Liu v Liao
[2024] VCC 1753
•6 November 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE COMMERCIAL DIVISION | Revised Not Restricted Suitable for Publication |
GENERAL LIST
Case No. CI-22-02050
| YANWEI LIU | Plaintiff |
| v | |
| SHU-WAN LIAO | Defendant |
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JUDGE: | HIS HONOUR JUDGE MACNAMARA | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 12-16 August, 4-5 September, 17-18, 21 October 2024 | |
DATE OF JUDGMENT: | 6 November 2024 | |
CASE MAY BE CITED AS: | Liu v Liao | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 1753 | |
REASONS FOR JUDGMENT
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Subject:Specific performance of a contract for the sale of land
Catchwords: Sale of land – oral contract – subsequent note or memorandum – whether concluded contract – whether payment to incorporated Buddhist association made at request and direction of vendor and therefore in reduction of purchase price or not – application for specific performance – whether Limitation of Actions Act 1958 must be applied by analogy – whether application time barred – Limitation of Actions Act 1958, s5(1)(a) and sub-s(8) – application for specific performance not analogous to common law claims for damages – proceeding not time barred – purchaser non-resident/non-citizen – no steps taken under Foreign Acquisitions and Takeovers Act 1975, ss38 and 26A (repealed) – whether purchaser has an accrued right to be dealt with in accordance with the provisions of the Foreign Acquisitions and Takeovers Act 1975 as they existed in 2013-14, where the provisions as they now exist – plaintiff purchaser having an accrued right to be dealt with under the earlier provision Acts Interpretation Act 1901, s7(2) – contract not too uncertain to be enforced constituting an “open contract” – Sale of Land Act 1962, s29A – contract alleged not constituting a terms contract – no contravention of Sale of Land Act 1962
Legislation Cited: Limitation of Actions Act 1958; Transfer of Land Act 1958; Foreign Acquisitions and Takeovers Act 1975; Acts Interpretation Act 1901 (Cth); Sale of Land Act 1962; New South Wales Limitation Act 1969; Limitation Act 1980 (UK); Corporations Act 2001 (Cth); Defence Services Owners Act 1918; Crown Suits Act 1898
Cases Cited:Alec Finlayson Pty Ltd v Royal Freemason Benevolent Institution of New South Wales Nominees Ltd [2013] NSWSC 1168; P & O Nedlloyd BV v Arab Metals Co (No 2) [2007] 1 WLR 2288; R v McNeil (1922) 31 CLR 76; Fitzgerald v Masters (1956) 95 CLR 420; Auzhair Supplies Pty Ltd (in liq) [2013] NSWSC 1; Gerace v Auzhair Supplies Pty Ltd (in liquidation) (2014) 87 NSWLR 435; Hasham v Zenab [1960] AC 316; Misthold Pty Ltd v NSW Historic Sites and Railway Heritage Company Pty Ltd (No 2) [2002] NSWSC 561; Mir Bros Trading Co Pty Ltd v Cavasinni Constructions Pty Ltd [2015] NSWSC 421; Sloan v Arnold Thomas & Becker (No 2) [2019] VSC 682; Esber v The Commonwealth of Australia (1992) 174 CLR 430; Menzes v Salmon [2009] NSWSC 2; Yutaka Ikeuchi v Liu [2001] QSC 054; Nelson v Nelson (1995) 184 CLR 538
Judgment: (1) That within 14 days the parties must bring in short Minutes to give effect to these reasons
(2)Costs reserved
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr. S. D. Buchanan | Kenna Legal |
| For the Defendant | Self-represented with the assistance of Mr Sui-Duen (Kaiser) Li |
HIS HONOUR:
Background
1The defendant, Ms Shu-Wan Liao (also referred to as Master Jing), became a Buddhist nun in 1993 in Taiwan. (Transcript (“T”) 396, Line/s (“L”) 22-24) She arrived in Australia in 1998 and lived in a temple known as Yun Yang. She said:
“I do not need to pay money because as a nun I don’t need to pay any money to live in the temple. There is no such requirement.” (Ibid, L28-30)
2I took this to mean that as a woman who had devoted her life to Buddhism she was entitled to expect the faithful to provide her with shelter and sustenance in the same way that those who have devoted themselves to the religious life and taken vows of poverty in Catholic and Orthodox Christianity receive accommodation and sustenance as members of monastic or convent institutions. She regards her life as a nun as precluding her from undertaking paid employment. She must therefore rely on contributions from the faithful. (T466, L16-24) This means she has no stable or constant income. (Ibid, L27-28) Consequently, as a resident of the temple, she paid no rent or board. She said:
“[A]s a monk or nun we do not need to pay any money in order to live in Yun Yang temple. There is no such requirement ... in Buddhism.” (T397, L1-3)
3Ms Liao continued living at the temple until 2006 when she returned to Taiwan because her “teacher master” had become very sick. She cared for him until he died in 2007. (Ibid, L5-10) She then returned to Australia, achieving permanent resident status. (Ibid, L10-11) On her return to Australia, Ms Liao lived in “the students house” for a while. She then sought to purchase a house. (Ibid, L23-25) She selected a property at 257 Stud Road, Wantirna South, which is the subject of this proceeding. She said her father sent her a telegraphic transfer from Taiwan in Taiwanese currency, the equivalent of $60,000 Australian dollars. (T397, L29 – T398, L4) The asking price for the house was $320,000, and Westpac Banking Corporation granted her a mortgage loan in the sum of $260,000. (T398, L28 – T399, L4)
4Ms Liao said she resided in the house, meeting her living costs from donations offered by the faithful at religious observances held on the 1st and 15th of each month of the lunar calendar at Stud Road. (T399)
5The plaintiff, Ms Yanwei Liu, is a resident of the People’s Republic of China. She said she holds a “business visa, which lasts for 10 years”, giving her a residency entitlement in Australia though not permanent residency. (T78, L18-21) This visa was granted in 2017. (Ibid, L23‑24) Ms Liu said she first met the defendant in 2012, the year in which she was widowed, at the residence of Ms Emily Yao’s parents in China. (T78, L28 – T79, L2) According to Ms Liu, Ms Yao commended the defendant to her as “very good”. (T79, L12-17) Ms Liu said she made a contribution to the defendant in the local Chinese currency equal to approximately $400 Australian. (Ibid, L18-28) They met again at Emily’s residence in Melbourne “around the end of 2013”.
6Ms Liu said that Emily suggested to her that she might purchase the Stud Road property from the defendant because the mortgage loan was in arrears. The house had been offered for sale with a price listed below $500,000, but without success. The defendant and Ms Liu and Emily then proceeded to 257 Stud Road. (T80, L2-23) According to Ms Liu, she told Emily that she found the property a “little bit sheltered and old” and she was not enthusiastic. She said Emily assured her that the property had a good investment future. (T80, L31 – T81, L6) Ms Liu said she considered these views and then returned to Emily’s house in Berwick. (T81, L9-13)
7Ms Yao described these events as follows:
“So my Master taught me that he has a follower called Liu Yanwei [the plaintiff] would come to Melbourne and they asked me to take care of her so that’s why I just met her when she was in Melbourne and we had ... a meal together.” (T288, L14-18)
8Ms Yao was already acquainted with the defendant, though she could not say how long she had known her or who had introduced them. Ms Yao said that she was a founding member of the “Association for Buddhist Teaching and Learning in the Community Incorporated” (hereafter referred to as “the Association”). Her husband, Mr Barry Wells, was President of the Association, and she was Vice President. (T288, L29 – T289 L7) She is now the Financial Controller of the Association. (T289, L10-11) Ms Yao said of the defendant:
“I know that she had difficulties to pay back her mortgage because ... she didn’t got any income and then I talked to my Master, Master Fakong, and discussed about this, and then Master Fakong advised that the association ... could help Master Jing [viz the defendant] to pay back her mortgage for a temporary period but for the temporary period, whether it is three months, four months or five months ... So during this period, Master Jing also listed her property with an agent to sell the property ... What I have know is that she had tried a long time to sell the property but failed to sell it.” (T290, L10-22)
9Ms Yao continued:
“So for the people, we believe in Buddha, we try to, like, do something from our own heart and then I try to do this from my own heart and find some potential buyer for Master Jing, so I had tried to find at least a four person to help her, they are Alan Jiang, Yao Hong May and I could not remember the other two”. (Ibid, L26-31)
10She said she rendered assistance: “I found Liu Yanwei.” (T291, L13-14)
11Ms Yao described introducing Ms Liu to the defendant and explaining to Ms Liu the defendant’s “financial hardship”. (T291, L21-22) They travelled to inspect the Stud Road property, and according to Ms Yao she assured the plaintiff that the property had investment potential:
“And then Liu [the plaintiff] said that, okay and then they reached an oral agreement to sell the property. And then Liu asked Master Jing about how much the property and Master Jing said 520,000.”
12This conversation took place in Ms Yao’s presence. (T292, L5-13)
13Ms Yao recollected that Ms Liu “thought it was expensive, a little bit expensive ...” (T292, L29-30) According to Ms Yao:
“So Master Jing said that she will take, like a partial or half of the, like the money to the association to purchase a property. That property would be used for all the, like the people to practice [sic, scil practise].” (T293, L17-20)
14She said:
“[T]he bank details were given by Master Jing.” (Ibid, L29-30)
15There are restrictive rules as to the remittance of money from the People’s Republic to Australia. Ms Yao said that the practicalities of negotiating this regime were not discussed:
“Master Jing ask Yanwei to make payment to her to pay the mortgage and Yanwei transfer money from China, that’s Yanwei’s problem and that is Yanwei’s issue and we never discussed that.” (T294, L5-16)
16The Association’s bank statements from the ANZ Bank for the years 2013 to 2014 disclose a series of transfers to the credit of the Association: $21,333.65 on 14 January 2014; $21,991.62 and $10,432.84, both on 16 January; $49,988.00 on 21 January; $10,832.82 and $21,690.58, both on 5 February 2014; a further $21,613.10 on 7 February 2014; $21,627.14 on 10 February 2014; $21,559.42 on 14 February 2014; $21,464.38 on 18 February 2014; $20,968.42 and the same amount, both transferred on 31 March 2014; and two sums of $20,966.22, each made on 3 April 2014. (Court Book (“CB”) 125-134B) The total remittances were in the sum of $349,755.83.
17According to Ms Yao, these remittances were all made on behalf of “Yanwei”, viz the plaintiff, Ms Liu. (T294-296) Ms Yao said:
“Before Master Jing sold the property, Master Jing herself told me her plan. She said that after selling the property, I want to donate all the money, so what I want to do is that after I got the sales proceeding, I pay back all the mortgage and the rest of the money will just be donated to ... the temple to purchase a property and then all the people can do the practice there, and I want to donate money to the Master, the grandmaster and the association to purchase the – like, the future property to the practice and I told Master Jing, ‘You cannot donate all the money. You have to, like, leave $100,000 or $80,000 yourself because you are a nun. What if at the end of the day no-one want to contribute and donate to you? How do you survive?’ ” (T299, L1-15)
18The Association purchased a property at 822 Maroondah Highway, Coldstream, as its temple. (Ibid, L24-25) Following the purchase, Master Jing resided at the temple without payment for board and accommodation. (T300, L5-11)
19The Association has since sold the temple, but, according to Ms Yao, Master Jing declined to receive a refund of $320,000. (Ibid, L15-21) Ms Yao is apparently referring to an email dated 19 January 2022 (T450, L27-28; CB 503-4) over the signature of Pin Zheng on behalf of the Association and Ms Liu which deals with some five issues: one relating to the sale of the temple at Maroondah Highway, Coldstream; the second being the transfer of 257 Stud Road, Wantirna South; the third being “Your Own Money after Wantirna South Property Transfer”; the fourth issue relating to “Council and Service Bills” for the Wantirna South property; and the fifth issue dealing with “Your Return to Taiwan and Buddha Statues”. As to Issue 3, the email stated:
“According to Emily Yao, you were directed by Haijun ZHANG (Master Fa Kong) to contribute your money from Wantirna South property transfer to the purchase of the Coldstream property. You claimed to me the amount you have contributed is about $300,000. You will be entitled to get the full amount of your contribution after the property is sold. We will need to refer to the records to work out the full amount.” (CB 304)
20Asked why she did not accept this payment, the defendant said:
“I cannot accept because they have conditions.” (T451, L31 – T452, L1)
21Despite asking a number of questions, I remained unclear as to what the objectionable conditions were. As best I understood the exchange (and perhaps my understanding was imperfect), I understood the defendant to be saying she could not and did not agree to the sale of the temple (T452-3), which would be the necessary source of any payment or repayment to her.
22The Court Book contains a large volume of documentation relative to the remittance of moneys from the People’s Republic of China to Australia in different amounts via a variety of persons. Most of them identified the remittances as being with respect to “self-funded overseas study”: see for instance CB 249. The transactions proceed by means of the purchase via funds held in China – for instance, at the Postal Savings Bank of China – of amounts of United States Dollars. The Court Book also contains a bundle of statements relative to an account kept by the Westpac Banking Corporation on behalf of the defendant (being the mortgage account with respect to the Stud Road property) for the period 2013 to 2014. (CB 107-117) This shows a series of remittances similar to the ones made to the Association’s account in amounts of approximately $21,000, totalling $201,023.35. According to lengthy and tortuous evidence given by Ms Liu in her evidence-in-chief, these were amounts sent by a variety of individuals at her behest in payment of the agreed price for 257 Stud Road, viz $520,000 Australian Dollars. The total of the amounts remitted to the defendant’s account and the Association’s account slightly exceed that purchase price.
23The parties signed a document in the Chinese language dated 1 December 2014 dealing with the transaction relative to the property at 257 Stud Road, Wantirna South. A certified translation of this document into English appears at Court Book 361. It is in the following terms:
“This is to certify that the property at the address of 257 Stud Road, Wantirna South Vic 3152, Australia, is sold at the price of AUD520,000.00 by LIAO, Shu-Wan (or SHI, Ren Jing with Chinese passport number [redacted]) (the ‘Vendor’) to LIU, Yan Wei (Chinese National ID number [redacted]) (the ‘Purchaser’).
The payment is transferred by agreement to the following accounts (refer to the attachment for detail):
1. The Association for Buddhist Teaching and Learning in the Community Inc. in Australian Dollar under the Vendor’s instruction;
2. The Vendor’s private Westpac account (account number: [redacted]) in Australian Dollar.
Vendor:
Purchaser:
(Vendor’s signature)
(Purchaser’s signature)
Shu-Wan LIAO
Yan Wei LIU
1 December 2014
1 December 2014
Witnessed by
Witnessed by
(Witness’s signature)
(Witness’s signature)
Sui-Duen LI (signature)
Hong Yan YAO (signature)
1 December 2014
1 December 2014”
24Despite the reference in the document to an “attachment”, no such document was attached. The translation has the capacity to mislead. What it appears to show is that payment of the contract price was made into two accounts in sums not precisely identified. The Chinese original, however, includes distinct gaps in both paragraphs 1 and 2 with the evident intent that specific sums of money denominated in Australian Dollars were to be inserted (see the Chinese original at CB 360). The document as signed left these sections blank. When this document was signed, Ms Yao provided a handwritten document setting out, amongst other things, a list of all of the amounts remitted to the Association. (T428) A copy of this handwritten document was provided at page 21 of the “trial aids” filed immediately prior to the commencement of the hearing. According to the defendant, Ms Yao was pressing her to sign the narrative document. (T429)
25Emily had requested Mr Kaiser Li [that is Sui-Duen Li], who is an accountant and a friend of the defendant and who appeared as her “support person” and acted as her advocate at trial (fulfilling the role of counsel), to draft the Chinese-language original. (T131, L14-18) Mr Li said that the plaintiff, Ms Liu, told him that “she checked with a lawyer called Lloyd”. (T431, L28-30) Mr Li said, “And the lawyers advised her ... this is not the contract, but this is an intention ... to buy and sell.” (T432, L6-8) Presumably this represents an account by Mr Li of what he says Ms Liu told him at the time.
26The defendant signed, but when she left in Mr Li’s car she said:
“I was very upset. I told Kaiser [viz Mr Li] I didn’t want to sign that document, and because in 2013 we talk about this property, there is no deal at the time, and just when I come back, ah, from Taiwan, end of 2013, and then Emily told me that it’s sold. Okay this is sold, but where is my money? I only received 200 ... 200,000, okay? I feel rather upset, but I don’t want to ... to argue with them ... So, and then Kaiser comfort me, saying that, ah, Master this is nothing, this is not a purchase and sell contract, okay? So because Kaiser said that, I feel comfort, and then, mm, what you say, ah, to let it go.” (T433, L23‑31)
27She said she told Kaiser she had been cheated and had been the victim of some type of scam. (T434, L2-6) She said she had signed the document to avoid bitterness. (Ibid, L16-24) The defendant says she continued to press for the balance of her money. (T434, L25 – T436, L17)
28No step has been taken towards transferring title to 257 Stud Road to Ms Liu. Mortgage No AF298014H, dated 27 August 2007, remains as an encumbrance registered in favour of Westpac Banking Corporation. Ms Liu, the plaintiff, has lodged caveat number AV055530G, dated 25 November 2021, claiming a freehold estate in the property based upon an agreement with the registered proprietor dated 1 December 2014. (CB 691) A notice seeking removal of the caveat dated 30 March 2022 is designated as “abandoned”.
29As a consequence of remaining as registered proprietor of 257 Stud Road, Ms Liao continues as the rated owner of the property. For instance, the rate notice for the year 2023 from Knox City Council is directed to her at 2 Glendenning Rise, Templestowe. (CB 689-690)
30According to the plaintiff’s case, she enlisted a number of friends and associates to assist her in managing the property, including collection of rent and payment of expenses. (T158, L19-28) Included amongst these individuals was a person of Chinese ethnicity known only by his English name of Jeff (T156-159) and Mr Pin Zheng, who was a senior officer of the Association and who gave evidence as part of the plaintiff’s case. These individuals were involved in collecting rent from a tenant known as Sun Jing and transferring money to the plaintiff in China. (T159, L18-23; CB 474)
31Mr Zheng, unlike the other witnesses, gave his evidence in English and without the assistance of an interpreter. He said that the defendant had told him that she was trying to sell 257 Stud Road (T217, L2-6) and that she told him that the property was sold to Emily’s friend, viz Ms Liu, for a price of $520,000. (T218, L31 – T219, L4) According to Mr Zheng, “she [the defendant] was very happy because her original expected price was $500,000.” (T219, L23‑24) Mr Zheng said that in 2016 Ms Liu asked to “visit” the property. Mr Zheng said he first became aware that there was a dispute between the defendant and the plaintiff as to the fate of the property in “December 2019”. (T226, L16-20) Mr Zheng said that he “asked her to ... start the transferring process of the property to Madam Liu”, and the defendant responded:
“... now the property was worth over $1.5 million. ... she said to me that she can just use the $500,000 to buy a single storey house in a far suburban area and then she will have $1 million cash in her pocket and then she said to me, ‘And then I do not have to worry whether they would donate me any money or not. I will have sufficient money for the rest of my life’.” (T227, L24-31)
32Mr Zheng said he told the defendant “This was Madam Liu’s property”. (T228, L15) Mr Zheng said he conferred with Ms Emily Yao and Ms Liu. (Ibid, L28-29) Ms Liu asked Mr Zheng to represent her in the dispute over the property in Stud Road. He agreed reluctantly, warning her that the defendant – Master Jing – was his friend. (T229, L13-21) Ms Liu granted a “general non-enduring power of attorney” to Mr Zheng, apparently executed in both the Chinese language and English (CB 495-6) and dated 21 November 2021.
33Mr Zheng said he visited the defendant on 2 December 2021 at the temple [viz Maroondah Highway, Coldstream]. He raised the issue of the transfer of 257 Stud Road, and according to him the defendant said “she was busy in organising the [Buddhist] event [that day]. She couldn’t spend a lot of time ... and then she said that she can only arrange another time to have a discussion with me.” (T232, L5-7, L11-15) Mr Zheng said that further approaches via the Chinese social medium WeChat proved unavailing, and no further meeting eventuated. (Ibid, L16-23)
34On 19 January 2022 Mr Zheng sent an email in both Chinese and English to the defendant. He included an English version because the defendant’s friend and fellow nun, Sister Rebecca Au, reads English. (CB 503-4, T234) Despite the email’s foreshadowing a payment of approximately $300,000 by the Association to the defendant, she had not been paid. Mr Zheng agreed that the proper figure for payment to the defendant was $320,000. Mr Zheng understood that the Association engaged the law firm Madgwicks to prepare a deed of settlement and indemnity with which the defendant was dissatisfied. The sale of the temple settled in April 2024. (T236, L11-31)
35On 14 August 2022, according to Mr Zheng, he received a text from the defendant stating “Give me your account. I’ll make the transfer to you.” The rates notice from the City of Knox for the years 2022 to 2023 was attached. (CB 573) Mr Zheng said that this text sought payment or a refund of the rates on the property at Stud Road to be made on behalf of Ms Liu. He said that this request was made of him as Ms Liu’s attorney. (T241-2) CB 637 is an invoice from an entity described as “The Trustee for BLBG Trust”. It is rendered to Quantum Buildings Pty Ltd of 257 Stud Road, Wantirna South, for works entailing ceiling repair and the hire of a skip bin: $4,950.00 inclusive of Goods and Services Tax. Mr Zheng said that he engaged BLBG Trust to do work at the Stud Road property, and this document was the account for those works. He said, “I paid the full amount.” (T243, L18-22) He referred to a record of “payment submitted” issued by the Commonwealth Bank as part of the “NetBank – Transfers & BPAY” (CB 656), though this shows the payment of $2,475.00 to BLBG Pty Ltd, and a further document of the same type at CB 601 relative to a payment of $2,475.00 to BLBG Pty Ltd. Mr Zheng said that one payment represented a deposit, and the other one represented payment of the balance. (T244, L26-28) Mr Zheng was also taken to a series of documents at CB 657-668, all addressed to the defendant, for electricity and gas bills, which Mr Zheng said he paid. (T247)
36By an application dated 22 April 2022, solicitors acting for the defendant sought removal of Ms Liu’s caveat lodged against the title of 257 Stud Road. (CB 669) By a response notice dated 30 May 2022, solicitors acting for the plaintiff gave notice that the present proceeding was “on foot” to justify the caveat. (CB 671-2)
This proceeding
Statement of claim
37By her further amended statement of claim filed 16 April 2024, the plaintiff alleged that “in about December 2013” she entered into a contract with the defendant whereby the defendant agreed to sell her the property at 257 Stud Road. This contract was said to be partly in writing, partly oral, and partly implied. The oral portion was said to have been constituted by a conversation between plaintiff and defendant at Ms Yao’s house in Berwick in December 2013. The written portion was said to be constituted by the document dated 1 December 2014 and signed by the parties. There was also reference made to WeChat messages “in about January-February 2014”.
38The price for the property was said to be $520,000 Australian currency, payable to the defendant’s home loan account and the Association’s account with the ANZ Bank.
39It was said that the price had been paid into those accounts, and following such payments the defendant “gave vacant possession of the property to the plaintiff”.
40According to the statement of claim, from December 2014 to 2022 Ms Liu had paid the rates, a council infringement notice, $30,000 renovating the property, and undertook maintenance, leasing the property from October 2020 to October 2021 and by further agreement from March 2022.
41The plaintiff complained that the defendant had “failed to complete the transfer of the property in accordance with the contract”, and that she, the plaintiff, “was at all material times ready willing and able to complete the transaction as contemplated by the contract”. There was also a complaint of loss and damage. According to paragraph 16 of the statement of claim, “In the circumstances it would be unconscionable for the Defendant to deny that she holds the Property on trust for the benefit of the Plaintiff”. Further, or alternatively, it was said that the defendant, Ms Liao, had received $550,779.18 from Ms Liu which was recoverable by Ms Liu as moneys had and received to her use.
42Ms Liu sought a declaration that the contract alleged was “valid and enforceable and ought to be specifically performed”. She sought an order for its specific performance, together with further or other relief, damages, or a declaration that Ms Liao “holds her interest in the Property on trust for the benefit of [Ms Liu]”.
43There were further applications for relief by way of a vesting order or an order that Ms Liao “execute in registrable [form] an instrument of transfer to transfer her interest in the Property to the Plaintiff” or repayment of $550,779.18.
Defence and counterclaim
44By way of defence, by her amended defence and counterclaim dated 2 May 2023, Ms Liao first contended that the cause of action pleaded against her “did not accrue within 6 years before the commencement date of this proceeding and is therefore barred by section 51(1)(a) of the Limitation of Actions Act 1958”. Alternatively, she said that the property constituted “an established dwelling on residential land for the purpose of the Foreign Acquisitions and Takeovers Act 1975”, and the plaintiff was a citizen of the People’s Republic of China and not a permanent resident of Australia and did not ordinarily reside in Australia, and was therefore a foreign person for the purposes of the statute. The defence referred to s4 of the statute.
45Next it was said that the parties signed a document dated 1 December 2014 “in contemplation of some key terms for a possible sale of the Property ... at some stage in the future”. It was said that Ms Liao “was not consulted in the drafting of the Conditional Agreement”, and “was not given an opportunity to seek legal advice or any professional advice prior to signing the Conditional Agreement”, and it was represented to her before she signed the document that it was “not legally binding”. It was said that she relied on this representation and signed the document “solely to avoid conflict”.
46Next it was said that no concluded agreement was reached that $520,000 was to be transferred to an account or accounts identified in an attachment to be prepared, which was not in fact prepared, and any sale was dependent upon formal documentation being entered into, including full particulars of the property, the amount of the deposit and the date for its payment, the date for payment of balance of purchase price, etc, and finally the provision of “evidence of compliance with the statutory requirements under the Sale of Land Act (1962) (Vic), Transfer of Land Act (1958) (Vic) and the [Foreign Acquisitions and Takeovers Act 1975]”.
47The defendant said she did not handle or control the account of the Association referred to in the statement of claim. As to the management of her mortgage account, the defendant, according to the defence, “left it to be handled and managed by [the defendant’s] supporters”.
48Ms Liao said she never agreed to $320,000 being paid to the Association’s bank account and knew nothing of that account. She said, “she was not sure if $200,000 was from the Plaintiff; if Plaintiff proves that she paid $200,000 to her account, Defendant is willing to pay this amount back to Plaintiff”, though she denies having received the sum of $200,000.
49As to the payment of rates and outgoings on the property, she said these matters were to be dealt with by third parties, being her associates, who were to reimburse her [the defendant]. These third parties were Ms Yao and Mr Zheng. She denied authorising any maintenance or renovations to the property. She admitted that she permitted people to store personal property and to visit the property, but denied that Ms Liu was entitled to lease the property. Any such leases were without her knowledge or authority, and moneys received therefrom by the plaintiff were wrongfully received.
50According to Ms Liao, she has not transferred the property and denies that she is obliged to do so. She said Ms Liu had:
“never provided any documentation confirming that she had obtained approval from the Foreign Investment Review Board allowing her to acquire an interest in an established dwelling in Australia, which approval is necessary because the Plaintiff, being a non-resident foreign person, is and was prohibited from acquiring an interest in the Property as an established dwelling in Australia unless she had obtained:
i.an exemption certificate; or
ii.a no objection notification; or
iii.a notice imposing conditions,
prior to purchasing an established dwelling in Australia.”
51In any event, she said, the contract alleged was uncertain and unenforceable due to a lack of consideration received by her. The contract “by its terms was executory only and incapable in law of becoming fully executed by performance”.
52By way of counterclaim, Ms Liao alleged unauthorised leasing and dealings by the plaintiff Ms Liu and her attorney of the property. By way of counterclaim she sought a variety of relief entailing findings of unenforceability relative to the contract alleged by the plaintiff, estoppel, and similar matters, as well as restitutionary compensation.
Defence to counterclaim
53By her defence to counterclaim dated 12 July 2022, Ms Liu generally joined issue with Ms Liao’s defence.
The trial
54At least until the date of the amended defence and counterclaim, viz 2 May 2023, Ms Liao was represented by solicitors. Those solicitors were allowed to withdraw following the completion of an unsuccessful mediation. As a result, when the matter came on for trial before me Ms Liao, as defendant and counterclaimant, was without legal representation. She complained that she was unable to speak English, and sought the appointment of an interpreter to assist her.
55The court is not funded to provide interpreters. Ms Liao, however, had the assistance of Mr Kaiser Li, an accountant and friend, as her “support person”. He acted as her counsel and interpreter. In addition, all of the evidence except the evidence of Mr Zheng was given in Mandarin, which is Ms Liao’s native language. Given that Ms Liao arrived in Australia for the first time in 1998 and has resided here for extensive periods since – more than a quarter of a century ago – it would be surprising if she did not have some facility in the English language, granted that as a Buddhist nun she must have lived a life sheltered from the wider Australian community. There were occasions on which she reacted, obviously having understood exchanges in English. For instance, at T125, L4-9, I made what could be interpreted as a joke at the expense of the plaintiff’s case. Ms Liao reacted in her facial expressions and body language with a smile and some manifestation of satisfaction. Later, during Mr Zheng’s evidence-in-chief given in English, she reacted with facial expressions and body language apparently dissenting from some of what he said. There were other examples.
56The trial commenced on 12 August 2024. At that stage Mr Li applied on behalf of Ms Liao for an adjournment. The suggestion was that by November Ms Liao may have been able to raise contributions from Hong Kong sufficient to enable her to fund the provision of an interpreter herself. For reasons which I then gave, I declined to grant an adjournment, and the matter proceeded.
57Mr Buchanan, on behalf of the plaintiff, opened her case as one based solely on an application for specific performance.
58On the afternoon of Thursday, 15 August 2024, the fourth day of the trial, Mr Li announced before the resumption of the hearing:
“Half an hour ago, I just sent Master Jing, the defendant, on a taxi ... to the medical centre because this morning she already feel uncomfortable ... because she got some problem with her heart I believe. She said that she don’t feel comfortable whilst ... have the lunch with me. Then I call her GP. Unfortunately, Dr Gold is on the way to the airport to visit her mum overseas. And then, Dr Gold is also my GP okay. And then I tried to call a lot of fellows, in order to take care of her ...” (T375, L4-18)
59I suggested that the Emergency Department of one of the inner-city public hospitals would be the appropriate destination for a person taken unwell with suspected heart problems. The medical centre to which Mr Li had sent Ms Liao was in Glen Waverley. (T375) Mr Li eventually produced a document styled “Medical certificate” on the letterhead of Waverley Medical Centre, electronically signed by a Dr Eva Wu, stating:
“In my opinion Shu wan is suffering from a Medical Condition and she will be unfit for her normal duties from 15/08/2024 to 23/08/2024 inclusive.”
60The following morning, 16 August 2024, scheduled as the fifth day of the hearing, Mr Buchanan, counsel for the plaintiff, was present, but neither Mr Li nor the defendant was. Mr Buchanan was critical of the form of the medical certificate because it identified no illness. (T381, L3-10) Eventually I determined the proper course was to adjourn the hearing until the end of the certified period of incapacity, being Monday, 26 August. Mr Buchanan had other commitments at that stage, and so the first available date was 4 September. In adjourning to that date I gave a further direction that any additional adjournment application on the grounds of incapacity was to be supported by an affidavit from a medical practitioner giving particulars of the alleged indisposition.
61On 4 September 2024, the plaintiff’s case having been closed, Mr Li opened the defendant’s case, leading evidence-in-chief from Ms Liao. This consumed most of the day, and Mr Buchanan commenced his cross-examination late in the afternoon. The court adjourned at the usual hour of 4.15pm.
62The following day, 5 September 2024, Mr Buchanan was again alone at the bar table. Mr Li had emailed a further medical certificate, though not an affidavit in accordance with the direction I had given. He sought a further adjournment on behalf of the defendant. This certificate was from the same practitioner at Waverley Medical Centre. It stated, inter alia:
“She [viz, Ms Liao] developed chesty cough with yellow sputum overnight.”
She referred to “frequent cough during consultation” and “red throat, ears”. I found this surprising, since Ms Liao had not coughed at all in my recollection during an entire day in the witness box.
63Ultimately, Mr Buchanan did not oppose a further adjournment of the trial, which had to move to 17 October having regard to my imminent departure on leave. He pressed, nevertheless, for affidavit material, and foreshadowed that failing proof on affidavit of the matters relied on for the latest adjournment, he would press for an order that the defendant’s defence be struck out and the matter determined in his client’s favour on a default basis.
64On the resumption on 17 October, on my return from leave, cross-examination and re-examination of the defendant was completed. Mr Li gave evidence as to his involvement in the relevant event. His cross-examination and re-examination was completed prior to adjournment on 17 October. Discussions on the following day, 18 October, had the parties agree to Mr Buchanan giving his closing address on behalf of the plaintiff the following Monday, 21 October, followed by a closing address by Mr Li on behalf of the defendant. Mr Buchanan exercised a brief right of reply and I reserved judgment.
Conclusions
Background matters
65It became obvious that the defendant, Ms Liao, was in conflict with the plaintiff, Ms Liu, not only as regards the house in Stud Road but also as to matters relative to the Association and the beneficial ownership of the temple in Coldstream, which put her in conflict with those in positions of authority in the Association, such as Mr Pin Zheng and Ms Emily Yao.
66The defendant was expelled from the Coldstream temple (T497, L12-18) in 2022. (T546, L2-4) There was an offer to pay the defendant the amount of her contribution to the temple, whether it be a loan or a donation, but this came to nothing because of a dispute as to an indemnity which the Association required her to give. (See [32])
67As a consequence, the defendant finds herself deprived of her long-term residence at the temple without any reimbursement for her contribution, however it might be characterised, towards the acquisition and establishment of the temple. (T547, L4-16)
68There seems to have been one or more mediations relative to this wider dispute and proposal for settlement, including presumably the contentious indemnity required as a condition of the Association’s reimbursing of the defendant. Mr Li complained of the inclusion of “poison pills”. (T720, L3-8)
69The wider dispute seems to have related to the beneficial ownership of the temple property in Coldstream which, at all material times, was held by the Association as legal owner.
70The defendant and Mr Li were of the view that the temple was beneficially owned either by an association known as a Sanga, consisting of Buddhist clergy and recognised as a corporate body in Buddhist tradition or by another body incorporated under Victorian law known as “Whitehorse Monastery”. (T592-594)
71In his narrative, Mr Li described this dispute as developing from 2015 and coming to a head in 2022 at the time of the expulsion, mediation and the proposal for reimbursement subject to an indemnity.
72These matters were described to me only at the highest level of generality and the evidence would not enable me to make any findings as to precisely what happened, much less the rights and wrongs of the dispute.
73The timing of these matters would render them irrelevant to the determination of the issues relative to the house in Stud Road. The agreement had either been made or not made before the dispute relative to the temple broke out. The temple had not even been acquired at that point. The payments relied on by the plaintiff had either been made or not made prior to the dispute as to the ownership of the temple, and the defendant had either directed or not directed payment of part of the purchase price to the Association’s account before the dispute as to the temple broke out.
74In cross-examining the defendant, Mr Buchanan put it to her in effect that her attitude and the stand which she took relative to the Stud Road house was coloured by the situation she found herself in as a result of the wider dispute. She did not distinctly admit this, or perhaps denied it. Nevertheless, I accept Mr Buchanan’s proposition. Some of the positions taken by the defendant, which otherwise seem difficult to understand and constituted clear inconsistency, become intelligible in light of the wider dispute.
Was there a concluded contract?
75According to the defendant, whatever dealings she and the plaintiff Ms Liu had did not amount to a concluded agreement to sell the Stud Road property. Whilst the property was inspected by Ms Liu in late 2013 and a price of $520,000 or $530,000 was discussed, no “deal” was made. The defendant left Australia to visit a temple in the People’s Republic. (T418)
76In the event, it is difficult to treat the defendant’s denial of a “deal” having been done in late 2013 as other than “pro-forma”. The most obvious rebuttal of her denial is to be found in the document signed on 1 December 2014 in Mandarin, the translation of which is quoted in full at [22]. I will have more to say as to this document and the circumstances in which it was brought into existence in connection with the plaintiff’s case that the sums of money which she caused to be remitted to the Association, rather than to the defendant’s personal account, were paid at the defendant’s direction and as part of the purchase price of the Stud Road property.
77The defendant sent an audio message to Mr Pin Zheng on 19 July 2022, which translated into English stated inter alia:
“Hello,
I do not wish to create bad karma with anyone, including Yanwei [viz the plaintiff, Ms Liu], so I do not want to sue her. However when she bought my house, I only received 200,000, and even with a bank loan, it’s not enough …” (emphasis added) (CB 674)
78She sent an audio message to Ms Liu dated 13 October 2016 via “WeChat”, the English translation of which is “Jianwei, I want to ask you, someone wants to buy your house, do you want to sell it? …” (emphasis added) (CB 362)
79On her own account of the event leading to the preparation and signature of the document dated 1 December 2014, the defendant says at the outset of the meeting she enquired in peremptory terms “Where’s my money?”, meaning the difference between the $201,000 which had been remitted to her personal account and the agreed contract price of $520,000. (T419, L14-18)
80The demand for this money makes sense only if a sale had been agreed upon. No money would have been payable to the defendant unless the house had been sold by her.
81At the end of her re-examination, the defendant expressed herself willing to transfer the Stud Road property upon payment of $320,000. (T552, L15-18)
82Again, the evidence discloses that as between the plaintiff and the defendant responsibility for the outgoings of the property at Stud Road has, since 2014, been seen to lie with the plaintiff, Ms Liu, with payment for these matters being referred either to Ms Liu or to her Australian representative.
83Mr Li contended that it was improbable that the defendant would have agreed to sell the Stud Road property in 2013-14 in circumstances where the mortgage to Westpac Banking Corporation on the property secured a debt exceeding the $201,000 which was remitted to her personal account. This mortgage was paid off in 2017 with assistance from the defendant’s friends, not being any of those involved in the present dispute. (T720-721)
84There is some substance in this point, though it is perhaps more pertinent to the issue to which I will turn below, as to whether the defendant directed the payment of any, and if so what, portion of the purchase price to the Association rather than to her own personal account. Whatever issue of plausibility it raises, in my view, it cannot outweigh the admissions and other considerations to which I have already referred. Finding that there was a concluded agreement to sell the Stud Road property in 2013-14 necessarily entails the rejection of evidence given by the defendant subject to affirmation.
85However, as Mr Buchanan pointed out, in an affidavit affirmed 3 March 2023, the defendant said at paragraph 21 “… I have not been aware that the Plaintiff had transferred any money to me although she told me that she transfer [sic] some 200,000 to me.” (CB 29)
86This is plainly wrong. According to Mr Li, prior to the meeting on 1 December 2014, when the document at Court Book 360 was signed, at the defendant’s request he obtained a printout of her personal account from Westpac Banking Corporation and ascertained that there had been payments of approximately $201,000 in total into her personal account. He presumably acquainted the defendant with this fact. (T605, L9-21)
87The affidavit was made in support of an application to set aside a default judgment against the defendant. This indicates a willingness on her part to advance untrue evidence to advance her own case.
88The defendant did agree to sell the Stud Road property to the plaintiff.
Payments to the Association
89A large part of the defendant’s case, as presented in her evidence and on her behalf by Mr Li, was a contention that if there were a sale of the Stud Road property by the defendant to the plaintiff for $520,000, all sums remitted at Ms Liu’s request by her associates in the People’s Republic of China to the Association ought not to be counted as in relief or reduction of the purchase price. In conveyancing transactions generally, most properties sold are subject to some mortgage or encumbrance. As part of the settlement arrangements, therefore, a large percentage of the purchase price was paid not to the vendor or to an account of the vendor or even to the vendor’s solicitors or conveyancers, but rather to the outgoing mortgagee or mortgagees. In some cases, the payments are in relief of statutory liens held by municipal councils or utility providers. These payments made at the direction of the vendor are regarded as being payments to the vendor. Here, the plaintiff’s case is that she caused not less than $320,000 to be paid to the Association at the request and direction of the defendant. The defendant denies this, saying she never authorised or directed any such payment and, if there was indeed a sale of the Stud Road property, she remains entitled to $320,000 which remains unpaid. (The issue of interest was not mentioned.)
90In his closing submissions, Mr Li contended that the plaintiff’s case that the amounts remitted at her request from the People’s Republic of China to the Association constituted part of the purchase price of the Stud Road property ought to be rejected because inter alia, whilst the amount which would have been payable in those circumstances was approximately $320,000, the accounting records produced showed that amounts totalling approximately $349,000 were in fact remitted. (T710, L7 - T711, L6)
91The most striking thing as to the contention that these payments to the Association ought not to be treated as payments to the defendant is that no such issue is raised in the defence filed on her behalf which was prepared whilst she was represented by a firm of solicitors. Paragraph 5A of the amended defence and counterclaim states inter alia that “… the defendant did not handle let alone control the bank account of the Buddhist Teaching and Learning in the Community Inc. The defendant is not in a position to comment on any aspect of this account.”
92In his closing submission, Mr Li’s primary contention on behalf of the defendant was that the monies paid into the Association’s account were donations to the Association by Ms Liu, not payments of part of the purchase price for the Stud Road property. Despite this primary contention, Mr Li said that immediately after the meeting on 1 December 2014, he returned to Hong Kong to provide care for his aged and ailing mother. (T732) He returned to Australia in 2019 after the death of his mother and the defendant:
“showed me some voice message from the plaintiff that’s … her. I ask her, I understand that she didn’t get back the money, okay, … She always say that [she should get the money back] from Emily. [Representing … ABTLC viz the Association].” (T733, L6‑9, L24-29)
93This contention necessarily assumes that the alleged “donations” by Ms Liu to the Association were in fact payment or part of the purchase price for the Stud Road property. On no other basis could these donations be regarded as money to which the defendant was entitled.
94Moreover, there was no explanation as to why, if the Association were not a proper repository for part of the purchase price for the Stud Road property, its bank account particulars were included in the document signed on 1 December 2014. The remittances from the People’s Republic of China seem to have been made in a somewhat “hit or miss” way. Their precise total in Australian currency was affected by variations in exchange rates over the period of months where the remittances were made. They were also made, it would seem, illegally under the law of the People’s Republic of China because they purported to be for self-education expenses rather than for the purchase of real estate. These sort of matters and the inherent complexity of having monies remitted from a variety of difference sources (presumably as a means of evading the People’s Republic of China’s exchange controls) explain the discrepancy in figures.
95I accept that the relevant payments to the Association were made as part of the process of paying the purchase price to the defendant at her direction and at the direction of the plaintiff. I reject the defendant’s contentions to the contrary.
The statute of limitations
96Paragraph 1 of the defendant’s amended defence and counterclaim denied the enforceability of the contract alleged against it on the basis that the relevant cause of action “did not accrue within 6 years before the commencement date of this proceeding and is therefore barred by s5(1)(a) of the Limitation of Actions Act 1958 (Vic).”
97Section 5(1) of the Limitation of Actions Act 1958 provides inter alia:
“(1)The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued—
(a)Subject to subsections (1AAA), (1AA) and (1A), actions founded on simple contract (including contract implied in law) or actions founded on tort including actions for damages for breach of a statutory duty;
…”
98Sub-sections (1AAA), (1AA) and (1A) are irrelevant to the present proceeding. Ms Liu’s claim is “founded on simple contract”. Sub-section (8) of the same section provides:
“This section shall not apply to any claim for specific performance of a contract or for an injunction or for other equitable relief, except in so far as any provision thereof may be applied by the Court by analogy in like manner as the enactment corresponding to that provision was applied before the repeal of that enactment by the Limitation of Actions Act 1955.”
99This proceeding was commenced in 2022. The contract sued on was allegedly entered into in 2013-14. This proceeding has been brought beyond the six-year limit if that limit applies. Since it is a claim for equitable relief rather than a claim at law, the limitation period operates only “insofar as [the limit] may be applied by the Court by analogy” as the law stood in 1955. There has been no intention that the law or the equitable rules on this point have varied in the period since 1955, though reliance is placed on more recent authorities on the basis, as I understand the plaintiff’s case, that these more recent cases state the law or the relevant equitable principles as they always existed.
100Mr Buchanan, on behalf of the plaintiff, contended that the present was not an instance where the Court should apply the six year limitation period by analogy to the equitable claim. He relied on a decision of Ball J, sitting in the Equity Division of the Supreme Cout of New South Wales, in Alec Finlayson Pty Ltd v Royal Freemason Benevolent Institution of New South Wales Nominees Ltd [2013] NSWSC 1168. In that case, the plaintiff sought specific performance of a provision in a contract for the sale of land requiring the creation of an easement. The contract was entered into in 2003. The proceeding was commenced in 2012. His Honour was pressed with the analogous provisions in New South Wales law, namely ss14(1) and 23 of the New South Wales Limitation Act 1969 as constituting a bar to the proceeding. These provisions are differently worded but in substance appear to be to the same effect as the corresponding Victorian provisions quoted above. His Honour was guided as to the application of the six-year limitation period by what he said was the “leading decision in England” on the point, namely, the decision of the English Court of Appeal in P & O Nedlloyd BV v Arab Metals Co (No 2) [2007] 1 WLR 2288 which concerned the corresponding provisions in the English Limitation Act 1980. Again, the language is somewhat different but does not appear to depart materially from the terms of the Victorian provisions. His Honour quoted a statement by Dr Spry in the 8th edition of his work, The Principles of Equitable Remedies, where the learned author stated:
“Where legal rights, such as contractual or tortious rights, have been barred, it is not desirable (and it is contrary to principle) that the barring be circumvented by the grounds of auxiliary equitable remedies such as specific performance or injunctions.” (Page 245)
101His Honour referred to a number of authorities including R v McNeil (1922) 31 CLR 76 and Fitzgerald v Masters (1956) 95 CLR 420. He quoted at length from a judgment of Brereton J in the matter of Auzhair Suppliers Pty Ltd (in Liq) [2013] NSWSC 1. He referred to his Honour’s lengthy review of the authority where he said at paragraphs 61-63:
“61.In my view, the authorities to which reference has been made establish the following.
62.First, in equity's auxiliary jurisdiction, where the Court is asked to give a superior remedy for a legal right, Equity applies the legal limitation period: it obeys the law.
63.Secondly, even in equity's exclusive jurisdiction, where the cause of action is Equity's own creature, then if there is an analogue between the equitable claim and a legal or statutory right to which a limitation period applies, a court of equity will ordinarily apply the limitation period: in this, equity follows the law, and applies the limitation period as an aspect of the doctrine of laches. The existence of an analogue can only be determined by considering each of the equitable claim, the legal or statutory right and their respective remedies in the context of the facts and circumstances of the case; but it does not depend on a minute comparison between the claim in equity and the supposed analogue; while differences in the elements of the respective causes of action are relevant, and possibly significant, not every difference justifies not applying the statute by analogy. Further, because, in this context, application of the analogous limitation period is an aspect of laches, it is also subject to exceptions where the greater equity outweighs it; thus it is relevant to consider the plaintiff's knowledge of the plaintiff's rights and in particular of the impact of fraud, as equity will not apply a time limit in a case of "concealed fraud". The relevant enquiry is therefore to consider, first, whether the equitable claim and the corresponding legal right are so similar that the time limit applicable to the latter should be applied to the former; and, secondly, where such a similarity exists, whether it would nevertheless be inequitable to apply the analogous limitation period.” [2013] NSWSC 1 [61]-[63]
102Ball J then referred to the decision of the English Court of Appeal, P & O Nedlloyd v Arab Metals Co (No 2) [2007] 1 WLR 2288. His Honour concluded:
“A cause of action for specific performance of a contract is not analogous to a cause of action founded on contract that is recognised by the common law – that is, a claim for damages for breach of contract. The nature of relief is completely different in the circumstances in which the relief is available in relation to the two causes of action are not the same.” [2013] NSWSC 1 [48]
103Mr Buchanan contended that this authority supported the view that the plaintiff’s claim was not statute barred. Care needs to be taken in applying the reasoning of Brereton J in Auzhair. His Honour’s determination that the equitable claim against the former directors of a company was not time barred, despite the fact that the corresponding statutory cause of action under s1317K of the Corporations Act 2001 (Cth) was reversed by the New South Wales Court of Appeal in Gerace v Auzhair Supplies Pty Ltd (in Liquidation) (2014) 87 NSWLR 435. His Honour had concluded that the analogy between the two claims and the relevant remedies was “as close an analogy as one could conceive”, but nevertheless determined that there was a discretion not to apply the limitation period by analogy. The Court of Appeal disagreed.
104In P & O Nedlloyd BV v Arab Metals Co [2007] 1 WLR 2288, the English Court of Appeal considered a proceeding for specific performance of a contract of carriage relative to two shipping containers of scrap metal. It was contended that this claim was statute barred under the Limitation Act 1980 applying the limitation period for simple contracts by analogy. The provisions of the statute were in substance similar to those under consideration in this proceeding. The trial judge, Tomlinson J, declined to grant specific performance and the plaintiff, P & O, appealed to the Court of Appeal. The principal judgment of the Court was delivered by Moore-Bick LJ, with whom Jonathan Parker and Buxton LJJ agreed. In reversing the trial judge and determining that the application for specific performance had some prospect for success, his Lordship said:
“It is not surprising that equity should apply by analogy the limitation periods applicable to claims at law for an account and for damages for breach of duty, whether in contract or tort, to claims for an account and for claims for equitable compensation. In each case the same facts give rise to a claim, whether at law or in equity, and the same kind of relief is obtainable. A claim for specific performance raises different considerations, however, both because relief comparable to that available from the courts of equity was not available from the common law courts and because the facts needed to support a claim for specific performance are not in all respects the same as those necessary to support a claim for breach of contract. The latter point is demonstrated by the case of Hasham v Zenab [1960] AC 316. The defendant in that case had agreed to sell a parcel of land to the plaintiff on terms that a deposit was to be paid immediately and the balance on completion within six months. Immediately after signing the contract the defendant repudiated it, but the plaintiff elected to confirm the contract and proceed with the sale. About six weeks before the date for completion, the plaintiff bean proceedings for specific performance. The defendant contended that the action had been commenced prematurely since the date for completion had not arrived and there had been no failure of performance. The Privy Council held that a cause of action sufficient to support proceedings at law was not necessary to support a claim in equity for specific performance. All that was required was the existence of circumstances that would justify the intervention of a court of equity.
The fact that the common law courts could grant a coercive remedy comparable to a decree of specific performance strongly suggests that there is no case in which (to use the language of Lord Westbury in Knox v Gye) ‘the remedy in equity is correspondent to the remedy at law’ or ‘the suit in equity corresponds with an action at law’. At most it can be said that there are some cases in which the facts giving rise to a claim at law for damages for breach of contract will also be sufficient to justify the intervention of equity. I find it a little surprising, therefore, that the question whether equity would have applied a statutory limitation period by analogy to a claim for specific performance should have occasioned such a divergence of views among the commentators. However, that it is the case can be seen from the favourable essay of Professor Beatson (now Beatson J) entitled Limitation Periods and Specific Performance published in Contemporary Issues in Commercial Law, essays in honour of Professor AG Guest, (1977) (ed Lomnicka and Morse) in which he discusses the different views and the authorities on which they are based.” [2007] 1 WLR 2288, 2306-7 (check if this is right quote)
105The effect of these authorities would seem to be that whilst equity would and does apply to the statute of limitations by analogy, in cases where the equitable remedy is closely aligned with the common law one, such as for instance where the equitable remedy is for equitable compensation or damages according to equitable principle and the analogy with common law damages is clear enough. Specific performance is so different a remedy from a right to common law damages that no analogy exists. The decision in Alec Finlayson, upon which Mr Buchanan placed primary reliance, depends crucially upon the decision of the English Court of Appeal in the P & O Nedlloyd case. In the latest edition of his work on Equitable Remedies, (9th edition 2014), Dr Spry said of this case:
“A recent decision of the Court of Appeal holding that the limitation periods do not apply to proceedings for specific performance appears to have been incorrect. The court gave attention primarily to cases concerning the expression “by analogy”, and did not give proper attention to the requirement that courts of equity should act “in obedience” and should not grant auxiliary relief where the legal rights in question have been barred by a statute of limitations. Where legal rights, such as contractual or tortious rights, have been barred, it is not desirable (and is contrary to principle) that the barring be circumvented by the grant of auxiliary equitable remedies such as specific performance or injunctions.”
106The latter part of this passage (from a previous edition) was, it will be recalled, referred to but not applied in Alec Finlayson. Meagher, Gummow and Lehane’s Equity Doctrines and Remedies (5th edition) referred to the P & O Nedlloyd case with apparent approval – paragraphs [20-025], footnote 55, at p653 stating:
“… [E]quity will in some cases specifically enforce a contract for the sale of land when the plaintiff would be unable to recover damages at law. Equity will in some cases intervene with a decree quia timet even though, since no breach – not even an anticipatory breach – has yet occurred, a cause of action for damages has not yet accrued.”
107The P & O Nedlloyd case is footnoted for the proposition constituted by the second sentence relative to breaches of contract rather than the first sentence. The first sentence with the more general proposition is cross-referenced to paragraph 20‑180 which is headed “The nature of past performance” which deals with the issue of the statute of frauds and part performance. The effect is not a downright disapproval, as in Spry’s work, but less than a ringing endorsement.
108The approach to these matters in P & O Nedlloyd and Alec Finlayson also seems at odds with the general statement of principle by Isaacs J, as he then was, in TheCrown v McNeil (1922) 31 CLR 76. This case concerned a petition of right brought against the Western Australian Government under the Crown Suits Act 1898, which was sustained and determined favourably to the petitioners by a judge of the Supreme Court of Western Australia. The Crown appealed to the High Court. The statute required that the petition be filed within 12 months after the relevant claim had arisen and the petition was filed outside this time limit. The petitioners contended on appeal that fraudulent action by Crown officers ought to have the effect of extending the time limit. The High Court, Knox CJ, Isaacs and Starke JJ allowed the appeal. On the question of the operation of statutes of limitations, Isaacs J said:
“The position may be shortly stated. Where a Court of equity finds that a legal right, for which it is asked to give a better remedy than is given at law, is barred by an Act of Parliament, it has no more power to remove or lower that bar than has a Court of law. But where equity has created a new right founded on its own doctrines exclusively, and no Act bars that specific right, then equity is free. It usually applies, from a sense of fitness, its own equitable doctrine of laches and adopts the measure of time which Parliament has indicated in analogous cases, but, when a greater equity caused by fraud arises, it modifies the practice it has itself created and gives play to the greater equity. The present case is entirely outside the ambit of the doctrine.” (2022) 31 CLR 76, 100
109As to Alec Finlayson, it has, since its decision in 2013, been referred to on a number of occasions in later authorities but in no way decisively – see Misthold Pty Ltd v NSW Historic Sites and Railway Heritage Company Pty Ltd (No 2) [2002] NSWSC 561 [368] where Payne JA assumed, without deciding, that the claim before the Court under the Historic Buildings legislation was not time barred on the basis of the decision in Alec Finlayson. The claim failed for other reasons. The case was also referred to by Harrison AsJ in Mir Bros Trading Co Pty Ltd v Cavasinni Constructions Pty Ltd [2015] NSWSC 421 [91], but only in the context of a pleading dispute.
110It was also referred to by Daly AsJ in Sloan v Arnold Thomas & Becker (No 2) [2019] VSC 682 [49], where her Honour said:
“My survey of the authorities has shown that, in circumstances where a breach of fiduciary duty arises out of the same factual matrix as claims for breach of contract and negligence, the courts will invariably apply the statutory limitation period by analogy. After extensive searches, I have not discovered any case which post‑dates Seguros which has not applied the relevant statutory limitation period.”
111A determination that a Court of Equity will apply the limitation period by analogy relative to claims for compensation for breach of fiduciary duty does not deal with or determine the issue as to whether the limitation period ought to be applied by analogy in a suit for specific performance.
112Mr Buchanan referred me to the work “Law of Limitation” by Professor Dal Pont (2016) where the Professor referred at paragraph 13.36, page 272, to the P & O Nedlloyd case with apparent approval, noting that it had been followed in the Alec Finlayson case – see footnote 111. He said:
“In the face of no proper analogy or an exact one, the doctrine lacks justification. So, for instance, a claim in equity for specific performance lacks a common law analogy because ‘relief comparable to that available from the courts of equity was not available from the common law courts’ and ‘the facts needed to support a claim for specific performance are not in all respects the same as those necessary to support a claim for breach of contract’.”
The quoted passages are from the P & O Nedlloyd case.
113The situation therefore remains uncertain. Unsurprisingly, Mr Li was unable to contribute anything which might clarify the uncertainty.
114In my view, the context of McNeil’s case was so different that I should not regard the general statement of principle quoted from the judgment of Isaacs J as authoritative on this point. As to Dr Spry’s disapproval of the P & O Nedlloyd line of authority, it will be recalled that he said the English Court of Appeal gave attention only to the issue of analogy, failing to consider the issue of “obedience”. Commenting on the division which the Court had to consider in the P & O Nedlloyd case, namely s36 of the English Limitation Act 1980, Dr Spry says at p433 of his book:
“This provision is not well drafted, since it does not take account of the distinction between acting in obedience and acting by analogy, but, unless it is to be supposed that courts with equitable jurisdiction are no longer to act in obedience where formerly they would have done so - which would be a remarkable position – the words “by analogy” should be construed broadly, rather than in the narrower sense that is generally accepted elsewhere, and should be taken to include all cases where a legal limitation period would formerly have been applied by courts of equity, as a matter of discretion or otherwise, in refusing equitable relief.”
115His critique of P & O Nedlloyd therefore depends on effectively rewriting the terms of the Limitations legislation, which is a strong thing and generally a wrong thing to do. (Thompson v Goold and Co [1910] AC 409, 420 per Lord Mersey)
116With some hesitation, I believe I should apply the reasoning in Alec Finlayson and P & O Nedlloyd. Ms Liu’s claim is not statute barred.
Foreign Acquisitions and Takeovers Act 1975
117Ms Liao’s defence correctly identified (paragraph 3a) that the Stud Road property “constitutes an established dwelling on residential land” and that the plaintiff, as a citizen of the People’s Republic of China and a non-permanent resident of Australia, is a foreign person for the purposes of the Foreign Acquisitions and Takeovers Act 1975. (CB 15)
118At paragraph 5./iii./6, Ms Liao as defendant complained of a lack of “evidence of compliance with the statutory requirements under … the FATA” (viz Foreign Acquisitions and Takeovers Act) (CB 17)
119Paragraph 11 of the Defence states:
“that the Plaintiff has never provided any documentation confirming that she had obtained approval from the Foreign Investment Review Board allowing her to acquire an interest in an established dwelling in Australia, which approval is necessary because the Plaintiff, being a non-resident foreign person, is and was prohibited from acquiring an interest in the Property as an established dwelling in Australia unless she had obtained:
i. an exemption certificate; or
ii. a no objection notification; or
iii. a notice imposing conditions,
prior to purchasing an established dwelling in Australia.” (CB 20)
120The Defence referred to s95(4) and (5) of that section of the Foreign Acquisitions and Takeovers Act.
121Ms Liu accepts that none of these formalities or substantive legal steps have been undertaken.
122Mr Buchanan produced “compilation number 32”, being an authorised reprint of the Foreign Acquisitions and Takeovers Act, as at 20 October 2023. The two referenced sub-sections, namely sub-s(4) and (5) of s95 of the statute provide as follows:
“(4)A foreign person who is not a temporary resident must not acquire an interest in an established dwelling.
(5)Subsections (1), (4) and (8) do not apply in relation to an interest if the interest was, or was of a kind, specified in:
(a)an exemption certificate; or
(b)a no objection notification; or
(c)a notice imposing conditions.”
123Section 12 of the Act defines an interest in Australian land as including:
“(a) a legal or equitable interest in Australian land …”
124Mr Buchanan contended that on the plaintiff’s case, her acquisition of an equitable interest occurred in the period 2013-2014. Accordingly, he said, it was the version of the statute current in that 12-month period which governed the legality of what had occurred and what was being proposed, rather than the current version of the statute.
125Without concluding that the current version of the statute has no application, I accept that entry into what the plaintiff says is a specifically enforceable contract to purchase the Stud Road property in 2013-2014 would constitute an acquisition so as to engage the Foreign Acquisitions and Takeovers Act as it then existed.
126Mr Buchanan produced a print of the Act described as including amendments up to Act 180 of 2012. This version of the statute, whilst generally to the same effect, viz restricting the acquisition of established houses in Australia by non-residents, regulated this issue with a very different administrative regime.
127Section 26A of this version of the statute provides inter alia that where:
“an natural person not ordinarily resident in Australia … enters into an agreement by virtue of which he or she acquires an interest in Australian urban land and did not, before entering into the agreement, furnish to the Treasurer a notice stating his or her intention to enter into that agreement … the person is guilty of an offence and is punishable, on conviction, by a fine not exceeding 500 penalty units or imprisonment for a period not exceeding 2 years, or both.” Significantly, s38 of this version of the statute provides:
“An act is not invalidated by the fact that it constitutes an offence against this Act.”
128Mr Buchanan’s contention was that it is the earlier version of the statute which governs the sale of the Stud Road property by Ms Liao to Ms Liu. The substantial “rewrite” of the statute was effected by amendments in 2015.
129I was initially attracted by the thought that since entry into a specifically enforceable contract for the sale of land creates a beneficial interest in the purchaser, and performance of that contract by transfer or conveyance vests a legal interest in that purchaser, that the Foreign Acquisitions and Takeovers Act would be engaged twice. Once when the initial agreement was made and secondly upon its completion by transfer of title.
130Ultimately, I consider that this view of things would be wrong. First, as a matter of practicality because a person having obtained in 2013 or 2014 a consent from the Treasurer would not expect to have to return for some further consent or exemption on completion of the contract. Secondly, because a purchaser’s entitlement to complete a specifically enforceable contract by requiring a transfer of the legal estate in the subject property should be regarded as an accrued right which, in accordance with established principle, would be preserved despite the amendment or re-enactment of a statute.
131Section 7(2) of the Commonwealth Acts Interpretation Act 1901 provides inter alia:
“If an Act, … repeals or amends an Act (the affected Act) or a part of an Act, then the repeal or amendment does not:
…
(c)affect any right, privilege, obligation or liability acquired, accrued or incurred under the affected Act or part; …”
132In Esber v The Commonwealth of Australia (1992) 174 CLR 430, the High Court considered the operation of a previous version of this section of the statute then to be found in s8. Mr Esber applied to redeem his entitlement to periodic payments under the Compensation (Commonwealth Government Employees) Act 1971 in return for a lump sum. The fund rejected his application and he sought review from the Commonwealth Administrative Appeals Tribunal, requiring an extension of time to bring that application. Before the hearing, the 1971 Act was repealed and replaced by the Commonwealth Employees Rehabilitation and Compensation Act 1998, which did not provide a regime for the redemption of periodic payments in return for a lump sum.
133The Tribunal determined that Mr Esber had an accrued right to seek redemption under the repealed Act. The Commonwealth appealed to the Full Court of the Federal Court, which allowed the appeal by majority. Mr Esber then appealed to the High Court, which reversed the decision of the majority of the Full Federal Court.
134In allowing the appeal, Mason CJ, Deane, Toohey and Gaudron JJ said:
“Once the appellant lodged an application to the Tribunal to review the delegate's decision, he had a right to have the decision of the delegate reconsidered and determined by the Tribunal. It was not merely ‘a power to take advantage of an enactment’. Nor was it a mere matter of procedure it was a substantive right. Section 8 of the Acts Interpretation Act protects anything that may truly be described as a right, ‘although that right might fairly be called inchoate or contingent’. This was such a right. It was a right in existence at the time the 1971 Act was repealed. That being so, and in the absence of a contrary intention, the right was protected by s.8 of the Acts Interpretation Act and was not affected by the repeal of the 1971 Act.” (1992) 174 CLR 430, 440-1 [21]
Brennan J dissented.
135In like manner, Mr Liu’s entitlement to have her transaction regarded as valid despite any contravention of the 1975 Act, in accordance with s38 as it stood in 2013-14, was an accrued right and was therefore not affected by the repeal and re-enactment of the relevant consent provisions in 2015.
136Mr Buchanan contended therefore that by virtue of the former s38 of the 1975 Act and the presumption against accrued rights being affected or forfeited by repeal or amendment of a statute, despite the apparent contravention of the 1975 statute the contract remained enforceable. He relied on the decisions of Menzes v Salmon [2009] NSWSC 2 (McCredie AsJ) and Yutaka Ikeuchi v Liu [2001] QSC 054 to this effect, both of which concluded that property transactions entered into in violation of the 1975 Act, as it stood in 2013-14, were not to be treated as invalid or unenforceable for that reason alone.
137He also referred to and relied on the decision of the High Court in Nelson v Nelson (1995) 184 CLR 538 in particular, to the remarks of McHugh J, where the court was prepared to accept the existence of a beneficial interest in a property purchased with the assistance of finance under the Defence Services Owners Act 1918, despite it having been brought into existence in contravention of the terms of the statute.
138McHugh J said:
“The existence of criminal sanctions strengthens this analysis [viz that the beneficial interest or trust was not invalid] because the existence of a range of sanctions together with the omission of a provision that makes unenforceable any agreement made in breach of or to evade the Act is a powerful indication that no other sanctions are needed. Evidently, the federal Parliament saw the legislative sanctions and remedies as being sufficient to deal with unlawful conduct similar to that which has occurred in the present case. (1995) 184 CLR 538, [49]
139This case may be seen as the stronger one in favour of the plaintiff than Nelson v Nelson because of the express provisions of s38 of the 1975 Act, negating any contention that contravention of the statute invalidates an agreement or arrangement entered into as part of the contravention. The plaintiff’s claim is not defeated by contravention of the 1975 Act.
140At the conclusion of his submissions, Mr Buchanan said that were his client to receive a favourable outcome in the proceeding, she undertook within 14 days to take appropriate action under the 1975 Act to bring matters into conformity with that statute.
141In light of the fact that the relevant regime was repealed as long ago as 2015, consideration might need to be given to precisely what steps would be appropriate in late 2014. This can be a matter for further submissions. It would be wrong to order specific performance until the acquisition is brought into conformity with Commonwealth law.
Uncertainty
142Ms Liao’s Defence contends inter alia that the alleged sale was too uncertain to be enforceable. According to paragraph 16 of the Amended Defence (CB 21):
“The contract alleged in the Claim is vague, incomplete and incapable of being performed.”
143There is reference to the Sale of Land Act and the Foreign Acquisitions and Takeovers Act.
144As to the “vagueness”, the learned editor of Voumard The Sale of Land, 6th edition, states at paragraph [9050], update 76, page 9-3:
“It often happens … that parties make an informal agreement which contains no terms beyond those which are essential to constitute a binding contract. Such an agreement is called an “open contract” and all other terms defining the rights of the parties are implied by law.”
145The essentials are to be found here. The identity of the land and the identity of the vendor and the purchaser. In my view, the sale agreement entered into answers the description of an “open contract”.
146I have already dealt with the issues arising under the Foreign Acquisitions and Takeovers Act. Reference was made to s29A of the Sale of Land Act. That section provides as follows:
“What is a terms contract?
(1)For the purposes of this Act a contract is a terms contract if it is an executory contract for the sale and purchase of any land under which the purchaser is—
(a)obliged to make 2 or more payments (other than a deposit or final payment) to the vendor after the execution of the contract and before the purchaser is entitled to a conveyance or transfer of the land; or
(b)entitled to possession of the land or to the receipt of rents and profits before the purchaser becomes entitled to a conveyance or transfer of the land.
(1A)A payment made by a purchaser under a contract for the sale and purchase of any land following a default by the purchaser or agreed to by the purchaser and vendor in anticipation of a default by the purchaser does not count as a payment for the purpose of subsection (1)(a).
(2)In subsection (1)—
deposit means any part of the purchase price that the contract (including the contract as varied by written agreement between the parties after initial execution) specifies as being a deposit and provides must be paid, whether by one or more payments, within a specified period, not exceeding 60 days, after the execution of the contract;
final payment means a payment on the making of which the purchaser becomes entitled to a conveyance or transfer of the land.”
147The section has been modified over the years, in particular, sub-paragraph (1A) was amended in 2018. What has remained constant, at least during the time since I commenced practice in 1976, is that the definition requires that the purchaser be:
“obliged to make 2 or more payments (other than a deposit or final payment) to the vendor after the execution of the contract and before the purchaser is entitled to a conveyance or transfer of the land;”
148This sale was made orally. No contract was executed though the document at Court Book 360 (translation 361) would seem to be a note or memorandum thereof. The only payment provided for was a payment of the entire price. The fact that, for practical reasons, the purchaser chose to make this single payment via a miscellany of remittances is not to the point. This arrangement was not a terms contract and therefore the alleged breach of the Sale of Land Act has not been made out.
149More generally, the provisions in the Sale of Land Act and the consequences provided for in the event of contravention are obligations imposed on vendors not purchasers. The civil consequences accrue in favour of purchasers not vendors. The alleged contract is not invalid for uncertainty or for breach of the Sale of Land Act.
Disposition
150I will direct the parties to bring in short Minutes to give effect to these reasons.
Costs
151I have heard no argument on the question of costs and so I will reserve them.
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Certificate
I certify that these 38 pages are a true copy of the judgment of His Honour Judge Macnamara delivered on 6 November 2024.
Dated: 6 November 2024
Jodie Daniel
Associate to His Honour Judge Macnamara
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