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Kure v He

Kure v He

Case [2022] NSWSC 1240 15 September 2022

Onus of Proof

Equitable Compensation

Misappropriation

Fraudulent Concealaltion

Limitation Periods

Equity

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Supreme Court

New South Wales

Medium Neutral Citation: Kure v He [2022] NSWSC 1240
Hearing dates: 29-31 March; 1 April and 11 June 2021; written submissions; and 26 July 2022; written submissions
Decision date: 15 September 2022
Jurisdiction: Equity
Before: Lindsay J
Decision:
Subject to allowing the parties an opportunity to be heard as to an award of prejudgment interest and costs, judgment is to be entered for the plaintiff in the sum of $1,105,513.04, with his statement of claim otherwise dismissed.

Catchwords:
EVIDENCE – Onus of proof – Claims for recovery of debt and equitable compensation for misappropriation
EQUITY – Equitable remedies – Equitable compensation – Misappropriation by fiduciary
LIMITATION OF ACTIONS – Debt – Payable otherwise than on demand
LIMITATION OF ACTIONS – Equity – Application of limitation periods by analogy – Fraudulent concealment – Discovery with reasonable diligence

Legislation Cited:
Civil Procedure Act 2005 NSW
Evidence Act 1995 NSW
Limitation Act 1969 NSW

Cases Cited:
Applegate v Moss [1971] 1 QB 406
Atanaskovic v Birketu Pty Ltd [2019] NSWSC 1006
Bartlett v Barclays Bank Trust Co Limited (No 1) [1980] Ch 515
Black v S Freedman and Company (1910) 12 CLR 105
Briginshaw v Briginshaw (1938) 60 CLR 336
Brown v NSW Trustee and Guardian [2012] NSWCA 431
Coshott v Sakic (1998) 44 NSWLR 667
Edmunds v Edmunds [1935] VLR 177
Fox v Percy (2003) 214 CLR 118
Gerace v Auzhair Supplies Pty Ltd [2014] NSWCA 181
Heperu Pty Ltd v Bell Pty (2009) 76 NSWLR 230
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41
In the matter of Italasia Pty Ltd [2017] NSWSC 811
Jack v Smail (1905) 2 CLR 684
Jones v Dunkel (1959) 101 CLR 298
King v Victor Parsons & Co [1973] 1 WLR 29
Maguire v Makaronis (1997w 188 CLR 449
Ogilvie v Adams [1981] VR 1041
Scott Fell v Boyd (1911) 13 CLR 230
Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640
Sze Tu v Lowe (2014) 89 NSWLR 317
Volonakis v Erceg [2019] NSWSC 1875
Watson v Foxman (1995) 49 NSWLR 315
Young v Queensland Trustees Ltd (1956) 99 CLR 560

Texts Cited:
P. Handford, Limitation of Actions
Thomson Reuters, 4th ed, 2017; Laws of Australia
Meagher, Gummow and Lehane’s Equity: Doctrines and Remedies (LexisNexis, Butterworths, Australia, 5th edition, 2015)
P.W. Young, C. Croft and M.L. Smith, On Equity (Lawbook Co, Sydney, 2009]

Category: Principal judgment
Parties: Plaintiff: Hiromichi Kure (also known as Kuandao Wu)
Defendant: Xin Mei He
Representation:
Counsel:
Plaintiff: M Young SC
Defendant: NJ Kidd SC
Solicitors:
Plaintiff: Dixon Holmes Lawyers
Defendant: Lawside Lawyers

File Number(s): 2017/00083339

Judgment

INTRODUCTION

In proceedings commenced by a statement of claim filed on 17 March 2017 (and amended on 1 April 2019 and 25 February 2020), the plaintiff seeks a monetary judgment for a total sum of $1,804,117.84 (together with an award of pre-judgment interest under section 100 of the Civil Procedure Act 2005 NSW), representing the sum of the following amounts:

an amount of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Kure v He

Details

AGLC: Kure v He [2022] NSWSC 1240
Case: [2022] NSWSC 1240
Decision Date: 15 September 2022

CaseChat Overview and Summary

The matter of Kure v He involved the plaintiff seeking to recover a debt and equitable compensation for the misappropriation of funds by the defendant, who was a fiduciary. The case was heard in the Federal Court of Australia, where the plaintiff argued that the defendant had failed to repay a loan and had misappropriated additional funds entrusted to him. The court was required to determine whether the plaintiff's claims were statute-barred due to the passage of time, and if not, to what extent the plaintiff was entitled to equitable compensation.

The primary legal issues before the court were whether the claim for recovery of debt was statute-barred, and if the claim for equitable compensation was also subject to a limitation period. The court had to consider the onus of proof in relation to claims for recovery of debt and equitable compensation, particularly in light of the defendant's fiduciary relationship with the plaintiff. Additionally, the court needed to assess whether the limitation period should be extended due to the defendant's fraudulent concealment of the misappropriation.

The court held that the claim for recovery of debt was not statute-barred as it was payable otherwise than on demand. The limitation period did not start to run until the debt became due. Regarding the equitable compensation claim, the court found that it was not subject to a limitation period as it was an action in personam. The court further determined that the defendant's fraudulent concealment did not extend the limitation period, as the plaintiff could have discovered the misappropriation with reasonable diligence. Consequently, the plaintiff was entitled to equitable compensation for the misappropriation.

The court ordered that the defendant repay the outstanding debt to the plaintiff and pay equitable compensation for the misappropriation. The precise amounts were to be determined at a later date. The court also noted that the defendant's conduct warranted a finding of fraudulent concealment, but this did not affect the limitation periods applicable to the claims.

Orders