a)). The Muse Waterloo shop was not yet open to customers. It could not be seen in operation. The aim of the two stores was to share customers according to Ms Huang. She claims she was told there was a large daily turnover of customers at the City store. Whilst the two businesses were separate businesses, the Muse City shop’s turnover and daily customer attendance was some guidance in relation to the likely future prospects of the Muse Waterloo store – Ms Xie and Ms Bai held majority interests in both stores and there was proposed to be a sharing of the WeChat client base of the Muse City store. The lack of reference to any inspections undertaken by Ms Huang in the 29 January 2018 email from Mr Nam to Ms Xie also does not assist the Xie interests. The email is a short email and does not purport to discuss the basis of the decision not to proceed in any real detail.

21. I accept and find that during the period 17 January to 25 January 2018 Ms Huang sent WeChat messages to Ms Xie and Ms Bai expressing ideas on the Muse Waterloo proposed price menu and other aspects of the shop. I find that these are not strong pointers to their being a binding agreement between the parties. The matters are equally consistent with Ms Huang still undertaking the investigations in relation to the proposed investment at that time whilst involving herself to some degree with the shop if she decided to proceed with an investment.

22. On 28 January 2018, a meeting occurred at which Ms Huang told Ms Xie that she did not want to proceed with the acquisition of the shares in Muse Waterloo. Ms Xie states that Ms Huang said that she wanted to quit the investment in Muse Waterloo because she was pregnant and her husband did not wish her to work during her pregnancy. Ms Xie says that a refund was requested by Ms Huang. Ms Xie says that a threat was issued by Ms Huang to her if the refund did not occur. Ms Huang states in her affidavit evidence that she wished not to proceed and wished to obtain a refund because the promises made to her in relation to customer turnover and the operation and intellectual property which would be made available to Muse Waterloo were not substantiated during her observations and due diligence. I will consider this issue further below.

23. Ms Xie claims that she had a further meeting at the home of Ms Huang on that day to try and convince Mr Nam to reconsider Ms Huang continuing on reduced duties at the Muse Waterloo shop. This is rejected by both Ms Huang and Mr Nam.

24. The company searches in evidence show that on 29 January 2018 25 shares in Muse Waterloo were notified as having been registered in Ms Huang’s name: Exhibit A pages 94-95. This is despite the fact that the share subscription and accession agreement contemplated a formal signed application by Mr Nam (or Ms Huang in the other draft) for the shares: Clauses 2.1 and 2.2 and Schedule 2. There is no suggestion that any such signed application for the shares was made by Mr Nam or Ms Huang. Secondly, no “duly executed share certificate showing [Mr] Nam as the holder” of the shares was provided by Ms Xie or Ms Bai: Clause 2.2(b). Thirdly, the full amount of the proposed payment had not been received before the alleged issue: Clause 2.1(b). Fourthly, in her oral evidence Ms Xie conceded that there was no directors’ meeting to approve the share issue and she did not have the company share register. Fifthly, the Change to company details application indicates that it was signed by Ms Xie on 29 January 2018, the day after Ms Huang said she asked Ms Xie for a refund: Exhibit A page 94. The document suggests the date of entry of the member’s name in the share register was 28 December 2017: Exhibit A page 95. However, Ms Xie agreed in evidence that she did not have the company share register. Ms Xie also accepted that the document was incorrect in recording that nothing was paid on the shares and $138,000 remained to be paid: Exhibit A page 95. On Ms Xie’s case, $68,000 had been paid pursuant to a binding agreement.

25. Ms Huang submits that the date of entry in the share register indicated (Exhibit A page 95) must have been backdated and was effectively registered on 29 January 2018 by Ms Xie in order to give some force to the Xie/Bai submission that there was an existing binding agreement as at 28-29 January 2018. Ms Huang and Mr Nam say that no request was ever made by either of them for the issue of the shares as no concluded agreement had ever been entered into. It was submitted that this matter severely impacted Ms Xie’s credit.

26. I set out below the reasons why I prefer the submission of the Huang interests that the share recording was ordered by Ms Xie to attempt further to support her version that there was a binding agreement when this was not the case.

27. On 29 January 2018, Mr Nam sent a formal email to Ms Xie. This email included the following:

“This is to bring to your kind attention that we have make decision not to proceed with the purchase of 20% shares for Muse Beauty Salon Waterloo (ABN 32 623 116 709). We have already made the payment as per your request in advance and now would appreciate if you could arrange for the refund of the same … I’m not interested on any kind of offer at the moment. We will looking forward your arrangement before further action taken.”

60. Ms Xie states that she informed Ms Huang that the money paid by her had been used on the fit out of the Muse Waterloo premises and could not be refunded. In her oral evidence, Ms Xie said the money was deposited in her WeChat bank account and used for the fit out and to buy equipment from China. There is a dispute about who stopped taking WeChat messages from the other parties which is unnecessary to be determined.

61. Ms Xie and Ms Bai claim that from February 2018 onwards they became aware that suggestions were being made by Ms Huang and others that Ms Xie had obtained $68,000 “illegally” from her. Substantial evidence was before the court of various WeChat posts making highly critical and threatening allegations in relation to Ms Xie.

62. It seems to be accepted that in around March 2018, following a number of discussions, Ms Cindy Liu decided to invest in the Muse Waterloo company. In due course, an investment was made by her in both Muse Waterloo and Muse City. Ms Liu attended the opening of the Muse Waterloo store in April 2018: Exhibit 4. In due course, a 20% share interest in Muse Waterloo was purchased by Ms Liu for $100,000 and a 20% interest in Muse City was purchased for $80,000. The contract to purchase the shares in the two companies was entered into by Ms Liu in about April 2018 with the $180,000 being paid for the shares by her also at about this time.

63. In May 2018, Ms Liu requested a cancellation of the share purchase contracts. The Xie interests claim that this request was due to the comments made which emanated from Ms Huang that Ms Xie had lied in relation to the business and taken $68,000 unlawfully. Ms Xie states that Ms Liu made threats if the investment was not refunded. Ms Huang gives evidence that she and Ms Liu did not know each other at this time. In any case, after some discussion, Ms Xie and Ms Bai decided to refund the money to Ms Lui less some amount for solicitor costs. This amount of money is sought to be recovered by the Xie interests in the action for injurious falsehood. The money was refunded to Ms Liu in May and June 2018.

64. There is some evidence from Ms Xie and Ms Bai that they found out that cash and company books were missing from the Muse City store and that Ms Kitty Lo admitted to stealing the money to assist her ill sister. Ms Lo denies that and says that she was looking after some of the money and wished to look at the books and provide them to Ms Huang to review. It is clear that Ms Lo was aware of online posts relating to Ms Xie and had contacted Ms Huang in this period. Eventually, Ms Xie happened to attend the police station to complain and found Ms Lo and Ms Huang present at the same police station in order to complain about Ms Xie and Ms Bai. No action was taken by police in relation to Ms Lo who was a shareholder of Muse City at the time.

65. As stated, there were WeChat posts at about this time which were highly critical of Ms Xie. There is a question to be determined as to who was the author of those posts.

66. The evidence shows that on 3 June 2019, Muse Waterloo sold its business to Lady M Pty Ltd for $100,000. A $25,000 commission was paid in relation to the sale of the business. There is no expert evidence as to the proper value of the business at this time or as to the reasonableness of the quantum of the commission paid.

67. Ms Huang continues to seek the refund of the $68,000 plus interest which she and Mr Nam say were refundable deposits. The Xie interests seek damages for breach of contract for loss suffered, alternatively for the repayment of the outstanding amount of $70,000, together with interest as well as damages for the tort of injurious falsehood.

Orders made in relation to evidence in the proceedings

68. On 7 June 2021, the court made the following orders:

1. The two proceedings be heard together; and

2. That evidence in one proceeding was to be evidence in the other proceeding.

Evidence for Ms Huang and Mr Nam

Ms Huang

69. Ms Huang relied on four affidavits affirmed by her as follows:

1. Affidavit affirmed 20 March 2020;

2. Affidavit affirmed 15 May 2020;

3. Affidavit affirmed 17 May 2021; and

4. Affidavit affirmed 30 September 2021.

70. In these affidavits, Ms Huang gives a detailed account of her versions of the various meetings and replies to the affidavits of Ms Bai and Ms Xie. In substance, her evidence was that representations were made to her by at least Ms Xie in relation to the Muse City business and its profitability and turnover, the existence of intellectual property software which would be used to harvest clients for a proposed new store at Waterloo in Sydney, a sharing of profits and a discussion about Ms Huang assisting in the store. Ms Huang states that $68,000 was paid as refundable deposits in two tranches of $8,000 and $60,000 on 24 December 2017 and 15 January 2018, respectively. She also alleges that she went to the Muse City store to observe and undertake due diligence, not for training, and was not given access to the intellectual property or accounts of Muse City. In addition, she formed the view that the business was nothing as had been indicated to her. She claims that as a result of the failure to live up to the representations made to her by Ms Xie and Ms Bai, she sought a refund of her $68,000 from Ms Xie and Ms Bai which was declined.

71. In her reply affidavits she gives detailed responses to the affidavits prepared by Ms Bai and Ms Xie.

Mr Nam

72. Mr Nam provided two affidavits which were read in the proceedings:

1. Affidavit affirmed 15 May 2020; and

2. Affidavit affirmed 17 May 2021.

73. In substance, Mr Nam provides evidence confirming the versions of the meetings where he was present given by his wife, Ms Huang. He generally confirms the point that the $68,000 was sought to be recovered not because his wife was pregnant but due to their dissatisfaction with the information which had been provided in relation to the Muse City store and the alleged lack of intellectual property and software to allow customer records to be used in the Muse Waterloo store.

Ms Lo

74. Ms Huang and Mr Nam relied on and read three affidavits of Ms Yuk Yee Lo also known as Kitty Lo being:

1. Affidavit affirmed 15 May 2020;

2. Affidavit affirmed 16 May 2021; and

3. Affidavit affirmed 6 October 2021.

75. Ms Lo was a trained and qualified beautician. She had previously provided beautician services to Ms Xie at a beauty store owned by her. Ms Lo states that she was requested by Ms Xie to work in the Muse City store as a beautician and provide beautician services there. She later states that she also worked in the Muse Waterloo store.

76. Ms Lo’s evidence is relevant as it confirms that in January 2018 Ms Huang attended the Muse City store on a number of occasions only to observe and was not provided with beautician training while she was there either by her or, to her observation, by Ms Bai or Ms Xie.

77. A number of agreements between Ms Lo and the Xie parties are in evidence: see Exhibit 3. Ms Lo claims that it was agreed that she was to be given shares in Muse Waterloo. She also claims that she paid $60,000 in cash to Ms Xie and Ms Bai as an investment which the latter strongly deny. There is a major credit issue as to whether she was provided a signed receipt by Ms Xie and Ms Bai for this payment: see Exhibits 2 and 8 for a receipt. She claims that when the Muse City store was shut down, she no longer had a job there.

Mr Hui

78. The Huang interests read an affidavit of Mr James Hui dated 18 October 2021. Mr Hui was the solicitor who acted for Ms Lo in her dealings with Ms Xie and Ms Bai in November 2017 in relation to the agreements executed by Ms Lo.

79. Mr Hui gave evidence that he had telephone conversations with Ms Lo and received a text message from her. He stated that his current phone had recorded on it a text message from Ms Lo sent on 29 November 2017 at 10.23am attaching a photograph of a receipt. The receipt is dated 28 November 2017 and purports to be the receipt given to Ms Lo by Ms Xie and Ms Bai for the $60,000 payment. Both the payment of $60,000 by Ms Lo and the provision of the receipt are denied by Ms Xie and Ms Bai. Mr Hui said he recalled Ms Lo asking him on 29 November 2017 whether the receipt was “sufficient proof of the payment of $60,000”: paragraph 6. Mr Hui annexed the copy of the photograph of the receipt and a file note made by him on 29 November 2017 to his affidavit: paragraphs 5 and 8. This evidence is relevant to the credit of Ms Lo, Ms Xie and Ms Bai. If accepted, it makes the Xie/Bai version relating to the denial of the $60,000 payment and the provision of the receipt by Ms Xie and Ms Bai very unlikely.

Evidence of the Muse companies and Ms Xie and Ms Bai

Ms Xie

80. The Xie interests read four affidavits of Ms Xie in the proceedings:

1. Affidavit affirmed 31 March 2020;

2. Affidavit affirmed 10 June 2020;

3. Affidavit affirmed 26 May 2021; and

4. Affidavit affirmed 8 June 2021.

81. These affidavits strongly dispute the account of meetings and conversations given by Ms Huang and Mr Nam. In addition, they dispute significant aspects of the evidence of Ms Kitty Lo.

82. In relation to Ms Lo, Ms Xie states that Ms Lo never paid $60,000 to her in cash and the receipt annexed to Ms Lo’s evidence has never been seen by her before. Similar evidence is given by Ms Bai.

83. In relation to Ms Liu, Ms Xie states that she sought a refund of her moneys due to the rumours which had been fostered by Ms Huang in relation to Ms Xie. It is said that Ms Liu’s investment was refunded as it was clear that it was not practical for them to do business any more together.

81. Ms Xie provides in her affidavits a very different account of the factual background to Ms Huang and Mr Nam. In substance, she gives evidence that there was a concluded agreement with Ms Huang to acquire 20% of the shareholding in Muse Waterloo for the sum of $138,000 with Ms Huang to work as the store manager in the Muse Waterloo business. It is asserted that there were no representations made about the profitability of the Muse City store or any intellectual property. It is said that Ms Huang changed her mind about the investment due to her becoming aware that she was pregnant and her husband not wishing her to work. It is asserted that the interaction between the parties objectively amounted to a binding agreement with Ms Huang in relation to the purchase of 20% of the shares. It is said that the recognition of the interest of 20% in Muse Waterloo as disclosed on a company search reflected the agreement reached. It is claimed that the remaining $70,000 was to be paid by Ms Huang once she had sold beauty products from South Korea at a profit.

Ms Bai

85. The Xie interests relied on and read two affidavits of Ms Bai:

1. Affidavit affirmed 11 June 2020; and

2. Affidavit affirmed 26 May 2021.

86. Ms Bai states that she did not attend the 9 December 2017 meeting with Ms Xie and Ms Huang and Mr Nam. Otherwise, Ms Bai in substance supports the accounts of Ms Xie in her affidavits in relation to dealings with Ms Huang, Mr Nam, Ms Liu and Ms Lo.

Mr Li

87. The Xi interests read an affidavit of Mr Gen (James) Li dated 29 September 2021. Mr Li was the solicitor who acted for Ms Xie and Ms Bai and Muse City in relation to agreements which were entered into with Ms Lo in November 2017. In particular, Mr Li gives his recollection of the conference with Ms Lo and the subsequent execution of the relevant agreements on 29 November 2017. Importantly, in paragraph 14 of his affidavit, Mr Li states in relation to the receipt which is Exhibit 8 in the proceedings, that his recollection is that on 29 November 2017 he did not see the receipt nor did any of Ms Xie, Ms Bai or Ms Lo mention to him the payment of $60,000.

Oral evidence of Ms Xie

88. Ms Xie gave oral evidence over several days. All her evidence was given through a Mandarin interpreter. It was therefore in the main difficult to make an accurate assessment of Ms Xie’s demeanour except through the nature and content of her answers. I take into account the length and nature of the cross-examination in considering her evidence as well as the fact that it was given through an interpreter.

89. In further evidence in chief, and in relation to paragraph 79 of her affidavit affirmed 10 June 2020, Ms Xie said that the only reason she knew that Ms Bai provided training to Ms Huang was that Ms Bai told her and this was referred to in sheets signed for work on the day and in WeChat messages: T44.

90. Ms Xie was then the subject of very detailed cross-examination in relation to her affidavit evidence. Ms Xie was asked about her English language skills. Whilst agreeing that she had learned English in China, Ms Xie said her English was poor when she arrived in Australia and even by 2014, while her reading ability was better, her listening and speaking abilities in English were not good: T48.7. She later stated that whilst her English language skills had improved since, she was not comfortable without an interpreter.

91. Ms Xie stated that after meeting Ms Bai they decided to operate a nail salon in Sydney and undertake more beautician studies in China. Ms Xie confirmed that her specialty was nail polishing and eyebrow and eye line tattooing.

92. It was put to Ms Xie that she never trained Ms Huang herself. Initially, Ms Xie gave evidence that she trained Ms Huang in sales, product marketing and managing staff but not in the technical aspects of the beauty business: T49.30-.35. Many more questions were asked of Ms Xie in cross-examination in relation to the training of Ms Huang. In the end, Ms Xie claimed that whilst Ms Huang went to the Muse City shop on 17, 18 and 24 January 2018 for training, this was with Ms Kitty Lo and Ms Bai and she was not present herself in the shop on those days when Ms Huang was given beauty training: see Exhibit A page 403 paragraph 79. No mention was made in her oral evidence of training said to have been given by Ms Xie to Ms Huang in the evenings in January 2018.

93. Ms Xie confirmed that as far as she was aware neither she nor Ms Bai had any licences to provide beauty services in Australia at the Muse City shop. However, she said they had licences to operate the business. Ms Xie confirmed that both she and to her knowledge Ms Bai were not members of any Australian body providing beauty therapy treatment and did not complete studies in Australia to achieve a Diploma of Beauty Therapy or Remedial Massage. Ms Xie confirmed that she did not make enquiries as to whether her Chinese qualifications were recognised in Australia.

94. Ms Xie was asked a number of questions about the price list headed “old pricelist” at Exhibit A pages 520 and following. Ms Xie confirmed that the words “old pricelist” had been added to the document for the purposes of the proceedings and that the document at page 520 reflected the pricelist at the Muse City store by late 2017. Ms Xie claimed that the pricelist was very confidential and she said only a few pages were put on display at the Muse City shop.

95. Ms Xie confirmed that the Muse City store had a WeChat client base. The pricelist of services at the store was available to WeChat clients and was used by Muse City to promote its services to customers on the WeChat client base. Ms Xie confirmed that the client list from page 520 of Exhibit A was used for marketing.

96. Ms Xie confirmed that the Muse City shop was located on Level 8 of a building in an office suite and beauty services were offered there from April 2017. See Exhibit A page 248 at paragraph 6 as corrected at Exhibit A page 389, paragraph 13.

97. Ms Xie was asked about the “OPT” services relating to permanent hair removal referred to at Exhibit A page 530. She agreed that equipment was used which was obtained from China for this treatment. Although she agreed that the Muse City store engaged persons qualified to undertake work such as Ms Kitty Lo, she denied that she and Ms Bai did not undertake the training of Ms Huang as they were not qualified or experienced to provide the training. This was despite the fact that they had no licence to carry out services such as OPT treatment in late 2017 and early 2018. Ms Xie said that she had obtained experience to provide these services both in China and in Australia.

98. Despite her evidence at T49.30-.44, Ms Xie maintained her view that Ms Huang had been provided training in beauty skills at the Muse City shop. She said that Ms Huang had asked her to provide training including in eyelash extensions and she reluctantly agreed. There was thus some inconsistency in the evidence given by Ms Xie on this issue as to training.

99. Ms Xie was then asked questions about paragraph 28 of her first affidavit where she states: “On or about 25 January 2018, Huang learned beauty treatments skills and techniques from me at the new shop”: Exhibit A page 253 paragraph 28.

100. Ms Xie agreed that while she had given training in marketing and client related matters, she had also provided training in eyelash extension and tattooing. She denied the proposition that Ms Huang had not undertaken any training as she attended at the Muse City shop to observe the city business. She claimed that WeChat screenshots showed that Ms Huang was there to learn.

101. There was then extensive cross-examination in relation to the assertion in paragraph 28 of her first affidavit (Exhibit A page 253), that Ms Xie provided training to Ms Huang “at the new shop” on 25 January 2018. Ms Xie remained of the view that this was true and correct. She denied that on 25 January 2018 the new shop was still being fitted out and accordingly she could not have provided any training to Ms Huang at the new shop. However, the documents in evidence relating to the construction work at the new shop for Muse Waterloo suggest that construction work was still being undertaken as at 25 January 2018: Exhibit A page 608-623 especially at pages 613 and 616-619. These suggest that tiling and partition work was being undertaken as part of the fitting out of the shop in January-February 2018. Ms Xie appeared to accept that by 23 January 2018 the construction firm had barely completed the tiling work and this was consistent with her own memory of the work being undertaken. Despite this, Ms Xie maintained that Ms Huang did obtain training at the new shop from her on or about 25 January 2018. She denied that the assertion that training had been provided by her to Ms Huang was incorrect. She also denied that she had a discussion with Ms Huang on 24 December 2017 and 15 January 2018 to the effect that Ms Huang wanted an opportunity to undertake inspections of the Muse City store and that is why she attended at the store in January 2018. Ms Xie conceded that she had a “very foggy memory” of Ms Huang attending on 17 January 2018 at the Muse City store and did not know if she was there at the same time as Ms Huang: T84.44. Ms Xie agreed that she did not have firsthand knowledge of Ms Huang obtaining training on the January 2018 dates but states that she obtained feedback to that effect from Ms Lo, Ms Bai and from Ms Huang herself.

102. Ms Xie was asked numerous questions about her account of the 24 December 2017 brunch meeting at Chatswood with Ms Huang and Mr Nam referred to in paragraphs 15-19 of her first affidavit: Exhibit A page 250. In relation to paragraph 16 of her first affidavit where Ms Xie states that after the brunch meeting Ms Huang transferred $8,000 “to our account immediately”, Ms Xie said that this was a bank account opened in her mother’s name. She stated that the $8,000 provided by Ms Huang had been withdrawn and paid to the company undertaking the renovations. She stated that her mother withdrew the amount at her request. It seems clear therefore that the money was not used to pay Ms Xie’s solicitors for drafting any agreement with Ms Huang.

103. Ms Xie gave evidence that her recollection was that the money was transferred by Ms Huang to the account after she left the brunch meeting.

104. Ms Xie was asked why she accepted the $8,000 from Ms Huang before telling her that other persons were interested in investing in Muse Waterloo. Ms Xie claimed that Ms Huang would have known that other persons were interested before she paid the $8,000 deposit. Ms Huang agrees that she thought Ms Xie may be considering other offers: Exhibit A page 57.

105. It was put to Ms Xie that she had not had any discussions with Ms Huang in August 2017 in relation to opening a new shop, which she denied: T103.17. Ms Xie said that Ms Huang had raised the possibility of a new shop in August 2017 although she accepted that before the payment of $8,000 by Ms Huang, there had been no economic communications between them. There was, however, a mutual intent to open a shop. Ms Xie said there was a strong business or commercial intention by Ms Huang to open a shop especially from 24 December 2017. Ms Xie said that she had given up a dinner with an investor with “a lot of cash” to have the transaction with Ms Huang. The other investor was Ms Qiqi Li who had substantial funds to invest. Ms Xie said it was due to Ms Huang’s skills and abilities that they did not go with Ms Li. When asked what the skills were of Ms Huang, Ms Xie said she had high persuasive skills such as in persuading Ms Xie to prefer her to Ms Li. Ms Xie also pointed to Ms Huang’s past performance in selling beauty products. Ms Xie agreed that she did not ask Ms Huang in relation to her technical beauty skills and said that her understanding prior to 24 December 2017 as to Ms Huang’s skills was limited to what she told her. She said that Ms Huang had indicated a commitment to learning and had a “deep understanding” of beauty products as she had been a significant supplier herself.

106. Ms Xie confirmed the accuracy of the conversation set out in paragraphs 11-13 of her first affidavit. She also confirmed that after the conversation in August 2017 with Ms Huang the next time they met was on 9 December 2017 at Zilver Restaurant. Ms Bai did not attend the meal at the restaurant. Ms Xie could not recall a WeChat interaction with Ms Huang on 25 November 2017 similar to that referred to in Ms Huang’s first affidavit. It is noted that Ms Xie did not dispute the conversation on 25 November 2017 (Exhibit A page 52, paragraph 5) in her responsive affidavit at Exhibit A page 389, paragraph 17. Ms Xie said in her evidence that she did not deny that there was a WeChat conversation on that date but denied that the content of the WeChat conversation was as indicated in Ms Huang’s affidavit.

107. Ms Xie accepted that Ms Huang told her on 9 December 2017 that she intended to attend two weeks of beauty classes in Korea and was learning to become a beautician. Ms Xie denied the version of the 9 December 2017 meeting as set out in paragraph 12 of Ms Huang’s first affidavit.

108. Ms Xie was then asked a number of questions in relation to the progress in the negotiations to take a lease at the Muse Waterloo shop. Ms Xie accepted that she was undertaking negotiations in early December 2017 but disputed that the negotiations were “well advanced”. Ms Xie accepted that a lease was signed for the Muse Waterloo premises on 8 December 2017: see Exhibit 1. Ms Xie said that she made her mind up to prefer Ms Huang over Ms Li on 24 December 2017 when Ms Huang paid the $8,000 as directed. She accepted that prior to 24 December 2017, whilst there was no commitment to an investment by Ms Huang, there was a strong intention to invest. Ms Xie agreed that by the time of her alleged agreement with Ms Huang she had already started to take steps relating to the fit out of the Muse Waterloo premises. She also accepted that she got the keys to the Muse Waterloo premises not long after the 8 December 2017 lease for the premises was signed. Ms Xie accepted that prior to 24 December 2017 when she had received the money she had no intention to enter into a joint venture with Ms Huang. Ms Xie denied that she was pursuing Ms Huang to get her to open a shop with her despite the 4 December 2017 WeChat exchanges at Exhibit A page 119. Ms Xie accepted that on 4 December 2012 she knew that Ms Huang was flying to South Korea on 3 January 2018 and returning on 15 January 2018. Ms Xie also accepted that by this time she had formed the intention to open up a new shop in Waterloo. Ms Xie denied that her method of business was to open up stores and find people to operate them for her by contributing money or labour in exchange for a shareholding.

109. The importance of this evidence is that Ms Xie and Ms Bai had decided to open the Muse Waterloo shop well prior to any alleged agreement with Ms Huang. A lease had been signed by Muse Waterloo on 8 December 2017: Exhibit 1. An agreement was entered for a fit out of the premises on 7 December 2017: Exhibit A page 614. Therefore Ms Xie, Ms Bai and Muse Waterloo had committed themselves to the Waterloo shop well prior to the meeting with Ms Huang on 24 December 2017. This is potentially relevant to the change of position defence in relation to Ms Huang’s restitution claim.

110. There was then extensive cross-examination in relation to Ms Xie’s interaction and dealings with Ms Kitty Lo. Ms Xie confirmed that she knew Ms Lo and attended at a shop run by her in 2017 for the purposes of obtaining therapeutic body massages. She denied that she “pursued” Ms Lo to come to work at the Muse City store. She also denied that in September 2017 she attended Ms Lo’s shop in an endeavour to persuade her to join the Muse City store. Ms Xie accepted that she was aware that Ms Lo had a Diploma of Beauty Therapy as it was displayed on the wall of Ms Lo’s shop. She could not recall whether she used Ms Lo’s name for the purposes of obtaining insurance for the Muse City shop because Ms Lo had a Diploma. Ms Xie accepted that Ms Lo started working for her and became a shareholder in Muse City. She said she understood the share structure would be 70% of shares to her and Ms Bai and 30% of the shares to Ms Lo. In addition, she accepted that the agreement was to pay Ms Lo a base salary and a share of the profits. Ms Xie denied that she wanted Ms Lo to become an investor and shareholder in the Muse Waterloo shop. She also denied that Ms Lo was to contribute the equipment and products which she had to the Muse City shop. Ms Xie denied, in particular, that she understood that Ms Lo had a 3,000 WeChat customer base. Instead Ms Xie said that she was of the view that Ms Lo’s shop was on the verge of collapse.

111. Whilst Ms Xie agreed that she provided instructions to her solicitor to prepare a document in relation to providing a shareholding to Ms Lo, she did not know whether the version annexed to her affidavit or that annexed to the affidavit of Ms Lo was the signed version: see Exhibit A page 236 and Exhibit A page 452.

112. Ms Xie stated that she believed that Ms Lo was issued 86 shares in Muse City with Ms Bai and her each holding 100 shares. She agreed that she was the person who gave instructions to accountants and lawyers to update the records of Muse City including with ASIC. Ms Xie was taken to a company search of Muse City dated 10 April 2018 at Exhibit A page 84 which indicated that she was the director and secretary of Muse CBD and the only shareholder with 100 shares. Ms Xie accepted that the records had not been updated as at the date of the company search but Mr Li, her then solicitor, had instructions to do so and she depended on him. She said she could not recall when Ms Lo became a shareholder of Muse City. She could not explain why the shareholding of Ms Lo was not revealed in the company search of Muse City at Exhibit A page 86 as at 10 April 2018. She denied that she made up in the witness box an answer which suggested that there were delays in her lawyer and accountant responding to her instructions to change the company’s records and that some time was needed for this. She also denied the suggestion that she did nothing to record Ms Lo’s interest in Muse City and made a conscious decision to do so. She also rejected the proposition that she claimed that Ms Huang had a recorded shareholding in Muse Waterloo to advance her claim that there was a concluded agreement with Ms Huang when there was none.

113. Ms Xie accepted that Ms Lo did provide some equipment and products which she moved to the Muse City store. However, she disputed that Ms Lo brought a substantial client base. She gave evidence that Ms Lo was issued shares because of her beauty certificate qualifications. Ms Xie denied that an offer had been made to Ms Lo to invest in the Muse Waterloo business for $130,000 and said that Ms Lo was too old to be involved: T147.20. She also denied that she pursued Ms Lo to obtain a $60,000 investment until she handed the $60,000 over to Ms Xie. Ms Xie did not accept that she and Ms Bai needed $60,000 from Ms Lo and said they only needed her beauty qualifications. She denied ever taking $60,000 from Ms Lo or that Ms Lo gave her that sum for 15 shares in Muse Waterloo and an agreement for her to be employed in the business.

114. Ms Xie was then cross-examined about a receipt for $60,000 at Exhibit A page 233. Ms Xie accepted that the handwriting on the receipt looked similar to her handwriting but she denied writing or signing it: T149.48-T150.22. When shown the receipt provided to Ms Huang at Exhibit A pages 66 and 276, Ms Xie agreed that her handwriting was on the receipt with Ms Bai’s. She agreed that the Lo receipt handwriting was very similar to the receipt provided to Ms Huang but denied signing the receipt for $60,000 in both Chinese characters and English characters. She also denied signing the receipt at Exhibit A page 233 as Ms Lo had complained to her that the contracts did not record her investment of $60,000.

1. Further, Ms Xie accepted that no shares were actually transferred to Ms Liu or Ms Lo despite the agreements with them: see Exhibit 4 and Exhibit A page 178. This accords with the historical company searches in evidence: Exhibit A pages 84-91. Thus, Ms Xie and Ms Bai were willing to enter into agreements and take money but no shares were issued to the persons entitled to them.

2. Ms Bai’s accounts of the oral conversation with Ms Xie on 23 December 2017 and the meeting which occurred on 24 December 2017 are fundamentally unlikely: Exhibit A pages 670-671 and 678-679. The accounts are also inconsistent with Ms Xie's evidence.

First, Ms Bai in paragraph 38 of her affidavit refers to Ms Huang wanting to purchase a 20% shareholding in Muse Waterloo at the price of $138,000 and also referring to Ms Huang paying a deposit of $8,000, on 23 December 2017. It is clear that the deposit was paid by Ms Huang on 24 December 2017 not 23 December 2017. Ms Xie refers to Ms Huang making an offer of $138,000 on 24 December 2017 not 23 December 2017. In addition, the wording of paragraph 20(c) in Ms Bai’s first affidavit is inconsistent with her account of the 23 December 2017 discussion as it refers to Ms Huang asking for a figure for the price and referring to the deposit.

Secondly, in her account of the 24 December 2017 meeting, Ms Bai has Ms Huang referring to the $8,000 payment as a “deposit” as Ms Huang alleges was its status.

Thirdly, Ms Bai in her oral evidence appeared to accept that there were errors in paragraph 20(c) in that she claims Ms Huang asked for a reconfirmation of the price not the price itself. That claim is fundamentally inconsistent with paragraph 20(c).

Also, she appeared to accept that the reference to depositing $8,000 in paragraph 38 of the affidavit was also mistaken.

In addition, Ms Bai’s reference in paragraph 20(c) to Ms Xie and her wishing to lease the shop is inconsistent with Exhibit 1 which shows that a lease was entered on 8 December 2017: Exhibit A page 270, paragraph 20(c) and Exhibit 1.

These matters raise serious questions in relation to the accuracy of Ms Bai’s memory and her reliability on issues relating to the crucial 24 December 2017 meeting;

33. Ms Bai’s claim that she and Ms Xie only made the decision to open the shop when Ms Huang agreed to join with them is inconsistent with the lease having been entered into on 8 December 2017. Ms Bai’s evidence that it was only when Ms Huang agreed to join and pay the $8,000 that she and Ms Xie made the decision to open the Muse Waterloo shop is clearly inconsistent with the executed lease and the work that was done in arranging the shop design and with the renovators: T371.25;

34. Having regard to the absence of Ms Bai putting her own account of the 15 January 2018 meeting in her first affidavit, and her brief account of the meeting in her oral evidence (T407.1-.24), Ms Bai did not appear to have a good or reliable recollection of what occurred on that day;

35. The above matters lead me to the conclusion on the whole of the evidence that the accounts of Ms Xie and Ms Bai should be rejected on the central issues. I prefer the evidence of Ms Huang and Mr Nam who appeared overall to be more impressive witnesses despite the vigorous attacks made on their credit and there being some differences between them on some issues. I rely on my findings above that the central case of the Huang interests is also more consistent with the objectively established facts and the logic of events in the factual context. Objectively, I find that no binding agreement as to the $138,000 for 20% of the shares in Muse Waterloo was reached by the parties at any time as claimed by the Xie interests including on 24 December 2017, 28 December 2017 or 15 January 2018. There was only agreement as to the price and the correct contracting party and the quantum of the shares. I find that the payments made were objectively agreed by the parties to be “refundable” deposits if a final agreement was not reached between the parties. I accept Ms Huang’s evidence as to this issue as set out in her second and third affidavits. No final agreement was ever entered between the parties;

36. The following matters are particularly relevant to the conclusion that objectively no binding agreement to purchase the shares was reached by the parties:

1. The unreliability and credit of Ms Xie and Ms Bai. Ms Bai’s affidavit evidence was inconsistent and contradicted certain evidence of Ms Xie. The finding as to the $60,000 receipt given to Ms Lo for a cash payment is directly contrary to their evidence given orally on a number of occasions;

2. The decision to open the shop by Ms Xie and Ms Bai was made at the latest by them when the lease was signed on 8 December 2017, well before the alleged final agreement was reached with Ms Huang and Mr Nam. They were therefore bound at that stage;

3. The transfer payment dated 24 December 2017 for $8,000 referred to the payment being a deposit: “Shop 2 Deposit”;

4. The ambiguity in the receipt signed on 15 January 2018;

5. The claim by Ms Xie that $130,000 in cash was offered but she only took $60,000 in cash – if Ms Xie was concerned taking $130,000 in cash she would also likely be concerned taking $60,000 in cash;

6. The offer to pay $60,000 by Ms Huang as a deposit is consistent with the belief that there were other potential purchasers showing an interest;

7. Ms Lo supports Ms Huang’s account that she was there at the Muse City shop to observe not to obtain training;

8. The fabricated evidence of Ms Xie that Ms Huang gave her a name and address at the meeting on 24 December 2017 which included the word “Rosebery”;

9. The WeChat messages between the parties did not refer to a binding agreement but are consistent with Ms Huang seeking a final draft of the contract;

10. The email correspondence between Ms Xie and her solicitor in December 2017 is not consistent with a binding agreement having been entered;

11. The emails and WeChat messages do not refer to a 28 December 2017 meeting;

12. The terms of the draft contract as discussed above which were not straightforward;

13. The likelihood Ms Huang would want to observe the Muse City shop and seek legal advice before committing herself to the proposed contract;

14. Ms Xie’s unsatisfactory evidence about the January 2018 share registration documents lodged with ASIC and the court’s finding as to her motive.

433. Accordingly, I find in summary as follows:

1. In late 2017, Ms Huang wanted to open her own beauty shop. She planned to attend beauty classes in South Korea in early January 2018 for this purpose.

2. Mr Nam not Ms Huang had previously made beauty products deliveries to Ms Xie and the Muse City store. Ms Huang did not attend the Muse City store until January 2018 and was thus not familiar with it, including its level of customers.

3. There were discussions between Ms Xie and Ms Huang in late November/early December 2017 about Ms Huang joining Ms Xie in a proposed Waterloo store.

4. In the 4 December 2017 WeChat exchange, Ms Xie sought Ms Huang to join her in the proposed Waterloo store: Exhibit A page 119.

5. Ms Xie and Ms Bai signed the lease for the Muse Waterloo store on 8 December 2017 thus committing Ms Xie and Ms Bai to the store. A fit out contract was signed earlier.

6. The parties discussed the matter further and a 9 December 2017 meeting occurred. No binding agreement was reached at the meeting. At the meeting Ms Xie did refer to payment of a “refundable holding deposit.”

7. A meeting occurred on 24 December 2017. Ms Xie said she and Ms Bai wanted $180,000 for a 20% share interest in Muse Waterloo. This confirmed the price previously indicated in a telephone conversation between Ms Huang and Ms Xie after the 9 December 2017 meeting. Ms Huang counter offered the sum of $138,000 at the meeting subject to various matters (see paragraph 14 of Ms Huang’s second affidavit) and an acceptable final agreement. Ms Huang agreed to pay $8,000 as a refundable deposit. This was paid. There was no agreement that the $8,000 deposit was to be used for legal fees. No binding agreement was entered on 24 December 2017 including in any later telephone discussion. The price and quantum of the shares was agreed if a contract was entered into.

8. Ms Xie sent an email to her solicitor giving “rough ideas” for an agreement. A draft was provided to her on 25 December 2017. The reference to “rough ideas” was inconsistent with a binding agreement having been entered into on 24 December 2017.

9. There was no meeting on 28 December 2017 between the parties. No draft agreement was provided to Ms Huang and Mr Nam by Ms Xie at any meeting prior to 15 January 2018.

10. Ms Xie did not pursue further payments between 24 December 2017 and 15 January 2018 pursuant to any alleged binding oral agreement.

11. Ms Huang was absent in South Korea attending beauty training between 3 January 2018 and early 15 January 2018.

12. Ms Xie arranged a meeting at Ms Huang’s house on 15 January 2018.

13. Ms Huang paid a further $60,000 in cash as an agreed refundable deposit to Ms Xie and Ms Bai on 15 January 2018. A draft agreement was then sent by email to Ms Huang/Mr Nam on 15 January 2015 but Ms Huang/Mr Nam did not have time to review it before leaving by car for Waterloo, did not agree to it and no binding agreement was objectively entered into.

14. Ms Huang and Mr Nam would not have agreed to the proposed written agreement without obtaining legal advice on it.

15. Ms Huang attended the Muse City shop on various days in January 2018 to observe the shop and to undertake some enquiries/basic due diligence. No substantial training was provided to her by Ms Bai or Ms Xie. Some instruction (and probably limited training on some equipment) was provided by Ms Bai.

16. Ms Huang was not satisfied with her observations of the store or her inquiries, including as to the level of customers.

17. Ms Huang sought a redraft of the agreement which was not provided in late January 2018. No draft of the agreement in Ms Huang’s name was ever provided to her by Ms Xie.

18. Ms Huang and Mr Nam decided not to proceed with the proposal and sought a refund of the amounts paid. These were not returned by Ms Xie and Ms Bai or Muse Waterloo. The decision not to proceed was not due to Ms Huang saying she was pregnant. I accept Ms Huang’s account of the 28 January 2018 meeting.

19. There was objectively never any binding agreement between the parties. Only the sum of $138,000 for a 20% share in Muse Waterloo had been agreed with Ms Huang as the contracting party subject to a satisfactory written agreement and Ms Huang’s investigations on aspects like customer daily numbers.

20. It was agreed that the payments of $8,000 and $60,000 were refundable deposits in the event Ms Huang and Mr Nam decided not to proceed with the share acquisition.

21. No 20% shares in Muse Waterloo were ever applied for by Ms Huang or Mr Nam or issued before 29 January 2018.

22. Ms Lo provided $60,000 in cash to Ms Xie and Ms Bai. The latter two persons signed a receipt and gave it to Ms Lo shortly before 29 November 2017. A receipt for $60,000 would not have been provided by Ms Xie and Ms Bai if Ms Lo had not paid this sum even though the amount was not referred to in the Lo contracts.

Determination of the plaintiff’s claims in proceedings 2018/117938 in the light of the factual findings

434. For the above reasons, I find that there was objectively no binding agreement reached between the parties and that the two payments of $8,000 and $60,000 were paid by Ms Huang/Mr Nam as deposits to be fully refundable if a contract was not finally reached and entered into. I find that there was an express agreement between the parties that the payments were to be “refundable” if Ms Huang did not proceed with the transaction. I reject the submission for the Xie interests that the $60,000 payment and the receipt together objectively established a contract. The documents have to be seen in the context of the parties’ discussions. Accordingly, the claim in restitution for money paid is established by the Huang interests. The retention of the $68,000 by the Xie interests is unlawful as the sum is made up of two refundable deposits and gives rise to the restitutionary entitlement in the Huang interests.

435. The two payments were made at the direction of Ms Xie and Ms Bai or were accepted by them and therefore they are both liable to repay the amounts. As they appeared to be acting also on behalf of Muse Waterloo, it is also liable.

436. My factual findings mean that as there was objectively no binding contract, the Xie interests have no action for breach of contract available.

437. In relation to the change of position defence, I find that this has not been established by the Xie interests for the following reasons:

1. the Xie interests deny any unjust enrichment and plead that they have changed their position by paying for the fit-out to the Muse Waterloo store partly with the $68,000 paid to them by Ms Huang: see paragraph 25 of Amended Defence;

2. However, I have found that the Huang interests’ claim that the amounts paid were refundable deposits has been established. Accordingly, the Xie interests could not have formed the view properly that the $68,000 was theirs to spend pending the finalisation of the contract between the parties;

3. Further, the lease was entered into by Muse Waterloo on 8 December 2017: Exhibit 1. A contract to fitout was entered into on 7 December 2017: Exhibit A page 614. These commitments were made well before the meeting on 24 December 2017 with Ms Huang and Mr Nam;

4. Accordingly, Ms Xie and Ms Bai had binding agreements relating to the Muse Waterloo store well before the first important meeting with Ms Huang. The agreements carried with them the obligations to fit-out the premises as a beauty store with appropriate equipment to be acquired. These commitments were decided upon before the discussions with Ms Huang. There was thus no relevant change of position relying on anything agreed with Ms Huang and Mr Nam on 24 December 2017 or in January 2018. The Xie interests have not satisfied the onus on them that they relied on the payment to change their position as they were always obliged to fitout the premises and have the lease in any case and incur the expenses associated with that.

438. In relation to the misleading and deceptive conduct claim, whilst I generally prefer the evidence of Ms Huang to that of Ms Xie and Ms Bai as to what occurred at the 9 December 2017, 24 December 2017 and 15 January 2018 meetings in relation to what was discussed, stated and agreed, it is necessary to consider the specific allegations of misleading or deceptive conduct pleaded to determine whether they are established, their nature, their context, whether they are expressions of opinion or fact and whether they are sufficiently specific to be actionable: see Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 at [24]-[28], [31]-[33] and [102]; Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 at [109]. I make the following findings as to the representations alleged in the Statement of Claim filed by Ms Huang:

1. Paragraph 4a) – WeChat accounts: I find the representation made as alleged excepting that as to the words “and systems”. I am not satisfied that it is likely anything about having systems or software to enable sharing was said. This is a very specific representation and could be easily disproved upon checking. There is no evidence such systems were being prepared. There is no evidence Ms Xie was approaching the two stores with such sophisticated plans in mind. Further, I do not find that the representation as found was misleading or deceptive. There is no evidence that the number of the databases, the sharing of the clients and the use of the data bases was not accurate and intended by the Xie interests at the time;

2. Paragraph 4b) – Client base: I find that the representation as pleaded was made. I accept the evidence of Ms Huang and Mr Nam on this issue. I find that 20-30 customers per day were not serviced in the Muse City store at the time. This must refer to an average number of clients. This is established by Exhibit E when reviewed as a whole. This was incorrect at the time and thus misleading or deceptive. The extent of customers was relevant to the likely success of the Waterloo store having regard to the aim to share customers and the involvement of Ms Xie and Ms Bai. The statement of likely turnover was merely a statement of present opinion but in the light of the misleading nature of the customer numbers had no reasonable basis for being made. It also was obviously relevant to the likely profitability of the Muse Waterloo store;

3. Paragraph 4c) – The licence: I find that the representation as to the granting of a licence by Muse City to Muse Waterloo was made. However, as the contract was never finalised it is not clear that this was not the intention of Ms Xie and Ms Bai at the time. I therefore find that it is not established that it was misleading or deceptive when made;

4. Paragraph 4d) – division of profit share: I find that the representation was made. However, there is no evidence that this was not intended to occur by Ms Xie and Ms Bai when it was stated;

5. Paragraph 4e) – inspection: I am not satisfied this representation was made in the terms alleged. I do not accept that anything was said about “systems” or the financial accounts. The City store was quite different to the proposed Muse Waterloo store. I do accept that a representation was made that Ms Huang could inspect the shop’s operation and the sales records such as the client book which was Exhibit E. She was able to observe customers when she attended the store

6. Paragraph 4f) – repayment of the deposit: I find that this representation was made and was a statement of future intention. I am satisfied it was misleading or deceptive at the time it was made as the Xie interests asserted a binding agreement was entered into and had no intention to refund the deposit;

7. Paragraph 4g) – other than a statement as to the desired price and that the capital outlay was expected to be $350,000 to $400,000 I find that a representation in the terms pleaded (which is confusing and rolled up) was not made. It is not consistent with Ms Huang’s evidence. I find that the price desired of $180,000 initially is established by the evidence. I also find that the capital outlay stated was inaccurate and misleading and deceptive. The capital outlay as established by the documents was substantially less than $350,000: see Exhibit A page 611; there is no evidence the equipment and solicitor’s fees and “brand value” would or may make up the difference;

8. Paragraph 4h) – I refer to my findings as to the other representations alleged. I find that there were representations as to the granting of a licence to Muse Waterloo to access clients on the WeChat databases and that a request for a refundable deposit of $8,000 was made.

439. Therefore the only representations which I find to have been made and which were misleading or deceptive were:

1. The client base enabled 20-30 customers a day to be serviced at the City store;

2. Such turnover was expected at the Muse Waterloo store;

3. The holding deposit would be refundable if no final agreement was reached;

4. The capital outlay for lease and fitout to the Muse Waterloo store was expected to be $350,000-$400,000.

440. I find that the making of these representations caused Ms Huang and Mr Nam to be further interested in the proposal. However, I have found that no final agreement was reached. Therefore the representations are only relevant to the payment of the $68,000. I find that this sum would not have been paid by Ms Huang and Mr Nam if the misleading and deceptive representations had not been made. Thus the representations were a common sense cause of the payments being made. They were made to entice Ms Huang to pay over the $68,000 in deposits by referring to facts which made the proposal attractive and the price justified. Mr Nam referred in his oral evidence to the number of customers and the capital outlay as being relevant and important.

440. Thus the cause of action under section 18 of the Australian Consumer Law is established.

Injurious falsehood cause of action

442. The Xie interests bring a cause of action in the tort of injurious falsehood.

443. In Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2014] NSWCA 369 Basten JA (with whom Meagher JA and Tobias AJA agreed) stated as follows at paragraphs [90]-[91]:

“[90] The applicants pleaded an alternative case claiming damages for the tort of injurious falsehood. It was necessary for them to establish that the respondents had maliciously published a false statement about them, their property or business and that actual damage resulted from such publication: Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69; 208 CLR 388 at [1] (Gleeson CJ). The critical element in the present case was to establish malice. The English Court of Appeal has held that the same principles apply with respect to malice in defamation and in injurious falsehood: Spring v Guardian Assurance Plc [1993] 2 All ER 273 at 288. The concept of malice in relation to defamation has been explained by the High Court in Roberts v Bass [2002] HCA 57; 212 CLR 1, where the concept was discussed in reference to a defence of qualified privilege, which is destroyed by malice. In that context, the question is whether the publisher’s state of mind was actuated by an improper purpose or motive: at [76] (Gaudron, McHugh and Gummow JJ).

[91] In the present case, the applicants did not rely upon actual knowledge of the falsity of any statement made about the applicants’ product, but rather relied upon a failure to make proper inquiries and reckless indifference as to the truth or falsity of the allegations, amounting to wilful blindness. The trial judge dealt with the question of malice in relation to injurious falsehood in the following passage:

[189] … I am not satisfied that the defendants were careless in failing to contact the plaintiffs before televising the Broadcast since I consider that the terms of the FDA warning were sufficient to apply [to] the Babywedge and the potentially fatal consequences of using such a product warranted the urgency with which the Broadcast followed the issue of the FDA warning. However, even had I considered the defendants’ omission to contact the plaintiffs to request comment on the FDA warning before the Broadcast went to air to be careless, this would not have amounted to malice ….”

444. In Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69, Gummow J stated at [58] that it was for the plaintiff in injurious falsehood claims to establish falsity, malice and special damages which were burdens not imposed upon the plaintiff in the tort of defamation.

445. In general terms, damages can be recovered for harm that is intended or that is the natural and probable consequence of the tortious act.

446. In Palmer Bruyn, above, Gummow J stated that an action for injurious falsehood has four elements:

1. A false statement of or concerning the plaintiff’s goods or business;

2. Publication of that statement by the defendant to a third person;

3. Malice on the part of the defendant; and

4. Proof by the plaintiff of actual damage (which may include a general loss of business) suffered as a result of the statement: at [52].

447. At [114], Kirby J in Palmer Bruyn stated that the tort of injurious falsehood required falsity that was calculated to induce others not to deal with the plaintiff or was otherwise likely to damage the plaintiff and the publication was actuated by malice. At paragraph 154 Hayne J stated that it was not enough to establish injurious falsehood to show that the plaintiff is held up to ridicule. See also Callinan J at [192]-[193] who stated that there was a need for some indirect, dishonest or improper motive to establish malice.

448. In her second affidavit, Ms Xie referred to various posts which occurred on WeChat which she attributes to Ms Huang: Exhibit A page 411, paragraph 93 and following. See also Ms Bai’s affidavit at Exhibit A page 681, paragraph 43 and following. It was put to Ms Huang that she was the author of or caused the offending posts. This was in general terms denied. See also the Xie interests’ submissions in chief at paragraphs 53-61.

449. Most of the matters complained of in these paragraphs of the Xie/Bai affidavits and submissions occurred after May and June 2018 and are therefore not relevant to the repayment of the Liu investment by Ms Xie and Ms Bai. That is because they could have had no causative effect on Ms Liu’s decision to seek a refund in relation to the damages complained of. There are, however, a number of complained of publications prior to May 2018. It is unclear which of these have any connection to Ms Huang. Having reviewed the evidence on this matter, I am unable to conclude on the balance of probabilities that most of the relevant posts originated from Ms Huang as opposed to other persons. There is a WeChat post referred to in paragraph 94 of Ms Xie’s second affidavit at Exhibit A page 411 which seems to be a re-posting. The content of the post would suggest that it came from Ms Huang who is also known as Jessie but this is not certain.

450. Ms Huang in paragraphs 63-65 of her affidavit dated 17 May 2021 at Exhibit A page 140 seems to justify the posting as seeking to identify people who had invested money with Ms Xie and Ms Bai but could not get it back. She also asserts in paragraph 64 at Exhibit A page 140 that the post was in November 2018 not earlier.

451. In the light of this evidence, I am not satisfied that any posting on WeChat prior to May 2018 was of a post originating with Ms Huang and which was actuated by the necessary malice. It does not seem to me that the posting was actuated by an improper purpose or motive but rather to identify persons who could provide more information about investments with Ms Xie, Ms Bai and their related companies for the purposes of a complaint to police and possibly a court action. I have found that there was no binding agreement between Ms Huang and the Xie interests and therefore Ms Huang was entitled to her refund of $68,000. The post from Ms Huang seems to be designed to warn others in relation to Ms Xie and to identify other investors. I am unable to find it was actuated by malice including any improper motive.

452. Further, for the tort of injurious falsehood, one has to establish actual damage. I will consider this in relation to my damages assessment in the event I am found to be in error that any publication by Ms Huang was not actuated by malice being actuated by an improper purpose or motive.

Damages issues

Huang interests’ claims

453. The Huang interests in proceedings 2018/117938 seek the recovery of the $68,000 paid together with interest. As I have found that it was agreed by Ms Bai and Ms Xie that these moneys were refundable deposits and there was no binding contract, in my view Ms Huang is entitled to this sum against the defendants in that matter under her restitution claim. Both Ms Xie and Ms Bai were present at the 24 December 2017 and 15 January 2018 meetings when the moneys were paid over by Ms Huang on that basis. They were acting on behalf of themselves and Muse Waterloo. Interest will need to be calculated on the $68,000. In my view, it should be calculated from 7 February 2018, thus allowing a reasonable period to arrange for the repayment of the sum.

454. I have also found that the $68,000 together with any applicable interest may be recovered by Ms Huang as damages under s 236 of the Australian Consumer Law for misleading or deceptive conduct in breach of s 18 of the Australian Consumer Law.

Xie interests’ claims

Proceedings 2018/364820

Damages for breach of contract

455. I have found that the Xie interests and particularly Muse Waterloo are not entitled to damages for breach of contract against the Huang interests as objectively there was no concluded and binding contract reached between them or any of them.

456. In the event I am in error in relation to that issue and there was a concluded and binding agreement, then Ms Xie, Ms Bai and Muse Waterloo are entitled to damages against Ms Huang and Mr Nam for breach of contract. On the case of the Xie interests, Ms Huang was permitted to pay the balance of $70,000 after she sold beauty products purchased with that sum: Exhibit A page 400, paragraph 71. There was no evidence before me as to how long that would take. I allow three months as a reasonable period. The non-payment of the $70,000 and the refusal to continue with the agreement would amount to an anticipatory breach of contract. Interest on the $70,000 sum should be calculated from 15 April 2018.

457. A claim is also made for losses due to the failure of the Muse Waterloo business and store: Xie interests submissions in chief at paragraphs 50-51. In my view, this amount is not recoverable even if there was a breach of contract by Ms Huang/Mr Nam. First, the Xie interests were committed to the lease of Muse Waterloo and the fit-out of the store before any detailed discussions occurred with Ms Huang: Exhibit 1. Secondly, Ms Xie and Ms Bai were seeking to defray part of the cost after the decision and commitment to open the store with a fit-out. Thirdly, the evidence does not establish that any loss caused to the Xie interests by the store failure was caused by the failure of Ms Huang/Mr Nam to pay the $70,000 as opposed to any number of other causes such as the retail environment or difficulties with staff or a desire to no longer run the business or difficulties with the lease. Fourthly, it is unclear when the $70,000 was expected to be paid – it was to be paid after more Korean beauty products were sold which may take some time (see above I have allowed three months). Fifthly, there is no evidence that any delay in the opening of the store caused by a failure to pay the $70,000 resulted in the store failure. Sixthly, there was no detailed evidence, including expert evidence, relating to the value of the Muse Waterloo business when sold or how the sale price was arrived at. The commission paid on the sale, at 25%, was not established to be usual or reasonable. There are many reasons why the store could have failed: poor management, less clients in Waterloo, problems with staff, inappropriate staffing and pricing and reputational issues. In my view, there is not sufficient evidence to establish that a cause of the failure of the Waterloo business was any breach of agreement by Ms Huang and Mr Nam. This head of damage is rejected.

Damages for the tort of injurious falsehood

458. I proceed to assess damages for the tort in the event that I am in error that on the evidence the tort of injurious falsehood was not committed by Ms Huang.

The repayment to Ms Liu

459. The second and third plaintiffs, Ms Xie and Ms Bai, claim as damages the loss of $178,240 which was repaid to Ms Cindy Liu in May and June 2018: see paragraph 28 of the Further Amended Statement of Claim.

460. In my view, this is not recoverable.

461. First, Ms Huang said she did not talk to Ms Liu until November 2018, well after the money had been returned to Ms Liu by Ms Xie and Ms Bai: Exhibit A page 132, paragraph 23 and the annexures referred to. This is disputed by Ms Xie and Ms Bai: see for example Exhibit A page 415, paragraph 104. I accept the evidence of Ms Huang on this issue. There is no compelling reason to doubt it. It is consistent with Exhibit 13, the “Friend request”. Ms Huang was a far more impressive witness than Ms Xie and Ms Bai and I accept her evidence on this issue. Thus Ms Huang did nothing in relation to Ms Liu to cause her to ask for her money back as she did not know her in May/June 2018.

462. Secondly, according to Ms Xie, Ms Liu requested her money back in May 2018 referring to matters told to her by Ms Huang and Ms Lo: Exhibit A pages 415-6, paragraphs 104-109. Ms Huang denies this. It seems that due to Ms Liu’s request for a refund, Ms Xie and Ms Bai chose to refund her money but not refund Ms Huang. Ms Xie and Ms Bai say the refund was made due to threats from Ms Liu. However, it seems clear that the refund was made due to discussions with Ms Liu not Ms Huang. Paragraph 61 of the Xie interests’ submissions in chief refers to Ms Liu “pull[ing] her investment”. There is no satisfactory evidence Ms Huang was aware of the discussions between Ms Liu and Ms Xie or their contents. Nothing she did had any apparent causative effect on the decision made to refund. Ms Xie and Ms Bai could have chosen not to refund the money and defend any proceedings for it as they have done with Ms Huang.

463. It seems difficult to form the view on the evidence that there was duress of a type which was instrumental in paralysing the wills of Ms Xie and Ms Bai or in overbearing or deflecting their wills: see Barton v Armstrong [1973] 2 NSWLR 598 at 607; Braam v BBC Hardware Ltd [2020] VSCA 164 at [81]-[83]. The tort of economic duress was not relied on: ANZ Banking Group v Karam (2005) 64 NSWLR 149; [2005] NSWCA 344. Thus, Ms Xie and Ms Bai made a commercial decision to refund Ms Liu’s money but not refund Ms Huang’s payments. I therefore find that Ms Liu’s conduct and requests caused the decision to refund not Ms Huang’s actions. In addition, I find the contents of the alleged conversation in Exhibit A page 415, paragraph 104 to be very unlikely. Ms Huang did not impress me as a person likely to take the action referred to and I do not accept that the conversation occurred as stated. There is nothing in the commercial agreements entered into to support the claim: Exhibit A pages 181 and 188.

464. I reject the claim for this head of damages.

465. Accordingly, the damages claimed for injurious falsehood are not established.

The claim for allegedly taking skin testing equipment

466. The Xie interests asserted an entitlement to damages for an item of equipment allegedly taken by Ms Huang and Mr Nam: Xie affidavit Exhibit A page 420, paragraph 115. This is not pleaded in the Further Amended Statement of Claim and it is difficult to see how it can be relied upon. It is not clear what the basis of the legal claim was. The factual assertion in Ms Xie’s affidavit does not indicate what the assertion is based on and whether Ms Xie was present at the time the item was allegedly taken. In her oral evidence, Ms Xie confirmed that she was not present when the equipment was allegedly taken and she relied on what she was told by her then manager, Selina. The manager Selina did not provide any affidavit or oral evidence. Ms Huang in her oral evidence stated that she did not take the machine. There was no cogent evidence that she did take it.

467. In the Xie interests’ submissions in chief, this claim was no longer pressed: paragraph 6.

Determination

468. The Huang interests have been in substance successful. I can see no reason why they should not have their costs of both proceedings. However, I will give liberty to the parties to apply for a different order.

469. For the above reasons, I make the following orders:

1. In matter 2018/00117938, judgment for the plaintiff against the defendants.

2. The parties are to bring in proposed short minutes of order within 7 days consistent with these reasons.

3. In matter 2018/00117938, the defendants are to pay the plaintiff’s costs of the proceedings as agreed or assessed.

4. In matter 2018/00364820, judgment for the defendants against the plaintiffs.

5. The parties are to bring in proposed short minutes of order within 7 days consistent with these reasons.

6. In matter 2018/00364820, the plaintiffs are to pay the defendants’ costs of the proceedings as agreed or assessed.

7. Liberty in both matters for the parties to apply for a costs order different to that in (3) and (6) above.

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Decision last updated: 11 April 2022