Li v Liu

This matter concerned an appeal from a decision of the primary judge in the Supreme Court of New South Wales. The appellants, Mr and Mrs Li, sought to recover moneys paid to the respondent, Mr Liu, under an agreement that was rendered unlawful by the *Migration Act 1958* (Cth). The agreement involved an "investment" in a local company in return for the company employing a foreign national to satisfy visa criteria.

The central legal issues before the Court of Appeal were whether the appellants were entitled to recover the moneys paid to Mr Liu in restitution, despite the illegality of the underlying contract. Specifically, the court considered whether Mr Liu, as a director of the company, could rely on a defence of having paid the moneys over to the company, even if this defence was not expressly pleaded. The court also examined whether the primary judge had erred in dismissing the claim against Mr Liu without making a specific finding as to whether he had notice of the illegality. Furthermore, the court considered whether a representation made by Mr Liu that a visa "would be" granted constituted conduct in trade or commerce under the Australian Consumer Law, and if so, whether recovery was permissible despite the illegality of the transaction.

The Court of Appeal held that the manner in which the case was conducted at trial meant that the defence of payment over to the company was available to Mr Liu. The court found that the primary judge's findings were inconsistent with Mr Liu having the relevant notice of the illegality. Regarding the Australian Consumer Law claim, the court determined that the representation that a visa "would be" granted was not made. Even if it had been made, the court found it would have constituted conduct in trade or commerce, and recovery would have been permissible.

Consequently, the appeal was dismissed, and the appellants were ordered to pay the respondents' costs of the appeal.