Li v So

Case [2021] VSCA 32 26 February 2021

Type to search within this case.

SUPREME COURT OF VICTORIA

COURT OF APPEAL

S EAPCI 2019 0122

HUA LI	Applicant
v
JOHN HONG PING SO	Respondent

---

JUDGES:	TATE, EMERTON and SIFRIS JJA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	4 February 2021
DATE OF JUDGMENT:	26 February 2021
MEDIUM NEUTRAL CITATION:	[2021] VSCA 32
JUDGMENT APPEALED FROM:	[2019] VSC 515 (Croft J); [2019] VSC 655 (Costs) (Croft J)

---

EQUITY – Applicant and respondent acquired investment property in Melbourne as tenants in common – Applicant recently arrived in Australia with poor language skills – Respondent obtained loan from bank to fund share of property acquisition – Applicant executed guarantee for respondent’s loan – Property sold for profit – Applicant denied giving fully informed consent to guarantee – Applicant also alleged forgery of her signature on guarantees – Whether primary judge erred by finding no breach of fiduciary duty by respondent – Where primary judge’s decision based on factual and credibility findings – No basis to overturn factual or credibility findings by primary judge.

EQUITY – Equitable relief – Discretion to refuse equitable relief for illegality – Where primary judge found that applicant disentitled to equitable relief due to non-compliance with s 26A of the Foreign Acquisitions and Takeovers Act 1975 (Cth) – Within discretion of the primary judge to refuse equitable relief on the basis of illegality.

PRACTICE & PROCEDURE – Discovery – Application for discovery and other orders under r 64.03 of the Supreme Court (General Civil Procedure) Rules 2015 – Proper role of appellate court in conducting appeal – Documents and other orders sought not relevant to appeal – Application refused.

COSTS – Indemnity costs – Allegation of fraud not made out – Whether primary judge erred in awarding indemnity costs – Where award of indemnity costs in respect of part of proceeding not in dispute in proceeding below – Position on appeal inconsistent with position below – Application for leave to appeal costs order refused.

---

APPEARANCES:	Counsel	Solicitors
For the Applicant	In person
For the Respondent	Mr C Caleo QC with Mr D McAloon	b2b Lawyers

TATE JA

EMERTON JA
SIFRIS JA:

Introduction

On 27 March 2010, the applicant, Ms Li, and the respondent, Mr So, purchased a property at 589 King Street, West Melbourne (‘the Property’) as tenants in common for $1,355,000. They did so on the understanding that each would contribute equally to the purchase costs and would share equally the income generated by the Property. After the purchase, they carried out works to increase the number of rooms for lease and to improve the attraction of the Property to tenants. They then let the eight rooms in the Property to individual tenants, who were principally young women from China studying in Melbourne.

At the time of the purchase, Mr So was 24 years old, an ambitious young man who already owned an investment property in North Melbourne. He had been born and raised in Melbourne, educated at an exclusive private school and had a combined degree in commerce and…

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading Li v So

Details

AGLC: Hua Li v John Hong Ping So [2021] VSCA 32
Case: [2021] VSCA 32
Decision Date: 26 February 2021

CaseChat Overview and Summary

In the case of Li v So, the applicant and respondent had purchased an investment property in Melbourne as tenants in common. The applicant, who had recently arrived in Australia with limited English proficiency, executed a guarantee for a loan taken out by the respondent to fund their share of the property acquisition. The applicant subsequently denied giving fully informed consent to the guarantee and alleged that her signature was forged on the documents. The dispute reached the court with the applicant seeking various forms of relief, including a declaration that there was no breach of fiduciary duty by the respondent and an order for an accounting of the proceeds from the sale of the property. The primary judge found in favour of the respondent, concluding that there was no breach of fiduciary duty and that the applicant was disentitled to equitable relief due to non-compliance with the Foreign Acquisitions and Takeovers Act 1975 (Cth). The applicant also sought an order for discovery and other documents, which was denied by the primary judge. The applicant further appealed the costs order, arguing that the primary judge erred in awarding indemnity costs.

The central legal issues in this appeal revolved around whether the primary judge had erred in finding no breach of fiduciary duty by the respondent, whether the primary judge's factual and credibility findings were sound, and the appropriateness of the refusal of equitable relief due to illegality under the Foreign Acquisitions and Takeovers Act. Additionally, the court considered the proper role of the appellate court in relation to discovery orders and the correctness of the primary judge's decision on indemnity costs.

The court found that the primary judge's determination on the breach of fiduciary duty and the credibility of the parties was based on factual findings that were not shown to be incorrect. The court held that there was no basis to overturn the primary judge's findings on these matters. Regarding the refusal of equitable relief, the court upheld the primary judge's decision, stating that it was within their discretion to refuse relief due to the illegality under the Act. The court also dismissed the appeal concerning the discovery orders, noting that the documents sought were not relevant to the appeal. Finally, the court rejected the applicant's appeal against the indemnity costs order, finding that the applicant's position on appeal was inconsistent with their position below and that the allegation of fraud was not substantiated.

The appeal was dismissed, and the costs order was upheld. The primary judge's findings and orders were affirmed, and the applicant's application for leave to appeal the costs order was refused.

Orders