Li v Yang

[2025] NSWSC 904

Supreme Court

New South Wales

Medium Neutral Citation:

Li v Yang [2025] NSWSC 904

Hearing dates:

12 May 2025

Date of orders:

12 August 2025

Decision date:

12 August 2025

Jurisdiction:

Equity

Before:

Richmond J

Decision:

(1) The plaintiff’s notices of motion dated 11 September 2024 and 25 March 2025 are dismissed with costs.

(2) Leave is granted nunc pro tunc for the defendant to file the Amended Defence filed 12 February 2025.

(3) The defendant has leave to withdraw such admissions as are withdrawn by the said Amended Defence.

(4) In relation to the defendant’s motion dated 3 March 2025, order that the parties’ costs of the motion will be costs in the cause.

(5) Grant leave to each party to approach the Associate of Richmond J within 14 days by email if either party wishes to seek a different costs order to those set out in these orders.

Catchwords:

PRIVATE INTERNATIONAL LAW — Jurisdiction — Stay of local proceedings — Whether earlier judgments in China on matters with some degree of overlap to current NSW proceedings can give rise to res judicata, issue estoppel, Anshun estoppel or a plea of abuse of process in relation to latter proceedings

PRIVATE INTERNATIONAL LAW — Jurisdiction — Non-exercise of jurisdiction — Forum non conveniens — Whether earlier judgments in China on matters with some degree of overlap to current NSW proceedings sufficient to render NSW Supreme Court forum non conveniens in respect of latter proceedings

CIVIL PROCEDURE — Admissions — Admission of facts — Withdrawal of admissions

CIVIL PROCEDURE — Interim preservation — Freezing orders — General principles to be applied

Legislation Cited:

Civil Procedure Act2005 (NSW)

Conveyancing Act 1919 (NSW)

Limitation Act 1969 (NSW)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

BP Exploration Co (Libya) Ltd v Hunt (1980) 1 NSWLR 496

Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853

Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245; [2010] NSWCA 33

Charm Maritime Inc v Kyriakou [1987] 1 Lloyd’s Rep 433

City of Swan v McGraw-Hill Companies Inc (2014) 223 FCR 295; [2014] FCA 442

Crawford Freight Services Ltd v Coral Seatel Navigation Co (1998) 82 FCR 328

Kuligowski v Metrobus (2004) 220 CLR 363; [2004] HCA 34

Murakami v Wiryadi (2010) 109 NSWLR 39; [2010] NSWCA 7

Nouvion v Freeman (1889) 15 App Cas 1

Paramasivam v Flynn (1998) 90 FCR 489

PCH Offshore Pty Ltd v Dunn (No 2) [2010] FCA 897; (2010) 273 ALR 167

Re C & L Cameron Pty Ltd [2012] NSWSC 676

Sims v Commonwealth of Australia (2022) 109 NSWLR 546; [2022] NSWCA 194

Telesto Investments Ltd v UBS AG [2012] NSWSC 44; (2012) 262 FLR 119

TelestoInvestments Ltd v UBS AG [2013] NSWSC 503; (2013) 94 ACSR 29

Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28

Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538; [1990] HCA 55

Texts Cited:

M Davies, A S Bell, P L G Brereton, Nygh’s Conflict of Laws in Australia (8th ed, LexisNexis, 2010)

M Davies, A S Bell, P L G Brereton and M Douglas, Nygh’s Conflict of Laws in Australia (10th ed, LexisNexis, 2020)

P Biscoe, Freezing and Search Orders (3rd ed, Lexis Nexis Australia, 2023)

P A Keane, Spencer Bower and Handley: Res Judicata (6th ed, LexisNexis, 2024)

Category:

Procedural rulings

Parties:

Zhen Li (Plaintiff)
Zihan Yang (Defendant)

Representation:

Counsel:
T J Morahan (Plaintiff)
D Smallbone (Defendant)

Solicitors:
Chen Shan Lawyers (Plaintiff)
Martin Street Lawyers (Defendant)

File Number(s):

2023/181274

Publication restriction:

Nil

JUDGMENT

1. Before the Court are three notices of motion in these proceedings: the plaintiff’s notices of motion dated 11 September 2024 and 25 March 2025 and the defendant’s notice of motion dated 3 March 2025.

Background

2. The plaintiff is the stepmother of the defendant. The defendant’s father was Mr Guang Yang (the deceased) who died on 28 June 2018 at the age of 42 when the defendant was 18 years old and a first-year medical student at the University of New South Wales. Her mother died of lung cancer in Shenyang, People’s Republic of China in May 2013 at the age of 39, when the defendant was only 13.

3. The defendant and the deceased moved to Sydney in around October 2014. At the time of moving to Australia, the deceased owned around 15 properties in China. The deceased met the plaintiff shortly after his arrival and married her in June 2015. They had a son, Harold, who was born in June 2016. The defendant’s evidence is that she and the plaintiff had a good relationship from the time they first met until 2023, but this is disputed by the plaintiff who says that their relationship was distant and never close.

4. In May 2015, the deceased purchased a two-bedroom apartment at 107 Quay Street, Haymarket (the Haymarket property) funded in part by a loan secured by a mortgage over the property which he discharged before his death. On completion of the purchase, the deceased lived in this property with his family.

5. The deceased later purchased two further residential off-the-plan apartments in Sydney, one at Mascot (Mascot property) and the other at Ryde (Ryde property). The contract for one of these properties named the plaintiff as purchaser, and the other was later novated to her. Both of these purchases were completed using mortgage finance, obtained and serviced by the deceased. The Haymarket property was the only land owned by the deceased in Australia at his death.

6. The defendant completed the higher school certificate in 2017 and commenced as a medical student at the University of New South Wales in February 2018. The family moved from the Haymarket property to the Mascot property in around April 2018, following which the Haymarket property was rented out.

7. In about May 2018, the deceased was admitted as an inpatient at the Chris O’Brien Lifehouse at Camperdown, Sydney and remained there until he died. On 14 June 2018, he was visited by the plaintiff, the defendant and the deceased’s father, Mr Chunyu Yang (now deceased) and they had a conversation, in Mandarin, about many matters including financial matters and future plans. The defendant alleges that at this meeting the plaintiff gave undertakings to the deceased and to her to manage the deceased’s estate and its income and to use this resource to pay the defendant’s tuition fees for her medical degree. The defendant made a recording of the conversation, which she proposes to tender in evidence. There is a dispute about what was discussed at the meeting and its significance for the proceedings.

8. The deceased died on 28 June 2018, a little over two years after he was diagnosed with cancer. At the time of his death he owned land and other property in both China and New South Wales. He left two wills, one made in China and one made in Australia.

9. The deceased’s Chinese will dated 22 June 2017 disposed of land in China in favour of the defendant but did not deal with his other assets there. During his lifetime, the deceased had transferred to the defendant four of his Chinese properties. The plaintiff subsequently challenged the Chinese will in proceedings brought in China as noted below.

10. The deceased’s Australian will dated 18 January 2018 dealt with his Australian assets, including the Haymarket property which he gifted to the plaintiff and the defendant as tenants-in-common in shares, respectively, of 40% and 60% (cl 4). The executor under the Australian will is Mr Qingchun He, a friend of the deceased, to whom probate was granted on 11 September 2018. The Haymarket property was subsequently transferred to the plaintiff and the defendant as tenants-in-common in the shares stated in the will.

11. On 2 July 2018, the plaintiff says that she and the defendant had a conversation regarding the transfer of the defendant’s interest the Haymarket property on which the plaintiff relies in her statement of claim in these proceedings filed on 6 June 2023 (SOC).

12. On 4 July 2018, the plaintiff and the defendant held a memorial burial service for the deceased at Waverley Cemetery and then that evening flew together to Shenyang, China. The trip had been arranged by the plaintiff in part to deal with issues relating to properties in China, including one property owned by the defendant in Shenyang City (referred to by the parties as the ‘Heilongjiang Street property’) which had a troublesome tenant.

13. On 6 July 2018, shortly after the plaintiff and the defendant arrived in Shenyang, the plaintiff arranged for the defendant to sign a loan agreement between the plaintiff as lender and the defendant as borrower and a mortgage secured over the Heilongjiang Street property. The loan agreement provided for a loan of RMB 380,000 by the plaintiff to the defendant for a period of five years expiring on 5 July 2023, secured by a mortgage over the Heilongjiang Street property. It appears that the loan amount reflected the market value of the property. The interest rate under the loan agreement was 1.3% per month. On 4, 5, 6 and 7 July 2018, the plaintiff transferred to the defendant’s bank account in Sydney amounts totalling $76,000, which approximated the Australian dollar equivalent of the loan amount of RMB 380,000.

14. The defendant says that she was told by the plaintiff that the purpose of the loan transaction was to benefit the defendant because it would help with the eviction of the troublesome tenant. However, it appears that while the defendant took steps to remove the troublesome tenant, ultimately he remained in occupation. The defendant paid only a small amount of interest payable under the loan agreement and consequently was in default of her obligations under it.

15. On 29 June 2023, the plaintiff commenced proceedings in China against the defendant to recover the amount of the loan plus unpaid interest (Chinese Debt Proceedings). There was a hearing on 19 December 2023, at which both parties were legally represented. On 15 January 2024, Judge Hongli Zou of the Shenyang Shenhe District People’s Court of Liaoning Province gave judgment in favour of the plaintiff by orders requiring the defendant to repay the plaintiff the amount of $74,956.48 plus interest. The interest payable by the defendant was calculated at the monthly rate of 1.3% up to 19 August 2020, and thereafter at four times the loan prime rate for one-year loans.

16. A translation of the decision of the Chinese court is in evidence (CJ1). In CJ1 the claims brought by the plaintiff are recorded as a ‘request’ for the defendant to repay the loan of RMB 380,000 together with interest and the granting to the plaintiff of priority repayment rights for the Heilongjiang Street property. CJ1 records the defence as being that the defendant’s relationship with the plaintiff was not a loan relationship and that the purpose of the loan agreement and mortgage was ‘to make the outsiders vacate the house’, and that the transfer of $76,000 was paid ‘to the defendant’s tuition and living expenses’.

17. In May 2024, the plaintiff commenced enforcement proceedings in respect of the judgment debt. In August 2024, the defendant paid to the Chinese court RMB 738,263 in satisfaction of the judgment debt. She funded this amount by selling one of her properties in China. It is not in dispute that the defendant has now paid the judgment debt in full.

18. On 23 November 2023, the plaintiff (and her son Harold) commenced proceedings in China against the defendant and the deceased’s father to challenge the deceased’s Chinese will because she and Harold did not receive any benefit under it (Chinese Inheritance Proceedings). Following a hearing in which all parties were legally represented, Judge Lan Luan of Shenyang City, Dadong People’s Court gave judgment on 6 December 2024.

19. A translation of the judgment of Luan J is in evidence (CJ2) which records the principal claims brought by the plaintiffs were requests: (1) that half of the share of the 11 properties covered by the Chinese will be granted to Harold; (2) that the assets in the stock account of the deceased be considered part of the estate and inherited jointly by the plaintiffs and the defendants in those proceedings according to the laws of intestate succession; (3) that the sum of RMB 5473.23 in deposits under the name of the deceased be recognised as part of the estate and inherited according to law; (4) an order that the heirs were to share the funeral expenses of the deceased.

20. CJ2 records that the matters put by the defendants in the Chinese Inheritance Proceedings (being the defendant in these proceedings and her grandfather) in their defence were that all the properties registered in the name of the deceased and included in the Chinese will should be entirely inherited by the defendant, and that the estate not covered by the will should be inherited and divided according to the law. CJ2 states the following about a further claim raised by the defendants in the Chinese Inheritance Proceedings:

‘Both the plaintiffs and defendants have separate inheritance disputes in Australia, which will be handled separately. Furthermore, from 2018 to the present, the rental income from the domestic properties, totalling RMB 1.4 million yuan, has been deposited into [the deceased’s] account at China Construction Bank and subsequently withdrawn by [the plaintiff]. According to the will, all of the rental income is to be inherited solely by [the defendant].’

21. In summary, Luan J held that the Chinese will was valid and made the following findings:

1. Seven of the Chinese properties identified in the will were registered under the ownership of the deceased, and the rights under a sales contract for another Chinese property belonged to the deceased. A further Chinese property identified in the will was jointly owned by the deceased and the plaintiff.

2. The seven properties and rights under the sales contract for the other property referred to in the previous paragraph passed to the defendant under the will. The plaintiffs’ claim that a portion of these properties should be reserved for Harold was rejected. The Court ordered that these properties and contract rights be assigned to the defendant.

3. The deceased’s half interest in the other property jointly owned with the plaintiff passed to the defendant, and the Court directed that this property be transferred to the defendant in return for her paying to the plaintiff RMB 204,050 representing 50% of the market value of the property.

4. The other assets of the deceased’s estate comprised funds representing the profits from stock sales of RMB 862,520 which had been held and used by the plaintiff for her own benefit, and bank accounts with a credit balance of RMB 5,479. These were not dealt with by the will and constituted marital property, half of which belonged to the plaintiff. The other half was part of the deceased’s estate and passed equally to the plaintiff, the defendant and Harold. As the plaintiff had used the funds for her own benefit, she was ordered to pay compensation to the defendant and Harold of RMB 108,499 each.

5. The plaintiff’s claim that the defendants in the Chinese Inheritance Proceedings should bear the funeral expenses was rejected.

6. The Court rejected the defendant’s claim regarding the rental income from domestic (ie. Chinese) properties in the period from the deceased’s death until the present (ie. 6 December 2024) totalling RMB 1.4 million. Luan J said the following about this claim:

‘…the evidence provided by the plaintiff confirms that [the deceased] had previously made decisions regarding the rental income during his lifetime, with [the plaintiff] managing and utilising the funds. Therefore, the court does not support the defendant’s claim for a share of the rental income.’

22. On 27 December 2024, the plaintiff lodged an appeal on behalf of Harold from CJ2. The appeal was dismissed on 16 April 2025 (Ex C). In so far as the decision concerns claims of the plaintiff as against the defendant, and vice versa, no appeal was filed.

Issues in these proceedings

23. By the SOC, the plaintiff alleges that she made an oral contract with the defendant in the conversation on 2 July 2018 referred to above, by which the defendant promised to transfer to the plaintiff the defendant’s 60% share as tenant-in-common in the Haymarket property at the completion of her studies to qualify as a medical practitioner in consideration of the plaintiff’s promise to pay the defendant’s tuition fees for the course: SOC, par 7. The plaintiff also pleads that in performance of the agreement, she paid tuition fees for the defendant’s course of $356,596.55: SOC, par 8. The plaintiff seeks specific performance of this alleged oral contract and makes alternative claims in estoppel, common intention constructive trust and restitution founded on mistake. Each claim is based on the existence of the alleged consensus reached in the conversation on 2 July 2018, except for the restitution claim which is founded on the allegation of a mistaken belief in the existence of such a consensus.

24. In her defence filed on 1 September 2023, the defendant denied that the promise was made, but she admitted that the plaintiff paid the tuition fees for the course until 2 June 2023 (pars 8(a), 12(a), 14(a) and 34(e)).

25. The defendant filed an amended defence on 12 February 2025 (Amended Defence), without leave, withdrawing the concession referred to in the previous paragraph on the basis that she does not admit that the plaintiff made the payments from her own funds, and also pleading the failure to comply with s 54A of the Conveyancing Act 1919 (NSW) as a defence to the alleged oral contract, and alternative defences that the alleged bargain was induced by unconscionable conduct or undue influence on the part of the plaintiff.

26. The defendant has filed three cross-claims in the proceedings. By her first cross-claim filed on 1 September 2023 (CC1), the defendant seeks a declaration that she is entitled to receive 60% of the rental proceeds of the Haymarket property from 28 June 2018 plus damages.

27. By her second cross-claim filed on 26 June 2024 (CC2), the defendant seeks various relief against the plaintiff in respect of two identified groups of properties located in China (Chinese properties): the first group comprises eleven properties listed in schedule 1 to the cross-claim which it is alleged were owned by the deceased at the date of his death, and the second group comprises four properties listed in Schedule 2 which it is alleged were already owned by the defendant at the time of the deceased’s death. In CC2, the defendant pleads that during the lifetime of the deceased (in particular, in the conversation on 14 June 2018 referred to above) the plaintiff undertook to manage the financial affairs of the defendant, including Chinese properties, in the interests of the defendant, giving rise to a fiduciary relationship and an obligation to account for her management of those properties: CC2, pars (17)-(26).

28. In CC2 the defendant seeks orders:

1. to restrain the plaintiff from receiving rent and other income from the Chinese properties (prayer 1), and from managing or otherwise dealing with those properties (prayer 2);

2. to require the plaintiff to deliver to the defendant all documents and other records relating to the Chinese properties (prayers 3 and 4);

3. to attorn to the defendant as lessor in relation to the Chinese properties (prayer 5);

4. to require the plaintiff to give an account of her dealings with the Chinese properties and income received from them (prayers 6 and 7);

5. to restrain the plaintiff from disposing of or otherwise dealing with the proceeds of sale of and income from the securities held by the deceased in China listed in paragraph 40 of CC2, and to require her to give an account of her dealings with those securities (prayers 8, 9 and 10).

29. By her third cross-claim filed on 23 August 2024 (CC3), the defendant seeks orders to set aside the loan agreement and the mortgage entered into in China on 6 July 2018 and various consequential relief, alleging that those agreements are vitiated by undue influence and unconscionable conduct of the plaintiff. Also, it is alleged that the plaintiff managed the defendant’s Chinese properties in breach of her fiduciary duty to the defendant, and relief including an account of her management of the Chinese properties (including as to whether the amount of $76,000 was sourced from income from those properties rather than the plaintiff’s own resources). There are also alternative claims for money had and received by the plaintiff in respect of payments made to the plaintiff from the defendant’s bank account. The plaintiff appears to admit the payments were made but contends that each was a payment of interest by the defendant for the loan agreement.

29. The plaintiff has filed defences to CC1, CC2 and CC3 in each case without notifying any challenge to the jurisdiction of the court. Those defences do not identify any question of contention as to Chinese law.

The plaintiff’s amended notice of motion dated 11 September 2024

31. By this notice of motion the plaintiff seeks orders that both CC2 and CC3 be dismissed pursuant to r 13.4 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’), or be struck out in whole or in part pursuant to UCPR r 14.28, or be stayed permanently pursuant to s 67 of the Civil Procedure Act2005 (NSW) (‘CPA’) or the Court’s inherent jurisdiction.

32. Rule 13.4(1) of the UCPR provides:

If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:

(a)    the proceedings are frivolous or vexatious, or

(b)    no reasonable cause of action is disclosed, or

(c)    the proceedings are an abuse of the process of the court,

the court may order that the proceedings be dismissed generally or in relation to that claim.

33. Rule 14.28(1) of the UCPR provides:

The court may at any stage of the proceedings order that the whole or any part of a pleading be struck out if the pleading:

(a)    discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading, or

(b)    has a tendency to cause prejudice, embarrassment or delay in the proceedings, or

(c)    is otherwise an abuse of the process of the court.

34. I will address first the grounds relied on by the plaintiff in relation to CC2 and then those relating to CC3. I note that at a directions hearing before Kunc J on 14 February 2025, when a timetable was set for the hearing of this motion, the plaintiff was given leave to file evidence in reply on the motion and it is apparent from the transcript of the hearing that his Honour contemplated that this could extend to expert evidence on Chinese law and Chinese procedure (Tcpt, 14 February 2025, pp 2-3). The plaintiff did not take up that opportunity.

(a)    The plaintiff’s challenge to CC2

35. The plaintiff advances eight grounds on which she seeks the relief in the motion in respect of CC2. It is convenient to address each in turn.

36. The first and second grounds are related and can be dealt with together. The first is that the defendant did not have an entitlement to file more than one cross-claim. It was submitted that UCPR r 9.1 permits a party to file a cross-claim, not multiple cross-claims and the defendant should have applied for leave to amend her original cross-claim. The second is that CC2 was filed without leave, as required by UCPR rr 9.1 and 14.3(1).

37. I reject each of these grounds. Any cross-claim can be brought by a defendant against the plaintiff if the relief sought might have been granted in separate proceedings brought by the defendant: CPA, s 22(1). It is correct that the defendant required leave to file CC2 under r 9.1 of the UCPR, but the failure to obtain leave is a formal defect or irregularity which can be cured by an order of the Court that leave be given with effect from when the cross-claim was filed: CPA, s 63; UCPR rr 1.12 and 9.1(1); Crawford Freight Services Ltd v Coral Seatel Navigation Co (1998) 82 FCR 328 at 333-334.

38. If the subject matter of a cross-claim is a cause of action which could not be raised in separate proceedings commenced by the defendant, eg. because an applicable limitation period had expired, that would be a basis for refusing leave, but the plaintiff did not identify any limitation period under the Limitation Act 1969 (NSW) which had expired at the time of filing CC2. Given that all the claims relate to the period after the death of the deceased which occurred less than six years prior to the filing of CC2, it is not apparent that any of the limitation periods which might apply (eg. under s 14(1)(a) of the Limitation Act for money had and received: Sims v Commonwealth of Australia (2022) 109 NSWLR 546; [2022] NSWCA 194 at [79], [153]) was infringed. Further, there is nothing in the UCPR which limits a defendant to one cross-claim.

39. The third ground is that CC2 is an abuse of process. It was submitted that by filing CC2, the defendant circumvented the requirement to apply for leave to amend the original cross-claim (see CPA s 64), with the onus as the moving party on the application, and the exposure to a costs thrown away order. The defendant also sidestepped limitation period issues by depriving the plaintiff of an ability to raise limitation period issues in answer to an amendment application; whereas upon CC2 being filed the defendant then could take advantage of the relation-back provisions that deemed the cause of action made when the proceedings proper were commenced. Given the plaintiff’s foreign residence, the defendant also avoided the necessity of meeting the requirements of Part 11 of the UCPR, which she would have had to meet had she commenced a fresh proceeding.

40. I reject this ground for the reasons given in respect of the first two grounds. No relevant limitation period having been identified, CC2 is not an abuse of process. The complaint regarding the Court’s jurisdiction was not pressed as the plaintiff has submitted to the Court’s jurisdiction by filing a defence to CC2 which involved an attack on its merits: City of Swan v McGraw-Hill Companies Inc (2014) 223 FCR 295; [2014] FCA 442 at [112]-[118].

41. The fourth ground is that the filing of CC2 without leave has a tendency to cause delay to the determination of the plaintiff’s claim: UCPR r 14.28(1)(b). It was submitted that the plaintiff has been ready since 20 March 2024 to have her claim set down for hearing, whereas this has not occurred through a combination of the defendant failing to serve her evidence, and the filing of CC2 and CC3.

42. This ground is not made out because it is not apparent that the matter would have proceeded any quicker without CC2.

43. The fifth ground is that the Court is a forum non conveniens, having regard to the principles explained in Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538; [1990] HCA 55. The plaintiff contends that (a) she is resident in China; (b) the defendant seeks to enforce a Chinese will that purportedly creates rights under Chinese law as to Chinese property, and the defendant also seeks orders regarding payments made in China by Chinese tenants; (c) the dispute concerns the application of Chinese law; (d) there are also Chinese proceedings on foot in which both parties are represented, that are significantly advanced in which the Chinese will and the distributions under it are subject to challenge, in circumstances where the defendant has not sought an anti-suit injunction; and (e) it is unlikely that this Court’s orders regarding the validity of the Chinese will can achieve recognition, or be enforced, by the Chinese legal system and, to the contrary, it may be regarded as an infringement of Chinese sovereignty. The contentions in (b), (d) and (e) relate to the Chinese Inheritance Proceedings which have now been resolved by CJ2.

44. It is not in dispute that under the principles stated in Voth this Court will only decline to exercise jurisdiction if it is satisfied that it is a clearly inappropriate forum for the determination of the claims brought in CC2. A plaintiff has the onus of establishing that this court is the clearly inappropriate forum. The relevant factors in considering that question are summarised by Ward J (as her Honour then was) in Telesto Investments Ltd v UBS AG [2012] NSWSC 44; (2012) 262 FLR 119 (Telesto No 1) at [184] (adopting M Davies, A S Bell and P L G Brereton, Nygh’s Conflict of Laws in Australia (8th ed, LexisNexis, 2010) at [8.19]) as being:

‘(a)    Any significant connection between the forum selected and the subject matter of the action and/or the parties, such as the domiciles of the parties, their places of business and the place where the relevant transaction occurred or the subject matter of the suit is situated, and other factors affecting convenience or expense, such as the availability of witnesses.

(b)    Any legitimate and substantial juridical advantage to the plaintiff, such as greater recovery, more favourable limitation period, better ancillary procedures, or assets within the jurisdiction against which any judgment can be enforced.

(c)    Whether the law of the forum will supply the substantive law to be applied in the resolution of the subject case or whether the matter is governed by foreign law.’

45. As regards (a), there is a close connection with New South Wales given that this is the place where dealings which gave rise to the alleged fiduciary relationship took place and the defendant is resident in New South Wales. While the plaintiff says that she is now resident in China, she has the status of a permanent resident of Australia and was a resident of New South Wales when the relevant dealings occurred. She is available to give evidence here, particularly as she is a plaintiff in these proceedings.

46. As regards (b), there is no evidence to suggest that equitable principles on which the defendant relies in CC2 are available to her in China and it cannot be assumed that they are. This is potentially a significant and legitimate juridical advantage to the defendant.

47. As regards (c), the choice of law rule for equitable claims of this nature was discussed by the Full Federal Court in Paramasivam v Flynn (1998) 90 FCR 489. In that case, Miles, Lehane and Weinberg JJ said at 503 that in the case of a fiduciary relationship which did not have its source in a contract governed by foreign law or the duty owed to a foreign company by its directors:

‘…both principle and the balance of Anglo-Australian authority favour, in our view, the general application of the lex fori, subject, perhaps, to this: that where the circumstances giving rise to the asserted duty or the impugned conduct (or some of it) occurred outside the jurisdiction, the attitude of the law of the place where the circumstances arose or the conduct was undertaken is likely to be an important aspect of the factual circumstances by reference to which the Court determines whether a fiduciary relationship existed and, if so, the scope and content of the duties to which it gave rise…’

48. In Murakami v Wiryadi (2010) 109 NSWLR 39; [2010] NSWCA 7, Spigelman CJ (with whom McColl and Young JJA agreed) while not expressing a concluded view, approved this passage at [131]-[132], noting at [139] that the categories of exceptions to the application of the lex fori are not closed.

49. The plaintiff did not seek to explain why on the facts of this case there are facts and circumstances which would point against the application of the lex fori. In my view, the fact that the circumstances giving rise to the alleged fiduciary duty occurred in New South Wales and the nature of the conduct relied on point to the lex fori as the governing law, and importantly the plaintiff failed to advance any submissions to the contrary. While Chinese law will be relevant to the aspects of the claims in CC2, the plaintiff has not identified any dispute over the foreign law pleaded in CC2. In view of this, and the absence of evidence that the equitable claims can be brought in China, the plaintiff has failed to establish that this Court is a clearly inappropriate forum.

50. The sixth ground is that CC2 is an abuse of process because it is a collateral attack on the Chinese Inheritance Proceedings. I have dealt below with a similar submission that CC3 is a collateral attack on the Chinese Debt Proceedings. For the reasons explained in considering that issue, due to the failure of the plaintiff to adduce evidence that the equitable claims brought in CC2 were possible under Chinese law she has failed to discharge her burden of proof that CC2 is an abuse of process as a collateral attack on CJ2.

51. The seventh ground is that CC2 is vexatious in that it seeks to agitate matters already the subject of the Chinese Inheritance Proceedings. This raises no different issue to the sixth ground and should be rejected for the same reason.

52. The eighth ground is that the plaintiff contends that the Court lacks jurisdiction to determine the claim in CC2 and/or no reasonable cause of action is disclosed and/or the pleadings are embarrassing. I have already dealt with the jurisdiction question, and as the defendant submitted, the balance of this ground is mere assertion on which no submissions were made and should be rejected.

53. For these reasons prayers 1 to 3 of the motion filed on 11 September 2024 should be dismissed.

(b)    The plaintiff’s challenge to CC3

54. The plaintiff advances five grounds on which she seeks the relief in the motion in relation to CC3, which I will address in turn.

55. The first ground is a repeat of the first to fourth objections to CC2, viz (1) the defendant has no right to file multiple cross-claims; (2) the defendant did not have leave to file CC3; (3) CC3 is an abuse of process; and (4) CC3 has a tendency to cause delay to the determination of the plaintiff’s claim.

56. I reject this ground for the same reasons given in relation to the same points made in relation to CC2.

57. The second ground is that CC3 seeks to relitigate a dispute already determined by a foreign court and/or collaterally attack the judgment and authority of that foreign court (being CJ1). It was submitted that a court in China has already found that the Chinese loan and mortgage was enforceable and the defendant has paid the judgment debt, yet the defendant ex post facto seeks to relitigate the validity of the instruments and claw back what she paid in satisfaction of the judgment debt. The plaintiff relies on the doctrines of res judicata or cause of action estoppel, issue estoppel, Anshun estoppel, and collateral attack amounting to an abuse of process, which she contends preclude the defendant from doing so.

58. Counsel for the plaintiff did not elaborate orally or in written submissions as to how the principles referred to in the previous paragraph operate to preclude the defendant bringing CC3. By CC3 the defendant seeks to set aside the loan agreement and mortgage on equitable grounds and also brings a claim that the plaintiff breached her fiduciary duty to the defendant in the management of the Chinese properties. There is no evidence before the Court as to whether these issues were the subject of the Chinese proceedings referred to earlier, or whether they are causes of action available to the defendant under Chinese law.

59. In Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 at [21]-[22], French CJ, Bell, Gageler and Keane JJ explained the principles of cause of action estoppel, issue estoppel and Anshun estoppel as follows. In relation to cause of action estoppel, their Honours said at [22] (footnotes omitted):

‘Estoppel in that form operates to preclude assertion in a subsequent proceeding of a claim to a right or obligation which was asserted in the proceeding and which was determined by the judgment. It is largely redundant where the final judgment was rendered in the exercise of judicial power, and where res judicata in the strict sense therefore applies to result in the merger of the right or obligation in the judgment.’

60. In relation to cause of action estoppel, it can apply where the earlier judgment is of a foreign court, provided that it is final and on the merits. This requires that the merits of the cause of action has been finally disposed of by the foreign court so that the matter cannot be raised again in the foreign country: Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2) [1967] 1 AC 853 at 918, 969. That is a question determined by the law of the foreign country, in this case China: Nouvion v Freeman (1889) 15 App Cas 1 at 9; Carl Zeiss at 918-919, 936, 949, 969; P A Keane, Spencer Bower and Handley: Res Judicata (6th ed, LexisNexis, 2024), [5.20]. It is also necessary that the right or obligation which is asserted in the later proceeding is in substance the same as that litigated to judgment in the earlier proceeding: Champerslife Pty Ltd v Manojlovski (2010) 75 NSWLR 245; [2010] NSWCA 33 at [106].

61. There are two relevant earlier proceedings in China. The cause of action litigated to judgment in the Chinese Debt Proceedings was a claim for a debt arising under a contract, the loan agreement. There is no identity between the claim brought by the defendant in CC3 and that cause of action.

62. The cause of action litigated to judgment in the Chinese Inheritance Proceedings was the plaintiff’s challenge to the validity of the Chinese will (which failed), as well as the entitlement of the plaintiff and defendant to the proceeds of sale of certain securities owned by the deceased at the time of his death (in respect of which he died intestate), and the claim advanced by the defendant to rental income from the deceased’s Chinese properties during the period from his death to the time when CJ2 was delivered. Luan J made findings in respect of each of these causes of action in CJ2, summarised earlier. There is an overlap between some of the causes of action on which the defendant failed and some of the claims made in CC2, in particular prayers 1, 6 and 8. The parties did not address that issue but it appears that where there is overlap it may not be complete. In particular, insofar as the Chinese properties are concerned, the inference to be drawn from CJ2 is that the defendant has an entitlement to the entire rental income from those properties from 6 December 2024.

63. I do not need to resolve the question of the extent of this apparent overlap, because there is no evidence that under Chinese law, CJ2 was final as to the claims on which the defendant failed, in the sense that a Chinese court ‘would treat [CJ2] as giving rise to an estoppel in respect of [future] proceedings’: PCH Offshore Pty Ltd v Dunn (No 2) [2010] FCA 897; (2010) 273 ALR 167 at [107], explaining Charm Maritime Inc v Kyriakou [1987] 1 Lloyd’s Rep 433 at 450. The plaintiff has the burden of proof on that matter. She chose not to adduce evidence of Chinese law and consequently has not discharged that burden. The absence of evidence of Chinese law as to whether CJ2 is final in relation to the causes of action it dealt with cannot be cured by applying the presumption that the foreign law is the same as domestic law because the presumption is intended to operate against and not in favour of the party who has the burden of proving foreign law: BP Exploration Co (Libya) Ltd v Hunt (1980) 1 NSWLR 496 at 503; M Davies, A S Bell, P L G Brereton and M Douglas, Nygh’s Conflict of Laws in Australia (10th ed, LexisNexis, 2020) at [17.41].

64. In relation to issue estoppel, in Tomlinson French CJ, Bell, Gageler and Keane JJ said at [22] (footnotes omitted):

‘The second form of estoppel is almost always now referred to as “issue estoppel”. Estoppel in that form operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment. The classic expression of the primary consequence of its operation is that a “judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies”.’

65. The requirements for an issue estoppel are: (a) that the same question has been decided; (b) that the judicial decision which is said to create the estoppel was final; and (c) that the parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised: Kuligowski v Metrobus (2004) 220 CLR 363; [2004] HCA 34 at [21]. In relation to the first of these requirements, it is necessary to consider carefully the earlier judgment to identify with precision the issue which was necessarily decided in the earlier proceedings: Nygh’s Conflict of Laws at [40.54].

65. In my view, none of the issues raised in CC3 were decided in CJ1.

66. In so far as CJ2 is concerned, it did deal with two issues raised by CC2. The first is whether the deceased was the owner of all the properties stated in the Chinese will, and the Chinese court determined that he was the owner of only some of them. Secondly, CJ2 addressed the defendant’s claim that she was entitled to rental income from the deceased’s Chinese properties between the date of his death and the time judgment was given by Luan J, and concluded that she was not. That appears to be the same issue raised by prayers 1, 6 and 8 in relation to the deceased Chinese properties for the period up to 6 December 2024.

67. However, no issue estoppel arises in these proceedings because the plaintiff has not established the requirement of finality for the same reason given earlier in relation to cause of action estoppel because there is no evidence that under Chinese law CJ2 would operate by way of issue estoppel in Chinese courts: Carl Zeiss at 918-919; Charm Maritime at 450; see generally Nygh’s Conflict of Laws at [40.53].

68. In relation to Anshun estoppel, in Tomlinson French CJ, Bell, Gageler and Keane JJ said at [22] (footnotes omitted):

‘The third form of estoppel is now most often referred to as “Anshun estoppel”, although it is still sometimes referred to as the “extended principle” in Henderson v Henderson. That third form of estoppel is an extension of the first and of the second. Estoppel in that extended form operates to preclude the assertion of a claim, or the raising of an issue of fact or law, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding. The extended form has been treated in Australia as a “true estoppel” and not as a form of res judicata in the strict sense. Considerations similar to those which underpin this form of estoppel may support a preclusive abuse of process argument.’

70. As stated in this passage, for an Anshun estoppel to arise the issue must be so connected with the subject matter of the earlier proceedings as to make unreasonable in the context of the proceeding for the claim not to have been made or the issue raised. An Anshun estoppel can arise when the matter not raised as a defence or a cross-claim in the earlier proceeding is later raised as a cause of action, but it must have been so relevant to the earlier proceeding that it was unreasonable not to have relied on it in that earlier proceeding: Telesto Investments Ltd v UBS AG [2013] NSWSC 503; (2013) 94 ACSR 29 (Telesto No 2) at [228]-[229].

71. The difficulty for the plaintiff here is that without evidence of Chinese law as to whether the equitable claims now raised in CC3 could have been raised in the Chinese Debt Proceedings, it cannot be determined whether an Anshun estoppel arises. In particular, it would not be unreasonable for the defendant to have failed to raise these matters by way of a defence or cross-claim in the Chinese Debt Proceedings if there is no equivalent concept or principle under Chinese law to the equitable principles she relies on in CC3. There being no evidence as to Chinese law on that question, the plaintiff has not discharged her onus of proof that CC3 is precluded by an Anshun estoppel. In any event, the Court also needs to be satisfied that there exists an equivalent doctrine to Anshun estoppel in China (Carl Zeiss at 969, Telesto No 2 at [235]). There was no such evidence before the Court in this case, and it would be inappropriate to apply the presumption that the foreign law would be the same as Australian law in this case on account of the lack of submissions on the matter and the significant differences between Chinese and Australian law: see generally PCH Offshore at [111]-[112].

72. Finally, it is necessary to deal with the contention that CC3 is an abuse of process. The basis for this contention is that CC3 amounts to a collateral attack on CJ1. The circumstances in which an attempt to relitigate a question already decided in earlier litigation may be an abuse of process are set out by Sackar J in Telesto No 2 at [248]-[258]. The authorities referred to by his Honour establish that: (a) an abuse of process may arise where a litigant seeks to relitigate the question already decided in earlier litigation by another court even if the principles of estoppel already referred to do not apply; (b) while the categories of abuse of process are not closed, in general terms what is involved is invoking court procedures for an illegitimate purpose, or their use in a manner unjustifiably oppressive to one of the parties, or which would bring the administration of justice into disrepute; and (c) the coexistence of local and foreign proceedings is not vexatious or oppressive where relief is available in one forum which is not available in the other.

73. Critical to the plaintiff’s contention that CC3 is an abuse of process as a collateral attack on CJ1 is the premise that it was open to the defendant to bring the claim she raises in CC3 in China but did not do so. However, in circumstances where the plaintiff has chosen not to adduce evidence as to whether it is possible under Chinese law to bring the claims in CC3, she has not discharged her burden of proof that CC3 is an abuse of process.

74. The third ground is that the Court is a forum non conveniens in respect of the claims made in CC3 relating to the Chinese loan agreement and mortgage. The loan agreement and mortgage were made in China, the security that was provided was Chinese real property, and these instruments are governed by Chinese law.

75. I have referred to the relevant principles regarding forum non conveniens above in dealing with a similar submission regarding CC2. In my view, for essentially the same reasons as apply to CC2, the plaintiff has not established that this Court is a clearly inappropriate forum for determining the equitable claims brought in CC3. First, while some of the conduct complained of occurred in China, in particular the execution of the loan agreement and mortgage, the loan was made by transfers to the defendant’s bank account in Sydney at a time when both the plaintiff and the defendant were residents of New South Wales and there is a significant overlap between the evidence relating to the claims brought by the plaintiff in the SOC and by the defendant in CC3. Secondly, the plaintiff has not established that the defendant could have brought equitable claims of the same kind in China. Thirdly, the plaintiff did not establish a basis for a contention that the lex fori is not the governing law for the equitable claims in CC3.

76. The fourth ground is that there is a lack of jurisdiction and/or no reasonable cause of action is disclosed in respect of several of the claims and/or the pleadings are embarrassing. I reject those submissions. As the defendant submits, there is no basis for suggesting that this Court lacks jurisdiction to determine the claims in CC3 or that CC3 fails to disclose a reasonable cause of action, and the contention that the pleadings are embarrassing is not made out.

77. The fifth ground is that CC3 is vexatious in that it seeks to relitigate matters that have been or could have been raised in already determined Chinese proceedings. This ground raises no new point to those dealt with above and I reject it.

78. For these reasons prayers 4 to 6 of the motion filed 11 September 2024 should be dismissed

The defendant’s notice of motion

79. By this motion the defendant seeks an order granting leave nunc pro tunc for her to file the Amended Defence, and an order that she have leave to withdraw such admissions as are withdrawn by the Amended Defence. The motion is supported by an affidavit of the defendant’s solicitor, Ms Jessica Prats, sworn on 3 March 2025 which explains the circumstances in which the Amended Defence came to be filed, in error, without leave.

80. The Defence admitted the allegation in par 8 of the SOC that the plaintiff paid ‘the tuition fees for the Course’ (the ‘Course’ being defined as a course of study for the medical degree referred to earlier), but the Amended Defence withdraws those admissions and puts in issue the extent to which the plaintiff paid the tuition fees and whether the payments made were from the plaintiff’s own funds or, rather, funds for which she was accountable to the defendant. Ms Prats’ affidavit explains that the withdrawal of these admissions arises from the detailed review of the documentary evidence which came to light after the Defence was filed including documents produced by the plaintiff in response to disclosure orders made by the Registrar after the Defence was filed.

81. The Court has power under UCPR r 12.6 to grant leave to a party to withdraw admissions in a defence. I am satisfied that leave should be granted both to file an amended defence and withdraw the admissions previously made. No prejudice was identified by the plaintiff and the granting of leave is necessary for the purpose of determining the real questions raised by the proceedings and to ensure the just, cheap and quick resolution of the real issues in the proceedings: CPA ss 56 and 64.

82. Accordingly, I will make the orders sought in prayers 1 and 2 of the motion filed on 3 March 2025.

The plaintiff’s notice of motion dated 25 March 2025

83. By this motion, the plaintiff seeks an order restraining the defendant from ‘selling, providing security on, further encumbering or any way dealing, selling or otherwise dealing with her 60% share of’ the Haymarket property.

84. The plaintiff seeks this order because the defendant has admitted that she does not have money to pay legal fees and submits that it may be inferred that the defendant would not have enough money to pay the plaintiff’s legal fees if she is unsuccessful in the proceedings.

85. The notice of motion does not state the provision of the UCPR relied on and the hearing proceeded on the basis that what is sought is a freezing order pursuant to UCPR rr 25.11 and 25.14. However, the plaintiff did not advance any submission addressing the requirements for making a freezing order, being (a) that the plaintiff has a good arguable case on a justiciable cause of action; (b) that there is a danger that the prospective judgment debt will be wholly or partially unsatisfied because any of the events set out in UCPR rr 25.14(4) or (5), as applicable, might occur; and (c) as a matter of discretion it is in the interests of justice that the order be made, bearing in mind, among other things, the balance of convenience and that the jurisdiction is to be exercised with a high degree of caution: P Biscoe, Freezing and Search Orders (3rd ed, LexisNexis Australia, 2023) at [2.52].

86. It is well established that in an application for a freezing order over an asset the focus is on whether there is a reasonable apprehension of dissipation or removal of the asset or use of the dispositive power over the asset to frustrate or abuse the process of the Court, and the mere lack of assets to meet a judgment is not a proper basis for the grant of a freezing order: Re C & L Cameron Pty Ltd [2012] NSWSC 676 at [194]-[201]. In the present case, the evidence, at most, points to the latter rather than the former. Accordingly, I decline to grant the relief sought by this notice of motion.

Conclusion

87. For the above reasons, the plaintiff’s notices of motion dated 11 September 2024 and 25 March 2025 are dismissed. In my view, as the plaintiff was wholly unsuccessful on both motions there is no reason why costs should not follow the event.

88. For the above reasons I will grant the relief sought in the defendant’s motion dated 3 March 2025. The parties’ costs of the motion will be costs in the cause.

89. The Court makes the following orders:

1. The plaintiff’s notices of motion dated 11 September 2024 and 25 March 2025 are dismissed with costs.

2. Leave is granted nunc pro tunc for the defendant to file the Amended Defence filed 12 February 2025.

3. The defendant has leave to withdraw such admissions as are withdrawn by the said Amended Defence.

4. In relation to the defendant’s motion dated 3 March 2025, order that the parties’ costs of the motion will be costs in the cause.

5. Grant leave to each party to approach the Associate of Richmond J within 14 days by email if either party wishes to seek a different costs order to those set out in these orders.

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Decision last updated: 13 August 2025