Li v Deng (No 2)

Supreme Court

New South Wales

Medium Neutral Citation: Li v Deng (No. 2) [2012] NSWSC 1245
Hearing dates: 20 to 29 August 2012
Decision date: 19 October 2012
Jurisdiction: Equity Division
Before: Ball J
Decision:
See paragraph 182 of this judgment.

Catchwords: EQUITY - proprietary estoppel - resulting trust - constructive trust - no issue of principle.
EVIDENCE - credibility evidence - consideration of when lies of one witness can provide evidence against that witness - held only in limited circumstances.
TORTS - malicious prosecution - elements of the tort - meaning of "reasonable and probable cause" and "maliciously" - whether tort applies to the initiation of AVO proceedings.
TORTS - abuse of process - difference between abuse of process and malicious prosecution - onerous burden of proof.
Legislation Cited: Evidence Act 1995 (Cth)
Cases Cited: A v State of New South Wales [2007] HCA 10; (2007) 230 CLR 500
Ainsworth v Burden [2005] NSWCA 174
Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137
Briginshaw v Briginshaw (1938) 60 CLR 336
Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101
Hanrahan v Ainsworth (1990) 22 NSWLR 73
Hicks v Faulkner (1878) 8 QBD 167
Johnson v Emerson (1871) LR 6 Ex 329; 40 LJ Ex 201; 25 LT 337
Landini v State of New South Wales [2008] NSWSC 1280
Li v Deng [2010] NSWCA 266
Little v Law Institute of Victoria (No 3) [1990] VR 257
Raso v NRMA Insurance Ltd (New South Wales Court of Appeal, 14 October 1992, unreported)
Sharp v Biggs (1932) 48 CLR 81
Springett v London and South-Western Bank (1885) 1 TLR 611
Thomas v State of New South Wales (2008) 74 NSWLR 34
Williams v Spautz (1992) 174 CLR 509
Category: Principal judgment
Parties: Lin Li (aka Lyn Gleeson) (Plaintiff)
Wan Yun Deng (First Defendant)
Songshi Li (Second Defendant)
Dan Chen (Third Defendant)
Representation: DA Smallbone / JD Baxter (Plaintiff)
Dr AJ Greinke (First Defendant)
GJ McVay (Second and Third Defendants)
G J Gooden (Plaintiff)
Auyeung Hencent & Day (First Defendant)
Salvos Legal (Second and Third Defendants)

File Number(s): 2006/255516
Publication restriction: Nil

Judgment

Introduction

The plaintiff is the first defendant's daughter. On 1 May 1990, the plaintiff arrived in Australia from the People's Republic of China, originally on a student visa. In November 1990, she married Mr Patrick Warner and subsequently obtained Australian citizenship. The plaintiff and Mr Warner separated in February 1992 and divorced in about 2000, but have remained good friends.

In July 1995, the first defendant visited the plaintiff for about one month. Following that visit, the first defendant applied for a migration visa, which was granted in June 1996. She migrated to Australia to join her daughter in December 1996.

In March 1997, the first defendant bought a property in Roseville for $443,000. The property was on two titles, on one of which was an old house. The property was re-subdivided and the block on which the house was situated was sold and a new house was constructed on the remaining block. While the house was being constructed, the first defendant returned to China and the plaintiff went to the United States to continue her studies, although before going she arranged for Mr Warner to oversee the construction of the house and to do some work on it himself. The plaintiff was also involved in giving instructions in relation to the work from the United States and on two occasions she returned to Sydney to inspect the progress of the works. At some stage during the construction, Mr Warner moved onto the property.

The plaintiff and first defendant both returned to Sydney in April 2002 and moved into the house. The plaintiff's father joined them in April 2002 followed by her brother, the second defendant, in April 2004 and his wife, the third defendant, in April 2005. However, not long after the plaintiff moved into the house, the relationship between her and the rest of her family broke down to the point where on three occasions, on 29 November 2002, 12 April 2005 and 29 June 2005, the first defendant sought apprehended violence orders against the plaintiff and on the second and third of those occasions, the first defendant or her husband made complaints to the police resulting in the plaintiff being arrested and charged with assault.

In September 2006, the plaintiff's father returned to China and died shortly afterwards. In January 2007, the second defendant and his family moved out of the Roseville property and in May 2007 he bought a unit at Auburn. The first defendant borrowed money against the Roseville property to assist with the purchase of the Auburn unit, although there is a dispute concerning the proportion of the purchase price contributed by her and the circumstances in which the money was paid. Subsequently, the second defendant sold the Auburn unit and he and the third defendant bought a unit at Westmead on 11 January 2012 using the proceeds of sale from the Auburn unit together with the proceeds of sale of a property owned by the third defendant in Milperra. In the meantime, on 10 November 2011 and 12 December 2011, the first defendant drew down a total of approximately $603,000 from a further loan she had obtained from Westpac secured against the Roseville property. The first defendant used part of that money to buy a unit at Merrylands on 17 March 2012 for the sum of $235,000. The first defendant subsequently moved into that unit.

In these proceedings the plaintiff makes three types of claim.

First, the plaintiff claims an interest in the Roseville property. She puts that claim on three bases. First, the plaintiff relies on a proprietary estoppel of the type considered by the High Court in Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 which is said to arise from contributions totalling $77,000 she claims to have made to the purchase price of that property together with conversations that she had with her mother. Originally, according to the plaintiff, it was agreed that the first defendant would buy the property, that the plaintiff would supervise its redevelopment, that the property would be sold and that they would split the profits equally. Subsequently, after the property was bought, the plaintiff says that the first defendant proposed that, instead of selling the whole property, she would sell the block on which the house was situated and build a family home on the remaining block in which they would live. According to the plaintiff, the first defendant said that, if the plaintiff agreed to supervise the construction of the house, she would give the plaintiff a half interest in the property and leave the balance of the property to the plaintiff on the death of her and her husband. On the faith of that promise, the plaintiff says that she supervised the construction of the house and sacrificed a promising career as an artist to do so. In those circumstances, she seeks a declaration that the first defendant holds the Roseville property upon trust for her as to a one-half share and as to the other half share for the first defendant for life with the remainder for the plaintiff, together with a number of ancillary orders. In the alternative, the plaintiff claims that the first defendant holds the Roseville property on a resulting trust for her and the first defendant in proportion to the contributions they made to the purchase price. Lastly, the plaintiff claims that the development of the Roseville property was a joint venture between her and her mother which has failed through no fault of her own and in those circumstances she is entitled to the imposition of a remedial constructive trust reflecting the contributions she made to the joint venture in accordance with the principles stated by the High Court in Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137.

Second, the plaintiff claims damages, including exemplary damages, in relation to the three apprehended violence order (AVO) proceedings and two assault prosecutions on the basis that they amounted to an abuse of process or malicious prosecution.

Third, the plaintiff seeks a declaration that the first defendant holds the Merrylands property on trust for herself and the plaintiff upon the same terms as the property at Roseville, that that property be sold and the sale proceeds be used to reduce the mortgage secured against the Roseville property. The plaintiff also seeks a declaration that the second and third defendants hold the Westmead property on trust for themselves and for the plaintiff and first defendant in the proportions that their own contributions and the contributions that can be traced to the money borrowed by the first defendant against the security of the Roseville property bear to the total purchase price.

History of the proceedings

These proceedings were first heard by Gzell J on 20 and 21 July 2009. At that time, neither the property at Auburn nor the property at Merrylands had been bought and the second and third defendants had not yet been joined as parties. In addition, on the first day of the hearing, the plaintiff abandoned her claims for malicious prosecution and abuse of process.

Gzell J delivered judgment on 28 August 2009. His Honour identified the critical question as whether the plaintiff gave the first defendant $77,000. On that question, his Honour found in favour of the first defendant. His Honour also indicated that he preferred the evidence of the first defendant to that of the plaintiff in relation to the question whether the first defendant had made any promises to the plaintiff of any interest in the Roseville property. Having reached those conclusions, his Honour dismissed the proceedings with costs.

The defendant appealed to the Court of Appeal. That appeal was allowed and the matter was remitted to this division for re-hearing: see Li v Deng [2010] NSWCA 266. In allowing the appeal, the Court of Appeal ordered that the oral evidence given before Gzell J may be read at the new trial from the transcript.

The matter was originally then listed for hearing before me for 5 days commencing on 26 March 2012. However, shortly before the hearing was due to commence, the plaintiff discovered that the first defendant had borrowed a total amount of approximately $780,000, from Westpac secured against the Roseville property and that the second defendant had acquired the Auburn property, which had been sold, and that the second and third defendants had subsequently acquired the Westmead property and the first defendant had acquired the Merrylands property. As a result, the plaintiff sought a number of interlocutory freezing orders. Those orders were granted initially ex parte by the court on 23 February 2012. Subsequently, on 26 March 2012, the plaintiff made an application for leave to join the second and third defendants and for the hearing date to be vacated. I granted those applications. Ultimately, the matter was listed for hearing before me for 8 days commencing on 20 August 2012.

The freezing orders have been extended and varied by the court on a number of occasions, most recently by me on 30 March 2012. On 30 March 2012, I also made an order requiring the first defendant to attend court on 25 May 2012 to be examined in relation to the question of what she had done with the $780,000. The first defendant did not attend on that day. Instead, her solicitor made an application, which I granted, that the hearing be vacated on the basis that the first defendant was unwell and had been hospitalised. That application was supported by an affidavit from Dr Veitch, her treating physician. At the same time, the first defendant filed an affidavit which gave at least some of the information that she was required to give in accordance with orders I had made on 30 March 2012. In fact, however, on the afternoon of the day the first defendant was due to attend court, she attended the Chatswood police station. At that time, she gave a detailed statement concerning 3 break-ins that she said had occurred at the Roseville property on 24 April, 26 April and 8 May 2012. On the third of those, the first defendant says that her safe was forced open and many of her original documents together with a significant amount of cash was stolen. The effect of her statement to the police was that the plaintiff had orchestrated the break-ins. Following that complaint, the police executed search warrants in relation to the studio where the plaintiff continues to reside. There is no suggestion, however, that they located any documents belonging to the first defendant.

On the first day of the hearing, Mr Smallbone, who appeared for the plaintiff, indicated that the plaintiff no longer wished to abandon her claim based on malicious prosecution and abuse of process. Dr Greinke, who appeared for the first defendant, accepted that the first defendant would not suffer any prejudice if the plaintiff were permitted to agitate those claims and accepted that, in those circumstances, no estoppel applied. In those circumstances, I indicated that I would permit the plaintiff to pursue her claims based on malicious prosecution and abuse of process.

Factual background

Two of the critical factual issues in the case between the plaintiff and first defendant are whether the plaintiff contributed $77,000 to the purchase price of the Roseville property and whether the first defendant made the promises the plaintiff alleges she did. However, apart from the evidence of the plaintiff and first defendant, there is no direct evidence relevant to either of those matters. Given that, both the plaintiff and the first defendant sought to lead evidence concerning a much broader range of facts which in one way or another were said to have a bearing on the likelihood of the competing accounts of the plaintiff and first defendant being correct and on the credit of the plaintiff and first defendant. In those circumstances, it is helpful to begin by describing in some detail the factual background. It is then necessary to say something about the credit of the witnesses who gave oral evidence before addressing the critical factual issues in the case.

The first defendant was born in Beijing in 1938. She is now 74 years old. She married in about 1956 and she and her husband had two children, the second defendant who was born in 1957 and the plaintiff who was born in 1960.

The first defendant studied Chinese medicine and started working as a doctor in Zhongxin Hospital in Anshun in 1960. She became head of the department of Chinese medicine at Zhongxin Hospital in 1984. Her husband worked in the same hospital as a surgeon.

In about 1987, the first defendant opened a clinic in Anshun specialising in the treatment of kidney and gall stones. Following the opening of that clinic, the first defendant's income increased dramatically from about RMB1,100 in the year before she opened the clinic to RMB20,000 per annum.

In March 1990, the first defendant moved to Shenzhen, which is close to Hong Kong, where she opened another kidney stone treatment clinic. The clinic was very successful and the first defendant's average annual income increased to about RMB1,500,000.

The plaintiff finished school in 1977 and worked as a set designer/backdrop painter for a government sponsored drama group known as the An Shan Drama Group. Her commencing salary was RMB19 per month and she says that when she left the group in 1982 her salary was RMB50 per month. In 1982, the plaintiff was accepted into the Lu Xun Fine Arts Academy in Shen Yang City to study sculpture. She remained there for 5 years and during that time received an amount from the government of about RMB50 per month. On completion of her course in 1987, the plaintiff obtained a job as a set designer/background setting painter for the Liao Ning Opera House in Shen Yang City. The plaintiff says that her commencing salary was approximately RMB70 per month which increased to RMB100 per month by the time she left that job in 1990.

Between 1985 and 1990, the plaintiff also says that she assisted her teachers to complete a number of public sculptures in Shen Yang City and that she earned roughly between RMB30,000 to RMB40,000 for that work.

The first defendant took issue with the plaintiff's evidence concerning her income between 1977 and 1990. In doing so, the first defendant relied on two certificates apparently issued by the plaintiff's employers stating the plaintiff's income. The first is dated 12 May 2006 and, according to the translation, was purportedly issued by the "Art Acadamy of Anshan" [sic]. That certificate shows that the plaintiff was employed from February 1978 to 1982 as an art design worker and was paid RMB32.50 per month. The second is dated 25 May 2006 and was purportedly issued by the Liaoning Opera House and showed that the plaintiff's salary between 1987 and 1989 was RMB82.00 per month. The first defendant says that the originals of the two certificates were stolen from her safe during the third break-in. The plaintiff suggested, however, that both documents were forgeries and, in support of that claim, she said that "Art Academy of Anshan" was not the correct name of the institution for which she worked between 1978 and 1982. Faced with that assertion, while the first defendant was being cross-examined, her solicitor obtained a further certificate from the Art Academy of Anshan to the same effect as the certificate that was originally tendered. Curiously, however, the person through whom the second certificate was arranged told the solicitor that the stamp on the certificate originally tendered was not the stamp of the Art Academy of Anshan, although it is difficult to see how that person could have reached that conclusion from a comparison of a photocopy of the two certificates. Even more curiously, the first defendant in the statement she made to the police on 25 May 2012 stated that both certificates that were originally tendered were forgeries. The implication is that they were forged by the plaintiff, although, as I have said, it was the first defendant who sought to rely on them. I return to these issues below.

In the middle of 1989 the plaintiff applied to study English at a college in Sydney. She was required to pay her tuition fees and living expenses before she was accepted, which were about RMB30,000 to RMB40,000. She says that she paid those amounts from the money she had earned while in China. She also says that she had about $1,000 when she came to Australia, although in cross-examination she accepted that her mother gave her USD1,000 towards the trip. The first defendant, on the other hand, gives a quite different account of the circumstances in which the plaintiff came to Australia. According to the first defendant, the plaintiff asked her parents for more than RMB40,000 to pay for her tuition and trip. Initially, her father refused and subsequently the first defendant relented and gave the plaintiff RMB46,000 together with USD1,000.

The plaintiff arrived in Sydney on 1 May 1990. Three days later she met Mr Warner and they married on 4 November 1990.

The first defendant says that she received no communications from the plaintiff between May 1990 and February 1991. The plaintiff, on the other hand, says that she spoke to the first defendant regularly by telephone and wrote to her. Two of the matters they discussed were the possibility of the first defendant buying a house in Sydney and the plaintiff setting up a small art gallery. The plaintiff says that the first defendant said to her on occasions:

We can put the house in my name so you don't have any trouble with your Husband.

Nothing turns on whether the first defendant made statements to this effect or not, except that those statements are inconsistent with the evidence originally given by the first defendant that she did not know until November 2002 that the plaintiff had married Mr Warner. However, it is clear from other evidence that the first defendant knew the plaintiff had married. In particular, the plaintiff's father wrote to her on 18 November 1990. The letter begins by saying:

After learning in your phone call that you had sent a letter, Mom hurried to the No. 2 Hospital to look for it, ...

Later the letter says:

If after careful consideration you believe the art gallery is worth a try, you need to tell us the amount the family should send you. There is only HK dollar and US dollar in Shenzhen (no AU dollar). We haven't exchanged the money yet. We will do that after you write to us. With regard to property purchase, you can first assume a total price for buying an ideal house in Mom's name. How much is the deposit? How much is the monthly repayment afterwards? We can then assess the feasibility based on current financial capacity. Please send our regards to the boy and his family. It is so lucky for you to meet such nice people in Australia. Buy some gifts for them on our behalf. Mom says she wishes we could meet in Australia in 1-2 years. She often tries to create opportunities to go visit you in Australia when the time is right.

Now that you are preparing for a wedding, don't stress too much about money. If you haven't got enough money, just write and tell me what currency to send you, how and where to send.

In my opinion, the plaintiff was close to her parents at that time, and I think that it is inconceivable that she was not in regular contact with them. It is also clear from the letter that the first defendant must have known that the plaintiff intended to get married and the likelihood is that she also knew that the plaintiff had married Mr Warner well before 2002.

The plaintiff studied English for about 6 months and during that time and subsequently she says she worked in a number of different jobs including:

Portrait painting in Chinatown from which she says she earned approximately $2,000;
Repairing stone lions in Chinatown in November 1990 for which she was paid approximately $4,000 to $5,000;
As a kitchen hand from early 1991 to early 1992 at the Mosman Grove Retirement Village where she earned approximately $370 per week after tax and from which she saved approximately $100 per week;
As a callgirl at the Flower City Karaoke Nightclub in Crows Nest from late 1991 to February or March 1993 where she earned approximately $1,000 per weekend;
As a kitchen hand at The Oaks at Neutral Bay from about mid-1992 where she received approximately $300 per week in her hand.

The plaintiff separated from Mr Warner in February 1992.

In 1993, the plaintiff started a masters degree at the College of Fine Arts at the University of New South Wales. She continued to work as a kitchen hand and babysitter earning approximately $200 per week. The plaintiff says by the beginning of 1993 she had saved approximately $80,000, although she spent some of that money subsequently on her living expenses.

On 31 March 1994, the first defendant wrote the plaintiff a letter. There was further mention in that letter of the possibility of the first defendant buying a house in Australia.

In October 1994, the plaintiff received a scholarship of $500 to assist in the costs of making her graduation artwork for the University. Her intention was to make a film in Tibet and for that purpose she travelled to China in October 1994. She says that she took with her $72,000, which was the balance of her savings. She said that she gave that money to her mother and asked her mother to keep it so that it could be used for them to buy a house together in the future. The plaintiff says that she had kept that money in cash in various denominations hidden in various places in her flat in Sydney. Before she went to China she changed the cash into $100 notes.

The first defendant denies that the plaintiff gave her any money for safekeeping. According to the first defendant, the plaintiff asked her for RMB100,000 for her trip to Tibet and she says that she gave the plaintiff RMB120,000 plus a camera which she had bought for RMB45,000. The plaintiff, on the other hand, says that she returned the camera at the end of her trip and that her trip to Tibet cost nothing like RMB100,000. In support of that claim, she produced a number of invoices for modest amounts relating to the costs she incurred on the trip.

The first defendant also says that, at the time of the plaintiff's visit to China in October 1994, she gave the plaintiff USD10,000 and HKD10,000 to deposit for her in Australia, which the plaintiff never did. The plaintiff denies that she was given those amounts.

The question whether the plaintiff gave the first defendant the sum of $72,000 is a critical issue in the case, to which I return below. As to the other issues between the parties concerning the plaintiff's trip to China, there is no issue that the first defendant paid for the plaintiff's trip to Tibet, although I accept the plaintiff's evidence that the amount that the first defendant gave her was substantially less than RMB100,000 or RMB120,000. There is no independent evidence that the first defendant gave the plaintiff that amount and the invoices produced by the plaintiff together with the evidence concerning the plaintiff's and first defendant's income prior to 1990 suggest that the costs would have been substantially less than either of those amounts. Moreover, it is hard to understand why, on the first defendant's evidence, she gave the plaintiff more than the plaintiff asked for. The first defendant could not give a satisfactory explanation for doing so.

I am also not prepared to accept that the first defendant gave the plaintiff USD10,000 and HKD10,000 to deposit for her in Australia. Again, there is no evidence concerning those amounts and it is unclear why the first defendant would give the plaintiff those amounts at that time. At that time, the first defendant had not made a decision to live in Australia or buy a house here.

The plaintiff completed her Master's degree in 1995 and in that year she was paid $4,000 for a sculpture commissioned by Transfield. Apart from that, it is not clear how the plaintiff supported herself during that year. According to her, she was looking for work at the time.

On 13 July 1995, the first defendant came to Sydney for approximately one month and stayed with the plaintiff in the plaintiff's flat at Cremorne Point. The plaintiff says that the first defendant brought with her approximately USD35,000, some of which, at least, was rolled up in the first defendant's hair - evidence that the first defendant says was fanciful. In cross-examination the first defendant says that she brought USD60,000 with her, that she gave $8,000 to the plaintiff, that she deposited over $50,000 with The Colonial State Bank and that she spent the rest of the money on her trip. The evidence is that the first defendant actually deposited two amounts in term deposits with the Colonial State Bank on 17 July and 20 July 1995. The first amount when converted to Australian dollars was $18,860. The second amount was $33,000. Nothing turns on precisely how the first defendant brought the cash to Australia or the precise amount she brought.

The first defendant also says that while she was in Sydney she opened a Streamline account with the Commonwealth Bank, although she says she cannot recall how much she deposited in that account at that time.

While in Sydney, the plaintiff showed the first defendant around the city and they visited a number of Chinese medical clinics. The first defendant says that on that trip she decided she wanted to immigrate to Australia. According to the plaintiff, she took the first defendant to the Immigration Department and arranged for her to obtain the relevant forms and that she completed forms in support of the first defendant's application under the Family Reunion program. The first defendant, on the other hand, says that she arranged her immigration visa through an agent in Shenzhen. The first defendant says that she organised to withdraw $5,000 from one of the term deposits with the State Bank to pay a bond in respect of her application. In my opinion, the plaintiff's account of how the application form came to be completed is more plausible than the account given by the first defendant.

The first defendant returned to China on 12 August 1995. Following her return, she says she had a discussion with her husband about helping the plaintiff and providing her with a proper place to live. The first defendant says that she finally decided to migrate to Australia in December 1995.

On 20 December 1995, the plaintiff's father wrote to her saying that the first defendant was "awaiting the Anshan Consulate to grant her application and is also learning English". The first defendant, however, denied in evidence that she was studying English at the time. Again, nothing turns on whether she was or not.

The first defendant wrote to the plaintiff on 12 January 1996. In the letter the first defendant largely complains about the second defendant and the fact that he wanted the first defendant to buy a house for him.

The plaintiff wrote to her father on 27 January 1996. In that letter she refers to speaking to her mother and also writing to her. The letter says:

Mom is the one who controls the finances at home. That means mom's decision to come to Australia for her retirement actually reflects her desire for the whole family to get together in Australia, and she is just the first one to come here. ... Now facing this situation, I feel even more responsible to bring you and my brother here, the sooner the better.

Through the first part of 1996, the plaintiff says that she was looking for work. During that time she was paid an amount of $8,800 for two works of art. The plaintiff does not give any evidence of any other income she earned in 1996.

The first defendant's migration visa was granted in June 1996 and she migrated to Australia in December 1996. The first defendant says that before leaving China she transferred USD190,000 to her Commonwealth Bank account and that she brought a further USD100,000 with her, which she declared to customs on her arrival on 28 December 1996.

The plaintiff gives a quite different account of what happened. She says that the first defendant asked her to go to China to help her (the first defendant) take the sum of USD270,000 out of the country. The plaintiff says that the first defendant had the USD270,000 in cash at home and that she assisted the first defendant to count it out into bundles. The plaintiff says that she asked the first defendant where the $72,000 was that she had given to the first defendant in October 1994 and the first defendant replied that she had a friend who needed Australian dollars quickly and that she managed to exchange the Australian dollars for US dollars at a good exchange rate and that the amount she received was included in the USD270,000. The first defendant says that she made two trips to Hong Kong with a friend from Shenzhen with the cash sewn into a belt wrapped around her waist and that she deposited the cash in a safety deposit box there. The plaintiff and the first defendant then flew to Sydney through Hong Kong on 27 December 1996 and the plaintiff left the airport to collect money from the safety deposit box at that time. When they arrived in Sydney, the plaintiff says that she accompanied the first defendant to the Commonwealth Bank where the US dollars were exchanged for Australian dollars and deposited in the first defendant's name.

Whether the first defendant brought USD270,000 or USD290,000 to Australia is unclear. However, in my opinion, the plaintiff's account of how it was brought here is more plausible. Her account is supported by three pieces of evidence. First, there is a letter from HSBC confirming that the plaintiff maintained a safe deposit box with the Bank between 23 December 1996 and 27 December 1996. Second, the first defendant conceded that the plaintiff left her for a period of approximately 3 hours at the Hong Kong Airport. Third, in the face of evidence given by the plaintiff, the first defendant accepted that she did not open the Commonwealth Streamline account until she arrived in Australia. She then said that the money she transferred from China was sent to an account with the State Bank. However, the evidence suggests that that account was not opened until 13 March 2007. The first entry on page 1 of the statements for that account shows the payment in of a term deposit of $51,510.21. The opening balance is shown as $0.00.

Following their arrival in Sydney, the plaintiff and first defendant began looking for houses. The plaintiff says that in February 1997, they saw the property at Roseville. She says she had a conversation with the first defendant to the following effect:

I said: "The 90 Boundary Street house could be sub-divided for sure. There are two Lots on one title. My friend made lots of money from doing this way.".

She said: "It would be over AUD$400,000. We don't want to borrow money."

I said: "We can borrow money for a short period of time, after sub-division, we could sell the property with the house on it straight away to pay back the bank, and using the rest of the money from the sale, could build a dual occupancy house. The dual occupancy house would sell for AUD$750,000 at least. We could double our money through this development."

She said: That's a great idea, but who is going to do all this work?"

I said: "I will do it. But I would like to have half of the profits from this development."

She said: "Can you find more information on this?"

The plaintiff says that following that conversation she carried out extensive research on how easy or difficult it would be to sub-divide the property. She also investigated the costs of building a dual occupancy house on the vacant block and concluded that it would be between $230,000 and $300,000. She then says that she explained to the first defendant that, on the basis that the maximum price of the property would be $450,000, they could borrow $100,000, sub-divide the property, sell the existing house for $380,000 repay the loan of $100,000 leaving $230,000 to build a dual occupancy house, which could be sold for $750,000.

The plaintiff says that the first defendant replied that the figures appeared to be a bit tight and asked the plaintiff whether she had any more money to contribute to the costs of the house. The plaintiff replied that all she had was $5,000, which she had saved from the sale of her two artworks. She then says she gave the first defendant the $5,000 in cash.

The first defendant gives a quite different account of what happened. She says that she was unhappy living in the plaintiff's flat which she described as "small and damp and smelly". She started looking for properties to buy in the local Chinese newspapers and saw the property at Roseville being advertised. She denies that there was any discussion of reselling the property at a profit and splitting that profit. She was seeking to buy the property as a home and did not consider until after it was acquired the possibility of building a second house on it.

The auction for the property was on 11 March 1997. The day before the first defendant arranged to borrow $100,000 through a mortgage broker. There is a dispute between the plaintiff and the first defendant on how the mortgage broker was located. There is also a dispute on who placed bids for the property. The first defendant says that she engaged a real estate agent to bid on her behalf and that the plaintiff translated for her. The plaintiff says that she did the bidding. In any event, the first defendant was successful in acquiring the property for $443,000. The deposit was paid from the term deposit that the first defendant had established with the Colonial State Bank in 1995.

Settlement took place on 22 April 1997 and following settlement the plaintiff and first defendant moved into the existing house. Before doing so, the first defendant says that she engaged a builder who she found through an advertisement in the local Chinese press to do work on the house, including painting it. The plaintiff admits the house was painted, but says minimal other work was done on it and that the cost of the work was substantially less than the $20,000 that the first defendant claims she spent.

Some time in April 1997, the plaintiff won the Helen Lempriere Travelling Arts Scholarship which was worth $40,000. In addition, during 1997 she earned a further $5,000 and $2,000 from other artwork she completed.

Shortly after the property was purchased, the plaintiff began to work on the subdivision of the property. She approached Burrell Threlfo Pagan Pty Ltd (BTP), town planning consultants, to prepare a report and fee proposal on the proposed development. That report describes two principal options. One was to build a second house at the rear of the site which "could have separate accommodation for you and your mother, but only one kitchen". The second was to subdivide the site and build a second house at the rear and convert that house to dual occupancy by internal alterations only. The report goes on to describe the steps that were required. It is dated 27 May 1997.

According to the plaintiff, shortly after she received the BTP report, the first defendant said that she no longer wanted to build a dual occupancy house and sell it. Rather, she wanted to build a house in which the family could live. According to the plaintiff, the first defendant proposed that they sell the existing house and build a family home on the vacant lot. She says that the first defendant told her:

You get your own living room and en suite as well as a studio in which you can do your sculpture and painting work. We don't pay other people to do all the works, you do the property development. It would be safe money for us. Half of the profit from the development would go into the house. The half of the house is yours, although it is under my name now, because your marriage is not stable. After your Dad and I pass away, the whole house is yours as our Chinese traditions.

The plaintiff says that she asked the first defendant to put this arrangement in writing, but the first defendant refused on the ground that it would be the equivalent of a will and a curse.

As a result of that conversation, the plaintiff says that she deferred taking up her scholarship for a year so she could complete the subdivision work. She then spoke to Mr John Deller, an architect friend of hers, who helped her draw up a plan of subdivision and a DA for the construction of the house. The plaintiff with the assistance of Mr Deller then did a significant amount of work to obtain council approval to the proposal. She paid Mr Deller $500 for that work. Mr Deller says that some time while they were working on the development application the plaintiff said to him words to the effect of:

In return for all of the work I am doing Mum has promised me that I will have my own area of the house to live in.

The first defendant gives a different account of what happened. According to her, after they moved into the existing house she found it too noisy and for that reason she suggested building a second house on the vacant lot, which was at the back of the property. She says that she paid Mr Deller approximately $7,000 for his assistance in relation to the subdivision and development application, which is inconsistent with Mr Deller's evidence. Although Mr Deller was not cross-examined, I prefer his evidence on this point.

While work was proceeding on the subdivision and development approval for a second house, the plaintiff and first defendant inspected a number of project homes with a view to engaging a builder.

On 27 October 1997, the plaintiff received $7,525.35 from the RTA for a work of art. She said she paid $3,500 of that to the first defendant towards the mortgage plus a further $1,575 in small amounts.

Some time in 1997, the plaintiff also won a commission from the Sydney City Council for a public sculpture on the corner of Sussex and Hay Streets in Chinatown. Deferring her overseas studies allowed her to complete that commission. The commission was for a sum of $180,000 of which she was to receive a fee of $30,000. Mr Nicholas Tsoutas, the Zelda Stedman lecturer at the Sydney College of the Arts described the plaintiff in the late 1990s as "an 'up and coming artist' who had a great future ahead of her".

The proposed subdivision was approved in December 1997.

On 30 March 1998, the first defendant paid a deposit to Westminster Homes in relation to a building contract for a house on the property. The proposed house was a two-storey residence with a room attached to the main house. The plaintiff says that that room was intended to be her studio. The first defendant, on the other hand, said the room was intended to be a surgery for her to set up a Chinese medical practice. The first defendant says that the plaintiff told her that she was going to the United States and would not come back and that there was no need to design a room for her. However, in my opinion, that is implausible. There is no evidence that the plaintiff planned permanently to move to the United States and I think the likelihood is that the plaintiff and first defendant intended that the room attached to the main house would be the plaintiff's studio.

On 22 April 1998, an application was made to increase the mortgage by $79,000 to assist with the construction of the house.

On 13 June 1998, the first defendant returned to China. Before doing so, she executed an authority in favour of the plaintiff to operate her bank accounts.

On 19 August 1998, the DA was approved.

On 16 September 1998, the plaintiff went to China. She says that she had heard that her brother was proposing to immigrate to Australia and she was concerned that the arrangements she had with her mother had not been put into writing. The principal purpose of her trip was to raise her concerns with her parents. She says that she had a conversation with her parents in the first defendant's residence in Shenzhen. She said in her first affidavit that her cousin, Ms Ying Gao, "could also be present at the time". In cross examination, the plaintiff said that she was certain that her cousin was present at the meeting, although she then resiled from that position. In fact, the evidence suggests that at the time Ms Gao was a fugitive from the police because she had been accused by the first defendant of stealing money from her. In any event, the plaintiff says that the first defendant refused to put the arrangement into writing.

Again, the first defendant gives a different account of the plaintiff's visit to China. According to her, the plaintiff went to China because she had spent the money in the first defendant's bank account on personal expenses and needed more for the construction of the house. It was only then, according to the first defendant, that she agreed that the original house should be sold. The plaintiff admitted in cross-examination that she used money in the account to pay for some of her personal expenses, although she said that in each case the payment had been authorised by the first defendant.

During the visit, the plaintiff also arranged for the first defendant to sign a power of attorney in her favour.

On 2 February 1999, the original house was sold for $375,000. After repayment of the mortgage, the net proceeds were $160,000.

On 20 April 1999, the first defendant returned to Australia with her husband, who had obtained a migration visa. The first defendant says that she brought USD50,000 with her on that visit and deposited approximately $50,000 with the Commonwealth Bank.

The building approval for the house was given on 30 April 1999 and a building contract was signed with Westminster Homes on 5 May 1999. The first defendant returned to China on the same day.

On 19 September 1999, the plaintiff left for California to take up her scholarship. Mr Warner took responsibility for overseeing the building project and the plaintiff left a number of blank cheques with him drawn on the first defendant's account to pay for the building expenses. According to Mr Warner, the plaintiff told him on a number of occasions that "This is going to be a home for Mum and me. I own half of it".

Both the plaintiff and the first defendant made short trips to Sydney in October 1999. The first defendant says that she gave the plaintiff USD30,000 and asked her to deposit it in her bank account - which the plaintiff denies.

While in the United States, the plaintiff continued to be involved in supervising the construction of the house. On a number of occasions, she gave detailed instructions concerning particular aspects of its construction.

The plaintiff returned to Sydney in December 1999. According to her, the first defendant's money had run out and consequently the plaintiff says that at her mother's request she paid some of the costs associated with the construction of the house herself including service connection costs, the installation of an alarm system, gutter screens, fencing, retaining walls, floor tiles in the studio and landscaping and related fees. She refers to a number of invoices which she has still retained which she says she paid. According to the first defendant, however, at that time there was still more than $90,000 left in her Commonwealth bank account.

The first defendant returned to China on 11 January 2000 and at about the same time the plaintiff returned to the United States to complete her study. Mr Warner continued to oversee the construction of the house and liaise with the builder, the council and the plaintiff. He apparently lived on the property during that time.

The plaintiff completed her Masters degree at the California Institute of the Arts in June 2001. She then applied for a working visa in the United States to undertake practical training in the field of film video for the period June 2001 to June 2002.

The plaintiff visited Sydney in June 2001. At that time, the house had been completed and the keys had been handed over by Westminster Homes.

In January 2002, the first defendant ended her contract with the Chinese Traditional Treatment Centre in Shenzhen. She returned to Sydney on 16 April 2002. The plaintiff returned to Sydney at about the same time. She says that she was ordered to do so by her mother in order to oversee the landscaping. The first defendant may well have asked her to come back. However, I think that it is most unlikely that the plaintiff would have done so if it was important for her to remain in the United States. Although she had not completed the full 12 months of her practical training, she had completed most of it. The plaintiff does not give any evidence to suggest that it was important for her to remain in the United States for her career. At that time, she was working on her own film project called "Save Our Souls". However, there is no suggestion that that project could not have been completed in Australia.

The plaintiff arrived in Sydney about a week before her mother. Initially she moved into the bedroom on the ground floor of the house. However, a short time later she says it was necessary to move into the studio while wooden floors were being installed. It is difficult to reconcile this evidence with evidence given by the plaintiff that the house was completed in June 2001.

The first defendant says that when she arrived in Sydney she found the house a terrible mess. There is a dispute about the extent of the mess and how long it took to clear it up. The first defendant took photographs of the outside of the property and certainly those photographs suggest that the mess was extensive. They show large quantities of junk including things such as old furniture piled up on the property. In addition, although the first defendant says she did not know it at the time, the council had served a number of notices requiring timber and wire structures which had been erected on the property to be removed. It seems those structures were used to house poultry. There were also four dogs on the property.

On 30 April 2002, the first defendant's husband arrived in Sydney. The first defendant says that she asked him to come because she felt threatened by the plaintiff's insistence that she make out a will leaving the property to her.

It was suggested to the plaintiff in cross-examination that, at the time the first defendant arrived in Sydney there were cannabis plants growing on the property, which the plaintiff denied. However, I find that denial implausible. The plaintiff admitted that she used cannabis and that in fact she smoked up to 20 joints a day. However, she said that it was only in recent years that she had started using cannabis. Mr Warner, however, gave evidence that "I grow a few plants" at the Roseville property and later he gave evidence that on rare occasions he used cannabis himself although "not for years". It is likely that he used the cannabis he grew; and had been doing so since he took up residence on the property. More significantly, the fact that Mr Warner was growing cannabis and that he and the plaintiff were using it provides a more plausible explanation than the one offered by the first defendant for asking her husband to come to Sydney almost immediately after she arrived. It also helps to explain why there was such a rapid deterioration in the relationship between the plaintiff and first defendant and evidence given by the plaintiff that:

Mum every time see Patrick [Mr Warner]. Just go crazy.

It is unclear what happened during the balance of 2002. Certainly, the relationship between the plaintiff and the first defendant deteriorated very substantially. According to the plaintiff, her mother refused to permit the first defendant to move back into the house after the floorboards had been laid because her brother was expected to arrive from China and he needed somewhere to stay. Instead, the plaintiff resided in the studio, although there was no bathroom there. According to the first defendant, the plaintiff lived with Mr Warner in the garage and the shed which was attached to it. In one of her affidavits, the plaintiff denies that she and Mr Warner were living in the garage and shed attached to it. She says that a timber shed was never constructed and attached to the garage. Somewhat oddly, in that affidavit she says that she and Mr Warner lived in the downstairs bedroom.

The plaintiff did some work on the landscaping and she submitted plans to council for the landscaping on 15 August 2002. Some time later, following meetings the plaintiff had with council officers, those plans were approved. The plaintiff says that, from about the time that she arrived back in Sydney, every morning the first defendant would give her a list of things to do which made it difficult for her to work on her documentary film project. Eventually, the plaintiff says that she was forced to rent an office in August 2002 which she kept until May 2003 in order to work on that project. The first defendant, on the other hand, says that she spent $50,000 completing the landscaping. Although there is no evidence to support that assertion, there is evidence that some landscaping work was done.

On 26 May 2002, the plaintiff's father wrote a somewhat extraordinary letter addressed to "policemen, prosecutor, court". The letter (written in Chinese) makes a number of complaints about the plaintiff and concludes:

6. Their [meaning the plaintiff and Mr Warner] plan of actions is related with killing her parent and to occupy our property.

7. If this kind of tragedy happened, the planner must be our daughter, Lin Li, and the killer must be somebody who is the closest to our daughter and follow whatever my daughter said.

The first defendant denied having any involvement in the drafting of the letter and says that she did not find it until after her husband's death.

Things reached a head on or about 20 November 2002. According to the plaintiff, the first defendant told her that she wanted her to move out. The plaintiff asked the first defendant to write down the agreement they had reached which the first defendant refused to do. On the other hand, the first defendant says that while she and her husband were in the yard the plaintiff said to her:

Go back to China! If not, we'll kill you!

According to the first defendant, Mr Warner than strangled a chicken in front of her and the police were called. At about that time, the first defendant says that she told the plaintiff that she wanted Mr Warner to move out and it was then for the first time the plaintiff said that she was married to him although it was not a real marriage and that she did it for immigration reasons. By that time, however, the plaintiff had divorced Mr Warner.

As a result of this incident, an interim AVO was issued and an application was made for a final order. The "circumstances of a complaint" attached to the application for the AVO gives a quite different account of what happened. According to it, the first defendant had asked the plaintiff to move out many times. Also according to it, the plaintiff and Mr Warner kept a number of dogs and other animals and were running a business involving the tanning of hides. According to the complaint, what triggered the incident was that the fence that had been constructed on the property had been destroyed and the first defendant had accused the plaintiff and Mr Warner of being responsible for its destruction. The complaint also records that the first defendant had alleged that the plaintiff had threatened to kill her if she did not sign the property over to the plaintiff and had threatened to burn the house down. There is no reference to Mr Warner strangling a chicken. The complaint was dismissed on 13 December 2002.

According to the first defendant, the plaintiff and Mr Warner moved out in March 2003, but broke into the property again in May 2003. The plaintiff denies that. According to her, relations improved between her and her mother and as evidence of that points to the fact that, in June 2003, her mother paid for a shower and toilet to be installed in the studio where the plaintiff continued to live. It seems that at some time Mr Warner moved out of the property, although it is unclear when.

On 9 October 2003, the plaintiff lodged a caveat following further demands that she move out. The nature of the estate claimed was expressed in the following terms:

The Caveator claims an Equitable Estate in the Land arising from the Caveator's financial contributions and otherwise, to the acquisition and maintenance of the land and further interest.

In about May 2003, the plaintiff had completed a draft of her documentary film and, on 26 November 2003, she received an offer from the ABC setting out the terms on which it would retain "Lin Li Films P/L" to develop "SAVE OUR SOULS" as a one hour documentary. The plaintiff signed that agreement as a director of Lin Li Films Pty Ltd, although no corporate entity existed. The ABC wrote a second letter on 3 February 2004 advising the plaintiff that it had approved an "in principle" pre-purchase of the documentary. However, on 23 March 2004, the ABC returned the film under cover of a "with compliments slip" which announced it was no longer proceeding with the documentary. It is not clear why that happened. In her affidavit, the plaintiff says that from the time she lodged the caveat, the first defendant would call the police on a regular basis. As a result, she says that she became very depressed and was unable to deliver the documentary and consequently lost her pre-purchase agreement. In cross-examination, she initially said that she did not know why the ABC cancelled the project, although later she said "I was absolutely too depressed at the time. I could not complete some of the tasks as ABC gave to me [sic]". What those tasks were was left unexplained.

In April 2004, the second defendant migrated to Australia and took up residence at the property.

On or about 2 June 2004, the first defendant and her husband made a further complaint for an AVO against the plaintiff and both the plaintiff and Mr Warner were charged with assaulting the plaintiff's father. The plaintiff says little in her affidavit evidence about the circumstances giving rise to those complaints. According to the first defendant, the plaintiff and Mr Warner were attempting to return to the property and the first defendant's husband tried to stop them. He was knocked to the ground and assaulted. The circumstances of complaint attached to the application for the apprehended violence order gives an account of what is alleged to have happened which is broadly consistent with the evidence given by the first defendant. However, the complaint does record that the events were witnessed by the second defendant's son, although he was not called to give evidence either at the hearing before the magistrate or in these proceedings. The complaint also alleges that the first defendant claimed that the plaintiff smoked marijuana and used drugs and made some reference to the fact that she had seen Mr Warner break a chicken's neck.

Initially, an interim order was made including an interim order excluding the plaintiff from the property. That interim order was subsequently varied. The fact sheet apparently prepared in support of the interim order stated, among other things:

The injuries suffered by Janming LI [the plaintiff's father] as a result of this attack is a Psoas haematoma (massive bleeding in the muscle) in the abdomen area. Treating doctor stated to police that the victim would have had to have had a serious beating to have sustained this injury.

On 9 April 2005, the third defendant arrived in Australia to join her husband.

On 12 April 2005, the Hornsby Magistrate's Court heard the application for the second AVO and the assault charges. According to the plaintiff, the second and third defendants attended the hearing as well as the first defendant and her husband, although in cross-exmaination the plaintiff admitted that she could not be sure that the third defendant attended. The second defendant agrees that he attended the hearing, but says that he stayed outside the court. Initially, he said it was because he could not understand English. Subsequently he said it was at the first defendant's suggestion so as not to antagonise his sister. The third defendant denied that she attended court on that day.

The complaint for the AVO records that the plaintiff had stated that her "earnings" contributed towards buying the property and that she had threatened to kill the first defendant and had insisted on the first defendant making a will in her favour.

The assault charges and application for an AVO were heard on 12 April 2005. During the course of that hearing, the first defendant gave the following evidence:

Q. Well, there was an agreement wasn't there, between you and your daughter that if the house was sold, she would receive 15% of the sale process, do you remember that?

A. That's after my death, my will. I didn't mention anything else.

Q. There was a meeting organised at that time with a Chinese speaking lawyer, so that I want to suggest to you that agreement that is, that your daughter would received [sic]15% of the sale proceeds of the house could be reduced to writing?

A. No.

By this stage, Mr Warner was no longer living at the property and it appears that he returned with the plaintiff at the time the assault was alleged to have occurred. According to the plaintiff, her father yelled at her and then gently lay on the ground. Mr Warner gave evidence at the hearing of the assault charge which is consistent with the plaintiff's evidence.

The assault charge and the application for an AVO were dismissed. In dismissing the charges, the Magistrate said:

Mr Li for his part claimed that the blows were heavy ones and it was a little surprising given his age and apparent frailty that there was so little sign of his having sustained a severe assault when he was examined at hospital. An expert certificate of Dr Hubert Louw, surgical registrar at the hospital is in evidence as exhibit 2, that shows that the patient underwent a fairly searching visual examination. That there were blood tests that were unremarkable, a normal ECG, x-rays of abdominal pelvic right femur areas all normal and a CT scan of the abdomen was done which showed no pelvic or intra abdominal haematoma or haemorrhage apart from right lower abdominal pain of which the patient himself complained there was really nothing upon which the doctor could remark and that seems an unlikely outcome from an assault such as has been described.

On 29 June 2005, another incident occurred leading to the laying of a further assault charge together with a further application for an AVO. The circumstances giving rise to those applications was that the circuit breaker for power supply to the main house and the studio tripped on a couple of occasions. The first defendant accused the plaintiff of causing that to happen by using too much electricity and, in particular, using a heater. She went to the studio intending to switch the heater off. The plaintiff says that she tried to explain to the first defendant that it was the kettle, not the heater that was causing the problem. However, the first defendant would not listen to her. The first defendant claims that the plaintiff assaulted her by pulling her out of the studio and again called the police. The plaintiff, on the other hand, concedes that she ushered the first defendant out of the studio, but denies that she assaulted her.

The charge and application were heard on 8 February 2006. The plaintiff says that the second defendant was definitely present in court at that time, although she could not be a hundred percent sure whether or not the third defendant was present. The second defendant denies that he attended court on that occasion. He says he only attended the Hornsby Magistrate's Court once.

On 9 February 2006, the first defendant served a lapsing notice in respect of the plaintiff's caveat.

On 24 February 2006, the plaintiff commenced these proceedings making an application to extend the caveat. That application was granted.

There were then settlement discussions between the plaintiff and her parents. The plaintiff says that, during one of those discussions, which occurred on or about 25 May 2006, she agreed with her father that she would not pursue the court proceedings if she were permitted to remain in the studio. As a result, she did not appear at a hearing fixed by the court for 29 June 2006 and the proceedings were dismissed.

On 25 August 2006, the plaintiff's father signed a document which was prepared in both Chinese and English. The document was headed "Solemn Declaration" and said:

I am Jin Ming Li, Lin Li's father.

I never heard of following two things:

1, Wan Yun Deng, Lin Li's mother, has any economical promises to Lin Li;

2, The house was built for Lin Li.

Those above two things were said by Lin Li herself.

I prove this here.

The document was witnessed by the first and second defendants together with the second defendant's son. There is a dispute about whether the third defendant prepared the English version of the document.

On or about 15 September 2006, the plaintiff's father returned to China. The plaintiff says in an affidavit she affirmed on 12 July 2012 that shortly before departing her father approached her with the second defendant. According to the plaintiff, her father said that he was speaking on behalf of himself and the first defendant and offered to make a cash payment if the plaintiff gave up her claim to the property. The plaintiff says that the conversation then continued in the following terms:

My father replied:

"As you put approximately $77,000 into the property, if you allow for interest over the years, your entitlement would be worth something like $100,000."

I replied:

"What about Patrick [referring to Patrick Warner]? He has put a lot of time and effort into the property as well."

Mr father replied:

"We could give Patrick $5,000. Your mother will have to borrow the money so there is a limit on what we can pay you and Patrick."

I said:

"Patrick might be prepared to accept $5,000 because it will at least enable him to buy a car."

My father said:

"So you would withdraw the caveat and leave the property if Mum pays you $105,000?"

I replied:

"Yes."

The conversation is denied by the second defendant.

The plaintiff's father died in China on 1 October 2006.

Some time in November 2006, the first defendant with the assistance of the plaintiff applied to obtain a loan from Westpac for $250,000. According to the plaintiff, the purpose of the loan was to enable the first defendant to settle with the plaintiff. The loan was approved by Westpac on 1 December 2006. Negotiations for a settlement continued between the plaintiff and first defendant between then and March 2007.

On or about 25 January 2007, the plaintiff says that she was discussing settlement with the first defendant in the first defendant's upstairs bedroom in the house. She heard a noise and found the third defendant in the upstairs toilet. She accused the third defendant of eavesdropping and a scuffle between them broke out. Following that event, the second and third defendant moved out, initially to rented accommodation.

On 19 March 2007, the first defendant terminated the retainer of her lawyers and withdrew from the settlement discussions.

The following day, the plaintiff lodged a second caveat over the property, although how she came to do so is unclear. On 27 April 2007, the first defendant served a lapsing notice. The plaintiff then made an application on 15 May 2007 seeking to have the dismissal of these proceedings set aside. That application was granted.

At about the same time, the second defendant bought the unit in Auburn. The purchase price was $178,000. The second defendant says that that amount was funded from 5 sources. First, he says that part of the money came from wages he had earned during 2005 and 2006 when he worked at a Chinese restaurant, some of which he had given to the first defendant for safe keeping. Second, he says that when he came from China he brought with him approximately $36,000 and USD1,000 which had been confiscated by customs on arrival. It was returned to him in 2006. He says that he then gave part of that money to the first defendant for safe-keeping. Third, he says that in June 2006 he transferred the sum of $51,980 from China and that part of that money was paid towards the purchase price. Fourth, he says that on or about 16 May 2007 the first defendant transferred to him the sum of $145,600 and that $45,600 of that amount included the money that he had given to the first defendant for safe keeping. As to the balance of the $100,000, the second defendant says that that money was in payment for various furniture and household goods that he had given to the first defendant and to compensate him for the fact that he and his family had to move out of the Roseville property following the altercation between the plaintiff and third defendant. Lastly, the second defendant says he received the first home owner's grant of $7,000, although it is apparent that he did not receive that money until after settlement.

In relation to the $100,000, the third defendant prepared a document on or about 19 August 2007 entitled "Bestowal Contract". The document consists of one page. The top half is in Chinese and the bottom half is a translation. It provides:

Mother, Wanyun Deng would like to bestow $100,000 AUS from her home loan to Songshi Li, her son, to buy a property used for living in, ...

After discussion, Songshi Li, the son, would like to undertake one year's interest of the mother's home loan, $1400/m AUS in half year; if the mother's house hasn't been sold out, the son would undertake $700/m AUS in the next half year. After Wanyun Deng, the mother sold out her house, the interest of the home loan would be repaid by Wanyun Deng herself; if her house can't be sold out, one year after, the interest of the home loan would still be repaid by Wanyun Deng.

The couple of Songshi Li own the right of the property which Songshi Li bought.

The Chinese and English versions of the agreement are signed by the first and second defendant.

The second defendant says that he paid interest of $1,400 for the first four months and then $700 for two months. He says that all those payments were made in cash. He says that his mother then told him that there was no need to make further payments. He also says that, at the time, he was unaware that there was a dispute between the first defendant and the plaintiff concerning the Roseville property.

In or about December 2011, the second defendant sold the Auburn unit for $278,000. On 11 January 2012, the second and third defendants bought the unit in Westmead for $484,000. They also paid stamp duty of $17,290. Those amounts were paid from the proceeds of sale of the Auburn unit together with the proceeds of sale of a property owned by the third defendant at Milperra. The net proceeds of sale of that property were approximately $223,000.

On 17 March 2012 the first defendant bought the Merrylands unit for $235,000 using funds which were drawn down from the Westpac mortgage secured against the Roseville property. She also says she paid other amounts associated with the unit including stamp duty, legal fees and some renovation costs together with $30,000 which was described as "Cash paid to vendor/developer". What that money was for was never explained.

Findings in relation to credit

Before addressing the important factual issues in the case, it is necessary to say something about the credit of the witnesses. In my opinion, none of the witnesses who gave oral evidence was satisfactory.

The plaintiff

The plaintiff, as I have said, admits that she is a heavy user of cannabis. She also takes medication for a schizo affective disorder and to some extent the way she gave evidence appeared to be affected by her medication or her cannabis use. So, for example, she would sometimes lose the thread of what she was saying or give answers which were vague and not to the point. For example, when asked about why the ABC terminated her contract, she said at one point:

Why? I don't know why. This is a murky world. The world is very difficult. Where my Mum don't sign anything, you know, work all done, money all put in, why Mum not sign any piece of paper you live here, you can live here, to give me some security. Why not?

When asked whether she kept chickens on the property, she gave the following evidence:

Q. Was there a pen for the chickens?

A. Yes chicken pen.

Q. Did you allow them to wander all over the yard during the day?

A. My side and not my Mum's side.

Q. Page 78 which is the next page is that a sign you put up "Fancy bantams for sale"?

A. Yes they all love fancy bantams.

The plaintiff was, on occasions, prepared to make appropriate concessions. For example, she accepted that postponing her studies in the United States had not damaged her career and had allowed her to complete the commission she received from the Sydney City Council. However, there was some evidence that was given by the plaintiff which I found implausible and do not accept. In particular, I do not accept the evidence that the plaintiff gave in relation to her income while she was in China. Nothing in my view turns on a resolution of the question whether the certificates relied on by the first defendant accurately set out the income the plaintiff earned while working for the An Shan Drama Group and the Liao Ning Opera House. Whether the certificates are accurate or not, it is not in dispute that the plaintiff earned no more than RMB50 per month while she was working for the An Shan Drama Group and no more than RMB100 per month while she was working for the Liao Ning Opera House.

The real question is whether the plaintiff also earned RMB30,000 to RMB40,000 for public sculptures in Shen Yang City. In my opinion, it is implausible that she did and I do not accept her evidence in relation to that matter. She was still a student. There is no suggestion that she had an established reputation as an artist in China at that time. The plaintiff gave no evidence concerning the sculptures on which she worked and there is no evidence corroborating her evidence. It seems to me inconceivable that a governmental authority would pay her RMB30,000 to RMB40,000 to work on a number of public sculptures in conjunction with others when her annual income, apart from that work, was no more than about RMB1,200, which was also paid by a governmental authority; and the evidence that the plaintiff earned from that work an amount that was equivalent to the amount she said was the cost of her study in Australia strikes me as contrived.

Mr Smallbone submitted that, given the first defendant's and her husband's income, it was implausible that they could have afforded to give the plaintiff RMB46,000 and that supports evidence given by the plaintiff concerning her income. However, I do not accept that submission. There was no detailed investigation into the financial affairs of the first defendant and her husband or any information concerning how much the first defendant's husband earned as a surgeon. It seems clear that RMB46,000 (roughly $10,000 at the time) was a very substantial sum of money for them at that time. However, it strikes me as far more plausible that the plaintiff's parents could have saved that sum of money over their lives than that the plaintiff could have earned the amount she said she did from assisting her teachers to complete a number of public sculptures while she was still a student. Given the closeness of the family at that time, it also strikes me as plausible that the plaintiff's parents would be willing to give the plaintiff that money to further her career and education.

I also am not prepared to accept the plaintiff's evidence concerning the conversation she had with her father in which her father offered her $105,000 if she would abandon her claim in respect of the Roseville property. The plaintiff relies on the conversation as being relevant to the second defendant's knowledge of her claim. However, it was an important conversation in relation to her claim against the first defendant as well. It is to be expected that, if it occurred, the plaintiff would have remembered it, given her detailed recollection of other events. However, she did not give evidence of it until the affidavit she swore on 12 July 2012, which was the eighth affidavit she has sworn in the proceedings. Moreover, the words she attributes to her father seem a contrived repetition of her claim.

Mr Warner

Mr Warner admitted that he was an alcoholic and that his alcoholism affected his memory, although he said it was more his memory of time rather than events. In my opinion, despite his denial, it is also likely that he is a user of cannabis in substantial quantities. That is something that he has in common with the plaintiff. The impression Mr Warner gave was that he had been affected substantially by his alcohol addiction and his use of cannabis. On occasions, he took a long time to answer questions and the impression that he gave was that it took time for him to process the questions asked of him. Although he and the plaintiff are divorced, it is apparent that they remain close and he gave the impression of tailoring his evidence to assist her case. I accept the evidence that he did a substantial amount of work on the property. However, apart from that, in my opinion, little weight can be put on his evidence.

The first defendant

In my opinion, the first defendant was not a reliable witness. She saw her role in the witness box to a large extent as being an advocate for her own case. She often failed to answer questions asked of her and instead sought to give information that she thought would assist her case. More than once she stressed - correctly - that it was for the plaintiff to prove her case and she had no documents to support it. She appeared to be willing to say anything which she thought would assist her case and to regard the truth, at best, as a secondary consideration. So, for example, the overall picture she sought to paint of the plaintiff was that of an uncaring and selfish daughter who did nothing to assist her, whereas the few family letters that are in evidence suggest the opposite. She sought to minimise the assistance her daughter gave her with her visa application, with finding and purchasing the Roseville property and with work on the property. She said that she paid Mr Deller $7,000 for his work, which Mr Deller denied. None of the evidence given by the first defendant on these matters struck me as plausible and the impression the first defendant gave was that she saw it as important to minimise the plaintiff's role in purchasing the property in any way she could.

The first defendant said that she did not know that the plaintiff had married despite the evidence in one of the letters to the contrary. When confronted with that letter, the first defendant said that she meant that she did not know who the plaintiff had married because it was a fake marriage and, implausibly, that her evidence had been mis-translated in her affidavit. The first defendant also insisted in relation to the USD290,000 that she brought to Australia in 1995 that part of it was transferred through the banking system and that she brought the rest with her, which she declared to customs. However, the bank records are inconsistent with both accounts she gave of what happened. In my opinion, the plaintiff's account of what happened is more plausible.

The fact that the first defendant was willing to instruct her solicitor that she could not attend court because she was in hospital when on that very afternoon she was busy making a further complaint to the police about her daughter also casts doubt on her credibility.

The second defendant

In my opinion, the second defendant was also an unreliable witness. The evidence that he gave in relation to the apprehended violence orders and assault charges was generally unsatisfactory. He said that he only attended the Hornsby court on one occasion which was the first assault charge involving his father. On that occasion he says that he remained outside the court. Initially he said that that was because he could not speak English and then he said it was at his mother's request. Both explanations strike me as implausible. He then gave evidence about other applications for apprehended violence orders in these terms:

Q. Do you know that there was a second matter that started in 2005 in Hornsby Court and that finished in 2006?

A. INTERPRETER: No, I do not know. I was not - I did not participate.

Q. You did not know? Did you know at the time that it was going on whether or not you participated?

A. INTERPRETER: No, I do not know.

Q. Did you receive from the Hornsby Court an application from your sister in relation to an apprehended violence order that she was seeking about you in 2005?

A. INTERPRETER: No, I have never received anything.

Q. Did you take any steps at all to deal with such an application brought against you?

A. INTERPRETER: I did not know about this application. Did I apply for it?

Q. No, this is an application against you by your sister?

A. INTERPRETER: No, I do not know.

Q. Dealt with at the same time or heard at the same time as the prosecution against your sister for assault where the hearing commenced in late 2005?

A. INTERPRETER: What you have been talking I am really not aware of that and also at the time people involved are all my relatives. I do not know which side to help. On top of that I work very long hours. I left home early in the morning and did not get home after 10pm.

This evidence also strikes me as implausible. I am prepared to accept that the second defendant only went to the Hornsby court once. However, in circumstances where he was living with his parents and clearly aligned with them, it strikes me as implausible that he would not have discussed with them the second assault charge. It also strikes me as implausible that the second defendant knew nothing about the application for an AVO that his sister sought against him.

The second defendant's evidence that he gave his mother $45,600 for safe keeping also strikes me as implausible. In cross-examination, the second defendant suggested that he gave the money to his mother so that she could put it in her safe. It is clear, however, that when the first defendant purportedly returned the money, it came from her bank account. There is no reason why the money could not have been deposited in the second defendant's bank account.

The third defendant

In many respects the third defendant appeared to be the most satisfactory of the 5 who gave oral evidence. Her answers were generally straightforward and to the point. However, there is one respect in which I do not accept her evidence which casts doubt on her reliability generally. It emerged during cross-examination that she had divorced the second defendant while in China although it appears that they have since remarried. She sought to explain the divorce on a temporary breakdown in their relationship caused by the second defendant's family. However, given that the divorce was temporary and that there is no evidence that they spent a significant time apart after the third defendant came to Australia, I think that the more likely explanation was that they divorced so that the third defendant would be entitled to the first home owner's grant when she bought the property in Milperra. That was put to her in cross-examination and she denied it. However, it strikes me as a more plausible explanation than the one she offered. The explanation and her refusal to admit it casts doubt on the reliability of her evidence generally.

Critical factual issues

Despite the amount of evidence that was led, there are only 4 critical factual issues in the case. One is whether the plaintiff contributed $77,000 towards the purchase of the Roseville property. The second is whether the first defendant made the promises the plaintiff says she did. The third concerns the second and third defendants' knowledge of the plaintiff's claim. The fourth concerns how much the first defendant contributed to the purchase price of the Auburn unit from funds secured by the mortgage over the Roseville property. On each of these factual issues, the plaintiff bears the burden of proof.

Did the plaintiff contribute $77,000 to the purchase of the Roseville property?

I am not satisfied that the plaintiff has discharged the onus she bears on this issue. As I have said, I do not regard the plaintiff as an entirely reliable witness. In particular, I do not accept her evidence that she saved RMB30,000 to RMB40,000 and used that money to finance her trip to Australia. In those circumstances, I am not prepared to accept her evidence concerning the $77,000 unless it is inherently probable or sufficiently corroborated by other evidence.

As to the $72,000, there is a question whether the plaintiff could have saved the sum of $80,000. Dr Greinke took issue with the plaintiff's evidence that she worked as a call girl. According to him, it was not plausible that she would have worked as a kitchen hand earning approximately $300 per week in hand if she could earn $1,000 per weekend as a call girl. He also submitted that, if the plaintiff had really worked as a call girl, it was open to her to call corroborating evidence, such as evidence from the manager of the Flower City Karaoke Nightclub at the time. I do not accept these submissions. I am prepared to accept that the plaintiff worked as a call girl. That evidence does not strike me as something that she would make up. I am also prepared to accept the plaintiff's evidence that the uncertainties associated with an income from that job meant that it was necessary for her to retain her regular job as a kitchen hand. In addition, I am prepared to accept that the plaintiff did not want to bank that income, which was clearly income on which she did not pay tax.

Even so, there are discrepancies in the plaintiff's evidence which mean that I am not prepared to accept her evidence that she saved $80,000. In her affidavit evidence she suggests that part of those savings came from her job as a kitchen hand. However, in the first trial she admitted that she spent the whole of the income she had from casual jobs and her student allowance on living expenses. In cross-examination during the hearing before me the plaintiff said, in order to explain why she kept her job as a kitchen hand, that "The nightclub is not that certain. Sometimes there is money, sometimes sit there all night there is no customers. There is no certainty." She still suggested that, on other occasions, she earned more than $1,000 per week because "some days have you out for five days of a trip". But how that evidence sat with her other commitments remains unclear and it is inconsistent with her evidence that "I worked at the Flower City Karaoke Night Club in Crows Nest on weekends".

In addition, there is no evidence corroborating the plaintiff's evidence that she gave the first defendant $72,000 and it strikes me as inherently improbable that she did. There is no reference to that amount in the letter dated 12 January 1996 from the first defendant to the plaintiff or the letter dated 27 January 1996 from the plaintiff to her father. Even if it is accepted that the plaintiff had savings that she was not prepared to put in the bank and even if it is accepted that the plaintiff was not prepared to leave those savings in Australia while she travelled to China, it strikes me as improbable that the plaintiff would leave that sum of money with her mother in China when it seems clear that ultimately she intended to use it in Australia. It seems more likely that she would have brought the money back with her. It also strikes me as inherently improbable that the first defendant would have been able to exchange that money for US dollars and that, having just been given $72,000, the first defendant would offer to pay the costs of the plaintiff's trip to Tibet.

Mr Smallbone submitted that the plaintiff's evidence was corroborated by the first defendant's lies. The lies of one party may corroborate the evidence of another, but only in limited circumstances. As Handley JA (with whom Mahoney JA and Priestly JA agreed) explained in Raso v NRMA Insurance Ltd (New South Wales Court of Appeal, 14 December 1992, unreported):

The fact that a witness has told lies may, in some circumstances, provide evidence against that witness. However there are strict limits to this principle as demonstrated by the decision in R v Heyde (1990) 20 NSWLR 234 at 246 where Clarke JA said:

"... there is only a very limited class of lies by an accused which are capable of constituting corroboration of the evidence of a prosecution witness ... The most helpful test is that which emerges from Eade (Eade v The King (1924) 34 CLR 154) and that it is only lies which suggest that the liar cannot give an innocent explanation of proved facts, or that he is unable to account for what witnesses say they saw in any way consistent with his own innocence which are capable of providing corroboration. "

Although this is not a criminal case the principles stated by Clarke JA are still applicable because they determine whether lies are capable of supporting an inference relevant to the matters in dispute. In the present case there is no other evidence directly implicating the plaintiffs and it follows therefore that their lies, as found by the trial Judge, are not evidence that they were guilty of arson or conspiracy to commit arson.

The current case does not fall within that limited class either. Here, the issue is whether the plaintiff gave the first defendant $72,000. The fact that the first defendant may have lied about other events does not prove that she lied about that event. Her lies about other events were not necessary to support her denial that the plaintiff gave her $77,000. The position may be different if, for example, the first defendant had lied about her income in order to support a conclusion that she could have saved USD290,000. However, there is no suggestion that the first defendant's evidence on that matter was not truthful. At most, the first defendant's lies mean that her evidence that the plaintiff did not give her that sum of money is unreliable.

As to the $5,000, I am not satisfied that the plaintiff gave the first defendant $5,000. There is no evidence corroborating her evidence that she did. Moreover, it is unclear why the first defendant would have asked her for money or why she would have accepted $5,000. On settlement of the purchase there was a surplus of $35,704.24, which the first defendant placed in a cash management account. If more money was required, there is no reason why the first defendant would not have borrowed it, as happened subsequently. Up until this time, the first defendant had been generous with her daughter and it is implausible that she would have asked for money or taken the $5,000 when she had no immediate need for it and could have borrowed more if necessary.

Did the first defendant promise the plaintiff an interest in the property?

Again, I am not satisfied that she did.

In my opinion, the plaintiff's account of what happened is inherently improbable. According to her evidence, the first proposal was to buy the property, develop it and split the profits equally. According to the plaintiff, when the first defendant decided she wanted to keep the property as a family home, the first defendant agreed in effect that the plaintiff was to have the property subject to a life interest in half the house in favour of the first defendant and her husband. That strikes me as implausible for a number of reasons.

First, all the prior discussion and correspondence had been about buying a house to live in, not buying a property to develop and sell. As early as 18 November 1990, the plaintiff's father wrote about buying "an ideal house in Mom's name".

Second, it is difficult to understand why, if the original proposal was to buy the property and redevelop it, the plaintiff investigated the possibility of developing a dual occupancy home. It is hard to believe that that would have increased the appeal of the development. Investigation of a dual occupancy home is more consistent with an intention that the plaintiff and first defendant would live in the property. According to the plaintiff she obtained the report from BTP before the defendant decided that they should build a family home. However, that report says the new house "could have separate accommodation for you and your mother, but only one kitchen".

Third, if what really had been agreed was that the profits would be shared equally, it is difficult to understand why the first defendant would then have agreed that the whole house would be the plaintiff's subject to the life interest I have referred to in accordance with "Chinese traditions". As the plaintiff pointed out in her letter dated 27 January 1996 to her father "Mom is the one who controls the finances at home"; and it does not seem likely that she would willingly have given away so much control. In addition, it was apparent from the same letter that it was expected that the second defendant would also come to Australia and, as the first defendant points out, it does not seem consistent with "Chinese traditions" to exclude him from inheriting any interest in the house.

Fourth, the evidence given by Mr Deller is not consistent with the plaintiff's case. According to him, the plaintiff said that the first defendant had promised the plaintiff that she would have her own area of the house to live in in return for the work she was doing. The evidence of Mr Warner went further. However, for the reasons I have given, I am not prepared to place any weight on his evidence. Moreover, even his evidence did not go as far as the plaintiff's claim. According to him, the plaintiff told him that she had a half interest in the property. He does not suggest that the plaintiff told him that she would inherit the whole property on the death of her parents.

Fifth, if the true position was that the first defendant had promised the plaintiff the house subject to the life interest in half of it, it is to be expected that some reference would have been made to that fact in the caveat lodged by the plaintiff. However, the interest claimed in the caveat is based on the plaintiff's contributions to the property.

The plaintiff relies on what is said to be an admission by the first defendant during the course of the first assault charge on 12 April 2005. The relevant evidence is quoted above (at para [102]). In my opinion, the reference to "15%" must be a transcription error and that the real figure was "50%". However, even on that basis, I do not regard the relevant evidence as an admission. All the first defendant appears to be saying is that the first defendant intended to leave 50 per cent of the property to the plaintiff in her will. Presumably, she intended to leave the other 50 per cent to the second defendant.

Did the second and third defendants know of the plaintiff's claim on the property?

This is a factual issue which is critical to the plaintiff's claim against the second and third defendants.

In my opinion, both the second and third defendants did know that the plaintiff claimed an interest in the Roseville property, although there is no evidence that they knew the precise nature of that claim.

In my opinion, the second defendant must have known by no later than 25 August 2006 that the plaintiff had made claims in respect of the property. The plaintiff had commenced these proceedings on 24 February 2006. On 25 August 2006 the first defendant's husband signed the declaration in which he said that he had not heard that "The house was built for Lin Li". That declaration was witnessed by the second defendant. In my opinion, it is inconceivable that the second defendant would have been asked by his father or mother to witness that declaration without being given some explanation of the reason for the declaration. The only explanation that he could have been given was that the plaintiff had commenced proceedings claiming an interest in the property.

I also think it is likely that by 25 August 2006 the third defendant had been told of the plaintiff's claim. I accept that she may not have attended the Hornsby Local Court and that when she first arrived in Australia the plaintiff's claim was not discussed with her, since she was new to the family. However, by August 2006 she had been in Australia for over a year living with her parents-in-law. The disputes between the plaintiff and the first defendant and her husband must have been an important part of their lives. In those circumstances, I think that it is likely that that dispute was a frequent topic of family conversations and I think that it is likely by that stage that the third defendant was a witness if not a party to those discussions.

Even if that conclusion is not correct, the third defendant prepared the "Bestowal Contract" on or about 19 April 2007. In my opinion, the purpose of that document was not to create rights as between the first and second defendants. Although the second defendant says that he made some payments under that document, there is no evidence that any of those payments were actually made and I think the likelihood is that they were not. Rather, in my view, the purpose of the document was to provide evidence that the second defendant had given something in return for the $100,000. The purpose of doing so was to insulate the $100,000 from a claim by the plaintiff. In my opinion, the likelihood is that both the second and third defendants appreciated that fact.

How much did the first defendant give to the second defendant?

The total purchase price of the Auburn unit was $178,000. There is no dispute that the first defendant gave the second defendant the sum of $145,600. That amount was paid into the second and third defendants' Westpac account on 16 May 2007 and there is a corresponding withdrawal from the first defendant's mortgage account. The question is whether that amount was a gift. In my opinion, it was.

As to $100,000 of that amount, the Bestowal Contract suggests that it was given to the second defendant in exchange for a promise by the second defendant to make some interest payments. In his affidavit, the second defendant also says that part of the amount was in payment of furniture and household goods that he had bought for the plaintiff in China in 2004. I do not accept that evidence. I have already indicated that, in my opinion, the Bestowal Contract was brought into existence to provide some evidence that the $100,000 was not a gift. However, in the absence of any evidence corroborating what the second defendant says, I am not prepared to accept that he paid any money under that contract. As to the furniture and household goods, if the $100,000 was in part payment for those items, then that is something that the parties would have recorded in the Bestowal Contract. Moreover, if the first defendant really owed the second defendant money in respect of those items, the likelihood is that she would have paid for them in 2004. In my opinion, the claim that the second defendant bought goods for the first defendant for which he had not been paid in 2007 is a recent invention designed to support the argument that the $100,000 was not a gift.

As to the $45,600, I have already rejected the second defendant's evidence that, in paying that money, the first defendant was repaying money that had been left with her for safe keeping.

As to the balance of the purchase price of $178,000, that was made up of a deposit of $17,300 and the balance of the purchase price of approximately $15,000. There is no evidence that the deposit came from the first defendant. So far as the $15,000 is concerned, the bank statements show that on 18 May 2007 there was a deposit of $10,000 into the second and third defendants' Westpac account. There is a corresponding withdrawal from the first defendant's mortgage account on 18 May 2007. In my opinion, it is to be inferred that that amount also came from the first defendant. The balance of the $15,000 came from two deposits of $2,000 and $3,000 which were made on 14 and 17 May 2007 respectively. Again, the source of those deposits is not clear. However, there are no corresponding withdrawals from the first defendant's mortgage account and there is no other evidence to suggest that the ultimate source of those funds was that account; and there is no basis for inferring that that is where those funds came from.

It follows that the first defendant contributed a total amount of $155,600 to the purchase price of the Auburn unit from borrowings secured against the Roseville property.

There is no evidence to suggest that the first defendant contributed any additional amount to the purchase of the Westmead property.

The plaintiff's claims in respect of the Roseville property

The plaintiff's claim based on proprietary estoppel and a resulting trust must fail at a factual level. I am not satisfied that the conversation between the first defendant and the plaintiff upon which the proprietary estoppel claim is based occurred or that there was any contribution by the plaintiff to the purchase price of the Roseville property.

Nor do I think it could be said that there was a joint venture between the plaintiff and the first defendant which failed so as to bring the case within the principles stated by the High Court in Baumgartner v Baumgartner (1987) 164 CLR 137. In my opinion, it is not correct to say that the plaintiff sacrificed her career as an artist in order to develop the property with the expectation that she would obtain an interest in it. She did not sacrifice her career. At most, she postponed her studies in the United States for a year in order to help her mother construct a house on the property. Delaying her studies also permitted her to complete an important commission that she had been awarded. The plaintiff did a significant amount in organising the construction of the house. However, in my opinion, the work that she did was no more than what might have been expected from a daughter by her mother. I accept that the expectation was that the plaintiff would live in the house and that, in the normal course of events, she could have expected to inherit it with her brother. However, I do not think those expectations could be described as something in the nature of a joint venture that failed. They are simply expectations arising from the nature of the relationship between the parties which were not realised because the relationship broke down.

It follows that the plaintiff's claim against the first defendant in respect of the Roseville property must fail.

It follows from the conclusion of the previous paragraph, that the plaintiff's claim against the second and third defendants must also fail.

The claim for malicious prosecution and abuse of process

In order to make out the tort of malicious prosecution, a plaintiff must prove:

(a) that proceedings of a kind to which the tort applies (generally criminal proceedings) were initiated by the defendant;

(b) that the proceedings terminated in favour of the plaintiff;

(d) that the defendant acted maliciously.

See A v State of New South Wales [2007] HCA 10; (2007) 230 CLR 500 at [1].

"Reasonable and probable cause" is "an honest belief in the guilt of the accused based upon a full conviction, founded upon reasonable grounds, of the existence of a state of circumstances, which, assuming them to be true, would reasonably lead any ordinarily prudent and cautious man, placed in the position of the accuser, to the conclusion that the person charged was probably guilty of the crime imputed": Hicks v Faulkner (1878) 8 QBD 167 at 171 per Hawkins J; see also Sharp v Biggs (1932) 48 CLR 81 at 109 per Dixon J. Consequently, a defendant acts without reasonable and probable cause if the defendant does not actually believe that the accused was probably guilty of the crime or the defendant does not have reasonable grounds for that belief.

A defendant acts "maliciously" if the sole or dominant purpose of the defendant was a purpose other than the proper invocation of the criminal law: A v State of NSW at [91]. Improper purposes which could constitute malice include spite, ill will, and an intention to punish the accused: A v State of NSW at [92]. An improper purpose can also include the securing of some collateral advantage, such as proceedings brought by a defendant for the purpose of preventing the plaintiff from pursuing a civil action against the defendant: Springett v London and South-Western Bank (1885) 1 TLR 611; referred to in A v State of NSW at [92].

Although the tort of malicious prosecution normally involves criminal proceedings, it is also available in relation to civil proceedings if those proceedings could give rise to the types of damage for which the tort provides compensation - in particular, damage to reputation. An example is bankruptcy proceedings: Johnson v Emerson (1871) LR 6 Ex 329; 40 LJ Ex 201; 25 LT 337; see also Little v Law Institute of Victoria (No 3) [1990] VR 257 at 267-8. In my opinion, the tort would extend to an application for an AVO. Proceedings of that type are obviously capable of damaging the reputation of those against whom such an order is sought.

In order to make out the tort of abuse of process the plaintiff must prove that a process, which is normally ancillary to a principal claim for relief, has been used to effect an object not within the scope of the process and damage has resulted: Hanrahan v Ainsworth (1990) 22 NSWLR 73 at 112 per Clarke JA. Unlike in an action for malicious prosecution, the plaintiff in an action for abuse of process need not show (a) that the initial proceeding has terminated in his or her favour; or (b) want of reasonable and probable cause for institution of the principal claim for relief: Williams v Spautz (1992) 174 CLR 509 at 522-523.

Although a claim based on the tort is normally brought in respect of some ancillary process, it may be available in respect of a claim arising from principal proceedings, such as proceedings commenced in order to extort money from a defendant to which the plaintiff is not entitled: Hanrahan v Ainsworth (1990) 22 NSWLR 73 at 112 per Clarke JA.

The burden of proof in both actions is, of course, on the plaintiff. It is an onerous one because of the allegations of impropriety that the actions entail: Landini v State of New South Wales [2008] NSWSC 1280 at [45] per Hall J referring to Dixon J's judgment in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-3.

There is no question in the present case that the first defendant initiated the second assault charge and the applications for AVOs. Nor is there any question that the charges and applications were dismissed. It is not clear, however, that the first defendant initiated the first assault charge. The charge was that the plaintiff and Mr Warner assaulted the plaintiff's father; and the plaintiff's father appears to have been the complainant in respect of that charge. That point aside, the principal question, in the case of the tort of malicious prosecution, is whether the first defendant did not honestly and reasonably believe that the plaintiff was guilty of assault or liable to an AVO and caused the charges to be laid or complaints to be brought maliciously. It is not clear whether the tort of abuse of process adds anything to the tort of malicious prosecution in this case. The question it raises is whether the applications for the AVOs were made for an ulterior purpose - that is, for the purpose of removing the plaintiff from the Roseville property for reasons unconnected with any concern for the first defendant's personal safety. If that was the purpose of the applications, it is difficult to see how it could be said that the first defendant had an honest and reasonable belief in the plaintiff's guilt (or liability) and that the proceedings were not brought maliciously.

In my opinion, the plaintiff has not made out either tort.

One difficulty with the plaintiff's case is that the plaintiff has led little admissible evidence concerning either tort. She has sought to tender the transcript of the judgments delivered by the magistrate who heard the charges and the second and third applications for AVOs, the transcript of the evidence given at those hearings, the relevant initiating processes and a number of witness statements given in connection with the charges and applications. However, in my opinion, with the exception of witness statements prepared by the first defendant and her husband for the second assault charge, none of that material is admissible to prove the relevant underlying facts. The judgments of the magistrate are admissible to prove what decisions were reached by the magistrate: see Ainsworth v Burden [2005] NSWCA 174 at [109] per Hunt AJA (Handley and McColl JJA agreeing). However, they are not admissible to prove any of the facts in issue in those proceedings: Evidence Act 1995 s 91. The transcripts may be admissible as first hand hearsay to prove what occurred at the hearings on the basis that they consist of evidence of the shorthand reporters who prepared the transcripts of what they heard at the hearings and it would cause undue expense or it is not reasonably practicable for those persons to give that evidence: Evidence Act s 64. However, the transcripts are not a business record which can be admitted under s 69 of the Evidence Act: see s 69(3)(a); Thomas v State of New South Wales (2008) 74 NSWLR 34 at [3]-[11] per Hodgson JA (Campbell JA agreeing). Consequently, they are not admissible to prove the truth of the evidence they record. Similarly, except for the witness statements prepared by the first defendant and her husband, the witness statements prepared for the proceedings are hearsay and not admissible in these proceedings to prove the truth of any asserted representation: Evidence Act, s 59(1).

The witness statement prepared by the first defendant is admissible under s 64(3), which provides:

(3) If the person who made the representation has been or is to be called to give evidence, the hearsay rule does not apply to evidence of the representation that is given by:

(a) that person; or

(b) a person who saw, heard or otherwise perceived the representation being made.

The witness statement prepared by the first defendant's husband is admissible under s 63, which provides:

(1) This section applies in a civil proceeding if a person who made a previous representation is not available to give evidence about an asserted fact.

(2) The hearsay rule does not apply to:

(a) evidence of the representation that is given by a person who saw, heard or otherwise perceived the representation being made; or

(b) a document so far as it contains the representation, or another representation to which it is reasonably necessary to refer in order to understand the representation.

However, neither statement supports the plaintiff's case.

The plaintiff gave no evidence in chief concerning the precise events leading up to the charges and applications. Some details emerged in the first defendant's affidavit, the plaintiff's affidavit in reply and in cross-examination. The first application for an AVO arose out of the incident that occurred after the first defendant told the plaintiff that she (the first defendant) wanted Mr Warner to move out. The plaintiff is said to have said "Go back to China! If not, we'll kill you" and Mr Warner is said to have strangled a chicken. The first defendant denies that she said those words and emphatically denies that Mr Warner strangled a chicken. There is no evidence of what actually occurred at the time the application for an AVO was heard except that the application was dismissed. The first assault charge and second application for an AVO arose from events in which the plaintiff's father sought to prevent the plaintiff and Mr Warner coming on to the Roseville property. There are diametrically opposed accounts of those events. According to the first defendant the plaintiff and Mr Warner both punched the plaintiff's father, who fell to the ground. She also said Mr Warner kicked him in the stomach. According to the plaintiff, her father simply lay on the ground and her mother followed her and Mr Warner as they walked to the studio prodding her in the back as she walked. Her father was taken to hospital and examined. However, no medical evidence was called to establish that he suffered no injuries. The magistrate found that he had not. However, as I have said, that finding is not admissible in these proceedings and appears to be contradicted by other (inadmissible) material.

The second assault charge and third application for an AVO arose from the first defendant's complaint about the plaintiff's use of electricity. The first defendant entered the studio where the plaintiff resided and claims that the plaintiff assaulted her by dragging her out. According to the plaintiff, she ushered her mother out of the studio, although even on her account that appears to have involved some physical contact.

It is also important to bear in mind that the proceedings were brought in a context where there has been a long history of arguments between the plaintiff and her family that have their genesis in her lifestyle and the way she and Mr Warner used the Roseville property. In the context of those disputes, the plaintiff herself sought an AVO against the second defendant.

I am not satisfied that the first defendant was the person who initiated the first assault charge. There is no evidence concerning precisely how that charge came to be brought. The complainant appears to have been the first defendant's husband. The first defendant certainly gave evidence in support of her husband's case. But that is not sufficient to establish that she initiated the charge. Nor am I satisfied in relation to the second assault charge that the first defendant did not honestly and reasonably believe that the plaintiff had assaulted her when the plaintiff ushered her out of the plaintiff's studio following the confrontation concerning the plaintiff's alleged excessive use of power. It seems that there was at least some physical contact between the plaintiff and the first defendant at that time. By that stage, there was a great deal of animosity between them. For the reasons I have given, I do not regard the first defendant as a reliable witness and it may well be that she has exaggerated what happened. But I do not think that the plaintiff has established to the requisite standard that the first defendant did not honestly and reasonably believe that the plaintiff was probably guilty of an assault.

For similar reasons, I am not satisfied that the plaintiff has established that the first defendant did not honestly and reasonably believe that she was entitled to AVOs arising out of the events about which she complains. Again, the likelihood is that the plaintiff has exaggerated those events. But there had been a long history of disputes. The first application for an AVO was made in November 2002. The second application was made in June 2004. If the first defendant's real purpose in seeking the AVOs was to have the plaintiff excluded from the Roseville property for reasons unrelated to concern about her safety, the likelihood is that she would have made a second complaint leading to an application for an AVO earlier than she did. Similarly, it was the first defendant who ultimately moved out of the property. The fact that she decided to do so is more consistent with a long history of disputes during which, on occasions, she became concerned for her safety, rather than a calculated attempt to have the plaintiff removed from the property. Certainly, having regard to the onus the plaintiff bears, I am not prepared to conclude that the plaintiff has established that the first defendant did not on the relevant occasions have an honest and reasonable concern for her safety which was sufficient to justify applications for AVOs.

Orders

The court makes the following orders:

(1) The plaintiff's claim be dismissed with costs.

(2) The freezing orders made by the court on 27 April 2012 be dissolved.

(3) Order 9 of the orders made by the court on 6 June 2012 be dissolved.

(4) The first defendant be released from her undertakings given to the court on 6 June 2012.

(5) The duplicate Certificate of Title in respect of the Merrylands' property be released to the first defendant.

**********

Decision last updated: 19 October 2012

[2012] NSWSC 1245

19 October 2012

Key Legal Topics

Areas of Law

Trusts & Equity

Tort Law

Legal Concepts

Constructive Trust

Constructive Trust

Malicious Prosecution

Abuse of Process

Medium Neutral Citation:	Li v Deng (No. 2) [2012] NSWSC 1245
Hearing dates:	20 to 29 August 2012
Decision date:	19 October 2012
Jurisdiction:	Equity Division
Before:	Ball J
Decision:	See paragraph 182 of this judgment.
Catchwords:	EQUITY - proprietary estoppel - resulting trust - constructive trust - no issue of principle. EVIDENCE - credibility evidence - consideration of when lies of one witness can provide evidence against that witness - held only in limited circumstances. TORTS - malicious prosecution - elements of the tort - meaning of "reasonable and probable cause" and "maliciously" - whether tort applies to the initiation of AVO proceedings. TORTS - abuse of process - difference between abuse of process and malicious prosecution - onerous burden of proof.
Legislation Cited:	Evidence Act 1995 (Cth)
Cases Cited:	A v State of New South Wales [2007] HCA 10; (2007) 230 CLR 500 Ainsworth v Burden [2005] NSWCA 174 Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137 Briginshaw v Briginshaw (1938) 60 CLR 336 Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 Hanrahan v Ainsworth (1990) 22 NSWLR 73 Hicks v Faulkner (1878) 8 QBD 167 Johnson v Emerson (1871) LR 6 Ex 329; 40 LJ Ex 201; 25 LT 337 Landini v State of New South Wales [2008] NSWSC 1280 Li v Deng [2010] NSWCA 266 Little v Law Institute of Victoria (No 3) [1990] VR 257 Raso v NRMA Insurance Ltd (New South Wales Court of Appeal, 14 October 1992, unreported) Sharp v Biggs (1932) 48 CLR 81 Springett v London and South-Western Bank (1885) 1 TLR 611 Thomas v State of New South Wales (2008) 74 NSWLR 34 Williams v Spautz (1992) 174 CLR 509
Category:	Principal judgment
Parties:	Lin Li (aka Lyn Gleeson) (Plaintiff) Wan Yun Deng (First Defendant) Songshi Li (Second Defendant) Dan Chen (Third Defendant)
Representation:	DA Smallbone / JD Baxter (Plaintiff) Dr AJ Greinke (First Defendant) GJ McVay (Second and Third Defendants) G J Gooden (Plaintiff) Auyeung Hencent & Day (First Defendant) Salvos Legal (Second and Third Defendants)
File Number(s):	2006/255516
Publication restriction:	Nil