Hurst Iii v Zhang
[2025] QCA 159
•29 August 2025
SUPREME COURT OF QUEENSLAND
CITATION:
Hurst III v Zhang [2025] QCA 159
PARTIES:
AL WILBERFORCE HURST III
(appellant)
v
YUN ZHANG
(respondent)FILE NO/S:
Appeal No 11053 of 2024
DC No 374 of 2021DIVISION:
Court of Appeal
PROCEEDING:
General Civil Appeal
ORIGINATING COURT:
District Court at Southport – Unreported, 26 July 2024 (Jackson KC DCJ)
DELIVERED ON:
29 August 2025
DELIVERED AT:
Brisbane
HEARING DATE:
11 June 2025
JUDGES:
Mullins P and Boddice JA and Sullivan J
ORDER:
Appeal dismissed with costs.
CATCHWORDS:
GIFTS – GIFTS INTER VIVOS – ESSENTIALS OF PERFECT GIFTS – IN GENERAL – where the appellant and the respondent were romantically involved – where the appellant transferred $99,997.21 on 2 March 2021 and $99,037.03, on 13 March 2021 to the respondent – where the appellant sought to recover the two payments from the respondent at trial – where the trial judge found the payments to be gifts – whether the trial judge erred by in law by not considering whether the respondent intended to accept the gift
APPEAL AND NEW TRIAL – APPEAL - GENERAL PRINCIPLES – INTERFERENCE WITH JUDGE’S FINDINGS OF FACT – FUNCTIONS OF APPELLATE COURT – WHERE FINDINGS BASED ON CREDIBILITY OF WITNESSES – NECESSITY FOR FINDING TO BE CLEARLY WRONG – where the trial judge made findings based on their impression of the appellant and respondent as witnesses – where the trial judge preferred the respondent’s oral evidence as to the circumstances of the first payment – where the appellant challenges the trial judge’s finding that the appellant expressly told the respondent the first payment was a gift – where the appellant submits the trial judge’s findings are inconsistent with contemporaneous text messages – whether the trial judge erred in preferring the respondent’s evidence, and forming a negative impression of the appellant’s reliability and credibility
GIFTS – GIFTS INTER VIVOS – ESSENTIALS OF PERFECT GIFTS – IN GENERAL – where the appellant submits that there was no oral or written evidence relating to the second payment that expressly stated it was a gift – whether the trial judge erred in fact by concluding the appellant had made a clear statement of intention to gift the second payment
GIFTS – GIFTS INTER VIVOS – CONDITIONAL GIFTS – where the appellant had no pleaded case at trial that the gifts were conditional – where the appellant submits the two payments are correctly characterised as conditional gifts as a matter of inference – where the respondent said she would return the payments if she doubled or tripled them by Christmas – where the trial judge preferred the respondent’s evidence as to statements made about the payments – whether the trial judge erred in failing to find the two transfers were conditional gifts
APPEAL AND NEW TRIAL – APPEAL - GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – ERROR OF LAW – WHAT IS – GENERALLY – where the trial judge did not consider restitution because the payments were a gift – where the appellant ran its case at trial on the basis that if the trial judge determined the payments were gifts the other arguments fell away – whether the trial judge erred in law by finding that because there was a gift, it was not necessary to consider restitution
RESTITUTION – MISTAKE – MISTAKEN PAYMENTS – MISTAKES OF FACT AND LAW – MISTAKES OF FACT – where the appellant advances restitutionary causes of action on appeal that were not pleaded at trial – where the appellant submits the payments were advanced on certain mistakes of fact – whether the trial judge erred by failing to find the appellant was entitled to recover the payments in restitution
EVIDENCE – ADMISSIBILITY – GENERAL PRINCIPLES – RELEVANCE – where the respondent had been previously transferred $45,000 from a friend – where the respondent’s ex-fiancé had purchased a property in her name – where the appellant sought to rely on these previous payments as similar fact evidence at trial – where the trial judge did not find the evidence relevant – whether the trial judge erred in failing to have regard to this evidence
Dewar v Dewar [1975] 1 WLR 1532, considered
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22, applied
Maxwell v Maxwell [2022] NSWSC 1028, applied
Nolan v Nolan (2003) 10 VR 626; [2003] VSC 121, applied
Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516; [2001] HCA 68, considered
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35, distinguished
Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12, distinguishedCOUNSEL:
R Catterwell for the appellant
N H Ferrett KC, with A J Tindall, for the respondentSOLICITORS:
Omniad Legal for the appellant
Morrison Specter for the respondent
MULLINS P: I agree with Sullivan J.
BODDICE JA: I agree with Sullivan J.
SULLIVAN J: At trial, the appellant unsuccessfully sought to recover two amounts paid to the respondent in 2021. Those amounts were:
(a)$99,997.21, paid on 2 March 2021; and
(b)$99,037.03, paid on 13 March 2021.
The payments were found by the learned trial judge to have been gifts. At the time of the payments, the parties had been in a romantic relationship.
That finding is sought to be challenged on appeal. The appellant also advances other grounds of appeal, including some contentions which were neither pleaded nor advanced at trial.
Each of the grounds raised ought to be rejected and the appeal dismissed.
Pleaded case
The Amended Statement of Claim had alleged that the two payments were recoverable via a variety of alternative routes.
First, it was contended that the payments represented contractual advances made on three specific bases which the respondent was said to have agreed or acquiesced to, namely:
(a)the payments were for the respondent to utilise - at her discretion but with consultation and input from the appellant - for trading, until no later than 23 December 2021;
(b)to the extent that the trading realised a net profit of beyond 100 per cent (that is, where the respondent, by the trading, more than doubled the advanced funds) the respondent was entitled to retain any excess beyond the 100 per cent net profit (or “doubling”); and
(c)the trading was to occur at the appellant’s risk, such that in the event that the trading resulted in a net loss of capital, the loss would be borne by the appellant (the “Terms of the Advance”).
Secondly, as an alternative, it was alleged the two payments were held by the respondent on trust for the appellant.
Thirdly, as a further alternative, the value of the two payments were said to be recoverable by way of a restitutionary award. The restitutionary causes of action were articulated in four ways.
The first was a total failure of consideration or basis, which relied upon the Terms of the Advance being unfulfilled.
The second to fourth restitutionary causes of action were for alleged payments under a mistake. The mistaken payment causes of action were articulated in a confusing manner, and in some respects, did not make logical sense. They were pleaded to the following effect.
The first was made on the basis of the assumption that the payments were not advanced pursuant to the Terms of the Advance and, or alternatively, were not advanced as a gift. In that assumed scenario, the appellant pleaded that he made the payments under a mistake of fact because he considered that the funds were being paid in the circumstances of the Terms of the Advance and the respondent’s acceptance or acquiescence to the Terms of the Advance, and, or in the alternative, the respondent considered that the payments were being gifted to her.
The second was made on the basis that the appellant had made the payments under a mistake of law, if such amounts were not advanced in accordance with the Terms of the Advance, the respondent’s agreement or acquiescence to the Terms of the Advance and as pursuant to the contract alleged.
The third was made on the basis that the appellant had made the payments under a mistake of law because the payments had not been advanced in accordance with the Terms of the Advance, and the respondent had not agreed or acquiesced to the Terms of the Advance and were therefore not held on trust by the respondent for the benefit of the appellant.
The appeal no longer pursued the contractual or trust contentions. The appeal sought to advance restitutionary causes of action, but in an unpleaded form which was materially different to the pleaded case which had been run at trial. The appellant also sought to run an unpleaded contention that each of the payments was a conditional gift and each condition had not been fulfilled.
Background facts, evidence and trial judge’s reasons
The appellant and the respondent were introduced to each other by a mutual friend in early 2021. When they met, the appellant informed the respondent that he could assist her in learning how to make money by trading stocks on the stock exchange. Between 6 January 2021 and 2 March 2021, various oral conversations occurred, and written text messages were exchanged, which included the appellant providing the respondent with his opinions and advice on how to trade profitably.
At around 12 February 2021, the appellant commenced expressing his attraction to the respondent. This expression of attraction was reciprocated and various text messages of an intimate nature continued to be exchanged after this date.
The appellant and the respondent became romantically involved.
Prior to 2 March 2021, the respondent had raised with the appellant her wish to buy her dream car.
In the early morning of 2 March 2021, the appellant told the respondent by text that he had earnt $7 million on Wall Street overnight, and stated:
“…
And, I thought I’d buy your new car for You- Butt, There’d be some “Strings.”.…Not just anal sex - butt, some Market Targets For You, Too….
…”[1]
[1]Text messages; ARB Vol 2, p. 258.
Later, on 2 March 2021, the appellant texted the respondent and asked for her bank account details. By return text, the respondent provided the details.
On 2 March 2021, the appellant transferred the first payment to the respondent. The bank receipt stated, “Do NOT Get The Car Until We TALK”.
On the appellant’s case, he called the respondent a few hours after he transferred the first payment. The trial judge found that the appellant gave inconsistent evidence as to what the appellant claimed he had said in this call. In one version, the appellant said he hinted at there being two or three conditions. In another, the appellant said he first raised the issue of the first payment being seed funds. In another version, he said he would elaborate on the conditions in person. The trial judge noted that nothing of this conversation formed part of the pleaded case.
On 5 March 2021, a dinner occurred at which the appellant, the respondent and the respondent’s teenage daughter were present.
It was at this dinner, on the appellant’s evidence, that he said the Terms of the Advance had been articulated to the respondent and the respondent had allegedly agreed or acquiesced to the terms.
The respondent’s evidence was to the effect that at the dinner on 5 March 2021, the appellant persuaded her not to buy a car, or at least not immediately, and to use the first payment to buy shares instead. The respondent gave evidence that she was very excited, and that the appellant had guaranteed that she would make double or triple the amount of the payment.
Importantly, the respondent gave evidence to the effect that at this dinner she had told the appellant that she would pay the $100,000 back as a gift by way of a thank you if she, in fact, did double or triple her money. The appellant responded to the effect that he was pleased with this, and then said that he would never ask for the money back, and that it was a gift and she could use it as she wished.
The trial judge accepted the respondent’s evidence and rejected the appellant’s evidence as to what was said at the dinner.
Sexualised text messages and the romantic relationship between the appellant and respondent continued after 5 March 2021. This stream of sexualised text messages included a continual effort by the appellant to persuade the respondent to engage in two particular forms of sexual acts.
On 6 March 2021, the appellant had stayed at the respondent’s house. On this occasion, the appellant had asked for sex but the respondent had refused as she was not ready to do so. On the same occasion, the appellant had requested her to perform one of the other sexual acts, to which she had said no. The respondent described the appellant’s attitude to this refusal as suggesting that because he was so generous to her, she should give back. The respondent said that if the appellant required that sexual act for money, she felt like she was being treated as a prostitute. The appellant did not pursue the request and he left the house.
Despite what was said to have occurred on 6 March 2021, the romantic relationship continued between the appellant and the respondent, as did the sexualised text messages.
On 12 March 2021, after a dinner, they returned to the respondent’s house. On this occasion, the respondent and the appellant unsuccessfully attempted sex. The appellant then again tried to persuade her to engage in one of the other sexual acts, to which she again refused. The appellant left disappointed.
On 13 March 2021, the appellant made the second payment. The bank receipt on that occasion stated, “Up to 3 Stocks Next Week.” The appellant had given no notice that the second payment was to be made. The trial judge noted that in the appellant’s evidence under cross-examination he stated that he had intended the second payment to be a grand gesture.
In relation to the payments, the trial judge noted that the appellant had previously described the first payment to the respondent as being “dinner money.”[2] The appellant had subsequently referred to the second payment as being “breakfast egg”[3] money. The meaning of such statements was to emphasise the inconsequential nature of the payments to the appellant.
[2]Transcript of Judgment T1-4 l 23; ARB Vol 1, p. 9.
[3]Transcript of Judgment T1-11 l 2; ARB Vol 1, p. 16.
Shortly after 13 March 2021, the appellant had arranged a surprise trip to Melbourne for the respondent and himself. At this time, the romantic relationship and sexualised texts continued.
In Melbourne, the appellant had, on a number of occasions, asked her to perform one of the other sexual acts, to which she refused. The respondent’s evidence was that the appellant was “almost angry,” and he was upset as a result.
After the appellant and respondent returned from Melbourne, they did not speak much and the text messages were markedly different from how they had been before. The respondent said the appellant used to be loving, and now he was not. The romantic relationship and sexualised texts ceased.
On 11 April 2021, the appellant asked the respondent to return the two payments. On the respondent’s case, the appellant had been very abusive and angry, and had said that he wanted his money back, and that his money was a loan and not a gift.
The learned trial judge found the respondent to be a consistent witness, who appeared to have a specific recall of at least the important conversations. He considered that the respondent’s version of events was more consistent with:
(a)the communications between the parties;
(b)the appellant’s apparent wish to make grand gestures by the transfers;
(c)the statements as to the importance or otherwise of such moneys to the appellant (being a reference to payments being “dinner money” or “breakfast egg” money);
(d)the appellant’s feelings for the respondent at the time; and
(e)the appellant’s desire to please the respondent.
The trial judge formed a negative impression of the appellant’s reliability and credibility. He thought the appellant was someone who gave fundamentally inconsistent evidence as to what was discussed on the two occasions of 2 March 2021 and 5 March 2021, both by reference to what the appellant said at different times, and as to what was pleaded as to those occasions.
In support of his findings, the trial judge referred to various contemporaneous documents, which included a text sent by the respondent after receiving the first payment. In that text, the respondent stated that she would go straight to Porsche, and raised the availability of particular cars. The trial judge found that this was consistent with the respondent’s version of events, being her belief that at that time the money was for a car.
Specifically, the learned trial judge accepted the respondent’s version of what occurred on 5 March 2021. His Honour found that by 5 March 2021 there was a clear statement of intention to gift, and delivery of the gift, in relation to the first payment.
In relation to the second payment, his Honour found that the position “was the same”. The trial judge found that the respondent had been persuaded to invest the money gifted to her into shares in the first instance, with a view to increasing the overall value over time, with the goal being that by Christmas the funds would have doubled or tripled. His Honour went on to state:[4]
“…I do not mean, in saying that, that there was some conditional gift which failed because she did not invest in shares, but that the expectation, perhaps, of both parties was that that was what she would do given what he had told her as to what he thought the prospects were of increasing her net wealth before Christmas.”
[4]Transcript of Judgment T1-13 ll 34-37; ARB Vol 1, p. 18.
In respect of the message which had appeared on the bank receipt for the second payment of “Up To 3 Stocks Next Week,” the trial judge noted:[5]
“[This] was the method they had discussed, including the quantum of different shares for growing the value over some time.”
[5]Transcript of Judgment T1-13 ll 40-41; ARB Vol 1, p. 18.
The learned trial judge found that these were:[6]
“…statements of expectation rather than statements that rise to the height of a conditional gift, such as to mean that there had not been delivery until the money was transferred into the purchase of shares.”
[6]Transcript of Judgment T1-13 ll 42-44; ARB Vol 1, p. 18.
Having accepted the respondent’s version of what occurred in respect of the payments, his Honour found that there was no loan agreement or trust arrangement. He then went on to state:[7]
“…given what I have found in relation to the gifts, it is unnecessary for me to consider any of the restitutionary grounds. The order ought to be that the plaintiff’s claim is dismissed.”
[7]Transcript of Judgment T1-13 ll 47-49; ARB Vol 1, p. 18.
Grounds of appeal
There are 13 grounds of appeal, all of which were pressed.
The grounds are as follows:
“1.The learned Judge erred by applying the incorrect test for establishing a gift with respect to the first transfer and the second transfer.
2.The learned Judge erred by finding that, because there was a gift of the first transfer and the second transfer, it was not necessary to consider restitution.
3.The learned Judge erred by finding that the Appellant gifted the first transfer to the Respondent.
4.In the alternative to ground 3, the learned Judge erred by failing to find that the first transfer was a conditional gift.
5.The learned Judge erred by failing to find that the Respondent held the first transfer on trust for the Appellant.
6.The learned Judge erred by failing to find that the Appellant was entitled to recover the first transfer in restitution.
7.The learned Judge erred by finding that the Appellant gifted the second transfer to the Respondent.
8.In the alternative to ground 7, the learned Judge erred by failing to find that the second transfer was a conditional gift.
9.The learned Judge erred by failing to find that the Respondent held the second transfer on trust for the Appellant.
10.The learned Judge erred by failing to find that the Appellant was entitled to recover the second transfer in restitution.
11.The learned Judge erred by finding that the evidence regarding the payment of money by Reynold to the Respondent would not assist in determining the matter at all.
12.The learned Judge erred in by finding that the evidence regarding the payment of money by the Respondent’s ex-fiancé to the Respondent would not assist in determining the matter at all.
13.The learned Judge erred in fact by forming a negative impression of the Appellant’s reliability and credibility.”
The grounds were grouped together by the appellant under discrete headings. These reasons will follow the appellant’s form of grouping.
Elements of a gift (Ground 1)
This ground focused on the legal requirement for three elements to be present in order for there to be a valid gift of personal property made otherwise than by deed or declaration of trust. Those elements are:
(a)the donor must intend to gift the property to the donee;
(b)the donee must intend to accept the gift; and
(c)the donor and donee must perform an act or acts adequate to give complete effect to the relevant intention (often referred to as delivery).
It was submitted that the trial judge had erred in law by not considering the second element, namely, whether the donee in this case intended to accept the gift. This ground ought to be rejected.
Whilst the appellant’s written closing submissions[8] referred to the three essential elements for a valid gift, those submissions did not suggest that there was any lack of intent on the part of the respondent to accept the gift, nor was the absence of such an intent suggested in the oral submissions at trial.
[8]Appellant’s submissions at para [25]; ARB Vol 2, p. 101.
A judge in giving reasons does not have to list and deal with every essential element required for the establishment of a legal concept which is the subject of determination by the court. By way of example, there are various essential elements for the formation of a binding contract. It is not ordinarily expected that a judge will list in his or her reasons elements which are not in contest between the parties. To continue the example, if there was no issue between the parties that there was an intention to contract, or that the contract itself was certain, it is not expected that the judge will, in his or her reasons, identify each of those elements and find that they are factually present. A finding of the existence of the contract will implicitly recognise that the judge has found such required but uncontested elements to have been present.
Accordingly, a judge not mentioning such uncontested matters in his or her reasons will not ordinarily create an error of law.
In the present case, neither the pleadings nor the separate List of Issues for Determination document which the parties had provided to the judge at the start of the trial, identified the respondent’s intention to accept the gift as a matter in issue. Nor was such a contention raised by the appellant during the trial.
In those circumstances, the finding that each payment was a gift implicitly contained a finding that the element of there being an intention on the part of the respondent to accept the gift was present.
That conclusion becomes even clearer when it is understood that the law strongly presumes acceptance on the part of the donee of the gift. A donee’s retention of a gift is capable of constituting acceptance, even in the face of qualified acceptance.[9] It was for the appellant as the plaintiff at trial to displace that presumption.
[9]Dewar v Dewar [1975] 1 WLR 1532 at 1538, cited with approval in Maxwell v Maxwell [2022] NSWSC 1028 at 204.
In the absence of any suggestion of the element being put into contention by the appellant, there was no error of law by the trial judge omitting to state what was necessarily implicit in his finding of a gift.
Lack of intent to gift (Grounds 3, 7 and 13)
Under this grouping, the appellant broke his submissions up as between the first payment and the second payment. These reasons will adopt that approach.
In respect of the first payment, the appellant challenged the trial judge’s finding of fact that the appellant had expressly stated to the respondent on 5 March 2021 that the first payment was a gift.
In doing so, it was submitted that the finding was based solely on the oral evidence of the respondent, that there was no text message to that stated effect, and the statement was entirely inconsistent with contemporaneous text messages which had been exchanged between the parties, including text messages sent by the appellant where he had referred to the funds as “my money.”
This challenge to the finding in relation to the first payment ought to be rejected for the following reasons.
First, this finding was made, in part, on an assessment of the demeanours of the appellant and the respondent. In such a circumstance, there must be something that points decisively, and not merely persuasively, to error on the part of the trial judge who has acted on his impressions of the witnesses.[10] The appellant failed to point to anything which could be said to have such a decisive effect.
[10]Fox v Percy (2003) 214 CLR 118 per McHugh J at [66] and [90].
Secondly, the appellant submitted that in the period prior to 5 March 2021 there were texts which were entirely inconsistent with the finding of fact. None of the texts referred to in either the written submissions[11] or in the oral submissions of the appellant on appeal evidenced the inconsistency contended for.
[11]Appellant’s submissions para [5].
An analysis of the text messages prior to 5 March 2021 indicates that they were not inconsistent with the first payment having been a gift.
Before 2 March 2021, the respondent had discussed a wish to acquire a car. This wish was reflected in text messages up to this date. The first payment was made on 2 March 2021. The bank receipt itself referenced the intention of the respondent to buy a car. Subsequent text messages between 2 March 2021 and 5 March 2021 recorded the respondent expressing an intent to use the first payment to acquire the car she desired. Those texts were consistent with her having held a belief that the monies were to be a gift.
Counsel for the appellant (who was not the trial counsel) was taken by the Court to such texts in the relevant period leading up to the dinner on 5 March 2021. Counsel was then asked:[12]
“So do you say there’s anything before the 5th of March in the text messages, which are inconsistent with it being a gift?”
[12]Transcript of Hearing 1-10 ll 35-36.
In response, counsel stated:[13]
“No.”
[13]Transcript of Hearing l-10 l 38.
Once it is understood that there were no contemporaneous documents directly inconsistent with the respondent’s version of what was said at the dinner on 5 March 2021, it becomes apparent that for the first payment there is no decisive basis to challenge the trial judge’s acceptance of the respondent’s evidence over the appellant’s evidence, which was based, in part, on matters of demeanour.
In relation to the second payment, the appellant contended the learned trial judge erred in fact by concluding the appellant had made a clear statement of intention to gift. It was submitted that the evidence did not support that finding as there was no evidence, either in writing or orally, on or after the second payment on 13 March 2021, whereby the appellant expressly stated that the second payment was a gift. It was submitted that the statement in the bank receipt and subsequent text messages focused on the use of the funds for the acquisition of shares. It was further submitted that the proper inference was that there was no donative intention on the part of the appellant in respect of the second payment.
These grounds as they relate to the second payment ought to be rejected.
The trial judge had found that at least by 5 March 2021 there was a clear statement of an intention of gift and delivery of that gift in relation to the first payment.
The actual finding by the trial judge in relation to the second payment was that he considered:[14]
“…the position to be the same, because by that time, I find on the facts that the defendant had been persuaded to invest the money gifted to her into shares, in the first instance, with a view to increasing the value of those over time, with the goal being that by Christmas the funds would have double or tripled. I do not mean, in saying that, that there was some conditional gift which failed because she did not invest in shares, but that the expectation, perhaps, of both parties was that that was what she would do given what he had told her as to what he thought the prospects were of increasing her net wealth before Christmas.”
[14]Transcript of Judgment 1-13 ll 30-37; ARB Vol 1, p. 18.
The trial judge was not suggesting by that finding that there was an express statement that the second payment was a gift. Rather, the second payment was obviously recognised by the trial judge as occurring within the context of:
(a)the making of the first payment;
(b)the clear and unambiguous words of gift expressed on 5 March 2021 in respect of that first payment;
(c)the making of the second payment within a relatively short period after the first payment and the making of the 5 March 2021 statement; and
(d)the ongoing romantic relationship.
The clear and unequivocal words of gift in respect of the first payment, coupled with the relatively short period between payments, and the ongoing romantic relationship between the appellant and respondent, contextually supported that the second payment was a gift on the same basis as the first payment.
The trial judge obviously drew this inference, and accordingly found the donative intention. Such a finding comfortably fits within the principle that the donative intention need not be manifested by words of gift but may arise from a consideration of the general circumstances of the case.[15]
[15]Nolan v Nolan (2003) 10 VR 626 at [139] per Dodds-Streeton J.
Lack of intent to accept (Ground 3 and 7)
This grouping of grounds has been touched upon above. The appellant’s contention was that there was no gift in respect of the first payment or the second payment because the respondent had not intended to accept the gift as a matter of fact.
The submission as made by the appellant only focused on part of the respondent’s accepted evidence of what was said in the relevant exchange between the appellant and the respondent on the evening of 5 March 2021. In this respect, the appellant extracted that part of the exchange where the respondent had said words to the effect that if the appellant guaranteed that her shares would double or triple by Christmas that she would like to give as a gift to his “…bank business a hundred thousand, you give to me, your dinner money.”[16]
[16]Transcript of trial 2-9 ll 10-11; ARB Vol 3, p. 660.
That submission ignored that the appellant in response to the above statement then stated words to the effect that the appellant would never claim the money back because it was a gift for her, and that the respondent could do whatever she liked with the money.
Selecting only one part of the accepted conversation of 5 March 2021, out of the context of the full conversation, misrepresents the true effect of what occurred. Whilst there was an expression by her that if she made a particular amount of money that she had an expectation to re-gift $100,000 back to him, the appellant’s response was to reiterate that the money was a gift, that he would never ask for it back and that she was free to use it as she wished. There was then no subsequent disclaimer of the money by the respondent after that statement. Rather, the respondent simply retained the money.
When the full conversation of 5 March 2021 is considered, there is no rebuttal of the legal presumption in favour of the respondent as a donee, that she intended to accept the money. It is entirely consistent with the presumption that she held such an intention.
This conclusion sits comfortably with the observations of Goff J (as his Lordship then was) in Dewar v Dewar [1975] 1WLR 1532 at 1538-1539:
“…where a person intends to make a gift and the donee receives the thing given, knows that he’s got it and takes it, the fact that he says: “Well, I will only accept it as a loan, and you can have it back when you want it” does not prevent it from being an effective gift. Of course, it does not turn it into a loan unless the donor says: “Very well, let it be a loan.” He could not force the donor to take it back, the donor, having transferred it to him effectively and completely, intending to make a gift, and he – so far from repudiating – having kept it, it seems to me that that is an effective gift and accordingly I hold that the defendant has established that the mother’s contribution was a gift.”[17]
[17]That extract cited with approval in Maxwell v Maxwell [2022] NSWSC 1028 at [204], per Ward P.
The appellant also relied upon a portion of a text message which was sent by the respondent on 12 April 2021. The relevant portion stated, “I would like to return you 200 as this is my promise.”[18]
[18]Text message, ARB Vol 2, p. 348.
That portion of the text again has to be seen in the overall context of the evidence, including the full content of the text referred to. The evidence was that the respondent had stated that if, by December 2021, she earnt two to three times the amount of the original first payment, she would like to re-gift $100,000 to the respondent. Read in this context, that particular portion of the text relied upon by the appellant was consistent with the respondent’s version of what had been said on 5 March 2021, but applied to the two payments. This is made abundantly clear by a consideration of the full text message which had also expressly stated:
(a)the money was sent as a gift without any questions; and
(b)she hoped she could turn 200 into 600 by Christmas.
It was in that circumstance she said she would like to return to him 200, as this was her promise.
There was no disclaimer evidenced by this text. Again, extracting a portion only of the text misrepresents the true effect of the contents of the document.
Conditional gift (Grounds 4 and 8)
It was accepted by counsel for the appellant at the appeal hearing that there had been no pleaded case by the appellant that the gift had been a conditional one. The allegation by the appellant that the gift should be seen as a conditional one seems to have only emerged in the final written submissions. It was one which was briefly addressed by both of the counsel and by the trial judge in oral closing submissions. Whilst not pleaded, I am prepared to deal with this ground on its merits.
It was submitted by the appellant that the correct characterisation of both gifts as conditional was clear as a matter of inference based on, amongst other things:
(a)that part of the conversation of 5 March 2021 where the respondent said words to the effect that she did not want the appellant’s money, that she would return the funds if she doubled or tripled them and that if the appellant guaranteed her that she would make her shares double or triple by Christmas she would like to give to him $100,000; and
(b)certain identified text messages exchanged in the period between 2 March 2021 to 12 April 2021.
The appellant pointed to evidence that was said to show that only $80,000 of the $200,000 had in fact been invested in shares. The initial contention was that this meant that the gift had failed and the property in the funds had not passed to the respondent.
This grouping of grounds ought to be rejected.
In relation to the first payment, they ought to be rejected because they are contrary to accepted evidence of what was said at the dinner on 5 March 2021. Again, the appellant’s submission is based on selective parts of the 5 March 2021 conversation taken out of the context of the full conversation. Such cherry picking of parts only of the whole conversation leads to a misrepresentation of the overall effect of the exchange. Importantly, it ignores the end of the relevant conversation where the appellant responds to the effect that the first payment was a gift which he would never ask to be repaid and was one which the respondent could do with as she wished.
The trial judge’s acceptance of the respondent’s evidence of what was said on 5 March 2021 is fatal to the conditional gift contention advanced in respect of the first payment.
Counsel for the appellant orally conceded that if the acceptance of the respondent’s evidence of what was said at the 5 March 2021 dinner remained undisturbed, then he could not support the contention that the first payment was a conditional gift.
In relation to the second payment, the relevant finding by the trial judge was that the second payment was made on the same basis as the first payment. As previously discussed, it is implicit that the “same basis” was that it was a gift, that the respondent could do with as she wished and the appellant would never ask her to repay it. That finding is equally fatal to the conditional gift contention in respect of the second payment.
In light of his Honour’s acceptance of the respondent’s evidence of what was said at the 5 March 2021 dinner, the finding that the gifts were not conditional was plainly correct.
The various statements in the texts referred to, and in the bank receipt for the second payment do not alter this conclusion. Consistent with the trial judge’s finding, those statements merely reflected an expectation, perhaps by both parties, that the respondent would re-gift certain monies if she reached her investment goal by Christmas, namely that the funds had doubled or tripled.
It should be noted that there were other text messages between 5 March 2021 and 13 March 2021 which were consistent with the second payment being a gift of this nature.
Those text messages sent by the appellant contained statements which expressed how generous the appellant had been to the respondent. They were made in the context of the appellant seeking to emphasise his generosity to the respondent, whilst at the same time, expressing his expectation that the respondent should be reciprocally generous to him in relation to their sexual relations. In that respect, two of the more obvious examples of such texts sent by the appellant were as follows:
·“…
And, as I’ve Begged- I pray YOU ask Yourself daily: What will I do/offer- to make big al feel special Today- You can’t Only be a recipient of Thoughtfulness….
It’s just a way of Thinking And, more importantly, Acting- As love is Action- not just an emotion….
…” (16 March 2021)[19]
·“…
I don’t like selfish people. I Never expect Anyone to be as generous and thoughtful as I am….
Butt, I wd not stay in a relationship where I’m Always giving; and my partner does Not think/act:
Darn, IF This is what this kind person wants- I will happily do things He asks….
Or, as I wrote: As themselves daily: What can I do - to make Big Al Happy- No Jokes Nor Excuses - Ever….
You can NOT say later- IF I Only Knew What Big Al expects from me- as He’s constantly doing for me- WITHOUT my begging Him….
…” (17 March 2021)[20]
[19]Text messages; ARB Vol 2, p. 298.
[20]Text messages; ARB Vol 2, pp. 315-316.
Restitution of a gift (Ground 2)
This ground concerns that part of the judgment where his Honour stated the following:[21]
“It follows from what I have said, I am not satisfied that there was any loan agreement or trust arrangement. For – given what I found in relation to the gifts, it is unnecessary for me to consider any of the restitutionary grounds.”
[21]Transcript of judgment T1-13 ll 46-49; ARB Vol 1, p. 18.
The appellant contended that the trial judge erred because it was said to be well established that a person who pays money to another under a mistake of fact or law which causes the payment, may prima facie recover the money in restitution. It was submitted that there are at least two reported cases where payments by gift, otherwise than by deed, were recovered in restitution because of a mistake of fact.[22] It was said the trial judge erred in law by finding that because there was a gift, it was not necessary to consider restitution.
[22]Larner v London County Council [1949] 2 KB 683; University of Canterbury v Attorney-General [1995] 1 NZLR 78.
This ground ought to be rejected.
It can be accepted as a matter of principle that in certain circumstances the occasion of a gift can give rise to relief in restitution in respect of a payment made by reason of a mistake of fact or law which was causative of the payment.
However, the contention as articulated by the appellant in its written submissions failed to identify to this Court that the trial judge’s actions reflected by the statement above accurately reflected how the appellant had run its case at trial.
In the opening of the appellant’s case at trial, the then counsel for the appellant had the following exchange with the trial judge, initially in the context of the trust pleading but then also in the context of the restitutionary case:[23]
“TRIAL COUNSEL: Thank you, your Honour. This case is somewhat unorthodox; there’s no shying away from that. There was almost $200,000 that was transferred from my client to the defendant in March of 2021; there were two payments of just over $99,000 of each part. The basis for those payments being made is what’s obviously in dispute. It’s always been my client’s case that those funds were either provided on the basis of a loan or an advance or some sort of style investment, where there was to be the moneys repaid at a point in time or on demand, or alternatively, from a legal point of view, the moneys were advanced and held on trust by the defendant.
HIS HONOUR: A purpose trust?
TRIAL COUNSEL: Well, there’s three types of trusts that I will consider that could be utilised within this. Yes. The first will be the expressed purpose trust. The second would be a quite close[24] style trust. The issue with those two trusts is that intention of both parties needs to be established. The other type of trust it potentially could be would be a joint-endeavour constructed trust, where the court, in some circumstances, will look to the attention[25] of the donor or the giver of the money – beneficiary, at the time that those trust funds were advanced. So there’s sort of three elements that the trust put for within. As far as – ultimately, the question that your Honour needs to determine in this matter is the question of whether or not the funds were a gift. If your Honour is – determines that the funds were a gift, then all the rest of the arguments fall away.
HIS HONOUR: Yes.
TRIAL COUNSEL: The difficulty for the plaintiff in this case is that he bears the onus of proof in regards to not just establishing either this loan or the trust argument, but also in establishing that it wasn’t a gift, and that is a, you know, weighty threshold to have to hit. Especially in a case like this, where there’s really nothing documented but for a few text messages that are somewhat contemporaneous that may go towards indicating an intent – some of the intention; it’s all based on oral conversations.
Obviously, credit’s going to loom large in this matter. If your Honour is not satisfied – and this is a real possibility; if your Honour was not satisfied at the end of this trial that the matter – that the funds were gifted, but there also wasn’t the legal elements established to – for the loan or the trust, then it kind of leaves the party in no-man’s land – the parties in no-man’s land, because the – you’ve got the sum of money, and there’s really no legal recourse to have it returned to the plaintiff.
It’s on that basis that there’s the restitutionary case that – or the restitutionary cases, I should say, that have been advanced; the first one being the failure of consideration; the second would be the basis of a stake that the parties – or at least, from my clients’ point of view – that the funds were paid on the basis of this terms of the advance, and if your Honour found that those terms didn’t exist or that they weren’t to the threshold of establishing a contractual arrangement, then there would’ve been a mistake of fact, or potentially a mistake of law as well, there. This --- …”
[23]T1-7 l 24 - T1-8 l 21; ARB Vol 3, pp. 576-577.
[24]Although the transcript states ‘quite’, counsel was referring to a ‘Quistclose’ style trust.
[25]Although the transcript states ‘attention’, counsel likely meant ‘intention’.
The case was therefore opened by the appellant on the basis that if the trial judge determined that the funds were a gift then all of the rest of the arguments fell away and this included the loan case, the trust case and the restitutionary case. The only circumstance where a restitutionary case was said to operate was one where the trial judge was both:
(a)not satisfied that there was a gift; and
(b)was not satisfied that legal elements for a loan or trust were established.
It was only in that “no man’s land” that the appellant contended for restitutionary relief.
The case as opened did not change during the trial, including in closing submissions. The written closing submissions of the appellant at trial provided as follows:
“…
159. It is submitted that if the Court makes a finding that:
a.the funds were not advanced to the defendant pursuant to the Terms of the Advance and the Defendant’s Assent; or
b.were not advance pursuant to a trust; or
c.were not advanced to the defendant as a gift.
It follows that the parties were under a mistaken belief in respect to the provision of the Advanced Funds.
…
165.Alternatively, the defendant has retained the benefit of the Advanced Funds in circumstances where they were not gifted to her and there are no defences, therefore there has been unjust enrichment.”
Accordingly, the appellant had expressly conducted the trial on the basis that if the learned trial judge found that there was a gift, then the restitutionary causes of action fell away. In the context of how the appellant ran its case from the outset of the trial, it was extraordinary for the appellant to have made the unqualified submissions that the trial judge had erred in law by not dealing with the restitutionary causes of action.
It is clear that the reason why the learned trial judge did not need to deal with the restitutionary causes of action at trial was because that was how the appellant had expressly confined his case. The appellant was free to confine his case at trial in this way, but there can be no error of law by the trial judge in failing to deal with causes of action when the appellant has clearly stated it is not required to be dealt with.
Restitution for mistake (Grounds 6 and 10)
This grouping concerns arguments advanced in respect of restitutionary relief based on mistake only.
Quite separately to the problems which the appellant faces in light of how he confined his case at trial, the appellant now also seeks to advance restitutionary causes of action which are materially different to the pleaded restitutionary causes of action for mistake which were pleaded and advanced at trial.
In the introductory section of these reasons, I have set out the form of the pleaded restitutionary causes of actions. Three of the four pleaded causes of action were said to be founded on certain articulated mistakes of fact or law. As summarised in the pleading section of these reasons, each such cause of action was linked to the Terms of the Advance which had been pleaded.
In contrast, the restitutionary causes of action sought to be advanced on appeal arise from materially different alleged mistakes which are said to have caused the appellant to transfer both the first payment and the second payment. The case on appeal was said that the causative mistakes were as to:
(a)the respondent’s experience in investing in shares; and
(b)the respondent’s intention to invest the funds in shares and return the funds to him if she doubled or tripled them.
This is not a case where it would be appropriate for the Court to entertain such materially different restitutionary causes of action which was unpleaded and unadvanced at trial. Mistaken of fact cases are fact-sensitive in terms of:
(a)the facts which are said to have been mistaken;
(b)what was the true state of the facts which existed; and
(c)whether there was a reliance on the mistaken fact in a causative sense.
Where such matters are not pleaded and not advanced, it will be difficult for a court to be satisfied that all the relevant facts have been established beyond controversy and that it is expedient in the interests of justice to entertain such a case.
In the specific circumstances of this case, I am not satisfied that it could be said that in respect of the new causes of action now advanced that all the facts had been established beyond controversy. The respondent points out, by way of example only, that it was not put to her that she did not intend to invest the proceeds of the payments in shares prior to December 2021.
Further, the respondent did not know at trial the specifics of the case she is now asked to meet. I find it is likely that the respondent will have been materially prejudiced if the Court were to allow these causes to be advanced on appeal, not least because she will have lost the opportunity to lead evidence which may have supported her case and she has lost the opportunity to cross-examine the appellant in respect of the new allegations, including his alleged causative reliance. In such circumstances, it is not expedient in the interests of justice to allow the appellant to advance these new causes of action.
I am satisfied that these newly articulated causes of action do not fall within those categories of cases recognised in Water Board v Moustakas (1988) 77 ALR 193 and Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, where an appellate court might be prepared to entertain for the first time on appeal, matters not raised at trial.
It is unnecessary to further deal with the alleged new grounds of appeal.
Restitution for failure of basis (Ground 6 and 10)
This grouping of grounds is primarily premised on the basis that the appellant has successfully established that the gift was a conditional one. As the appellant has failed to establish that there was such a conditional gift, then this grouping must fail to the extent that this is the basis upon which it is advanced.
An alternative contention was put forward to the effect that even if the gift was unconditional, the basis of the gift was still that the respondent would invest the funds in shares. That alternative contention ought to be rejected.
First, the gift was unconditional. The mere expectation that the respondent would invest in shares did not constitute the payment as being made for a “purpose” or “condition” which has failed.[26]
[26]Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 at [16] per Gleeson CJ, Gaudron and Hayne JJ.
More specifically, having accepted the evidence of the respondent as to what was said at the 5 March 2021 dinner, the gift was expressed on the terms that it was a gift, that the appellant would never seek for it to be repaid, and that it could be spent by her as she wished.
The “basis” or “purpose” put forward by the appellant cannot stand in light of those findings of fact.
Trust (Grounds 5 and 9)
This grouping of grounds arises out of the matters articulated under the following headings set out above, namely:
(a)Lack of intent to gift (Grounds 3, 7 and 13);
(b)Lack of intent to accept (Grounds 3 and 7);
(c)Conditional gift (Grounds 4 and 8);
(d)Conditional gift (Grounds 4 and 8); and
(e)Restitution for failure of basis (Grounds 6 and 10).
This grouping is put forward simply as an alternative form of relief. It requires the appellant to succeed on one of the other groupings of grounds which I have identified. As the appellant has not succeeded under any of those groupings of grounds, then this grouping must also fail.
Evidence (Grounds 11 and 12)
This grouping of grounds related to the trial judge’s finding that certain evidence would not assist in determining the proceeding.
That evidence was:
(a)that the respondent’s friend, a Mr Gilson, had previously transferred $45,000 to the respondent to invest in shares and, although the respondent gave evidence that Mr Gilson could seek return of the money, the respondent had not returned the funds; and
(b)the respondent’s ex-fiancé, Mr Guan, had purchased a property in the name of the respondent for $1.8 million and had to institute proceedings to recover that property.
It was contended that the trial judge had erred in failing to have regard to this evidence.
It was contended by the appellant the evidence was relevant as circumstantial or similar fact evidence which reinforced the inference that, as at the time of the two payments, the appellant was mistaken as to the respondent’s intention. It was submitted that just like with Mr Gilson’s investment funds and her ex-fiancé’s payment for her house, the respondent did not intend on returning the money.
Those contentions ought to be rejected.
The evidence was not probative of the matters identified. The mere raising of the existence of such unpleaded and unresolved collateral disputes between the respondent and third parties in respect of unrelated transactions cannot speak to the state of mind of the appellant at the time of the two payments.
The learned trial judge was right in his conclusion that these collateral matters did not assist in determining the matters in dispute between the parties in the current proceedings.
Conclusions
For those reasons the appeal ought to be dismissed with the appellant paying the respondent’s costs of the appeal.
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