IMBK Pty Ltd v Zheng Tan

Case •

[2018] NSWSC 1801

•

26 November 2018

No judgment structure available for this case.

Supreme Court


New South Wales

Medium Neutral Citation: IMBK Pty Ltd v Zheng Tan [2018] NSWSC 1801
Hearing dates: 7-16 May 2018, 15 June 2018
Date of orders: 26 November 2018
Decision date: 26 November 2018
Jurisdiction:Equity
Before: Robb J
Decision:

(1) Plaintiff is entitled to judgment against the defendant for $250,000 plus pre-judgment interest under s 100 Civil Procedure Act 2005 (NSW).

 

(2) Defendant’s cross claim is dismissed.

 

(3) Defendant is to pay the plaintiff’s costs (the Court will hear the plaintiff as to the appropriate basis for the payment of costs).

 (4) Plaintiff to bring in short minutes of order plus a schedule setting out the calculation of interest.
Catchwords:

MONEY — Currency and exchange control — Repayment of Money — Cancelled Contract — Whether money was taken by the defendant without authority or taken lawfully pursuant to an agreement — Closed circuit television recording of defendant taking money from the plaintiff’s premises — Repayment of money paid under a cancelled contract on the ground that consideration for the payment wholly failed — The plaintiff has established an entitlement to be repaid money advanced to the defendant and to cash taken by the defendant from the plaintiff’s premises without authority — No point of principle

  EVIDENCE — burden of proof, presumptions, and weight and sufficiency of evidence — Transactions conducted overseas through oral conversations and the making of cash payments — the importance of objective evidence in assessing the credibility of the cases put forward by the parties
Legislation Cited: Civil Procedure Act 2005 (NSW)
Cases Cited: Hungerfords v Walker (1989) 171 CLR 125; [1989] HCA 8
Watson v Foxman (1995) 49 NSWLR 315
John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451
Category:Principal judgment
Parties: IMBK Pty Limited (plaintiff and cross defendant)
Mr Zheng Tan (defendant and cross claimant)
Representation:

Counsel:
N Carney (plaintiff)

  Solicitors:
SHL & Associates Lawyers (plaintiff)
Defendant (self represented)
File Number(s): 2016/88793

Judgment

  1. The plaintiff, IMBK Pty Ltd (IMBK) is an Australian company that operates a foreign currency exchange business under the trading name “Anping”.

  2. At relevant times, Mr Zhi Jiong was the sole director of IMBK. His wife, Ms Yanyan Sun, was also active in IMBK’s business, in dealing with its clients and making arrangements necessary for the exchange of currencies between IMBK and its clients.

  3. IMBK operated from two branches in Auburn and Eastwood in this State. The latter branch is the one in which events relevant to these proceedings occurred.

  4. IMBK employed Mr Jue (James) Gong as its manager. Mr Gong generally performed his duties at the Auburn branch. Mr Gong made an affidavit but it was not read by IMBK. IMBK employed a teller at its Eastwood branch called Sichen (Toby) Song. I will refer to Mr Song as Toby Song, as another witness had the same final name.

  5. The defendant in these proceedings, Mr Zheng Tan, was a client of IMBK with which he had engaged in a number of foreign exchange transactions before the events that have led to the present dispute. Mr Tan uses the first name Vincent.

  6. The dispute arises out of two transactions that were to occur on 3 and 11 March 2016.

Nature of IMBK’s business

  1. Relevantly for the purposes of the present case, IMBK conducted foreign exchange transactions for its clients in the following general manner. IMBK and its client would agree that the client would deposit money in bank accounts in the People’s Republic of China (China) nominated by IMBK, and after IMBK received confirmation of the deposits, IMBK would then pay to the client in Australia, either in cash or by payment into bank accounts nominated by the client, the equivalent amount of money in Australian dollars, calculated at the rate of exchange agreed between IMBK and the client. IMBK’s business also included foreign exchange transactions in the reverse order, whereby the client paid Australian dollars to IMBK and IMBK then arranged for the equivalent amount in Chinese currency, the renminbi (RMB), to be paid into bank accounts nominated by the client in China. IMBK also conducted foreign exchange transactions between Australia and countries other than China, but that aspect of IMBK’s business is not relevant.

  2. The two transactions that have given rise to the present dispute involved proposals that Mr Tan would cause agreed amounts of RMB to be paid to IMBK in China in return for the equivalent amounts of Australian dollars to be paid to Mr Tan at the exchange rates agreed between the parties for each transaction. Neither transaction was in fact completed.

The parties’ claims

  1. By its statement of claim filed on 15 April 2016, IMBK claims from Mr Tan the total sum of $250,000. That amount is made up of $12,494.90 which IMBK paid to Mr Tan’s nominated bank account on 3 March 2016, as an advance payment of the sum of $612,494.90 that IMBK agreed that it would pay to Mr Tan in Australia in return for Mr Tan causing RMB ¥ 3,000,000 to be deposited into bank accounts nominated by IMBK in China. That transaction was cancelled on 3 March 2016, and IMBK claims that it is entitled to be repaid the $12,494.90 on the basis that the consideration for the payment has wholly failed.

  2. The balance of IMBK’s claim of $237,505.10 arises out of a second transaction that was to take place on 11 March 2016. Under that transaction, Mr Tan agreed to cause RMB ¥ 1,247,500 to be paid into bank accounts to be nominated by IMBK in China in return for Mr Tan being paid $250,000 in Australia, $12,494.90 of which was to be retained by IMBK to reimburse it for the earlier payment made on 3 March 2016. Thus, Mr Tan was only to be paid the sum of $237,505.10 at the Eastwood branch, after confirmation had been received that Mr Tan had caused the RMB ¥ 1,247,500 to be paid into the nominated accounts in China.

  3. IMBK’s case is that, before IMBK received confirmation that the required RMB had been paid into the Chinese accounts, Mr Tan, who had assisted Mr Toby Song in counting the cash in the Eastwood branch, simply decamped with the money in a backpack without IMBK’s consent or authority. In essence, IMBK’s claim is that Mr Tan stole the $237,505.10 in cash.

  4. Mr Tan does not deny that he received the $12,494.90 on 3 March 2016, or that he physically took the $237,505.10 on 3 March 2016. However, he seeks to put an entirely different complexion on events than as is claimed by IMBK.

  5. Mr Tan’s case is that on 2 March 2016, he made an agreement with Mr Jiong on behalf of IMBK, at Mr Jiong’s request, that instead of Mr Tan causing the RMB ¥ 3,000,000 to be paid into any bank accounts in China nominated by IMBK, Mr Tan would cause the money to be paid in cash to an agent of IMBK. Mr Tan claimed that in fact his father-in-law did pay the cash to a person who represented IMBK, so that IMBK was not entitled to cancel the transaction as it did later on 3 March 2016. Mr Tan’s father-in-law’s name is Lu Guang Song, who I will call Mr Song.

  6. Mr Tan filed a cross claim against IMBK on 18 May 2016, in which he claimed an entitlement to be paid $350,000, as the balance of the $612,494.90 that he would have received from IMBK if the 3 March 2016 transaction had been completed. In calculating the amount of his claim, Mr Tan has given credit for the $12,494.90 that he had already received, and also for the $237,505.10 which he obtained in cash on 11 March 2016.

The statement of claim

  1. In its statement of claim, IMBK put its claim on a number of different grounds. The claim for the return of the $12,494.90 is put in contract and restitution, but is plainly a case for the repayment of money paid under a cancelled contract on the ground that the consideration for the payment has wholly failed.

  2. IMBK’s claim for the $237,505.10 is put on the grounds of breach of contract, deceit, conversion and constructive trust. In its final written submissions, IMBK put the claim on the basis of breach of the contract to pay the equivalent in RMB of $250,000 into the nominated bank accounts in China, unjust enrichment based upon mistake by IMBK that Mr Tan would pay the agreed amount, and on the basis that a person who steals money holds that money on trust for the true owner.

  3. This matter is unusual in that, if IMBK succeeds in establishing the factual basis of its claim, it will be clear that Mr Tan must be ordered to pay IMBK $250,000, and the precise legal basis of IMBK’s entitlement is of no significance.

  4. I note that in par 54 of its statement of claim, IMBK claims an entitlement to damages on the principle in Hungerfords v Walker (1989) 171 CLR 125; [1989] HCA 8. IMBK gave particulars of its claim to the effect that the average profit it could have earned if the cash had not been taken by Mr Tan was approximately $1500 per calendar day. IMBK did not lead evidence to sustain this claim. (There was some, inadequate evidence on this issue in Mr Gong’s affidavit, but that affidavit was not read). This claim is not mentioned in IMBK’s final written submissions, so I assume that it is no longer pursued.

The defence and cross claim

  1. At the time Mr Tan’s defence to the statement of claim and his cross claim were filed, Mr Tan had legal representation. Subsequently, at the hearing Mr Tan appeared in person and represented himself.

  2. In his defence, Mr Tan admitted that IMBK paid $12,494.90 into Mr Tan’s bank account on 3 March 2016, but he alleged that the agreement that he had with IMBK required that company to deposit $612,494.90 into his account. Mr Tan alleged that his father-in-law had paid the RMB ¥ 3,000,000 in cash to the agent of IMBK in accordance with the agreement.

  3. As to IMBK’s claim for repayment of the balance of the $250,000, Mr Tan denied in par 6 of his defence that he made an agreement on or about 10 March 2016 to exchange Chinese currency for the amount of $250,000, and claimed that he attended at IMBK’s Eastwood branch for the purpose of being paid the $600,000 that was owing to him “and was handed $250,000 in cash”. Mr Tan pleaded that he asked Mr Jiong for payment of the balance of the $350,000 and “was told by him that it would be provided later on that day, or during the following week”. Consequently, in par 8, Mr Tan said that he “denies that he removed the sum of $237,505.10 in cash”.

  4. On the same subject, in par 9 of his cross claim, Mr Tan alleges that on 11 March 2016, he “was given by staff member cash in the sum of $250,000, in part payment of the outstanding amount due pursuant to the agreement”.

The relationship between the parties’ claims

  1. The resolution of the present dispute will depend upon the findings of fact that the Court makes. Those findings will substantially depend upon the view that the Court takes about the credibility of the evidence given on behalf of IMBK compared to the evidence given by Mr Tan. This is a case where the Court must find in favour of one party or the other, in the sense that each party’s case excludes the possibility that the other party’s case should also be accepted. If the Court is not satisfied that the evidence establishes that Mr Tan’s father-in-law paid RMB ¥ 3,000,000 to an agent of IMBK in China in accordance with the agreement alleged by Mr Tan, then it will follow that the consideration for the payment of the $12,494.90 by IMBK to Mr Tan’s account failed, because IMBK validly cancelled the agreement due to be completed on 3 March 2016. In that case it would follow that Mr Tan was not entitled to take the $237,505.10 that he took from the Eastwood branch on 11 March 2016. IMBK would be entitled to judgment against Mr Tan for $250,000. On the other hand, if Mr Tan establishes that his father-in-law paid the agent of IMBK the alleged RMB ¥ 3,000,000 in accordance with an agreement binding IMBK, then IMBK’s case will fail, and Mr Tan will be entitled to judgment for $350,000 on his cross claim.

  2. Mr Tan’s cross claim depends upon proof of an oral agreement between Mr Jiong on behalf of IMBK and Mr Tan on 2 March 2016, and also proof that Mr Tan’s father-in-law paid RMB ¥ 3,000,000 to a person who represented IMBK. Proof of payment of cash is inherently difficult where there is no authenticated record of the cash being paid. As will be seen, Mr Tan’s father-in-law claims not to have paid over the cash until he was shown some evidence of identity by the person to whom he paid the money, and until he was given a receipt. This evidence introduces the additional problem of what is necessary to prove the authenticity of the evidence upon which Mr Tan relies. It will be obvious to anyone familiar with cash dealings that there is an inherent risk in undertaking such transactions that the proof that they have occurred sufficient to satisfy the burden of proof in formal court proceedings may not be available. The issue is not simply whether a particular transaction happened, but whether it can be proved to the satisfaction of the Court.

Observations on issues of proof

  1. It is a general rule in proceedings for civil relief that the party asserting a particular right has the burden of proving the facts necessary to establish that right to the satisfaction of the Court. The standard of proof is that the Court should be satisfied on the balance of probabilities that all of the necessary facts occurred. That means that the Court must be satisfied that more likely than not the particular facts happened.

  2. It can be difficult for a party to satisfy the burden of proof where the evidence upon which the party has to rely is of oral conversations and the making of cash payments. Unless such events are recorded in some reliable and authenticated manner, there will always be a risk that, if the occurrence of the events is contested, the party who has the burden of proving that they did occur will fail to satisfy the burden of proof. Court cases are not decided on the basis of what actually happened, because the Court will virtually never be a witness to the events, and it must rely upon evidence given by witnesses or documents that record events happening. Some evidence is inherently less persuasive than other evidence. Contested recollections of what was said in conversations fall into this category. So does evidence by one party that it has paid cash to the other.

  3. Commonly, the following observations by McClelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318-319 are accepted as being an astute description of the difficulties that arise where the issue depends upon the acceptance of one party’s evidence as to what was said by the other. His Honour said:

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

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

  1. The following observations made by Hammerschlag J in John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 are also apposite:

[94] Where a party seeks to rely upon spoken words as a foundation for a cause of action, including a cause of action based on a contract, the conversation must be proved to the reasonable satisfaction of the court which means that the court must feel an actual persuasion of its occurrence or its existence… In the absence of some reliable contemporaneous record or other satisfactory corroboration, a party may face serious difficulties of proof. Such reasonable satisfaction is not a state of mind that is obtained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question of whether the issue has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences: see Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; Helton v Allen (1940) 63 CLR 691 at 712; Rejfek v McElroy (1965) 112 CLR 517 at 521; Watson v Foxman (1995) 49 NSWLR 315 at 319.

[95] The sensation of feeling an actual persuasion, after a contest, that an event has happened or that something exists is one which is well known and recognised by experienced trial judges for what it is.

  1. It is a consequence of these considerations that the evidence may often fall short of that which is necessary to enable the Court to feel an actual persuasion that the facts asserted by a particular party occurred, and in the absence of that persuasion the Court cannot be reasonably satisfied that the allegation has been proved.

  2. One consequence of these considerations is that, in a case such as the present, the Court must carefully examine all of the documents that were produced in the course of the various transactions between IMBK and Mr Tan, to assess the extent to which the documents are consistent with the cases put forward by each party, as documentary evidence created at the time relevant events occurred in the ordinary course of business, and without any influence arising out of any subsequent dispute, will often provide the most reliable evidence of the real facts.

Significance of the closed circuit television recording

  1. One aspect of the present case that is relatively exceptional is that the events that occurred on 11 March 2016 that led to Mr Tan leaving IMBK’s Eastwood branch with $237,505.10 was recorded on closed circuit television, and the recording was played during the hearing (Exhibit E). The recording provides unequivocal evidence of what happened on that occasion.

  2. As I have recorded above, in Mr Tan’s defence and cross claim he made assertions concerning the circumstances in which the $237,505.10 was placed into his hands by Mr Toby Song. Although those pleadings were prepared by Mr Tan’s lawyer, I must infer that the allegations were made on instructions, and the lawyer drafted the wording of the documents to record what he was told by Mr Tan.

  3. Mr Tan’s pleaded case was that he went to the Eastwood branch on 11 March 2016 for the purpose of being paid the sum of $600,000 and that he “was handed $250,000 in cash”. That is, Mr Tan’s case was that he went to the branch in the expectation that he would be given the money as part of the $600,000 that was due to him, and he would be free to leave with it.

  4. In the manner that I will set out more fully below, it is clear from the evidence that in fact Mr Tan had agreed with Ms Sun a separate agreement to exchange $250,000 for the equivalent amount of RMB paid into accounts nominated by Ms Sun in China. My acceptance of that fact does not only depend upon Ms Sun’s evidence, but is unequivocally proved by documents brought into existence on 11 March 2016, one of which was signed by Mr Tan. The evidence shows that Mr Tan entered the branch at 11:01:46 AM and left with the money at 12:46:09 PM, about 1 ½ hours later (it was noted by the plaintiff that the CCTV recording depicted a time stamp that was 14 minutes ahead). In the interim, documentary records establish that Ms Sun and Mr Toby Song communicated about whether evidence had been received that Mr Tan had caused the necessary payments to be made into the nominated bank accounts in China, so that Ms Sun could authorise Mr Toby Song to allow Mr Tan to leave the branch with the money. It is clear from a viewing of the recording that neither Mr Tan nor Mr Toby Song acted in a manner consistently with Mr Tan entering the branch as if he expected to be given the money in payment of a debt due to him, so that he could leave the branch without much ado. While care must be taken in drawing definite conclusions from what ‘looks’ to be happening, I am entirely satisfied from viewing the recording that Mr Toby Song counted the money and put it in a bag, and then his attention wandered while he was waiting for further instructions from Ms Sun, and that after some time Mr Tan secreted the bag containing the money and left the branch with it without Mr Song’s authority. Furthermore, the claim that Mr Toby Song on behalf of IMBK willingly gave Mr Tan the money is entirely inconsistent with the evidence of what happened afterwards. It is not necessary for the Court to relate the detail, but after Mr Toby Song discovered that Mr Tan had taken the money with him, he chased Mr Tan and ultimately on Mr Jiong’s instructions IMBK made a formal complaint at the Eastwood Police Station that Mr Tan had stolen money.

  1. The evidence leaves no room for doubt that Mr Tan took the $237,505.10 from IMBK’s Eastwood branch without Mr Song’s knowledge and without IMBK’s authority. Mr Tan’s decision to take the money was either a spontaneous action, or alternatively he had misled IMBK into believing that he would implement the new transaction solely in order to give him an opportunity to take the money. The former must be regarded as the most likely explanation, as Mr Tan could not reasonably have expected to be given access to the cash and the opportunity to take it without being prevented from doing so by Mr Toby Song.

  2. The fact that Mr Tan surreptitiously took $237,505.10 from IMBK significantly damages his creditworthiness. The fact that Mr Tan pleaded that he was given the money by IMBK, when he plainly was not, further damages his credibility. But further, the starting position in this case is that Mr Tan took IMBK’s money in circumstances where he must have known that he was not authorised to do so, because IMBK was waiting for proof that Mr Tan had deposited the required amounts into the bank accounts in China that IMBK had nominated. The consequence as a matter of law is that Mr Tan will be obliged to repay the money, unless he proves that he has an entitlement to it. IMBK’s case is proved by the straightforward evidence that clearly establishes Mr Tan took its money without authority. Consequently, IMBK must succeed in this case unless Mr Tan establishes his cross claim, which would mean that he had a countervailing claim against IMBK for an amount greater than the $250,000.

The evidence

  1. I will now proceed to a consideration of the evidence of the relevant dealings between IMBK and Mr Tan.

  2. First, however, it will be appropriate to consider the evidence tendered by IMBK as to the manner in which it carried on business.

  3. That evidence established that IMBK operated from the two branches in Auburn and Eastwood. Mr Jiong gave evidence that IMBK did not operate any place of business or have any employees in China.

  4. IMBK tendered an agreement dated 20 May 2015 between itself and a Chinese company called (in English) Beijing Times Internet Technology Co Limited, which Mr Jiong called the “partner company”. The agreement was for the period 1 July 2015 to 30 June 2017. The agreement required the partner company to provide various services to IMBK including: “1) Managing real-time fund transactions for [IMBK]”. The partner company was required to provide other services of an administrative and auditing nature concerning the management of IMBK’s funds, including: “5) Organising and providing bank accounts for [IMBK’s] use”. A note to the agreement precluded the partner company from directly providing any service to any customer of IMBK in the name of IMBK.

  5. The existence of the service agreement does not provide definitive proof that IMBK did not make a special arrangement with Mr Tan on 2 March 2011 to receive RMB ¥ 3,000,000 from Mr Tan’s father-in-law, but its terms generally support IMBK’s claim that its business arrangements in China involved a service company providing bank accounts for use in transactions undertaken by IMBK, and in managing those accounts.

  6. Mr Jiong said it was a strict policy of IMBK that any receipt of funds outside of Australia must be undertaken by way of electronic transfers. That involved the partner company stipulating specific accounts into which IMBK’s clients were required to transfer funds electronically. IMBK then nominates the accounts and the details of the transfers to its clients. Upon receipt of all funds into the nominated accounts, the partner company notifies IMBK so that it may release the Australian dollars to its clients.

  7. Mr Jiong specifically denied that he had ever instructed the partner company to accept any cash for any transaction, or that he had ever instructed any employee of IMBK to instruct the partner company to accept cash for any transaction.

  8. I find Mr Jiong’s evidence in this respect to be inherently probable. Many of IMBK’s transactions involved substantial amounts of money. At the Australian end that often involved payments of substantial amounts in cash. As IMBK’s employees actually made the cash payments, IMBK could control the circumstances in which the payments were made. That would not be so in relation to IMBK’s receipts in China. IMBK may well have been prepared to trust the partner company in China (which the evidence suggested was operated by a relation of Mr Jiong). But the position would be different if IMBK permitted its clients to make cash payments in China for IMBK’s account. Neither IMBK nor the partner company could be sure that proper control of the cash could be maintained. To make the transactions safe, IMBK needed reliable assurance that the clients had made payments into accounts under the control of IMBK’s partner company, before IMBK could safely pay the Australian equivalent of the deposited money to its clients. The very problem that has arisen in the present case out of Mr Tan’s allegation that his father-in-law paid a substantial sum in cash to an agent of IMBK demonstrates the imprudence of IMBK adopting a business model whereby clients were permitted to pay cash for its account in China.

  9. The evidence establishes that IMBK carried out about eight foreign currency exchange transactions for Mr Tan before 3 March 2016. The details of those transactions are not material. On 2 March 2016, IMBK and Mr Tan made and completed an agreement on the same day under which Mr Tan caused RMB ¥ 1,800,000 to be paid into accounts in China nominated by IMBK, and IMBK paid Mr Tan $373,448 in cash in Australia. The effect of these transactions appears to be that IMBK came to treat Mr Tan as a relatively important client, and that explains the special treatment that Mr Tan was given at the Eastwood branch on 11 March 2016.

  10. Mr Toby Song gave evidence of the physical structure of the Eastwood branch. It is sufficient to record that the branch was divided into a public area that could be accessed by clients and an office area. Between the two areas there was a counter plus a full height glass security screen with two small openings to permit IMBK’s employees and clients to pass small items through the security screen. IMBK’s safe and equipment were placed in the office area. There was a security door between the two areas that had a double lock on the public side. The significance of these matters is that, as Mr Toby Song understood that Mr Tan was an important client of IMBK, when Mr Tan visited the branch on 11 March 2016, he allowed Mr Tan free access to enter and remain in the office area, and even to help count the money.

  11. I will now deal with the evidence relating to the transaction that was supposed to take place on 3 March 2016. Evidence was given about that transaction by Mr Jiong and Ms Sun on behalf of IMBK, and the evidence for Mr Tan’s case was given by Mr Tan and his father-in-law, Mr Song.

  12. All of the conversations relevant to the events in these proceedings took place in Mandarin, and all written communications were also in Mandarin. Consequently, it was necessary for all witnesses’ evidence to be translated into English, and also for all relevant documentary communications, including electronic communications, to be translated into English.

  13. The affidavits of Mr Tan and his father-in-law were first written in Chinese characters and then translated into English paragraph by paragraph. The formalities required for proof of accuracy of translations were not complied with, and it was necessary for the Court to make ad hoc arrangements using the qualified interpreters who were present in court for the purpose of assisting the witnesses to give their evidence to verify the adequacy of the translations in the affidavits.

  14. Important parts of the evidence consisted of printouts of communications between the witnesses that were conducted in Mandarin in Chinese characters on the social media platforms WeChat and Skype. Translations were made of those messages and included in the evidence. Issues arose about the accuracy of the translation of a small number of important messages. The interpreters who were assisting the parties were asked to confer for the purpose of trying to resolve their differences as to how these messages should be translated. Their resolution of the proper interpretation of five messages referred to in Mr Tan’s affidavit (and also by IMBK’s witnesses) became exhibit J (the original of the record of the interpreters’ agreement signed by both interpreters is part of Exhibit L). Where I refer to these messages below, I will adopt the interpretation agreed by the two interpreters, and I will set out the translations in italics and identify them as having been agreed by the interpreters.

  15. This is a convenient point to record that, as Mr Tan was not legally represented at the hearing, he conducted his case himself. He did so by speaking Mandarin, which required everything said by Mr Tan to be translated by his interpreter into English, and everything said by the Court, and counsel for IMBK, Mr Carney, to be translated from English into Mandarin. This process was inconvenient but necessary. To ensure fairness to Mr Tan, I invited his interpreter, who sat beside him at the bar table, to interrupt if she disagreed with any interpretation made by the interpreter retained by IMBK; I also invited the interpreter retained by IMBK to object if she disagreed with any interpretation made by the interpreter retained by Mr Tan. I am satisfied that Mr Tan was able to do justice to the presentation of his case. Care was taken by the Court to ensure that each step of the way was explained to Mr Tan, and the ordinary processes of the Court were adjusted where reasonably necessary to ensure that Mr Tan understood the process and was given proper opportunity to put his case. Mr Carney conducted his client’s case with punctilious regard to the fact that his opponent was representing himself. At no stage did Mr Tan appear overawed or fazed by his circumstances; he appeared to be in command of his situation; and he proceeded with a level of confidence that would be the envy of many an advocate.

Ms Sun’s evidence

  1. According to IMBK’s case, Ms Sun was its representative primarily involved with Mr Tan in relation to the 3 March 2016 transaction. Her primary affidavit was affirmed on 19 July 2016.

  2. Ms Sun gave evidence about the transaction on 2 March 2016, by which IMBK exchanged $373,448 in Australia for RMB ¥ 1,800,000 that was paid on behalf of Mr Tan into four Chinese bank accounts nominated by IMBK. This transaction proceeded in accordance with IMBK’s standard procedure, after Mr Tan sent to Ms Sun four photos of transaction records showing that the relevant amounts had been deposited into the four nominated accounts. Ms Sun then received confirmation from the relevant banks, and Ms Sun instructed Mr Toby Song to give Mr Tan the $373,448 in cash at the Eastwood branch. This was a separate transaction to the one that was agreed to take place on 3 March 2016, although it will be seen when the Court comes to deal with Mr Tan’s evidence that he appears to have conflated the two transactions.

  3. In her affidavit, Ms Sun gave evidence that Mr Tan called her at about 2:30 PM on 2 March 2016 on her mobile phone for the purpose of asking IMBK to implement a further foreign exchange transaction for RMB ¥ 3,000,000 on the following day. Ms Sun said that Mr Tan told her that he did not want cash and that he would give his bank account details the next day. Mr Tan asked her to ask Mr Jiong to meet him at the Eastwood branch the next day, but Ms Sun told him that was not necessary because Mr Tan would not be collecting cash.

  4. According to Ms Sun, at 10 AM on 3 March 2016, she had a telephone conversation with Mr Tan in which they agreed to an exchange rate of RMB 4.8980: AUD 1, which meant that Mr Tan would get $612,494.90 for RMB ¥ 3,000,000.

  5. Importantly, Ms Sun said that the last statement she made in this conversation was: “Sure. I will also send you the nominated Chinese bank accounts for you to deposit RMB in”. That approach would be consistent with IMBK’s standard operating procedure.

  6. Mr Tan sent Ms Sun a photo on WeChat at 10:30 AM of his Visa credit card and bank account details.

  7. Ms Sun said in par 35 of her affidavit that at 10:52 AM on 3 March 2016, she sent Mr Tan a draft Foreign Exchange Record statement showing the amount and type of currency to be exchanged and the agreed exchange rate. Ms Sun did not explain how the document was sent to Mr Tan, or whether she gave it any description at the time of sending. I note that in the translated version of the WeChat messages Ms Sun sent a WeChat message to Mr Tan at 10:52 AM that did not contain any words; however, in the original transcript of WeChat messages in Mandarin, at 10:52 AM Ms Sun is recorded as having sent an attachment to Mr Tan with the file name “312.pic”. It is probable that this file is the draft Foreign Exchange Record statement which Ms Sun claims she sent at 10:52 AM, and which appears as Annexure H in Ms Sun’s affidavit.

  8. The document is headed “Foreign Exchange Record”, and contains statements that “We Bought” (which evidently refers to IMBK) RMB ¥ 3,000,000 and “We Sold” AUD 612,494.90, at a rate of 4.8980.

  9. The document contains details under the heading “Customer Paid”, and in particular under the subheading “Option” it states: “Non-Cash” in respect of the payment of the RMB ¥ 3,000,000. In relation to “Customer Received”, being the $612,494.90, the “Option” states: “Non-Cash payable”. The document also sets out the details of the account into which Mr Tan wished the Australian currency to be paid.

  10. The document provides for a signature and date to be inserted on it, in the context of an instruction: “(Sign this section after you checked the above information)”. The document in evidence has not been signed or dated by Mr Tan.

  11. Mr Tan has not challenged IMBK’s case that the $612,494.90 was to be paid into his nominated bank account. As that “Option” is described as “Non-Cash payable”, then it is a reasonable interpretation of the reference to “Non-Cash” in respect of the payment to be made by Mr Tan, that the payment also was not to be paid in cash. (Mr Tan gave evidence that he does not read English, so it is possible that Mr Tan may have misunderstood the meaning and effect of this draft Foreign Exchange Record).

  12. A WeChat message sent by Mr Tan to Ms Sun at 10:45 AM was in the terms: “I will call my mum shortly and ask her to stay and wait for you”.

  13. Ms Sun gave evidence of a telephone discussion that she had with Mr Tan at 2:10 PM on 3 March 2016, in which Mr Tan commenced by saying: “My mother is already in the bank in China and she will be transferring RMB 3,000,000 to you today”.

  14. The references by Mr Tan to the involvement of his mother that I have referred to in the preceding two paragraphs are not consistent with the arrangement that Mr Tan claimed that he made with Mr Jiong, to the effect that Mr Tan’s father-in-law would pay the RMB ¥ 3,000,000 in cash to IMBK’s agent.

  15. As part of that conversation and a later conversation that occurred at 2:25 PM, Mr Tan asked Ms Sun to transfer the $612,494.90 before his mother transferred the RMB ¥ 3,000,000 into the accounts nominated by IMBK, but Ms Sun declined that request. Because Mr Tan had been a “loyal client”, Ms Sun agreed to transfer $12,494.90 into Mr Tan’s nominated account.

  16. Ms Sun and Mr Tan had a conversation by WeChat messages during the afternoon and evening of 3 March 2016. A table containing the time, the sender, the message in Mandarin, and the translation made by IMBK’s interpreter became part of Exhibit F. Ms Sun explained the significance of this evidence in her primary affidavit. The following table contains the information in Exhibit F, starting from a WeChat message at 3:40:22 PM. I have omitted a number of messages that I do not consider to be significant. I have inserted the translations agreed between the parties’ interpreters contained in Exhibit J in lieu of the translations by IMBK’s interpreter. I have given item numbers to the WeChat messages to assist in explaining the significance that I have attributed to those messages. I have also interpolated summaries of the evidence given by Ms Sun of what I understand to be telephone discussions or voice calls on WeChat with Mr Tan in the period covered by the table. Where I set out a summary of Ms Sun’s evidence, I will insert the paragraph number of the affidavit in the column for item numbers of WeChat messages. Attachments sent through WeChat which were described in the original Mandarin transcript (Ms Sun Affidavit, Annexure B) were omitted from the English translation, giving the appearance that empty messages were sent when in fact attachments were sent; I will specify where I have referred to attachments or other functions of WeChat by reference to the original WeChat transcript as “Original WeChat Transcript”.

Time

Sender

Translation

[39]

3:40 PM

Mr Tan asked Ms Sun to send the accounts into which the RMB had to be paid by WeChat message and email. Mr Tan’s mother did not have an email address.

1

3:40:22 PM

Mr Tan

His email: [email protected]

2

3:40:41 PM

Mr Tan

Take a picture and send it to my WeChat

3

3:40:47 PM

Ms Sun

Ok

4

3:40:54 PM

Mr Tan

My mom does not have email address.

5

3:41:06 PM

Ms Sun

[Attachment “317.pic” sent] (Original WeChat Transcript)

6

3:41:07 PM

Mr Tan

She cannot see it.

7

3:41:12 PM

Ms Sun

Got it.

8

3:41:21 PM

Mr Tan

Right

9

3:51:30 PM

Mr Tan

Done?

10

3:51:39 PM

Ms Sun

Soon

11

3:51:47 PM

Ms Sun

I’m trying to arrange some bigger amounts

12

3:51:49 PM

Mr Tan

In China all transfers [agreed translation in Exhibit J]

13

3:51:58 PM

Mr Tan

Ah

14

3:52:07 PM

Mr Tan

It’s ok.

15

3:52:21 PM

Ms Sun

Ok

16

3:52:32 PM

Mr Tan

There is a responsible person in China

[40]

3:59 PM

Ms Sun sent a photo showing nine nominated accounts for the transfer of the RMB by to Mr Tan’s WeChat address

[41]

3:59 PM

Ms Sun also sent the account details to the email address she had been given but it was rejected.

17

3:59:53 PM

Ms Sun

[Attachment “319.pic” sent] (Original WeChat Transcript)

18

4:00:16 PM

Ms Sun

Email was returned.

19

4:00:24 PM

Ms Sun

[email protected]

20

4:00:26 PM

Ms Sun

Is it correct?

21

4:00:40 PM

Mr Tan

Yes, received.

22

4:01:04 PM

Ms Sun

Is the email correct?

23

4:01:20 PM

Mr Tan

My mailbox is full.

24

4:01:26 PM

Mr Tan

Let me clean it up.

25

4:01:27 PM

Ms Sun

I will send it to you with the another WeChat account. This one has been used too much. [Agreed translation in Exhibit J]

26

4:02:43 PM

Mr Tan

No.

27

4:02:54 PM

Mr Tan

Too confusing to have too many WeChat contacts

28-29

[Omitted]

30

4:03:12 PM

Mr Tan

As long as I understand it

31

4:03:23 PM

Mr Tan

It’ll be okay.

32

4:03:37 PM

Mr Tan

It’s okay as long as both of us understand it.

33

4:03:43 PM

Ms Sun

Ok

34

4:03:54 PM

Ms Sun

Forward the picture to your mother then.

35

4:04:16 PM

Mr Tan

I understand what you mean.

36

4:04:19 PM

Mr Tan

Ok

37

4:04:40 PM

Mr Tan

Given it to my family already

38

4:04:45 PM

Mr Tan

Family member

39

4:05:05 PM

Ms Sun

Ok

40

4:05:25 PM

Mr Tan

You have it arranged on your end.

41

4:05:42 PM

Ms Sun

Mostly by today. The rest tomorrow morning.

42

4:05:51 PM

Ms Sun

Same bank as yours. Will be soon.

43

4:05:59 PM

Mr Tan

[webwxvoipnotifymsg] (Original WeChat Transcript)

44

4:06:07 PM

Ms Sun

There will be several payments to my nab account today from other banks. I shall receive them soon.

[46]

4:07 PM

Mr Tan told Ms Sun by WeChat voice call that he had sent the list of nominated accounts to his mother in China. There was a discussion as to when IMBK would transfer the $600,000 to Mr Tan’s account.

[47]

4:45 PM

Mr Tan by voice call on WeChat asked for confirmation that IMBK would be able to transfer him at least $310,000 that day.

[48]

5:34 PM

Ms Sun sent a photo to Mr Tan’s WeChat account showing the money in IMBK’s account.

45-59

[Omitted]

60

5:37:29 PM

Mr Tan

What is the transfer route for this one?

61

5:37:32 PM

Mr Tan

[This message was not translated into English]

62

5:37:38

Ms Sun

Transfer 310,000 firstly. The rest will be transferred to my (NAB) account from other bank. I should receive it in my Nab account tonight. I will transfer it to you tomorrow morning.

63

5:37:46 PM

Ms Sun

This is transfer between the same bank. Nab to nab.

64

6:12:11 PM

Ms Sun

What is the situation in China? Tell me. People at my side is waiting to check accounts

65

6:12:58 PM

Mr Tan

Wait

66

6:13:20 PM

Mr Tan

I am explaining

67

6:14:13 PM

Ms Sun

Forget it if they do not want to do it. I will call the bank to cancel that payment. For the amount over 10,000 given to you already, you can just give it back to me. This is too troublesome.

68

6:14:23 PM

Ms Sun

If I do all business like this, I cannot do it.

69

6:14:48 PM

Mr Tan

Wait

69

6:14:50 PM

Ms Sun

Please confirm. I have a few other clients’ orders, I will need to transfer money to them myself.

70

6:31:16 PM

Mr Tan

Dazzle Sister, you (dazzle) me a bit [Exhibit J – agreed literal translation]

71

6:31:23 PM

Ms Sun

Vincent, today’s transaction of 3 million RMB, exchange rate at 4.8980, has been cancelled. Do not transfer the RMB sent to you [agreed translation in Exhibit J]

72

6:31:33 PM

Mr Tan

Ok

73

6:32:15 PM

Mr Tan

You should have told me this morning.

74

6:32:20 PM

Mr Tan

Ugh (a sound to express emotions such as oh, alas, how, right, yes, what a pity – closer to the meaning under this context) [agreed translation in Exhibit J]

75

6:32:36 PM

Mr Tan

My mum also scolded me.

76

6:32:53 PM

Mr Tan

My childhood buddy is unhappy.

77

6:33:10 PM

Ms Sun

I won’t do anything against our policy in the future.

78

6:33:16 PM

Mr Tan

I need to pay for the amount.

79

6:33:24 PM

Ms Sun

I also sent it to you via text message. Please confirm.

80

6:33:31 PM

Mr Tan

Ok

81

6:33:58 PM

Mr Tan

Ok

82

6:34:13 PM

Ms Sun

Please refund AUD $12,494.90 transferred to your account today to the following bank account: [Account details inserted] Thanks.

83

6:34:20 PM

Mr Tan

Let’s do business in cash in the future.

84

6:34:27 PM

Mr Tan

It’s straightforward

  1. The combination of Ms Sun’s evidence and the WeChat messages is capable of supporting a number of significant findings.

  2. First, the draft Foreign Exchange Record would have conveyed to Mr Tan that IMBK did not expect to be paid RMB in cash in China, if Mr Tan had understood the effect of the English words in the document.

  3. Secondly, the involvement of Mr Tan’s mother in China is not consistent with Mr Tan’s case that he had arranged with Mr Jiong that the RMB ¥ 3,000,000 would be paid in cash by Mr Tan’s father-in-law to an agent of IMBK. Further, if Mr Jiong made the arrangement claimed by Mr Tan that was outside IMBK’s usual operating procedure, and even if he was not minded to tell Ms Sun what he had done, it is improbable that he would have allowed Ms Sun to pursue the inconsistent dealing that she did with Mr Tan on 3 March 2016, in ignorance of the real arrangement. It is also improbable that Mr Tan would not have said something to Ms Sun about his agreement with Mr Jiong, and instead engage in the communications with Ms Sun that he did on 3 March 2016 that were inconsistent with the alleged arrangement with Mr Jiong.

  4. Thirdly, a combination of Ms Sun’s evidence in pars 39 and 40 of her affidavit, together with the WeChat messages 2, 34 and 37, support a finding that Ms Sun sent to Mr Tan, and he acknowledged receiving, a photo of a list of nine bank accounts into which the RMB ¥ 3,000,000 was to be paid. The photo was Annexure J to Ms Sun’s Affidavit and stated (in Mandarin): “Hi mr tan (sic), Please transfer today’s 3 million according to the accounts and amount below.” There followed a list of nine bank accounts and amounts that add up to RMB ¥ 3,000,000.

  5. Fourthly, Ms Sun cancelled the transaction because, by about 6:14 PM, Mr Tan had not provided evidence that the funds had been paid into the nominated accounts in China; and Mr Tan’s only response was to say “Ok” and “You should have told me this morning”: see WeChat messages 67 and 71 to 74. See also the responses of Mr Tan at WeChat messages 70 and 74. If Mr Tan believed that his father-in-law had paid RMB ¥ 3,000,000 in cash to an agent of IMBK, it is unthinkable that he would have accepted the cancellation of the transaction without protesting, or that he would have exhibited the responses that he did (see message 74 for example, which was accepted by the interpreters to be closest to meaning a phrase such as “what a pity” in this context).

  6. Finally, it is improbable that Mr Tan would implicitly have agreed with Ms Sun’s demand that he repay the $12,494.90, if he thought that his father-in-law had already paid the agreed amount of cash to IMBK’s agent. If Mr Tan disagreed with Ms Sun’s request that he refund the $12,494.90 in WeChat message 82, it would be expected that he would have said so, rather than making the responses in WeChat messages 83 and 84. (In any event, later WeChat responses considered below more clearly show that Mr Tan agreed to repay the money).

  7. There were further relevant communications between Ms Sun and Mr Tan, following 3 March 2016 and before the date of the final transaction on 11 March 2016.

  8. Exhibit F contains the following relevant WeChat messages that were created during this period. The date notation in Exhibit F follows a month-day-year format, which I have formatted to conform to the Australian convention of day-month-year format.

Time

Sender

Translation

1

4/3/2016 12:36:22 PM

Ms Sun

Vincent, please remember to go to nab to transfer back to us the amount over 10,000 that was transferred to you yesterday.

2

4/3/2016 12:37:29 PM

Ms Sun

AUD $12,494.90 Please transfer it to the account below: [account details inserted] Thanks.

3

7/3/2016 6:03:41 PM

Ms Sun

Vincent, have you received the AUD transferred by RongQiao?

4

7/3/2016 6:05:31 PM

Mr Tan

Yes. Because it’s the first time transfer from RongQiao’s account to mine. Once this first time is recorded, I will receive the money immediately in the future. I was having dinner with the boss whole day today.

5

7/3/2016 6:05:54 PM

Mr Tan

I will transfer you the money tomorrow morning.

6-15

[Omitted]

16

7/3/2016 6:07:50 7 PM

Mr Tan

Thankfully they money was received.

17

7/3/2016 6:08:07 PM

Ms Sun

Indeed

18

7/3/2016 6:08:11 PM

Mr Tan

But made a bit lost due to change in the exchange rate.

19

7/3/2016 6:08:15 PM

Ms Sun

It’s good as long as it was received.

20

7/3/2016 6:08:24 PM

Mr Tan

I will talk about it when seeing you.

21

7/3/2016 6:31:02 PM

Ms Sun

ok

22

8/3/2016 2:06:48 PM

Ms Sun

vincent, can you go to the bank and transfer back to us that sum today. Don’t forget about it.

  1. A notable feature of these WeChat messages (including those that I have not included) is the good humour displayed by both parties. Mr Tan’s responses are completely inconsistent with his apparent state of mind being that his father-in-law had already paid RMB ¥ 3,000,000 in cash to IMBK, the money had not been returned, and IMBK had not paid into his bank account the remaining $600,000.

  2. Furthermore, Mr Tan again agreed to repay the $12,494.90 to IMBK: see WeChat messages 1, 2 and 5.

  3. Ms Sun gave the following evidence of a telephone conversation that she had with Mr Tan on or about 6 March 2016:

Tan:   I need to ask you a question. As our transaction was cancelled on 3 March 2016, I requested RongQiao, Campsie Branch, to exchange RMB 3,000,000 into Australian dollars for me on 4 March 2016. But after I transferred RMB 3,000,000 to them, I haven’t received the agreed amount of Australian dollars yet.

Me:   How was RongQiao supposed to give you those Australian dollars?

Tan:   Well what happened was the manager of RongQiao Campsie branch and I attended Commonwealth Bank of Australia and he transferred the agreed amount to Australian dollars to my NAB account over the counter. RongQiao even paid for $30 administrative fee to CBA.

Me:   Generally speaking, if it was done over the counter, you should receive the fund instantly into your bank account. Check again on Monday.

Tan:   Ok. Thank you.

Me:   Don’t forget to transfer $12,494.90 back to us as soon as possible.

Tan:   Of course. I remember.

  1. According to Ms Sun, RongQiao Investments Pty Ltd is an Australian company operating a business in foreign currency exchange similar to IMBK’s under the trading name “Money Change Foreign Exchange”.

  2. Ms Sun’s question in WeChat message 3, Mr Tan’s responses in messages 4, 16 and 18, and Ms Sun’s responses in messages 17 and 19 provide confirmation that the telephone conversation deposed to by Ms Sun occurred.

  3. The RongQing transaction was not explored in any detail in the evidence. Mr Tan’s father-in-law gave evidence in par 6 of his affidavit that during the Chinese New Year in 2016, he agreed to give his daughter and son-in-law RMB ¥ 4,800,000. The foreign exchange transaction that took place on 2 March 2016 involved RMB ¥ 1,800,000. That left RMB ¥ 3,000,000. If Mr Tan entered into an agreement with RongQiao on 4 March 2016 in respect of an RMB ¥ 3,000,000 foreign exchange transaction, and that transaction was completed, by one means or another Mr Tan must have had access to RMB ¥ 3,000,000 to transfer to RongQiao. Mr Tan did not suggest, and did not prove, that he had access to an additional RMB ¥ 3,000,000 in China on 4 March 2016, so that he was in a position to pay the RMB ¥ 3,000,000 twice, if his father-in-law had paid the RMB ¥ 3,000,000 in cash to an agent of IMBK the previous day. As the evidence about the conversation between Ms Sun and Mr Tan concerning the RongQiao transaction was not further explained, the Court can only treat this aspect of the evidence as a matter that throws obvious doubt on the case theory propounded by Mr Tan.

  4. Ms Sun gave evidence in par 60 of her principal affidavit that she had a call from Mr Tan at about 3 PM on 9 March 2016, during which Mr Tan asked whether IMBK would exchange RMB for $250,000 on 11 March 2016. Ms Sun agreed on the basis that IMBK would retain the outstanding $12,494.90, and pay Mr Tan $237,505.10. It was agreed that the payment would be made in cash at the Eastwood branch.

  5. According to Ms Sun, she spoke to Mr Tan by telephone at about 10 AM on 11 March 2016, and agreed that the exchange rate for the transaction would be RMB 4.99: AUD 1. That would mean that Mr Tan would have to transfer RMB 1,247,500 to IMBK in China. (As Mr Tan did not complete the transaction, it is not known whether he had access to the necessary RMB, so the fact that Mr Tan made the foreign exchange agreement with IMBK on 11 March 2016 is not necessarily inconsistent with the observations made above concerning the RMB ¥ 3,000,000 transaction with RongQiao on 4 March 2016).

  6. After Ms Sun was informed by Mr Toby Song that Mr Tan had arrived at the Eastwood branch at about 10:20 AM on 11 March 2016, she sent to Mr Toby Song by Skype message details of the three nominated Chinese bank accounts and the amounts to be paid into each account. She also confirmed by Skype with Mr Toby Song that Mr Tan was exchanging RMB ¥ 1,247,500 for $250,000, but that he should only give Mr Tan $237,505.10.

  7. Mr Toby Song gave evidence that he cut and pasted the instructions concerning the nominated bank accounts in China into an electronic document, printed it and gave it to Mr Tan on an A4 piece of paper.

  8. Ms Sun also sent to Mr Toby Song by Skype at about 10:30 AM on 11 March 2016, the Foreign Exchange Record for the transaction. This record provided in the place that recorded what the customer was required to pay that the “Option” was “E-transfer” and the amounts payable were separately described as $12,494.90 (payee “zheng tan”) and $237,505.10 (payee “cash”).

  9. Ms Sun gave evidence that Mr Tan called her at about 10:30 AM on 11 March 2016, and asked her to change the draft Foreign Exchange Record to refer only to the payment by Mr Tan of the single amount of $250,000. Ms Sun agreed, and sent an amended version of the document to Mr Toby Song by Skype at about 10:33 AM.

  10. Mr Toby Song said that he printed the amended Foreign Exchange Record out and he signed the customer copy and Mr Tan signed the company copy. Mr Toby Song exhibited the copy of the document signed by Mr Tan to his affidavit. The document has a signature in the place provided for the signature of the customer, and I infer that it is Mr Tan’s signature. Mr Tan did not challenge that inference, or deny that the signature on the document is his.

  11. The Foreign Exchange Record signed by Mr Tan is evidence that he agreed with IMBK to pay RMB ¥ 1,247,500 to IMBK in exchange for the receipt of $250,000. The existence of the document is entirely inconsistent with there being an agreement between IMBK and Mr Tan that IMBK would pay Mr Tan the $250,000 to discharge an obligation to him to pay that sum arising out of the receipt by IMBK of RMB ¥ 3,000,000 in cash from Mr Tan’s father-in-law on 3 March 2016.

  12. The evidence establishes that Mr Tan asked Mr Toby Song to release the cash to him before Mr Tan provided evidence that the RMB had been paid into the nominated accounts, and that Ms Sun expressly instructed Mr Toby Song to decline Mr Tan’s request, when he sought instructions as to whether he should comply.

  13. As I have explained above, Mr Tan left the Eastwood branch carrying the cash without the authority of IMBK, and without providing proof that the required RMB had been paid into the nominated bank accounts. Mr Tan did not in fact cause those payments to be made.

  14. At the end of her primary affidavit, Ms Sun specifically denied that she directed Mr Tan to give RMB ¥ 3,000,000 in cash to an employee of IMBK as alleged by Mr Tan. She also denied that IMBK instructed the partner company or anyone else to attend upon Mr Tan’s father-in-law to pick up the RMB ¥ 3,000,000 in cash.

Mr Jiong’s evidence

  1. Mr Jiong made an affidavit that provided some support for IMBK’s case, although Mr Jiong was only involved directly in the transaction that took place on 2 March 2016, and the events that occurred after Mr Tan left the Eastwood branch on 11 March 2016 with the cash, whereby IMBK sought to make a complaint about Mr Tan’s conduct to the police. Mr Jiong supported Ms Sun’s evidence concerning the manner in which IMBK conducted its business, in particular, the way IMBK did business in China with the assistance of the partner company, that IMBK always required money to be paid to it in China into bank accounts nominated by the partner company, that IMBK had no employees or agents in China other than the partner company, and that he did not on behalf of IMBK give any instruction to any person in China to collect RMB ¥ 3,000,000 in cash from Mr Tan’s father-in-law.

The credibility of IMBK’s witnesses

  1. Mr Tan cross-examined Ms Sun, Mr Jiong and Mr Song. The cross-examinations of Ms Sun and Mr Jiong took place wholly in Mandarin. Although Mr Tan and the two witnesses spoke Mandarin, it was necessary for Mr Tan’s questions to be translated into English for the transcript, and the same was necessary for the witness’ answers given in Mandarin. When Mr Toby Song was cross-examined, he answered in English, but those answers had to be translated into Mandarin for Mr Tan. Mr Tan adopted a respectful but abrupt tone in putting his questions to the witnesses.

  2. I found that the manner in which it was necessary to conduct the cross-examination significantly interfered with the process by which trial judges are accustomed to form impressions of the credibility of witnesses under cross-examination from their demeanour and the manner in which they have responded to questions. That is not a significant disadvantage in this case, as I have found the documentary evidence and the translations of recorded conversations to provide both reliable and sufficient evidence to support the conclusions that I have reached.

  3. All three witnesses adhered to the evidence that they gave in their affidavits.

  4. Ms Sun gave her evidence in a very subdued manner, which I believe was most likely a result of the forceful tone in which Mr Tan addressed questions to her. Ms Sun was withdrawn and responded to the questions asked in a manner that did not disclose any significant emotion or personality. Nonetheless, I found Ms Sun to be a satisfactory witness, and I did not detect any reason within the limitations of the process of the particular cross examination that would justify the Court in not accepting Ms Sun as a witness of truth.

  5. Mr Jiong’s evidence was not as significant to IMBK’s case in relation to the detail of relevant events, although as the sole director of IMBK at the time his evidence was important on the issue of the manner in which IMBK conducted its business in China through the partner company, and that he did not give any instructions that any cash would be collected from Mr Tan’s father-in-law in China. Mr Jiong gave his evidence much more confidently than Ms Sun, and I am also satisfied that his evidence was satisfactory and there is no reason why the Court should disbelieve him.

  6. Mr Toby Song’s evidence was largely coincident with the events that were depicted on the closed circuit television recording that was put into evidence and played to the Court, with the assistance of explanations given by Mr Toby Song from the witness box. Mr Toby Song’s evidence of his communications with Mr Tan was substantially corroborated by Ms Sun’s evidence and the translations of the Skype messages that had been recorded. I accept the evidence given by Mr Toby Song.

Mr Tan’s evidence

  1. Mr Tan’s response to IMBK’s evidence concerning the events of 3 March 2016 is primarily contained in his 8 August 2016 affidavit. The only way that the full effect of that evidence can be understood is for the English translations to be set out in full. I will indicate the parts rejected by the notation “[Rejected]” where the words rejected have been omitted. Parts of Mr Tan’s affidavit were rejected on the basis that the evidence of conversations contained in them was in an improper form, and leave was given for Mr Tan to adduce evidence in proper form. I have identified those parts of the evidence by the notation “[Leave]” and have omitted the parts for which leave was granted. The evidence in some paragraphs was admitted on the limited basis that it was only evidence of the conversations the subject of the paragraphs and not proof of the facts discussed. I have identified that evidence by setting out the relevant parts of the affidavit in square brackets and in italics.

  2. The relevant parts of Mr Tan’s affidavit, starting from the point where Mr Tan gave evidence of his version of the agreement that was to be implemented on 3 March 2016, were: (Note that Mr Tan’s affidavit was numbered pars 1 to 2, then 1 to 8, and then 3 to 47)

8. [Mr Zhi Jiong from IMBK Pty Ltd told me he would arrange staff from IMBK Pty Ltd in China to pick up RMB ¥ 3,000,000 in cash at the home of my father-in-law in China tomorrow (on 3 March 2016). Mr Zhi Jiong said because it’s during the Chinese New Year period, some of the bank staff in China were off for the holiday and the bank were short-staffed, therefore bank transfer would be relatively slow. If staff from IMBK Pty Ltd in China could pick up the cash at the home of my father-in-law, it would be much simpler and convenient. Also I didn’t need to wait so long at IMBK Pty Ltd, I only needed to provide IMBK Pty Ltd a bank account of mine in Australia, after IMBK Pty Ltd confirmed they had received the RMB from China, IMBK Pty Ltd would transfer exchanged Australian dollars into the bank account in Australia, nominated by me, the equivalent of RMB transferred to my families].

9. I immediately contacted my families in China, informing them that Mr Zhi Jiong, the boss of IMBK Pty Ltd, said IMBK Pty Ltd could arrange staff from IMBK Pty Ltd in China to pick up the cash at the home of by father-in-law. My families told me that all major banks were (sic) [omitted] during the Chinese New Year holiday, to avoid the inconvenience caused by the bank holiday. [Rejected].

10. [Rejected]. I made an agreement with Mr Zhi Jiong from IMBK Pty Ltd that he could arrange staff from IMBK Pty Ltd in China to pick up RMB ¥ 3,000,000 in cash at the home of my father-in-law on 3 March 2016, the converted Australian dollars would be deposited into the bank account in Australia nominated by me. And we agreed upon the amount of remittance and way of remittance.

11. After I left IMBK Ltd on the afternoon of 2 March 2016, I came back home and video chatted with my father-in-law in China and explained to him about the remittance.

12. [On 3 March 2016 at 9:20 AM (Sydney time), my father-in-law in China contacted me, he told me that staff from the Australian money-transfer company has arrived at his home and asked me what to do next].

13. On 3 March 2016 at 9:56 AM (Sydney time), I called Ms Yan Yan Sun from IMBK Pty Ltd [rejected], and confirmed with Ms Yan Yan the full name and identity of the staff who picked up the cash at my father-in-law.

14. [I called and asked my father-in-law to make sure the identity information of the staff from IMBK Pty Ltd is consistent with the information provided by Ms Yan Yan Sun and made a copy of the staff’s identity card. And the staff from IMBK Pty Ltd must write out a certificate of the transaction].

15. On 3 March 2016, I contacted Ms Yan Yan Sun, who is in charge of IMBK Pty Ltd again, informing her of [Leave] between my father-in-law and staff from IMBK Pty Ltd.

16. On 3 March 2016 at 10:30 AM, Ms Yan Yan Sun confirmed the details of bank account in Australia nominated by me and told me that the converted Australian dollars will be transferred to the bank account in Australia nominated by me at agreed exchange rate once the staff from IMBK Pty Ltd and my father-in-law finished counting RMB. Ms Yan Yan Sun reassured me that the transaction would be completed today.

17. [Rejected]. Ms Yan Yan Sun from IMBK Pty Ltd and I agreed upon the exchange rate, which was 4.8680. On 3 March 2016 at 10:52 AM (Sydney time), I received the certificate of transaction from Ms Yan Yan Sun from IMBK Pty Ltd, confirming the remittance of ¥ 3,000,000 RMB for at the exchange rate of 4.86804 for Australian dollars $612,494.4.

18. [On 3 March 2016 at around 2 PM, my father-in-law called and informed me that he had finished the handover with the staff from IMBK Pty Ltd in China and made a copy of the staff’s identity card and also received a certificate of transaction. He asked me about the exchange progress in Australia if I received the money in Australia].

19. [I immediately contacted Ms Yan Yan Sun from IMBK Pty Ltd, telling her that the handover of RMB was finished at my father-in-law’s home. I asked when would the converted Australian dollar be transferred into my bank account in Australia? Ms Yan Yan Sun from IMBK Pty Ltd told me she need a final confirmation of the transaction and would transfer the converted Australian dollars immediately once she confirmed there’s no problem].

20. [On 3 March 2016 at 3:40 PM (Sydney time), I received the first payment from Ms Yan Yan Sun from IMBK Pty Ltd of $12,494.4. Ms Yan Yan Sun from IMBK Pty Ltd told me she would pay the arrears of the converted Australian dollars first, and she would make a lump sum transfer of the rest $600,000 to me from another bank account. She told me to tell my father-in-law in China to allow the staff from IMBK Pty Ltd in China to leave my father-in-law’s home. Because the staff from IMBK Pty Ltd in China needed to process the RMB received from my father-in-law].

21. [I told Ms Yan Yan Sun the email address of my families in China, and asked Ms Yan Yan Sun to send the receipt of ¥ 3,000,000 RMB, record of the transfer to my bank account in Australia and transaction record of the exchange of ¥ 3,000,000 RMB to me via email as proof].

22. Ms Yan Yan Sun from IMBK Pty Ltd told me the email couldn’t get through to the email address I gave her. Ms Yan Yan Sun from IMBK Pty Ltd gave me a new WeChat number to contact her. I declined the new WeChat number provided by Ms Yan Yan Sun from IMBK Pty Ltd and insisted on using the current way of contact. I insisted on Ms Yan Yan Sun sending the trade confirmation of the exchange of ¥ 3,000,000 RMB for $612,494.4 Australian dollars on 3 March 2016 and the exchange record of 3,000,000 RMB to my current WeChat number as proof.

23. [On 3 March 2016 at around 4 PM (Sydney time), I notified my father-in-law that IMBK Pty Ltd had confirmed they received RMB in China and gave me the transaction record of the exchange. And I received a payment in Australia, IMBK Pty Ltd promised to transfer the rest to my bank account in Australia. I also told him that IMBK Pty Ltd had sent all the transaction record including the exchange of RMB to my WeChat account, and he could let the staff from IMBK Pty Ltd leave now].

24. On 3 March 2016 at 5:34 PM (Sydney time), Ms Yan Yan Sun from IMBK Pty Ltd sent me a transaction record of $310,000 into my bank account in Australia through WeChat.

25. [After I received the transaction record of $310,000 through WeChat I contacted Ms Yan Yan Sun, I told her since IMBK Pty Ltd had received ¥ 3,000,000 RMB, according to the transaction record, IMBK Pty Ltd should pay me $612,494.4 Australian dollars. But now I only received $12,494.04 and a transaction record of $310,000, I asked her how is IMBK Pty Ltd going to pay me the rest $290,000?].

26. [Rejected].

27. I told Ms Yan Yan Sun I didn’t want to wait until tomorrow, I asked IMBK Pty Ltd to transfer me the converted Australian dollars today like they promised [Rejected].

28. Ms Yan Yan Sun from IMBK Pty Ltd insisted that she wouldn’t make the transfer today. I said did you lie to me and I didn’t want to trade with you anymore. Ms Yan Yan Sun from IMBK Pty Ltd said if I didn’t want to trade then forget it, the exchange rate kept rising today, I would cancel the trade today. I said we could cancel the transaction but the staff from IMBK Pty Ltd in China must repay my father-in-law ¥ 3,000,000 RMB and I would repay IMBK Pty Ltd $12,494.4 and the $310,000 displayed on the transaction record.

29. [On 3 March 2016 at 6:40 PM (Sydney time), I notified my father-in-law in China that due to various reasons IMBK Pty Ltd cancelled the exchange today. Ms Yan Yan Sun from IMBK Pty Ltd told me that the staff from IMBK Pty Ltd in China would repay you ¥ 3,000,000 RMB. When you receive the money, I will repay IMBK Pty Ltd $12,494.4 and the $310,000 displayed on the transaction record].

30. On 3 March 2016 IMBK Pty Ltd did not repay my father-in-law ¥ 3,000,000 RMB [Rejected].

31. On Friday 4 March 2016, I checked my bank balance at NAB bank; the staff at NAB bank told me that there was a cash deposit of $12,494.4 on 3 March 2016. I showed the transaction record of $310,000 to the staff at the bank [Rejected]. I asked the staff why haven’t I received the money yet? The bank staff told me, according to bank practice, such a large transfer might take one or two working days.

32. [On 6 March 2016 I called Ms Yan Yan Sun from IMBK Pty Ltd, and said staff from IMBK Pty Ltd took ¥ 3,000,000 RMB in cash from my father-in-law and still had not repaid him. And I only received a transfer of $12,494.4 from Ms Yan Yan Sun from IMBK Pty Ltd; I still had not received the $310,000 shown on the transaction record. IMBK Pty Ltd is defrauding me. I demanded the IMBK Pty Ltd to finished (sic) processing the remittance of ¥ 3,000,000 RMB next week, otherwise I would call the police for fraud].

33. [Ms Yan Yan Sun from IMBK Pty Ltd asked me not to worry or get nervous. IMBK Pty Ltd issued an exchange statement, confirming that IMBK Pty Ltd had received ¥ 3,000,000 RMB from me and would exchange it into Australian dollars, the foreign exchange trade between IMBK Pty Ltd and me is under the supervision and protection of the law. She assured me that we could make an appointment next week and negotiate exchange rate again and I could pick up Australian dollars in cash at IMBK Pty Ltd].

  1. The next event dealt with by Mr Tan in his affidavit is a discussion with Ms Sun on 9 March 2016. I will deal with that evidence when I come to consider the evidence of events after 3 March 2016.

  2. Mr Tan is a layperson, and he has prepared his affidavit evidence in the form of assertions as to what he says happened. He has not addressed the contents of all of the documentary evidence, and he has not acknowledged and responded to the evidence given by IMBK’s witnesses, particularly where that evidence is inconsistent with the case that Mr Tan seeks to make. Mr Tan’s evidence therefore does not grapple with and explain the inconsistencies.

  3. In many of the paragraphs that have been set out above, Mr Tan gives evidence of what happened when he called or contacted Ms Sun. Mr Tan has not explained how those communications took place. As I have set out above, Mr Tan and Ms Sun carried out a continuing series of WeChat communications with each other during 3 March 2016. While limited parts of Mr Tan’s affidavit deal with aspects of the WeChat communications, much of what Mr Tan says happened does not fit at all well in the course of the WeChat communications.

  4. It is of some significance that in pars 8 and 9, Mr Tan claims that the reason Mr Jiong gave for suggesting that the RMB ¥ 3,000,000 be paid to IMBK in cash was that the transaction was going to happen in the Chinese New Year period, so that the relevant banks were likely to be short-staffed. As will be seen, IMBK challenged this assertion as a matter of fact, on the basis that Chinese New Year took place well before 3 March 2018.

  5. It is notable from par 17 that Mr Tan has treated the unsigned Foreign Exchange Record that was given to him by Ms Sun as if it was a receipt that provided evidence that IMBK had received the RMB ¥ 3,000,000 in cash from Mr Song. The Foreign Exchange Record was not drafted as a receipt, although it is possible that, as it was written in English, its purpose may not have been understood by Mr Tan. In fact, once signed, the Foreign Exchange Record was an authorisation for IMBK “to complete the above foreign exchange transaction”.

  6. In the balance of his affidavit, Mr Tan said that Ms Sun told him to pick up the Australian dollar equivalent of RMB ¥ 3,000,000 on 11 March 2016. He said that on 11 March 2016, at around 10 AM after he arrived at the Eastwood Branch, he called Ms Sun and was told that he should pick up $250,000 from the branch, and that Mr Jiong would bring him the balance of the $600,000 later. He said that he was given the $237,505.10 in cash, that he put the money in his bag and waited for the rest of the payment. He waited for over two hours. He then said that he was told by the staff to stop waiting because Mr Jiong had only arranged for the $250,000 to be available, and the balance of the payment would have to be made the following week. Mr Tan said that this made him very angry.

  7. Mr Tan was given the opportunity in oral evidence in chief to supplement his evidence on the issues in respect of which he was given leave to remedy evidentiary deficiencies. The Court took a relatively liberal view of issues of form, and it is sufficient to note that in substance Mr Tan repeated the evidence that he had given in his affidavit.

Mr Song’s evidence

  1. Mr Song’s affidavit was prepared in the same way as Mr Tan’s primary affidavit had been prepared.

  2. Mr Song said that he had been doing business in China for over 30 years, and that currently his family business was a tire sales dealership. Mr Song’s daughter married Mr Tan on 1 July 2004, and Mr Song has provided considerable financial support to his daughter and son-in-law. As I have noted above, Mr Song said that during the Chinese New Year in 2016, he agreed to give his daughter and son-in-law RMB ¥ 4,800,000.

  3. In relation to the transaction that happened on 3 March 2016, Mr Song said he paid a total of RMB ¥ 1,800,000 into a bank account in China in accordance with instructions given by Mr Tan.

  4. Mr Song explained that he had RMB ¥ 3,000,000 at home because of the closure of banks during Chinese New Year.

  5. He gave the following evidence in his 18 August 2016 affidavit concerning the circumstances in which he had made a cash payment of RMB ¥ 3,000,000 on 3 March 2016:

11. On 3 March 2016 at around 6 AM (China time), Mr Li Jian came to my home [Leave]. He said he was from IMBK Pty Ltd and coming to pick up ¥ 3,000,000 RMB in cash from my home.

12. On 3 March 2016, when Mr Li Jian from the remittance and exchange company in Australia came to my home, I used the voice call function in WeChat to call my son-in-law [Leave]. I began to trade with Mr Li Jian from the remittance and exchange company in cash.

13. On 3 March 2016 I counted the RMB with Mr Li Jian, it took us about 1 and half hour to count ¥ 3,000,000 RMB, then I put the 3,000,000 RMB in a red trolley case about 28 inch (28 inch: 76cm x 51cm x 32cm) and handed the case to Mr Li Jian from the remittance and exchange company. Mr Li Jian also gave me a handwritten proof of the exchange of ¥ 3,000,000 RMB. I also scanned and made a copy of the identity card of Mr Li Jian.

14. On 3 March 2016 I called my son-in-law, I told him that I had already made the handover of ¥ 3,000,000 RMB with Mr Li Jian from the remittance and exchange company. I asked him if he had received the converted Australian dollar and told him to get the proof of transaction of foreign exchange for ¥ 3,000,000 RMB on 3 March 2016 from the remittance and exchange company.

15. On 3 March 2016 at around 1 PM (China time), I received a transaction order of ¥ 3,000,000 RMB by an Australian remittance and exchange company from my son-in-law. [My son-in-law called to tell me that he had received a transfer of Australian dollars for the trade with Australian remittance and exchange company to exchange ¥ 3,000,000 RMB into Australian dollars. And the Australian remittance and exchange company promised to transfer the rest of the Australian dollars immediately. All the trade orders and trade records had been received and I could allow the staff from the Australian remittance and exchange company leave].

16. [On 3 March 2016 at around 3 PM (China time), my son-in-law called to notify me that today’s trade was cancelled because the Australian remittance and exchange company could not fulfil their commitment and gave up all the converted Australian dollars. The staff from the Australian remittance and exchange company would repay me 3,000,000 RMB in cash. My son-in-law told me to waited home to receive it].

17. [On 3 March 2016 I waited at home until very late. The Australian remittance and exchange company did not give me back the ¥ 3,000,000 RMB. I contacted my son-in-law and asked about information, my son-in-law told me he would handle it and told me not to worry].

  1. Mr Song annexed to his affidavit a copy of the identity card shown to him by Mr Li. The card is in Mandarin, but it was not suggested on behalf of IMBK that it was not an authentic Chinese government identity card. The card included a photo of Mr Li and his National Identification Number.

  2. Mr Song also annexed a copy of the handwritten receipt given to him by Mr Li together with a translation of the receipt from Mandarin. The receipt was in the following terms:

I, Jian Li, have received a total amount of 3 million RMB in cash from Luguang SONG today. Australian Anping Company should pay Zheng Tan an amount of 612,494.90 in Australian Dollars. This is based on the currency exchange rate of 4.8980, which is the rate of 3 March 2016 and agreed by Australian Anping Company and Zheng TAN

  1. The receipt then sets out for each of Mr Li and Mr Song his date of birth, residential address and National Identification Number. The receipt is signed Jian Li and dated 3 March 2016.

  2. Attached to Mr Song’s affidavit was a table setting out relevant WeChat exchanges between Mr Song and Mr Tan. The Australian translations of those exchanges are set out in the following table. I have excluded the 28 messages where the message is translated as: “[This message type cannot be displayed right now]”. (There is a hand written note on the attachment in English that suggest that this notation means that Mr Tan and his father-in-law exchanged a voice message via WeChat).

Time

Sender

Translation

1

2 March 2:08 PM

Mr Tan

All finalised today

2

2 March 2:25 PM

Mr Tan

Dad, the boss said that the 300 can be collected in cash from his home

3

2 March 2:28 PM

Mr Tan

I’ll tell you in more detail on the phone when I get home

4

2 March 4:38 PM

Mr Song

I mean it has to be safe

5

2 March 4:40 PM

Mr Tan

Emoticons [Smile] [Thumbs Up]

6

3 March 9:30 AM

Mr Song

The people have arrived. The company made the arrangements.

7

3 March 9:50 AM

Mr Tan

I’ll call to make sure

8

3 March 9:51 AM

Mr Tan

I’ll call you in just a second

9

3 March 10:12 AM

Mr Tan

Dad, it’s no rush. We can take a look at the citizen identity card first, make a photocopy and then confirm before processing it. I’ll keep an eye on the company over here.

10

3 March 10:50 AM

Mr Tan

Call if you need anything

11

3 March 11:45 AM

Mr Tan

Remember to ask someone from the company to write out an invoice as proof

12

3 March 2:23 PM

Mr Tan

It’s all right, they printed the invoice for me.

14

3 March 3:04 PM

Mr Tan

Image – Foreign exchange record

15

3 March 6:36 PM

Mr Tan

Dad, when the other party pays you back make sure the figure is correct and you must ask them to give you another invoice

16

3 March 8:10 PM

Mr Song

No one’s here yet

17

3 March 9:45 PM

Mr Tan

Dad, we discussed it through and came to an agreement. Don’t worry.

  1. Considered objectively, the documents that have been attached to Mr Song’s affidavit appear to provide some corroboration for Mr Tan’s claims concerning the events of 3 March 2016.

  2. Taken at face value, the receipt provides evidence that Mr Song gave RMB ¥ 3,000,000 to a Mr Li, who purported to receive the money on behalf of Anping, which is IMBK’s business name.

  3. The manner in which the receipt was prepared was not explored in detail in the evidence. If Mr Li had volunteered the information that he was acting for Anping, that evidence would be relatively telling. However, it is possible that Mr Song dictated to Mr Li what should be written on the receipt on the basis of what Mr Song had been told by Mr Tan during their telephone conversations on the day.

  4. It is possible, of course, that the receipt has been concocted in collaboration with someone called Jian Li, but that would be a relatively elaborate and risky subterfuge given that Mr Li allowed his identity card to be photocopied and set out his details in the receipt. The Court cannot know whether the authorities in China would be interested in such a deception, but it would be strange for both Mr Song and Mr Li to voluntarily create such clear and damning evidence against themselves if they were attempting to perpetrate a fraud on IMBK. It would have been an even more extreme course for Mr Tan and Mr Song to have entirely invented the involvement of Mr Li, given that IMBK has not challenge the authenticity of what appears to be Mr Li’s government identity card.

  5. The WeChat messages are also relatively consistent with Mr Tan’s version of the events that occurred on 3 March 2016, although there are not many of them.

  6. The “Image – Foreign exchange record” referred to in the WeChat record for 3:04 PM is probably a reference to the draft Foreign Exchange Record referred to in Ms Sun’s evidence, although the evidence does not specifically establish that fact. The reference to the Foreign Exchange Record suggests that Mr Tan treated it as a final record of the transaction, rather than a draft to be considered and if appropriate signed on behalf of both parties.

  7. It is necessary for the Court to consider the credibility of Mr Tan and Mr Song as witnesses. It will be convenient to deal with Mr Song first.

Mr Song’s credibility

  1. Mr Song was, at the time he made his affidavit on 18 August 2016, a 62-year-old man who had engaged in business in China for over 30 years. The fact that he gave his evidence in Mandarin made it more difficult than is usual for the Court to make a judgment from his demeanour as to the likelihood that he was telling the truth to the best of his recollection. The process of translation between questions and answers usually interferes with a witness’s ability to respond quickly and directly to the questions that are asked in cross-examination.

  2. Nonetheless, Mr Song impressed me as a direct and hard-headed businessman who responded promptly and in a satisfactory way in cross-examination. Although Mr Song travelled to Sydney from Laiyang City in Shandong Province in China to give his evidence, Mr Song’s daughter and only child lives in Sydney with Mr Tan and at least one grandchild of Mr Song. Mr Song travels to Australia from time to time to be with his daughter. I would not too readily dismiss Mr Song’s evidence on the basis that he could say what he liked in the witness box without being subject to any of the risks of giving false evidence. On the contrary, I would think that Mr Song would not jeopardise his ability to freely visit his daughter as and when he liked, by subjecting himself to the risks of giving knowingly false evidence to the Court.

  3. I would not reject Mr Song’s evidence entirely that he paid RMB ¥ 3,000,000 to a person called Jian Li, who provided his identity card and a receipt for the money, and who purported to act for Anping. While it is possible that Mr Song’s evidence is concocted, I am on balance not prepared to find that it was. In any event, I do not think it is necessary for the proper disposition of the present proceedings for the Court to make a positive and definite finding on this issue. The reason is that it is one thing for the Court to accept Mr Song’s evidence that he was induced to pay RMB ¥ 3,000,000 in cash to a person that he thought represented IMBK, but that does not mean that it has been established that in fact IMBK arranged for Mr Li to visit Mr Song to receive the money on IMBK’s behalf.

Mr Tan’s credibility

  1. As for Mr Tan’s credibility, I have come to the view that it is not necessary for the Court to make an elaborate finding on the issue of Mr Tan’s credibility as a witness. This is a case where the Court has available a considerable body of documentary evidence that is objective and does not depend upon the credibility of any of the witnesses, and that evidence is sufficient to provide a proper basis for the findings of fact that the Court needs to make to determine the dispute. Notwithstanding the assertiveness of Mr Tan’s evidence and the strength of his adherence to his evidence in both cross-examination and submissions, the case put by Mr Tan is inconsistent with or does not fit neatly with the objective evidence in the many respects that I have considered above when dealing with the objective evidence in these proceedings. Those inconsistencies speak for themselves.

  2. Considering the difficulties that Mr Tan faced in conducting his own defence in a foreign language, one could marvel at the level of confidence and purpose with which he approached the proceedings. One might contemplate how the ordinary lay Australian English speaker might respond to the need to conduct a significant civil case on their own behalf before a People’s Court in China where the proceedings would naturally be conducted in Mandarin. These problems did not appear to dismay Mr Tan. The level of Mr Tan’s conspicuous apparent belief in the virtue of his case led him to act consistently as if every element of his case was self-evidently true. If one were to attempt to gauge the credibility of Mr Tan’s evidence on the basis of appearances one would find that Mr Tan was apparently a witness of truth. But that approach would not accommodate all the respects in which Mr Tan’s evidence does not fit the objective facts.

  3. IMBK relied upon a number of specific circumstances to attack Mr Tan’s credibility.

  4. One matter concerned the fate of the cash that Mr Tan took from IMBK’s Eastwood Branch on 11 March 2016.

  5. On 24 March 2016, Pembroke J noted that Mr Tan made an undertaking to the Court to the effect that, until final judgment in these proceedings, or the proceedings were otherwise resolved, to preserve the sum of $250,000 in a safety deposit box in his name at a particular bank, and not to remove the funds from the safety deposit box. The money was to be deposited into the safety deposit box by 3 PM on Thursday 31 March 2016. Mr Tan’s solicitor was directed to notify IMBK’s solicitor in writing upon personally seeing the funds deposited into the safety deposit box.

  6. Mr Tan made an affidavit on 30 March 2016, in which he claimed that $550,000 had been stolen from his home. That money included the cash that Mr Tan had undertaken to deposit in a safety deposit box. Mr Tan claimed in cross-examination (T 199.22-200.33) that when he was attending a temple in Wollongong, his house was broken into and the two keys to the safe in his home that were located in his suit pocket were used to empty the safe. IMBK submitted that the inference is open that Mr Tan orchestrated the “theft” himself.

  7. IMBK also relied upon the fact that Mr Tan has a criminal history, including in relation to offences of dishonesty. Mr Tan’s New South Wales Police Force Criminal History – Bail Report was admitted into evidence as Exhibit M. Of the charges that led to a sentence, on 25 May 2015 Mr Tan was given 2 year bonds for offences committed between 9 September 2013 and 1 July 2014 for making a false document to obtain a financial advantage, using a false document to obtain a financial advantage, and possessing a false document to obtain a financial advantage. It appears that Mr Tan was charged with other offences, and was acquitted on 15 December 2009 of committing offences for which he was charged on indictment.

  8. IMBK challenged Mr Tan’s claim that Mr Jiong asked him to implement the 3 March 2016 transaction by paying cash in China to an agent of IMBK, because the banks in China would be closed because of Chinese New Year. IMBK relied upon the evidence of a solicitor, Mr Ka Kui Kwok, who is a native of China, who said that Chinese New Year in 2016 was on Monday 8 February 2016, and that people in China take one or two weeks break to celebrate Chinese New Year. He did not agree that all major banks in China are closed and not trading for a period of approximately one month until March 2006.

  9. It is only necessary for the Court to say that Mr Tan’s claim that it would not have been feasible for IMBK to conduct business in the normal way on 3 March 2016, by relying upon its client to cause money to be deposited electronically into the nominated bank accounts in China, is extremely dubious.

  10. Furthermore, the claim ignores the fact that on 2 March 2016 IMBK and Mr Tan successfully completed a transaction that required Mr Tan to cause money to be paid into bank accounts nominated by IMBK in China.

  11. It is not, however, necessary for the Court to express any definite conclusions about the effect of these matters on Mr Tan’s credibility, because I am satisfied that the Court has a proper basis for deciding this case without relying upon these matters.

Disposition

  1. The conclusion that I have reached on the facts is that IMBK has clearly established that it is entitled to be repaid by Mr Tan as a debt the $12,494.90 that was advanced to Mr Tan on 3 March 2016. IMBK has clearly established the $237,505.10 in cash was taken from the Eastwood Branch without IMBK’s authority, so Mr Tan is legally obliged to repay that money to IMBK. IMBK is entitled to pre-judgment on the debts owed to it under s 100 of the Civil Procedure Act 2005 (NSW). The Court will enter judgment on that basis in favour of IMBK against Mr Tan, after IMBK has provided a calculation in the conventional form of the amount of interest that is payable. An attempt should be made by IMBK to obtain Mr Tan’s agreement to the calculation, but if that cannot be obtained, a document showing the basis of the calculation should be provided to my associate within 14 days of this judgment being handed down.

  2. The Court will dismiss Mr Tan’s cross claim, on the basis that Mr Tan on the evidence has not established on the balance of probabilities that he agreed with Mr Jiong on behalf of IMBK that IMBK would accept the RMB ¥ 3,000,000 in China in cash, and he has also not established that if any payment was made in China to Mr Li, Mr Li accepted the money as the agent of IMBK. This finding ultimately reflects the fact that dealing in substantial amounts of cash is risky, as transactions of that nature may not lead to the creation of sufficiently authentic evidence to persuade a court to the necessary level of confidence that the transaction has occurred on the basis alleged.

  3. It is not inconsistent with this outcome that I have not refused to accept that Mr Song made some payment in cash in China on 3 March 2016. Mr Song may or may not have made that payment, but I am not prepared to find Mr Song is a liar. The problem is that, when people habitually deal in large amounts of cash, they invite the attention of malicious others. If Mr Tan’s claim about the $550,000 in cash being stolen from his home were true, that would exemplify the observation that I have just made. It is entirely beyond the powers of the Court, on the basis of the evidence before it, to confidently make findings about what happened in China on 3 March 2018. The final result is that Mr Tan has not proved that the RMB ¥ 3,000,000 was paid to an agent of IMBK at that company’s request.

  4. Mr Tan will be ordered to pay to IMBK the costs of the proceedings. I will give IMBK an opportunity to make submissions if it wishes to argue that the costs payable should be other than on the ordinary basis. IMBK should advise my associate whether it wishes to apply for a special costs order within 14 days of this judgment being delivered.

**********

Decision last updated: 05 December 2018

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Hungerfords v Walker [1989] HCA 8
Hungerfords v Walker [1989] HCA 8
Hungerfords v Walker [1989] HCA 8