MA v Xu

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

COMMERCIAL LIST

S ECI 2022 04876

MA, JIYUN	Plaintiff
v
XU, JIELUN	Defendant

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JUDGE:	Croft J
WHERE HELD:	Melbourne
DATES OF HEARING:	18–21 March 2025, 23 May 2025
DATE OF JUDGMENT:	20 June 2025
CASE MAY BE CITED AS:	Ma v Xu
MEDIUM NEUTRAL CITATION:	[2025] VSC 361

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EQUITY — Trusts — Funds advanced from mother in China to son in Australia — Funds dissipated and property purchased — Whether agreement to invest funds or funds advanced by way of gift — Whether presumption of resulting trust applies — Whether presumption of resulting trust is displaced by presumption of advancement — Agreement to invest funds — Funds held on resulting trust — Re BBY (Receivers and Managers appointed) (2022) 409 ALR 558 — Bosanac v Commissioner of Taxation (2022) 275 CLR 37 — Martin v Martin (1959) 110 CLR 297.

EVIDENCE — Evaluation of witness evidence — Most compelling evidence is contemporaneous documentation — Assessment of credit — Indicators of unsatisfactory witness evidence — LL Up Pty Ltd v Kegland Distribution Pty Ltd [2024] VSC 651 — Brookfield v Yevad [2004] FCA 1164 — Painter v Hutchinson [2007] EWHC 758 (Ch) — Webb v Getswift(No 5) [2019] FCA 1533 — Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm).

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Cawthorn KC and Mr P Caillard	Madgwicks Lawyers
For the Defendant	Ms K Weston‑Scheuber	Colin Biggers & Paisley

HIS HONOUR:

Background

The dispute between the parties relates to approximately AUD11 million that was sent by the Plaintiff (‘Jiyun’) to the Defendant (‘Allen’) during 2021 and 2022.

Jiyun claims that this money was provided to her son, Allen, as part of an ‘agreement’ that Allen would invest the money for her in Australia. Issues arise as to the nature of the consideration for any such agreement, ranging from Jiyun’s claim that this was in return for giving Allen AUD5 million that he could use to obtain an investment visa in Australia, to something more in the nature of mutual promises and dealings between the parties.

Allen, on the other hand, claims that the AUD11 million payment was, in fact, a payment by way of a gift to him and was his money to use as he pleased. Jiyun subsequently became angry when she learnt that Allen had spent some of that money on very expensive jewellery, expensive restaurant meals, a car and also on cosmetic surgery on his eyes. Jiyun’s anger was made clear in communications between her and Mr Peng, Allen’s paternal uncle, when she contacted him.[1] As a result of Jiyun’s revelations as to Allen’s spending, Allen made various ‘apologies’ to his mother and to Mr Peng. Allen claims that these were not admissions that he had used her money but, rather, that they represented a realisation that he had spent a good deal of money on frivolous items.[2] A different view is, however, taken on behalf of Jiyun and it is submitted that the critical communications, which are examined further in the reasons which follow, do represent clear admissions on Allen’s part that he had expended money which belonged to his mother.
[1]T146.23–8.
[2]T263.1–19.

Jiyun subsequently obtained a Power of Attorney over Allen’s Morgan Stanley account and transferred approximately AUD7 million of the AUD11 million into her own accounts via accounts associated with Allen’s father, Yi Xu, claimed by Allen to be in breach of the Power of Attorney. The parties are also in dispute in respect to a property that Jiyun purchased for Allen at 2202/81 Harbour Street, Haymarket (‘Haymarket Property’). Further Power of Attorney issues arise in relation to the Haymarket Property.

The parties agreed a list of issues in this proceeding. For reasons which will become clear, it is most convenient to address those issues with reference to events and legal consequences as set out in these reasons. An Appendix has been provided which provides answers to the 28 specific issues raised by the parties with reference to the relevant parts of these reasons. It is noted that one agreed issue (number 12) was whether the funds transferred to Allen were in contravention of Chinese law and, if so, whether that prevented Jiyun from recovering those funds. This issue has, however, now been abandoned.

Finally, in terms of general background, it should be observed that this proceeding is the outcome of a very unfortunate family dispute in which is seen very strong and fraught communications between the parties. Having regard to the facts and circumstances of this proceeding as they appeared at the conclusion of the four day trial on 21 March 2025, I referred the proceeding to judicial mediation before Gobbo AsJ. The mediation continued, but unsuccessfully, until 14 May 2025, and then 23 May 2025 was set aside to hear oral closing submissions.

Factual matters
Overall factual context

Many of the facts are not contentious, having been set out in the Agreed Statement of Facts which was filed on 14 February 2025 and the Agreed Chronology.

Jiyun lives in China and does not speak English. She married twice and Allen is her son from her first marriage. She also has a 12‑year‑old son from her second marriage.

Allen was born on 8 November 1996 and is 29 years old.

Allen is clearly an intelligent person, with a double degree in finance and accounting from the University of South Australia as well as a Masters Degree in Economics from the University of Sydney. Jiyun financially supported Allen’s tertiary fees and living expenses. She also financially assisted him to obtain a Business Innovation and Investment (Provisional) Visa (subclass 188C) which would allow him to reside in Australia. A personal loan was taken out with China Everbright Bank to fund the payment of AUD5 million for the purpose of obtaining this visa.[3] Jiyun does not seek to recover this money.
[3]CB988–1000.

Between 26 July 2021 and 26 May 2022, while Allen was living in Australia, Jiyun made nine payments totalling AUD11,133,322.35 into bank accounts nominated by Allen[4] (‘Jiyun Funds’). This is clearly a very substantial amount of money. Some funds were transferred from Singapore and Canada. The balance was paid by Jiyun to CJ Consignments in China which then made a corresponding payment into the bank accounts in Australia.[5]
[4]Agreed Statement of Facts, [6].
[5]T50.26–31; T51.1–23.

Jiyun says that Allen agreed to help her invest the Jiyun Funds in Australia and agreed to pay the money which would allow Allen to obtain his residence visa.[6] Moreover, it is contended that before each transfer of funds Allen and Jiyun would discuss the transfer to be deposited in an account with Morgan Stanley. Jiyun gave evidence that:[7]

[E]ach time before I make bank transfer to Allen, I would always communicate with him; I will tell him on which day what time I will transfer money and how much will be transferred and in what currency and, um, and also I – I will doublecheck which Allen’s account I will make bank transfer. Also, I ask him to check his bank account in around two or three days after bank transfer done by me to see if the money has arrived and how much; also, I require him to transfer this money to Morgan Stanley account in his dad’s name to do investment.
…
[E]ach time I check with him if the money has been transferred to his dad’s account in Morgan Stanley; he always told me it has been done, so that I believe until that finished.

The money was then paid into three different bank accounts with Westpac and the Commonwealth Bank. Jiyun said that if those representations or assurances had not been given by Allen, then she would not have transferred the Jiyun Funds to Allen in Australia.[8]

[6]T44.12–46.26; T47.16–48.22.

[7]T49.25–50.4; T50.7–10.

[8]T50 L11–12.

It is also contended on behalf of Jiyun that this is clear evidence that the money was to be ‘invested’ for her with Morgan Stanley in Australia. It is said that Allen was required to set up an investment account with Morgan Stanley in the name of Allen’s father, Yi Xu, Jiyun’s first husband, into which the money was to be paid.[9] Jiyun said Allen had assured her that he had done this.[10] Jiyun’s evidence that the money was to be invested with Morgan Stanley was said to be consistent with this position and,[11] further, that her evidence was consistent with what is described later as the ‘Second Letter’ dated 18 June 2022.[12] This document is said to record what was agreed and transpired, including the requirement that Allen open an account for Jiyun and his father, Yi Xu. It was also said to be consistent with Jiyun’s evidence in relation to what Allen told her after he was confronted with not opening an account into which the Jiyun Funds were to be transferred.[13] Allen’s evidence was also that he was instructed to put the Jiyun Funds into a US dollar account[14] and Allen says she told him to change the ‘nickname’ on the account to ‘Pengyou’.[15]
[9]T47.17–27; T48.10–5.
[10]T48.16–20.
[11]T66.28–30.
[12]CB1298; and see below, [46].
[13]T78.4–13.
[14]T237.3–6.
[15]T237.13–29.

Allen denied ever having spoken to his mother about her investing in Australia.[16] More particularly in this vein, it is submitted by the Defendant that Jiyun’s evidence is consistent with this position. Jiyun’s evidence is that Allen told her in a phone conversation in April 2021 that he had attempted to open an account in her name but was unable to do so due to issues with her identity documents, and that Allen suggested setting up an account in his father’s name.[17] However, it is contended that Jiyun produced no evidence of having provided any identity document to Allen and that this would have been done electronically rather than in person as Allen was located in Australia and Jiyun in China. Jiyun was asked to provide evidence of having given her identity documents to Allen by WeChat, but claimed to have deleted or no longer have access to the relevant messages, despite having produced other 2021 WeChat documents.[18]
[16]T281.13–7.
[17]T48.2–15.
[18]T164.2–165.11.

Allen gave evidence that he had no identification documents for his mother or father, other than a Turkish passport he previously had a copy of for his mother.[19] Thus, it is submitted that it is unclear how Allen could have set up a bank account, or have been expected to set up a bank account, for either of his mother or his father without identification. Nevertheless, Jiyun’s evidence was that Allen had agreed to help her open an account with Morgan Stanley into which the funds were to be deposited.[20] Jiyun said that Allen told her that there were identification issues and an account should be opened in his father’s name instead.[21]
[19]T250.17–30.
[20]T47.16–48.23.
[21]T48.2–6.

Jiyun denied that any of the money given to Allen was from Allen’s Chinese bank account, or that she had control over that account.[22] When asked whether she had used Allen’s bank account in 2021 for retail business transactions, she said that she could not recall clearly.[23]
[22]T113.30–114.3; T189.10–190.28.
[23]T114.12–6.

Jiyun gave evidence that the AUD11 million she transferred to Allen represented her ‘life savings’.[24] It is said that in cross‑examination, however, Jiyun declined to produce any documentation, such as tax returns or bank statements, that would prove her claim to the AUD11 million being her life savings.[25] Jiyun gave evidence that she operates nearly 40 retail shops in China.[26] She is a successful businesswoman. It is submitted on behalf of Allen that, without the provision of documentary evidence, the Court should give no weight to the claim that the payments to Allen comprised her life savings. Jiyun’s first response to the request for production of documents supporting her evidence in this respect was that these were private matters and that she had lodged tax returns in China. Nevertheless, as noted, she did say in re‑examination that ‘she would like to’ provide the documents if the Court required it. As it was observed on her behalf in the course of closing submissions, there was no call for production of these documents and the matter was taken no further. No evidence was led by or on behalf of Allen to contradict Jiyun’s evidence other than raising an inference that as a successful businesswoman, a claim with respect to the AUD11 million being her life savings was not plausible. This issue is considered further in the reasons which follow, particularly in the context of the credibility of the parties as witnesses.[27] For the reasons appearing in this context I observe, for the purposes of the present discussion, that I do not accept that Jiyun’s evidence with respect to her life savings carries no weight.
[24]T41.12–6.
[25]T115.29–116.5; T117.11–7. In re‑examination she said ‘she would like to’ provide the documents if the Court required it: T208.7–16.
[26]T40.31–41.2.
[27]See below, [96]–[101].

It may, however, be thought to be inconsistent or difficult to understand, particularly in light of Jiyun’s evidence that she was transferring her life savings to Allen, that she did not ask him for any bank statements or even bank account details for the Morgan Stanley account she believed he had created in Yi Xu’s name.[28] This is, however, a proposition put against her which overstates the position in light of the evidence with respect to the transfer of funds and, further, does not give weight to her evidence and the support she had already provided to Allen which indicates that she trusted him as her son to look after her interests. There is also the broader context that, as has been noted previously, Allen is an intelligent person and has gained some significant tertiary qualifications in respect of financial matters which provides a further reason why his mother would trust and rely upon him to look after her interests in financial matters.
[28]T170.11–25.

Transfer of Jiyun Funds

As set out in detail in the Defendant’s closing submissions, Jiyun transferred a number of amounts between July 2021 and May 2022. But as there was some delay between the time of transfer and the time of its receipt, the amount received by Allen in Australia is not exactly the same as the amount of money transferred by Jiyun.[29] The amounts transferred total AUD11,133,322.35 but the amounts received in Allen’s Australian accounts total AUD11,114,958.42. There is no dispute that Allen received these amounts as set out in the Defendant’s submissions.
[29]See Defendant’s Closing Submissions, [56]; and see the amounts set out in tabular form by date and the amounts pleaded in [57]–[58].

As indicated previously, Allen’s evidence is that Jiyun did not speak to him about investing in Australia and does not accept that any communications with his mother were concerned with her investing in Australia. Rather, Allen says that his mother would tell him how much she would transfer and what currency it would be in and he would confirm that the amount had been received.[30] During these conversations, Allen says that Jiyun reiterated that he was not to tell her second husband about the transactions.[31]
[30]T232.16–20; T235.27–236.25.
[31]T236.7–20.

The Plaintiff, in closing submissions, made reference to Allen’s evidence that before each transfer of funds he spoke to Jiyun and she would tell him how much he was about to receive.[32] According to Allen, during these conversations, Jiyun said:[33]

During this – she mentioned about – you don’t tell anyone, and in my recollection, it’s especially that one, she said that one, but I realize that’s her ex‑husband; so I-I-I know that – they, like, had some problems. So, she said ‘Especially don’t - don’t tell that one’; ‘that one’ means ‘that person’, That person is her ex-husband.

[32]T235.30–236.20; and see T237.3–6 (where Jiyun told Allen to open a new account).

[33]T236.8–14.

It follows that, on a purely factual matter, the parties are in agreement, but perhaps only in a broad sense, in terms of inferences. In terms of the latter, the Plaintiff observes that, by this time, Jiyun was separated from her second husband, thus raising what is said to be a ‘clear inference’ that on the basis of this evidence, Allen believed that Jiyun was trying to save or preserve her assets by shifting money to Australia and hiding it from her second husband. It is submitted that it was Allen’s understanding that the Jiyun Funds were transferred to avoid Jiyun’s second husband from having access to that money. Before the money was sent, she said not to tell ‘that one’ (which Allen understood to be a reference to Jiyun’s second husband).[34] The Canadian money, which I will come to shortly, was also to be kept secret from her second husband.[35] On this basis, the Plaintiff submits that this is consistent with the Jiyun Funds remaining Jiyun’s and not the subject of a gift to Allen.
[34]T236.9–10.
[35]T401.17.

As submitted by the Plaintiff, Allen gave evidence that Jiyun had instructed him to change the nickname of the bank account into which the funds were paid to ‘Pengyou’, meaning ‘friend’ in Chinese.[36] In cross‑examination, Allen acknowledged that at the time he believed:
[36]T237.13–239.11.

(a) he was requested to ‘hide the money’ from Jiyun’s second husband;[37] and
[37]T284.22–8.

(b) Jiyun sought to ‘save’ (or protect) her assets. This was specifically put to Allen in the following exchange:[38]
[38]T284.20–285.2.

You said she wanted the nickname of the account changed to Pengyou? ---Yes
You believe that was to hide the money from her ex‑husband?---At the time, I-I-I did according to her instructions. I know the marriage, she had problem with her marriage. I know she wants to save her assets.
…
You knew she wanted to save her assets?---At the time.

You just said before, you said, you knew she wanted to save her assets? ---Yes, I …
Save her assets from her ex‑husband?---I knew. In think I, I can tell I knew about. Yes, the answer is yes, yes.

The Plaintiff submits that Allen’s evidence in this context was unequivocal because, at the time, he knew that Jiyun wanted to save or protect her assets. Rightly or wrongly, it is contended that Allen believed that the Jiyun Funds were being transferred to save that money from Jiyun’s second husband, otherwise, there would have been no need for Allen to open an account for Jiyun in Yi Xu’s name. At this point, it should be noted that there was no evidence that transferring funds by Jiyun to hide assets from her second husband was unlawful or improper. It is not pleaded and nor is any suggestion made that Jiyun was moving her assets to hide them from her second husband, and this was never put to Jiyun. As observed, she was never given an opportunity to respond to such an allegation. Nevertheless, it is said that Allen’s evidence demonstrates a belief that Jiyun had sought to shift or conceal her wealth, rather than part with it.

The Jiyun Funds were transferred in US dollars. In this respect, Allen gave the following evidence:[39]

Did you open a new account for the purposes of the receiving USD?---Uh, yes; yes.
How did you – why did you open a new account?---My mother told me to open a new USD account; I did so.

Having regard to this evidence, the Plaintiff submits that Jiyun instructing Allen to deposit her funds into a US dollar account is inconsistent with the money having been transferred to Allen as a gift to spend as he pleased. Thus, it is contended that she retained control over that money, a position said to be inconsistent with the funds having been a ‘gift’.

[39]T237.3–6.

The Plaintiff also submits that Allen’s conduct after being confronted by Jiyun following the discovery that he had been using the money for his own purposes and benefit by purchasing property and personal expenses, is inconsistent with the funds having been a ‘gift’. Allen was, as the Plaintiff observes, initially contrite as indicated by the following examples:

(a) he directly and profusely apologised to Jiyun for taking the money;

(b) prepared or caused to be prepared correspondence—at that time—in which he specifically acknowledged that the funds had not been transferred to him as a gift;

(c) on 28 June 2022—just nine days after the ‘three letters’ were shown to Jiyun on 19 June 2022—Allen:

(i) signed a General Power of Attorney which stated, amongst other things, that Jiyun has the ability to operate his bank accounts;[40]
[40]CB1489–90.

(ii) made Jiyun a signatory to his bank accounts[41] enabling her to operate his bank accounts; and

(iii) signed a Power of Attorney enabling her to deal with the Haymarket Property.[42]

[41]CB1499–1500.

[42]CB1642–5.

Canadian funds

Some of the funds were transferred from Canada. Jiyun gave evidence that she requested her friend, Ms Yuefang Lu, to transfer some money owed to Jiyun to Allen on Jiyun’s behalf. As the Plaintiff submits, it appears that the fact that it was Jiyun’s money to transfer as she pleased is not disputed. In support of this and by way of example, reference is made to Ms Lu’s evidence that, when Jiyun was unwell, Jiyun gave Ms Lu instructions to transfer the money to Allen ‘if something happen [sic] to me’.[43] This comment was conditional on something happening to Jiyun in circumstances where Jiyun was very sick and ‘not sure about her health at all’.[44]
[43]T401.15–7.
[44]T401.12–4.

Jiyun gave evidence that Ms Lu drafted a letter for Jiyun to write and that Ms Lu had made it clear that if Jiyun did not send this letter, Ms Lu ‘won’t send money back to me [sic]’.[45] Ms Lu also gave evidence that she would not have transferred the funds until the letter was signed.[46] Jiyun further gave evidence that Ms Lu’s initial draft stated that the funds were to be a ‘gift’ to Allen. Jiyun did, however, give evidence that she did not agree with using the ‘gift’ word and ‘that’s why I just revised it to living expenses and tuition fee [sic]’.[47] It follows that as a result, the letters as sent do not state that the Canadian funds were a gift to Allen. The Plaintiff contends that Jiyun’s evidence is consistent with the contemporaneous WeChat messages between Jiyun and Ms Lu.[48] There is also evidence that Ms Lu had shown the letter to her lawyers.[49] Moreover, it is submitted that despite what was written in the letter, Allen did not have any business in China or tuition expenses at the time the letter was sent.[50] This is, it is observed, consistent with Allen’s own evidence.
[45]T72.20–4.
[46]T411.13–6.
[47]T72.27–30.
[48]CB2701.
[49]CB306.
[50]T71.5–11.

The Defendant, in closing submissions, casts a somewhat different light on the evidence of Ms Lu. More particularly, it is said that the correspondence in relation to the Canadian transfers directly contradicts Jiyun’s version of events. On 30 January 2022,[51] and again on 22 April 2022,[52] Jiyun sent letters saying that she had lent money to Ms Lu and that she would send the balance of the amount owing to her (Jiyun) to Allen as support for his business, living expenses and tuition fees. It is observed that there was no reference in these emails to the money being used to invest in Australia for Jiyun.[53] Allen and Ms Lu corresponded about the transactions in WeChat between January and April 2022.[54]
[51]Email chain between Julie Lu, Allen and Jiyun, 31 January 2022, CB1039–40; WeChat between Allen and Ms Lu, CB2093–4, 30 January 2022 message.
[52]Email chain between Julie Lu and ‘Obama’ (Allen), 19–22 April 2022, CB1064–7.
[53]CB304–5; CB306–9.
[54]WeChat between Allen and Ms Lu, CB2093–2135.

Ms Lu gave evidence that Jiyun visited her in Canada in 2016 and told her she wanted to do something to make up for the years she had not looked after Allen as a child.[55] Jiyun transferred CAD2 million to Ms Lu and, when she was ill, she told Ms Lu that if something happened to her, to help give the money to Allen and keep it a secret from her second husband.[56] Ms Lu told Allen about the money when he came to visit her in Canada.[57] The Defendant concedes that Jiyun denied this in evidence, and said that the money was a loan.[58] It is, however, contended by the Defendant that Ms Lu’s communications with Allen are consistent with her belief that the money was a gift for Allen.[59]
[55]T400.11–23.
[56]T401.12–402.4.
[57]T402.17–22.
[58]T111.24–30.
[59]WeChat between Allen and Ms Lu, CB2093–2135, for example 25 February 2022 message (CB2101) and 19 April 2022 (CB2123).

Prior to the two Canadian funds transfers to Allen, Jiyun told Ms Lu that she needed the money previously ‘lent’ to her returned for cashflow purposes. Jiyun’s evidence was that she could not say it was for investment purposes or Ms Lu would not pay her back.[60]
[60]T191.21–T192.14.

Ms Lu required Jiyun to provide certain documentation for her lawyer so that the money could be handled for tax purposes.[61] Ms Lu sent Jiyun a template document that she asked Jiyun to fill in so that she could show it to the bank.[62] Jiyun gave evidence that she changed the reference to ‘gift’ in the template to ‘for your business with China and partial living expenses’.[63] For the second transaction, Ms Lu consulted her lawyer and wrote a draft for Jiyun to sign.[64] Allen communicated with Ms Lu about these transactions and Ms Lu kept Allen updated on the transfers of money she was making to his accounts after speaking to his mother.[65]
[61]T405.1–9.
[62]T90.14–8; Jiyun/Julie Lu WeChat, (CB1065–7).
[63]T96.3–6.
[64]T405.25–31; CB2701.
[65]WeChat Julie Lu and Allen, CB2093–2135.

In my view, the evidence to which reference has been made is consistent with the position that, in reality, no gift was intended by Jiyun to Allen of the Canadian funds. I regard this as a position consistent with the evidence given by Ms Lu and the contemporaneous documents, having regard to Ms Lu’s evidence that she had to deal with the money for tax reasons and she needed documents to provide to her lawyer. Ms Lu gave evidence that Jiyun did not know what she should write and that Ms Lu consulted with her lawyer regarding what message Jiyun should provide and provided it to Jiyun.[66] The matters raised and the evidence to which reference is made by the Defendant in submissions on this issue does not, in my view, put a different light on Jiyun’s position with respect to these funds. And, more particularly, in the context of Ms Lu’s possible intransigence, taxation considerations as raised in the evidence and the ongoing perceived need for secrecy of the transactions from Jiyun’s second husband, the evidence does not establish any intention on the part of Jiyun that these funds be a gift to Allen.
[66]T405.25–31.

Payment of money — Proper characterisation of transaction
An agreement?

The Defendant contends that whether or not there was an agreement between Jiyun and Allen (in terms set out in Agreed Issue 1 or as amended as set out in Agreed Issue 3) is the key dispute between the parties and that resolution of this issue will determine the remaining issues in dispute in the proceeding. Whilst this may be so, I am of the view, for the reasons which follow, that the better analysis is, having regard to the state of the evidence and the absence of clear documentation, in equity rather than contract. Moreover, the evidence with respect to the dealings between the parties indicates that if an agreement is not established on the terms indicated in the Agreed Issues, this does not establish that Jiyun’s intention in paying the Jiyun Funds to Allen was a payment by way of gift.

In any event, the Defendant contends that Jiyun’s position in relation to the ‘agreement’ she says was in place between Allen and herself has changed dramatically since the commencement of the proceeding. However, as pleaded, it is said that the alleged agreement ties Jiyun’s agreement to provide AUD5 million for the purpose of obtaining an investment visa to Allen’s alleged agreement to open a bank account in Jiyun’s name and to assist Jiyun to remit funds from China to Australia.

More particularly, the Defendant contends that Jiyun’s position at trial conflates what were in fact two separate arrangements. The first was an arrangement made by both Jiyun and Allen’s father, Yi Xu, that they would both provide the funds for Allen to obtain an investment visa in Australia. This occurred after Allen suggested the arrangement on a visit to China in 2019. He had a conversation at dinner with his parents, and they agreed to give him the AUD5 million for the investment visa so that he could live in Australia after graduation.[67] To this end, both parents signed declarations that they were providing funds to Allen as a ‘gift’ for this purpose in December 2019.[68] Jiyun’s declaration stated that she was ‘unconditionally donating’ money to Allen and that the money was ‘gifted … free of any consideration’. Jiyun’s effort to explain away these references in the declaration, the Defendant submits, were not credible.[69] The loan for the investment funds required for the visa was in the name of both Yi Xu and Jiyun, and the property mortgaged was the property of both of them.[70] Both Jiyun and Yi Xu told Allen that the money was a gift.[71] Indeed, this would appear to be uncontroversial as repayment of the AUD5 million paid to Allen for the purpose of his investment visa is not sought to be recovered.
[67]T222.9–223.18.
[68]Yi Xu Gift declaration, 6 December 2019, CB982–983 (CB983); Jiyun Ma gift declaration, 9 December 2019, CB984.
[69]T126.18–127–T128.2.
[70]Personal Loan Contract of China, Everbright Bank, CB988–1020 (CB999–1000).
[71]T222.9–24.

Allen made an application for the visa and, after 12 months, the Australian Immigration Department sent a letter stating that the funds could be prepared.[72] Consequently, the visa money was paid into Allen’s Westpac account between 26 February and 17 March 2021.[73] This was arranged through Ding Wang from CJ Consignments, a company that arranges foreign currency exchange transfers. Allen communicated with Ding Wang from around 23 February 2021 and sent forms for the purpose of the visa investment funds transfer on 23 and 26 February 2021.[74] The money was then transferred into Allen’s BT Panorama account between around 12 and 15 March 2021.[75]
[72]T225.13–23; T227.18–24.
[73]CB1773; T227.6–8.
[74]WeChat Ding Wang and Allen, 23–26 February 2021, CB2058–68; Changjiang Currency Forms filled in by Allen, CB1025–6.
[75]BT Panorama statement 1 March 2021 to 30 June 2021, CB2019 (see two cash deposits totalling around $5m).

It is contended by the Defendant that the ‘second arrangement’ on Jiyun’s version was not in fact an agreement at all, but an indication from Jiyun that she intended to give Allen some money for his own use. On Allen’s evidence, Jiyun told him about this first in 2021 and told him that Ding Wang would contact him,[76] and also that Jiyun did not tell him that the money was for the purpose of investing, or that there was any limitation on its use.[77] Allen added that she told him to ‘remain silent’ about the money, to be ‘lowkey’ or ‘low profile’ and that it was his money.[78] It would, of course, have to be said that this evidence is self‑serving and unsupported by objective evidence or documentation.
[76]T231.13–232.2.
[77]T232.13–5.
[78]T232.3–12.

Allen’s evidence was also that Jiyun put these arrangements into effect by transferring funds to him over a period of time between July 2021 and May 2022, which he then used as he saw fit. He says that this was in accordance with what he believed to be a gift from his mother.[79] The first of these payments was also made via Ding Wang.[80] Moreover, it is said that the first payment was made using funds transferred by Jiyun from Allen’s Chinese bank account into his father’s Chinese bank account, and then on to Allen in Australia.[81] As indicated previously, Jiyun denies she had access to or used money from Allen’s Chinese bank account.[82]
[79]T256.14–7.
[80]See WeChat Ding Wang and Allen, 2 August 2021 (CB2085) (remittance for $1.126m AUD).
[81]T241.28–247.12; CB1777–82 (Yi Xu bank account statements).
[82]See [16] and footnote, [22].

The Defendant in submissions also made reference to Jiyun’s original affidavit in the freezing order application in this proceeding, which set out the discussion on the investment visa as separate and distinct from the ‘agreement’ about the AUD11 million.[83] Jiyun was cross‑examined regarding the suggested difference between her November 2022 affidavit, where she said that the visa investment discussion and the discussion about Allen helping her to invest were separate discussions, and her evidence in the trial that the two discussions were linked.[84] It is contended that her answers were non‑responsive.[85] In my view, having regard to the nature of the discussions between the parties, there is no significant issue arising out of the affidavit and other evidence given in the freezing order application and at trial. This all really goes to the question of whether there was any consideration for the agreement. The Plaintiff submits that there was a continuum of discussions involving the visa money and the investments. In a number of places, Jiyun said that one was in return for the other.[86] More particularly, Jiyun said ‘in return, I also required him, he must help me set up account and do asset investment in Australia [sic]’.[87] Continuing, Jiyun said ‘in return, Allen must set up, help me set up account and do I said investment in Australia [sic]’.[88]
[83]Jiyun affidavit (First), CB65–283; CB66, [7]–[11].
[84]T47.14–20.
[85]T179.18–29.
[86]See T44.
[87]T45.15–6.
[88]T47.24–6.

As indicated in the preceding reasons, I am of the view that, having regard to the context of the dealings between the parties, consideration is established on the basis of benefits and disbenefits to them flowing from these dealings, which was adequate consideration for a contract in the context of the nature and substance of the arrangements which were made. I do, however, think it somewhat artificial to seek to define the contractual provisions in terms of Agreed Issues 1 and 3 or to analyse what was, in reality, an ongoing process of dealing as an agreement between the parties in terms of amendments to a preceding agreement. In my view, a more than sufficient finding supporting the Plaintiff’s position is that the parties agreed that Jiyun would pay the relevant funds to Allen in Australia which were to be invested in a manner which would safeguard Jiyun’s interests and that he would act in accordance with her instructions with respect to investments and related matters from time to time. Moreover, the evidence in this context makes it very clear that it was not part of any such agreement between the parties that the beneficial interest in the Jiyun Funds, or any part thereof, or assets into which these funds were directed, was to pass to Allen at any stage. As indicated in these reasons, Allen has breached this agreement in many respects.

A purported gift?

The Plaintiff highlights that evidence is given of many WeChat messages and attachments after it was discovered that Allen had spent the Jiyun Funds, including to purchase a property at 6092 Bennelong Parkway, Wentworth, Sydney (the ‘Bennelong Property’) and numerous personal expenses. It is noted that in the Defence, for the first time, is the suggestion from Allen that the funds were a gift. Before the Defence was filed, no WeChat message, attachment, email or document filed in response to the freezing order application suggested that the money had been given to Allen and was his to spend. It is emphasised further that not once prior to the commencement of this proceeding did Allen suggest that the money had been a ‘gift’ for him to spend as he chose. To the contrary, it is said, the evidence establishes that he was contrite, remorseful and offered to repay Jiyun’s money. For the reasons which follow, it is clear, in my view, that neither the Jiyun Funds, nor any part of those funds, were a gift by Jiyun to Allen, and this was a position which he well understood at all relevant times. Moreover, I do not accept that he was, at any time, under any misapprehension in this respect.

The evidence indicates that Mr Peng, the uncle of Allen, became involved as an intermediary between Allen and Jiyun, in June 2022. It appears from the evidence that Mr Peng’s role as an intermediary was to seek to reconcile Allen and Jiyun following the revelations prior to that time as to what, as is common ground, was extravagant spending of a significant part of the AUD11 million which had been paid to him by his mother. Mr Peng’s involvement is very much in relation to the, so called, ‘three letters’ onto which attention is now turned.

The ‘three letter’ process begins with a handwritten letter from Allen[89] (‘First Letter’) in which he writes:

Dear Mom,
I wouldn’t be where I am today without you, I am fully aware of that. I know you are very sad but I still beg for your forgiveness. I know that you may [hate me so much] that you may even want to kill me, but I still dare to ask you not to get so angry for the sake of your health. In fact, no matter what, I know that the damage has been done, and I can’t make it up. I would still say that the source of my mistakes was my hubris. Since you gave me the opportunity to study abroad, normally I would not have time to take a close look at myself. But since I started working, I started to review myself from the inside out. It follows that once the wealth that was in return for your hard work arrived in Australia, I became arrogant, even though I knew it was your wealth. Next, I would like to explain to you where the wealth went, I know you may become furious. But this has also become my precious life’s wealth. By life’s wealth I mean that I have gained valuable experience that ordinary people could not obtain because of the platform of wealth you have built. Speaking of which, these words are all from the bottom of my heart. I am sad and relieved at the same time, because you eventually knew. I have no intention to stop you from the bottom of the truth. I just don’t know how to speak to you, maybe I am guilty. By the way, I look forward to speaking with you, and even more so, to seeing you. Maybe I can even fly back to [China], or beg you to fly to Australia. My eyes are still uncomfortable right now, but I still want to finish writing this letter. I hope you will pardon me for the scribbles due to my poor vision.
There is currently AUD$1.6 million yet to be invested. This is my mental journey — I came from the initial normal mindset to the sudden fantasy of having a large amount of wealth, and then back to the normal mindset. Let me put it this way, I also experienced the feeling of being rich. Now I understand well that super wealthy people are very low-key, but I always have to go through such a process. I truly realised that having money makes it easy to become complacent, arrogant, and ignorant. I used to understand these great truths, but now I can truly relate to them. I satisfied myself with your wealth and met many famous people and opened my horizon. You’re right, I’m just vain. There were so many great truths I could not grasp.

The First Letter is written in Chinese characters which Allen admits he wrote himself.

[89]At CB 1296–7 (emphasis added).

Allen sent a second version of the letter as a WeChat attachment to Mr Peng late on 18 June 2022[90] (‘Second Letter’). The covering WeChat message states:

Dear Mr Peng, I haven’t finished the letter yet, please check first, how do you think? Is there anything wrong?

[90]CB1093–4.

Allen sent the Second Letter to Mr Peng via WeChat on 18 June 2022. He acknowledged that this letter was specifically prepared for the purpose of showing his mother.[91] The Second Letter[92] states, noting the additions to the First Letter made in this letter are identified in italics:

Dear Mom,
I wouldn’t be where I am today without you, I am fully aware of that. I’m really sorry. I’m really sorry. I’m really sorry. All this time, but for such a great mother like you, I would never be able to overcome difficulties and obstacles. I’m really sorry! I know you are very sad but I still beg for your forgiveness. I know that you may [hate me so much] that you may even want to kill me, but I still dare to ask you not to get so angry for the sake of your health. In fact, no matter what, I know that the damage has been done, and I can’t make it up. I would still say that the source of my mistakes was my hubris. Since you gave me the opportunity to study abroad, normally I would not have time to take a close look at myself due to my heavy academic workload. But since I started working, I started to review myself from the inside out. It follows that once the wealth that was in return for your hard work arrived in Australia, I became arrogant, even though I knew it was your wealth. Next, I would like to explain to you where the wealth went, I know you may become furious. But this has also become my precious life’s wealth. By life’s wealth I mean that I have gained valuable experience that ordinary people could not obtain because of the platform of wealth you have built. Speaking of which, these words are all from the bottom of my heart. I am sad and relieved at the same time, because you eventually knew. I have no intention to stop you from the bottom of the truth. I just don’t know how to speak to you, maybe I am guilty. I am in so much shame.
By the way, I look forward to speaking with you, and even more so, to seeing you. Maybe I can even fly back to [China], or beg you to fly to Australia. My eyes are still uncomfortable right now, but I still want to finish writing this letter. I hope you will pardon me for the scribbles due to my poor vision. There is currently AUD$1.6 million yet to be invested. This is my mental journey — I came from the initial normal mindset to the sudden fantasy of having a large amount of wealth, and then back to the normal mindset. Let me put it this way, I also experienced the feeling of being rich. Now I understand well that super wealthy people are very low-key, but I always have to go through such a process. I truly realised that having money makes it easy to become complacent, arrogant, and ignorant. I used to understand these great truths, but now I can truly relate to them. I satisfied myself with your wealth and met many famous people and opened my horizon. You’re right, I’m just vain. There were so many great truths I could not grasp.
The process of opening an account in your name or my father’s name is troublesome. The opening of an account kept delaying. As I was afraid that you would blame me for my incompetence, I didn’t tell you the fact that the account was opened under my name. My plan is to not to tell you for some time. Most of the investment products were directly invested in Australian dollars. Since it is very convenient to exchange Australian dollars for US dollars in Australia, so I did not follow your opinion of investing solely in US dollars. I can honestly say that there is a total difference of $2.6 million in investment funds, of which $1.6 million is yet to be invested and $1 million is used for [my] daily life expenses. Of course, my daily life is my expenses on food, drink and shopping in Sydney. Speaking of this, you must be so upset. Yes, I failed you. Please curse me with the most vicious language in the world! However, my mood is calm, because my desires have been satisfied.
Yes, I am a greedy person, a dishonest person, an immoral person, and a very bad person. The bottom line is that I used your money. After Mr. Peng educated me, I felt like that I was an embezzler. I was extremely regretful. For someone like me who came to such a fancy world of Sydney from Adelaide, a small city, the temptation here was too great, with all kinds of luxury and designer goods and high‑end places where I could spend money. I know that these things don’t belong to me, the money doesn’t belong to me, and I don’t have the ability to earn that much money. But under the circumstances at the time, I really couldn’t control the devil living in my heart.

[91]T341.19–25.

[92]CB1298–9 (emphasis added).

The additional material contained in the Second Letter, and other revisions, was a response to the WeChat message from Mr Peng dated 18 June 2022 at 22:14[93] which stated:

It is not enough only to apologize to Ms Ma, you should describe the followings clearly:
1. You did not open an account under Xu Yi’s name due to trouble, then tell her why you did not tell her about this matter, and the reason why you told her you opened an account under Xu Yi’s name?
2. Why did you change the US dollar to Australian dollar? How much was the exchange rate at that time, why did not tell her in advance, and kept deceiving her afterwards?
3. Just as you calculated temporarily that you spent totally 1 million yuan, please list a sheet to show the place, merchandise, purchasing details and price of each item. If all 1 million yuan was spent entirely on necessities based on what you said, it is unrealistic, and Ms Ma will never believe either.
4. Where is the other 1.6 million yuan?
5. Your plan to solve this matter to make Ms Ma satisfied.

[93]CB1094–5.

The Second Letter was then further revised—after Allen received input from Mr Peng to include the following[94] (‘Third Letter’), noting the additions to the Second Letter made in this letter are identified in italics:

I wouldn’t be where I am today without you, I am fully aware of that. I’m really sorry. I’m really sorry. I’m really sorry. All this time, but for such a great mother like you, I would never be able to overcome difficulties and obstacles. I’m really sorry! I know you are very sad but I still beg for your forgiveness. I know that you may [hate me so much] that you may even want to kill me, but I still dare to ask you not to get so angry for the sake of your health. In fact, no matter what, I know that the damage has been done, and I can’t make it up. I would still say that the source of my mistakes was my complacency and arrogance. Since you gave me the opportunity to study abroad, normally I would not have time to take a close look at myself due to my heavy academic workload. But since I started working, I started to review myself from the inside out. It follows that once the wealth that was in return for your hard work arrived in Australia, I became arrogant, even though I knew it was your wealth. Next, I would like to explain to you where the wealth went, I know you may become furious. But this has also become my precious life’s wealth. By life’s wealth I mean that I have gained valuable experience that ordinary people could not obtain because of the platform of wealth you have built. Speaking of which, these words are all from the bottom of my heart. I am sad and relieved at the same time, because you eventually knew. I have no intention to stop you from the bottom of the truth. I just don’t know how to speak to you, maybe I am guilty. I am in so much shame.
By the way, I look forward to speaking with you, and even more so, to seeing you. Maybe I can even fly back to [China], or beg you to fly to Australia. I wanted to handwrite the letter to you, but my eyes are still uncomfortable right now. To avoid scribbles due to my poor vision, I decided to type the letter using a computer. There is currently AUD$1.6 million yet to be invested. This is my mental journey — I came from the initial normal mindset to the sudden fantasy of having a large amount of wealth, and then back to the normal mindset. Let me put it this way, I also experienced the feeling of being rich. Now I understand well that super wealthy people are very low-key, but I always have to go through such a process. I truly realised that having money makes it easy to become complacent, arrogant, and ignorant. I used to understand these great truths, but now I can truly relate to them. I satisfied myself with your wealth and met many famous people and opened my horizon. You’re right, I’m just vain. There were so many great truths I could not grasp.
The process of opening an account in your name or my father’s name is troublesome. The opening of an account kept delaying. As I was afraid that you would blame me for my incompetence, I didn’t tell you the fact that the account was opened under my name. My plan is to not to tell you for some time. Most of the investment products were directly invested in Australian dollars. Since it is very convenient to exchange Australian dollars for US dollars in Australia, so I did not follow your opinion of investing solely in US dollars. I can honestly say that there is a total difference of $2.6 million in investment funds, of which $1.6 million is yet to be invested and $1 million is used for [my] daily life expenses. Of course, my daily life is my expenses on food, drink and shopping in Sydney. Speaking of this, you must be so upset. That’s right, I failed you. Please curse me with the most vicious language in the world! However, my mood is calm, because my desires have been satisfied.
Yes, I am a greedy person, a dishonest person, an immoral person, and a very bad person. The bottom line is that I used your money. After Mr. Peng educated me, I felt like that I was an embezzler. I was extremely regretful. For someone like me who came to such a fancy world of Sydney from Adelaide, a small city, the temptation here was too great, with all kinds of luxury and designer goods and high-end places where I could spend money. I know that these things don’t belong to me, the money doesn’t belong to me, and I don’t have the ability to earn that much money. But under the circumstances at the time, I really couldn’t control the devil living in my heart. I have attached a list of my large expenses, please have a look. I admit that I was addicted to the world of high-grade jewelry. I was so fascinated that I couldn’t extricate myself. These high‑grade jewels are my size, so you can also wear them, especially Bulgari’s Serpenti ring is retractable. I can return them all to you. All the jewels I bought are of limited edition around the world, which are very precious. If you ask me what I have bought specifically, I can take photos for you or make a video call with you. For example, the Bulgari ring I wear uses Paraiba Tourmaline, a kind of rarest tourmaline in the world. This is the world’s most precious tourmaline. In a word, I was obsessed with haute couture jewelry like an addict, and I can return all these ‘stolen goods’ to you.

[94]CB1300–1.

This correspondence was shown to Jiyun by Mr Peng at a meeting around midday on 19 June 2022, just a few hours after Allen had emailed it to Mr Peng.[95] The evidence also showed that Allen sent the Second Letter to Mr Peng to show to Jiyun.[96]
[95]T81.14–82.2.
[96]T152.14–23; T156.21–3.

Evidence was given by Allen that Mr Peng’s daughter typed some—unknown—parts of the Second Letter, with no involvement from Allen at all. Allen explains this by saying that:[97]
[97]T347.17–20.

I think [Mr Peng and his daughter], what I really thought was they’d set a trap to, they set a trap to, to let me answer questions via WeChat and provided this to Court.

The Plaintiff submits that this is not credible and, at this time, it was 18 or 19 June 2022 with no contemplation of litigation. Moreover, it is said that it is incredulous that Mr Peng’s daughter could have written, without input from Allen, details relating to what Allen had agreed with his mother, such as:
The process of opening an account in your name or my father’s name is troublesome. The opening of an account kept delaying. As I was afraid that you would blame me for my incompetence I didn’t tell you the fact that the account was opened under may name.

For these reasons, it is contended that Allen’s evidence that he had no involvement in the letter at all should be rejected.[98]

[98]T347.13.

The Plaintiff concedes that Mr Peng or his daughter may have chosen some ‘harsh words or just exaggerate[d] a little bit to push [Allen] to make a genuine apology to Ms Ma’.[99] However, it is said that details such as the agreement to open an account in his parents’ name to receive the Jiyun Funds are neither ‘harsh words’ nor ‘exaggeration’. It is said that details of what Allen had agreed with his mother in relation to opening an account in their names to receive the Jiyun Funds were only known to Allen and his parents. Additionally, it is said that nor could Mr Peng’s daughter have known that Jiyun wanted the Jiyun Funds deposited into a US dollar bank account, as described in the Second Letter, unless Allen had told her.
[99]T149.13–5.

This Second Letter was written and sent via WeChat by Allen before any proceedings had been issued and the detail could not have been known to Mr Peng’s daughter without instruction from Allen. It does, however, the Plaintiff contends, accurately reflect Jiyun’s pleaded case.

Allen sent the Second Letter to Mr Peng on 18 June 2022—the day before it was shown to Jiyun—with the covering WeChat message:

Dear Mr Peng, I haven’t finished the letter yet, please check it first, how do you think? Is there anything wrong?[100]

It has been suggested that Mr Peng’s daughter drafted the words in the Second Letter and that somehow excuses Allen from admissions he might have otherwise made.

[100]CB1094.

The Plaintiff contends that this point is wrong, and whether someone else typed or drafted some parts of that letter is irrelevant. Importantly, it is submitted that, in fact, Allen sent it and so adopted its contents, asking ‘I haven’t finished’ suggesting he drafted it and then asked whether anything was wrong with it.[101]
[101]Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165, [47]; Equuscorp Pty Ltd v Glengallen Investments Pty Ltd (2004) 218 CLR 471, [33]: ‘The respondents each having executed a loan agreement, each is bound by it’.

The Plaintiff submits that the Second Letter, which was sent by Allen to Mr Peng,[102] is significant in containing a number of admissions against his interest that:
[102]T298.5.

(a) the money advanced was Jiyun’s (your wealth);

(b) there was still AUD1.6 million yet ‘to be invested’;

(c) there was a difference of AUD2.6 million in ‘investment funds’; and

(d) the money ‘doesn’t belong to [Allen]’.

As submitted by the Plaintiff, an admission is a previous representation made by a party to a proceeding which is adverse to the person’s interest in the outcome of the proceeding.[103] Further, acts subsequent to the date of an alleged declaration of trust, which tend to show the existence of the trust, will be admitted as admissions against interest.[104]
[103]Evidence Act 2008 ss 87, 88, and the definition of ‘admission’ in the Dictionary (sch 2 pt 1).
[104]Herdegan v Federal Commissioner of Taxation (1988) 84 ALR 271, 276–7; Shepherd v Cartwright [1955] AC 431, 445; Calverly v Green (1984) 155 CLR 242, 262.

The Third Letter is, as observed by the Plaintiff, substantially identical to the Second Letter but includes more detail about some of the jewellery items purchased by Allen, saying:

These high-grade jewels are my size, so you [i.e. Jiyun] can also wear them.

It is submitted that any suggestion that Allen had no involvement in the preparation of the Third Letter is also fanciful and incredulous.[105] Allen explained that detail relating to products he purchased were included on invoices, but that does not explain:
[105]T347.8–13.

(a) why anyone, other than Allen, would want to make this change to the Second Letter; or

(b) how anyone typing the Third Letter would know that Allen and Jiyun share the same ring size.

Thus, it is said that it is not credible that someone could write this detail in the Third Letter without input from Allen. The Third Letter—written when Allen was still contrite—concludes with an offer to return the ‘stolen goods’.

The Plaintiff contends that the ‘three letters’ are an accurate record of the arrangement between Allen and his mother for the opening of an account into which the Jiyun Funds were to be deposited. The veracity of these letters is said to be corroborated by their timing, a matter said to be significant:[106]
[106]Plaintiff’s Closing Submissions, [66]–[70].

66. The timing is significant, and corroborates what is in the three letters. Consistently with the three letters:
(a) on 20 June 2022 – the day after the three letters referred to above were shown to Jiyun - Allen sent a further WeChat message:
‘Mum, I know that you may want to kill me, but please listen to me …. I need to pay out of pocket the related medical expenses and hospital inpatient expenses … I’m worried about the cost, so I hope to use your money to help me go through this …. I’ll sort things out and send them to you’.[107]
[107]CB1259.

(b) on 28 June 2022, Allen proceeded to make arrangements for Jiyun to recover the Jiyun Funds by signing the General Power of Attorney; making her a signatory to his bank accounts and signing the Power of Attorney so that she could deal with her Haymarket Property.

67. There was not a single message or text in any WeChat message or other document prior to the filing of a Defence, in which Allen suggests that the money had been a gift or that Allen believed it was his to spend. Even throughout the freezing order application Allen did not suggest that the money had been a gift. Not even in response to being called a thief. In fact, the first time this argument was raised was in Allen’s Defence to this proceeding.
68. Insofar as Allen suggests that an inference can be drawn from his mother having purchased Allen a house in China, Jiyun never denied that it had been purchased as a gift for Allen. She even gave evidence to that effect.[108] The ‘Beijing Daxing District People’s Court’[109] concluded that the house had been purchased ‘for the consideration of his marrying and settling down in the future, as [Allen] would turn 18 when the house in question was purchased’. That rationale does not apply to the series of payments that are the subject of this dispute.
[108]CB1042.
[109]CB1043.
69. Allen has suggested that Jiyun’s anger was because he had purchased personal goods. That was denied by Jiyun and disproportionate to her response when she found out that Allen had not opened an account with Morgan Stanley on Yi Xu’s name and treated the money ($11,133,322.35) as his own.
70. We Chat messages from Allen in June and July 2022 (following 18 June) are consistent with Allen:
(a) agreeing to return money;
(b) agreeing the properties are held for Jiyun.

‘I hope to use your money to help me get through this’;[110]
‘this house is your property’;[111]
‘I will ensure the safety of your house’.[112]

[110]CB1259, 20 June 2022.

[111]CB1267, 4 July 2022.

[112]CB1269, 10 July 2022.

The Defendant argues against the position that the letters are to be regarded as ‘admissions’, and against interest and rather to cast their contents as the abject apologies of a contrite son. Moreover, more particularly, the Defendant submits that Jiyun’s own witness, Mr Peng, gave evidence that entirely contradicted any suggestion that the typed letters were written by Allen and that, rather, his evidence established that the typed letters were written by him and by his daughter. Mr Peng also said that Jiyun did not raise anything with him about investment money in Australia. Mr Peng gave evidence that he did not learn anything about investment being an issue until he was spoken to by Jiyun’s lawyer in preparation for the trial.[113] It is then said that the only letter that Allen wrote is the handwritten letter in Chinese characters which he sent to Mr Peng.[114] Allen’s evidence in cross-examination is that the two typed letters were not written by him.[115]
[113]T147.9–26; T148.8–20.
[114]Handwritten letter (CB1296–1297); T266.20–7.
[115]T266.29–267.1.

The Defendant submits that the first few paragraphs of the two typed letters, though with some exceptions to which reference is made in these reasons, are copied from the handwritten letter that Allen wrote. It is, however, said that the latter part of each letter was not written by him, beginning with the paragraph commencing:

The process of opening an account in your name or my father’s name is troublesome. The opening of an account kept delaying. As I was afraid that you would blame me for my incompetence, I didn’t tell you the fact that the account was opened under my name.[116]

It is said that Allen did not write these words.

[116]Second Letter, CB1298 (bottom para).

The Defendant says that the evidence establishes that the first of the two typed letters (the Second Letter) was written by Mr Peng’s daughter[117] and was then sent to Allen via WeChat by Mr Peng’s daughter.[118] The evidence is that Mr Peng was very worried about Allen’s mother so he asked his daughter to draft the letters to show that Allen was really sincere in apologising to his mother in order to help them resolve the matter as soon as possible.[119] Mr Peng said that he was quite upset with Allen and ‘made some revisions on the second version’.[120] He and his daughter added various things to the second typed letter (the Third Letter).[121]
[117]WeChat between Allen and Mr Peng, CB1082–54 (untranslated version at CB2194–2366); CB1094; T150.24–8.
[118]T143.1–144.3; T270.23–4.
[119]T151.3–17.
[120]T134.9–11 (regarding the 2nd typed letter).
[121]T153.3–26.

Turning to the content of the two typed letters, it is said by the Defendant that they contained additional paragraphs,[122] making statements such as, ‘I felt like that I was an embezzler’, ‘I know that these things don’t belong to me’, ‘I am a greedy person, a dishonest person, an immoral person and a very bad person’, and ‘I used your money’.[123] Allen’s evidence is that the first typed letter (the Second Letter) was sent to Allen by Mr Peng’s daughter and forwarded by Allen to Mr Peng without reading it.[124] The typed letters also added words to the initial paragraphs that largely reflected Allen’s handwritten letter but added:[125]

I’m really sorry. I’m really sorry. I’m really sorry. All this time, but for such a great mother like you, I would never be able to overcome difficulties and obstacles (first para).
… due to my heavy academic workload (first para).
I am in so much shame (first para).

At this point, reference should be made to the evidence from Allen that he did not read the Second Letter because, it is said, of issues with his eyes following the cosmetic surgery on his eyes. However, as indicated, this surgery preceded his writing of the handwritten letter (the First Letter). Consequently, it is, in my view, implausible that he would not have read the Second Letter, having been in a position to prepare the handwritten letter in spite of his eye surgery.[126] Thus, it might be said that the proper inference that should be drawn from this conduct is that, in light of the various communications with Mr Peng in relation to the ‘three letters’, it should be taken that Allen’s forwarding of the first typed letter (the Second Letter) to Mr Peng is properly to be regarded as an adoption of its contents. In my view, this is, having regard to this context, the proper inference.

[122]Second Letter, CB1298–9.

[123]CB1298–9.

[124]T338.29–31.

[125]CB1298.

[126]T503.31–504.27.

It was also put to Allen in cross‑examination that the typed letters contained details that only he or Jiyun could know.[127] However, when read in context, it is submitted that it is apparent that the first typed letter (the Second Letter) was drafted by Mr Peng or his daughter to refer to the various items referred to in the accompanying WeChat message, which references the various things that Mr Peng says the letter to his mother ‘must’ contain (‘it is not enough only to apologize to Ms Ma, you should describe the followings clearly’).[128] It is observed that Mr Peng agreed in evidence that the ‘dot points’ refer to things that have already been added to the letter by his daughter.[129] Thus, it is contended that they are not ‘further’ things that Mr Peng is saying Allen needs to add in; they are things that his daughter has already included in the first typed letter (the Second Letter). Mr Peng gave evidence that:[130]

Following point 123 was of Ms Ma. I just pass on her messages to Allen.

Thus, it is said that these dot points were ‘questions from Ms Ma’ that Allen needed to answer.[131]

[127]T337.30–338.1.

[128]WeChat between Allen and Mr Peng, 18 June 2022, CB1094.

[129]T151.28–152.20 (referring to the top of CB1094).

[130]T132.30–1 (referring to CB1094–1095 dot points).

[131]T134.21–28.

The document that Allen sent to Mr Peng on 19 June 2022 was a list of invoices for the luxury items.[132] Thus, it is contended that the evidence is clear that Allen did not send the second typed letter (the Third Letter) to Mr Peng.[133] Further, it is said, that as evidenced in the WeChat messages, Allen did not send any letters to his mother between 17 and 20 June 2022.[134]
[132]Document at CB1098 (Letter to mom.pdf); T136.8–21; T143.31–144.3, invoices (CB1304–‍1319).
[133]T145.7–11.
[134]WeChat Jiyun and Allen p 28–9 (CB2163–8).

Finally, the Defendant submits that regard should be had to the evidence that Mr Peng spoke to Jiyun on 16 March 2025 prior to the trial and told her how the typed letters came about.[135] When asked about this in cross-examination, Jiyun denied ever having been told that by Mr Peng,[136] but did eventually agree that Mr Peng had sent a message to her on 17 March 2025, prior to her giving evidence, that the two typed letters (the Second and Third Letters) had been written by his daughter and him.[137] On this basis, the Defendant submits that Jiyun’s willingness to omit this from her evidence‑in‑chief and to present the typed letters as having been written by Allen, when she knew that this was not the case, casts great doubt on her credibility. However, in my view, having regard to the fragmented and rather confused series of communications between Mr Peng, Allen and Jiyun, I do not regard this as a credibility issue but, rather, one more likely a result of confusion. Moreover, on the basis of my views with respect to the ‘three letters’ and the extent to which Allen might be said to have effectively adopted them or Jiyun’s credibility in these circumstances, this issue goes nowhere.
[135]T154.4–8.
[136]T122.15–23.
[137]T174.24–T176.7.

For the preceding reasons, I am of the view that the Plaintiff’s submissions with respect to the authorship, subsequent adoption by Allen, and the extent to which all three letters were ultimately provided to Jiyun, are to be preferred for the reasons and on the basis of the evidence relied upon in those submissions. As indicated in these reasons it is, in my view, more probable than not that Jiyun did receive the Third Letter, though there may have been problems in her opening the PDF version of that letter as attached to the WeChat messages when the message to which it was attached was first received. In any event, it is clear, in my view, that the evidence supports the finding that at the time the ‘three letters’ were being prepared, it was Allen’s understanding and intention in the context of his communications with Mr Peng that these letters were to be sent by Mr Peng to Jiyun. Moreover, having regard to this position, their characterisation as admissions on Allen’s part is not affected even if the position was that Jiyun did not receive the Third Letter at all, or about the time of receipt of the WeChat message to which it was attached. The same applies to the other letters. As submitted by the Plaintiff, an admission is a previous representation adverse to the person said to be making it. Moreover, the admission does not have to be conveyed to the party adverse to the person making the admission—it merely has to be a previous representation. In my view, the ‘three letters’ clearly fall into this category and are to be treated as admissions against interest by Allen.

Jones v Dunkel issue

Where a witness might be expected to be called but is not, an inference may be drawn that his or her evidence would not assist the party not calling him or her. This general statement of the rule in Jones v Dunkel[138] (the ‘Rule’) does, however, need to be examined more closely in terms of the threshold for the operation of the Rule. In this respect, it is most helpful to refer to the following passage from the judgment of the Court of Appeal in Tenth Vandy v Natwest Markets Australia as follows:[139]
[138](1959) 101 CLR 298.
[139]Tenth Vandy v Natwest Markets Australia [2012] VSCA 103, [154]–[156] (‘Tenth Vandy’).

154.Finally, under Grounds 9 and 10, counsel for the appellant submitted that the judge erred by refusing to draw a Jones v Dunkel inference adverse to the respondent on the basis of the absence from the witness box of the witnesses which the respondent had proposed to call.
155.As to that aspect of the matter, the judge reasoned as follows:
Applying the reasoning in Jones v Dunkel, I am of the opinion that no inference can be drawn in the present circumstances unless and until the party bearing the burden of proof of its case (the plaintiff) has by the evidence it relies upon established a case for the defendant to answer. If and when the plaintiff were to establish its case, then the defendant may, if it did not call evidence to rebut the case, be left in the position of arguing its case against the plaintiff’s unchallenged or uncontradicted evidence. This may of itself, or with the aid of inferences according to the rule in Jones v Dunkel, establish the plaintiff's case. However, I am of the opinion that the rule in Jones v Dunkel may not be resorted to by a party, in effect, to fill in the facts of its case before the threshold for the operation of the rule is reached, as explained in the passage from the judgment of Windeyer J above.[140]

156.With respect, there is no error in that analysis.

The relevant principles are also considered in Primrose Meadows Pty Ltd v River View Pty Ltd.[141]

[140]Tenth Vandy Pty Ltd v Natwest Markets Australia Pty Ltd[2010] VSC 2, [17](Croft J).

[141][2019] VSC 263.

As is clear from the preceding discussion in relation to the WeChat messages and the ‘three letters’, a matter of significant uncertainty was the extent to which Allen had been involved or participated in the preparation of the Second and Third Letters. The Defendant has emphasised in its submissions that substantial and critical parts of these letters were the product of Mr Peng and his daughter’s input and authorship, rather than that of Allen. It is quite clear that Allen’s involvement or otherwise is a critical matter with respect to the issue of admissions which is put against him. This is not a fanciful or irrelevant issue in the context of this proceeding and, in my view, does raise the threshold for the application of the Rule in Jones v Dunkel as, on the evidence that is available, it is more than likely that Mr Peng’s daughter could have given evidence in relation to Allen’s involvement or otherwise in the preparation of the Second and Third Letters. In spite of this, Mr Peng’s daughter was not called to give evidence, and in circumstances where it appears that Allen had contact with her in close proximity to the trial in this proceeding and where there is no suggestion, let alone evidence, that she could not have been called.

Against this background, it is helpful now to refer to particular matters raised in the Plaintiff’s submissions which, in my view, for the reasons put and the materials relied upon, clearly indicate that the Rule is applicable and the inferences flowing from that are adverse to Allen’s case on the admission issue. The Defendant’s submissions, on the other hand, do not clearly address or rebut the matters raised by the Plaintiff and concentrate, rather, on questions as to ‘whose camp’ Mr Peng’s daughter was in and who could, on that basis, have called her. The general proposition in this respect being that Mr Peng’s daughter was in the Plaintiff’s ‘camp’.[142] In my view, this analysis is neither helpful nor persuasive in the particular circumstances of this proceeding given that the evidence is that Allen spoke to Mr Peng’s daughter during the first day of the trial and there is no suggestion that he could not have called her if he thought she would support his evidence as to the authorship and preparation of the Second and Third Letters. On this basis, I turn now to some of the details raised in the Plaintiff’s submissions which support the application of the Rule.
[142]T511.25–517.27.

As the Plaintiff observes, despite sending the Second Letter to Mr Peng stating that he had not finished the letter yet,[143] Allen claims that he had ‘no involvement at all’[144] in the preparation of that letter. He claims to have received it from Mr Peng’s daughter by WeChat; a message or messages which he has not produced. In fact, he has not discovered any correspondence between himself and Mr Peng’s daughter, despite this proceeding having commenced in November 2022, giving him notice of the issues in dispute and that they were material documents. As the Plaintiff observes, the Court has seen the exchange of correspondence dated 17 January 2025 between the parties’ solicitors in which Madgwicks, on behalf of the Plaintiff, specifically sought clarification in relation to who had written the ‘three letters’ and were told that Allen only wrote the First Letter.
[143]CB1094.
[144]T347.8–13.

The Plaintiff also draws attention to the position that Allen’s affidavit of documents did not disclose that the crucial correspondence between Allen and Mr Peng’s daughter ever existed. In fact, Allen gave evidence‑in‑chief that he did not even look for any correspondence between Mr Peng’s daughter and himself when complying with orders for discovery.[145] In cross‑examination:[146]
[145]T270.21–271.10.
[146]T390.20–T392.19.

(a) despite initially saying that he last spoke to her at the end of last year, Allen conceded that he spoke to her on the first day of the trial; and

(b) Allen agrees that she could have given evidence in relation to:

(iv) how the second and third versions of the letter came into existence; and

(v) which parts of these letters she wrote or which parts Allen wrote or contributed to; and

(c) Allen does not know any reason why she could not have given evidence at trial.

As the Plaintiff submits, it became apparent during the course of the trial that Mr Peng’s daughter was a ‘key player in this case’. Jiyun had established a case for Allen to answer regarding the ‘three letters’ and their effect.[147] This emphasises my previous references to and comments in relation to the Jones v Dunkel threshold in the present context. Moreover, the Plaintiff contends that Mr Peng’s daughter’s evidence would not have been cumulative or corroborative of evidence given at trial. Allen and Mr Peng were unable to describe which parts of the Second Letter had been written by Mr Peng’s daughter or the source of the detail which had been included in the typed letters. As indicated previously, these details included an acknowledgement that Allen had been asked to open an account in Jiyun or Yi Xu’s name (which he now denies) as well as the admission that the money did not belong to Allen.
[147]Tenth Vandy, [155]; Sunland Waterfront (BVI) v Prudentia Investments Pty Ltd (No 2) (2012) 266 FLR 243, [346]–‍[348].

Flowing from these matters, the Plaintiff makes reference to the observation of Glass JA in Payne v Parker when considering whether a missing witness would be expected to be called by one party rather than the other:[148]

The … condition is also described as existing where it would be natural for one party to produce the witness: … or the witness would be expected to be available to one party rather than the other: … or where the circumstances excuse one party from calling the witness, but required the other party to call him,,, or where he might be regarded as in the camp of one party, so as to make it unrealistic for the other party to call him … or where the witness’ knowledge may be regarded as the knowledge of one party rather than the other …

The Plaintiff contends that the ‘circumstances’ of Allen relying on Mr Peng’s daughter having prepared the draft Second Letter and by sending WeChat communications (not produced) are such that he ought to have called her. For the preceding reasons, including my observations on the application of the Rule in the present context, I accept that this is the position.

[148]Payne v Parker [1976] 1 NSWLR 191, [7] cited with approval in Manly Counsil v Byrne [2004] NSWCA 123, [53] and Primrose Meadows, [24] (emphasis added, citations omitted).

Applying the principles to which reference is made, the Plaintiff submits that the knowledge of Mr Peng’s daughter in relation to the creation of the Second Letter and its content may be regarded as knowledge of Allen rather than Jiyun. Given Allen’s failure to discover any communications between himself and Mr Peng’s daughter—particularly the Second Letter that she supposedly sent to Allen by WeChat—it could not be expected that Jiyun should have called Mr Peng’s daughter rather than Allen. Further, Allen had been communicating with Mr Peng’s daughter as recently as the first day of the trial. Despite being given an opportunity to do so, no satisfactory explanation was given by Allen for not calling Mr Peng’s daughter as a witness.

Concluding with respect to the application of the Rule, it is, in all the circumstances, appropriate for the Court to draw an inference that Allen did not call Mr Peng’s daughter to give evidence in relation to the origin, content and authorship of the Second and Third Letters because it would not have assisted his case, or the inference that Allen provided the information to enable the letters to be prepared, to the extent it is found he did not personally prepare them, should also be drawn. In all the circumstances, the result with respect to the admissions issue would be the same.[149]
[149]And see above, [66].

Resulting trust
Plaintiff’s submissions

In the alternative, the Plaintiff submits that the Defendant held and holds all, or any, of the monies advanced, the Jiyun Funds, on trust for Jiyun beneficially. The Plaintiff alleges that the Jiyun Funds were advanced to Allen for investment on Jiyun’s behalf and, therefore, as a consequence of Allen failing to use the money for this purpose, he held and now holds the Jiyun Funds and assets purchased with these funds on a resulting trust for Jiyun beneficially. In the context of this issue and all these submissions, it is useful to emphasise that, for the reasons which follow, I do accept and find that the Jiyun Funds, and any part thereof, were and now are held on trust by Allen for Jiyun beneficially. Further, as indicated previously, this position was not and is not affected by my finding of an agreement between the parties with respect to the application of these funds.[150]
[150]See above, [41].

The Plaintiff refers to Re Australian Elizabethan Theatre Trust[151] and Re BBY (Receivers and Managers appointed) (‘Re BBY’),[152] and invited the Court to find that, if no transaction was established on the evidence, then a resulting trust in favour of the Plaintiff arose from the parties’ conduct.[153] The Plaintiff submits that separation of the Jiyun Funds from Allen’s own money provided a strong indication that the funds were held on trust. Indeed, in Re BBY,[154] Gleeson J said:

(e) self-contradiction;

(f) internal inconsistency;

(g) shifting case; and

(h) selective disclosure of documents or information.

In Webb v Getswift(No 5),[293] Lee J referred to the reasoning of Leggatt J in Gestmin SGPS SA v Credit Suisse (UK) Limited[294] (which has been cited with approval in this Court):[295]
[293][2019] FCA 1533, [17]–[18].
[294][2013] EWHC 3560 (Comm), [15]–[23].
[295]White v Woodward [2020] VSC 258, [14] (John Dixon J); 3 Apples Childcare Centre Pty Ltd v MMC Pacific International Pty Ltd (2023) 167 ACSR 401, [144] (M Osborne J).

As Leggatt J said in Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm) at [15]‑[23], there are a number of difficulties with oral evidence based on recollection of events given the unreliability of human memory. Moreover, considerable inference with memory is also introduced in civil litigation by the procedure of preparing for trial. As his Lordship noted, a witness is asked to make a statement, often when considerable time has already elapsed since the relevant events. The statement is usually drafted by a solicitor who is inevitably conscious of the significance for the case of what the witness does nor does not say. The statement is often made after the memory of the witness has been ‘refreshed’ by reading documents. The documents considered can often include argumentative material as well as documents that the witness did not see at the time and which came into existence after the events which the witness is being asked to recall. It may go through several iterations before it is finished. As Lord Buckmaster famously said, the truth ‘may sometimes leak out from an affidavit, like water from the bottom of a well’. This may be overly cynical, but the surest guide for deciding the case will be as identified by Leggatt J at [22]:
… the best approach for a judge to adopt in the trial of a commercial case, in my view, to place little if any reliance at all on the witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts.

In Gestmin SGPS SA v Credit Suisse (UK) Limited,[296] Leggatt J continues:

This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross‑examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.

[296][2013] EWHC 3560 (Comm), [22].

Similarly, in Armagas Ltd v Mundogas SA (The Ocean Frost)[297] Robert Goff LJ made the following observation:

It is frequently very difficult to tell whether a witness is telling the truth or not; and where there is a conflict of evidence … reference to the objective facts and documents, to the witnesses’ motives, and to the overall probabilities, can be of very great assistance to a judge in ascertaining the truth.

[297][1985] 1 Lloyd’s Rep 1, 57.

Having regard to the indicators identified in Painter v Hutchinson, the Plaintiff submits the evidence of Jiyun should be accepted.[298] The Plaintiff says although Jiyun gave evidence through an interpreter, which necessarily increased the time required for her to respond to questions, and this gave the appearance that some responses were longer than they would otherwise appear, the transcript does not suggest that Jiyun’s responses were particularly long or evasive.[299] The Plaintiff further submits that there were occasions, particularly in cross-examination, where clarification of the question being asked was sought, which suggested difficulty with the translation process. Accordingly, the Plaintiff contends that although Jiyun may not have directly answered questions from time to time which required a simple ‘yes’ or ‘no’ response, Jiyun does not fall within the Painterv Hutchinson indicators.[300]
[298]Plaintiff’s Written Closing Submissions, [3].
[299]Plaintiff’s Written Closing Submissions, [3].
[300]Plaintiff’s Written Closing Submissions, [3].

It is said that Jiyun was not argumentative or evasive and, although she may have elaborated on some answers, Jiyun did not do so to avoid answering the questions.[301] The Plaintiff contends that for many questions it is not necessarily fair to require a ‘yes’ or ‘no’ answer.[302]
[301]Plaintiff’s Written Closing Submissions, [3].
[302]Plaintiff’s Written Closing Submissions, [3].

Further, the Plaintiff submits that there were no discovery or evidence shortcomings on the part of Jiyun and her version of events was consistent.[303] The Plaintiff says this is in stark contrast to the material gaps in Allen’s discovery. The Plaintiff highlights that the Writ was filed on 28 November 2022, accompanied by an affidavit in support of the freezing order application sworn by Jiyun, clearly identifying the issues in dispute and exhibiting key documents.[304] The affidavit in support of the freezing order application exhibited the ‘three letters’ relied upon by the Plaintiff that had been shown to Jiyun on 19 June 2022, just six months before the proceeding was commenced and the freezing order obtained.[305] Accordingly, the Plaintiff submits that it is surprising that Allen did not discover any of the WeChat messages or emails between himself and Mr Peng or Mr Peng’s daughter.[306] However, it is relevant to note that Jiyun had received a copy of some messages including the ‘three letters’ from Mr Peng, albeit in PDF format which prevented attachments from being opened.[307]
[303]Plaintiff’s Written Closing Submissions, [4].
[304]Plaintiff’s Written Closing Submissions, [4].
[305]Plaintiff’s Written Closing Submissions, [4].
[306]Plaintiff’s Written Closing Submissions, [5].
[307]Plaintiff’s Written Closing Submissions, [5].

Allen’s evidence was that he was sent the typed version of the letter described as the ‘Second Letter’ by Mr Peng’s daughter.[308] However, not a single WeChat message or other correspondence between Allen and Mr Peng’s daughter has been produced by Allen.[309] The following exchange occurred in examination between Allen and Allen’s Counsel:[310]
[308]T270.21–4.
[309]Plaintiff’s Written Closing Submissions, [6].
[310]T270.21–271.3.

Weston-Scheuber: How did you receive – so this typed letter you didn’t write.
Allen: No.
Weston-Scheuber: How did you receive it?
Allen: His daughter send it to me.
Weston-Scheuber: How?
Allen: Via WeChat
Weston-Scheuber: And have you checked your WeChat to see if you can locate that document?
Allen: No.
Weston-Scheuber: And have you checked your WeChat to see if you could locate that document.
Caillard: I think he answered the question.
Weston-Scheuber: Well I’ll ask the question again? Yeah, have you checked your WeChat to see if you could find the letter between, that was sent by Mr Peng’s daughter to you?
Allen: Have I checked? No.

The Plaintiff submits that had these critical documents been produced at an early stage, the Court would be able to ascertain which parts of the ‘three letters’ had been written or dictated by Allen or Mr Peng’s daughter.[311] The Plaintiff highlights that the affidavits of discovery sworn by Allen in the proceeding do not indicate that the material WeChat messages had ever existed or what had become of them.[312]
[311]Plaintiff’s Written Closing Submissions, [7].
[312]Plaintiff’s Written Closing Submissions, [7].

In contrast to the Plaintiff’s submissions on credit, the Defendant submits that Jiyun was not a credible witness. The Defendant referred, in oral closing submissions, to the Painter v Hutchinson indicators and likened them to ‘a catalogue of things that one might say were true of Jiyun's evidence’, referring specifically to evasive and argumentative answers, tangential speeches, self-contradiction, internal inconsistency, shifting case and selective disclosure of documents for information.[313]
[313]T476.11–16.

The Defendant submits Jiyun’s evidence was marked by significant internal inconsistency, in the way in which her evidence at trial differs from the evidence she gave in her affidavit in support of the freezing order application.[314] It is said, however, that the documentary evidence is important, but that it indicates a picture that is entirely consistent with Allen’s version of events and casts serious doubts upon Jiyun’s credibility.[315] The Defendant says Jiyun’s answers often did not make sense, and there was an avoidance in answering questions.[316]
[314]T477.9–12; see above [40].
[315]T480.30–481.3.
[316]T481.4–11.

The Defendant also contends that despite being reminded many times to answer the questions Jiyun was asked, and even allowing for difficulties in translation, Jiyun repeatedly refused to answer questions without going off on tangents.[317] The Defendant says this was particularly the case where the obvious answer to the question was likely to be damaging to Jiyun.[318]
[317]Defendant’s Written Closing Submissions, [27].
[318]Defendant’s Written Closing Submissions, [27].

The Defendant further submits that it is not credible that Jiyun would have provided AUD11 million to Allen for the purposes of him investing that money in Australia on Jiyun’s behalf, and not sought any details or documentation as to those investments.[319] The Defendant says this is so in circumstances where Jiyun is a sophisticated businesswoman whose evidence indicates has no difficulty in dealing with the Chinese speaking agents at Morgan Stanley very directly.[320]
[319]Defendant’s Written Closing Submissions, [77].
[320]Defendant’s Written Closing Submissions, [77].

Further, it is said that Jiyun’s assertion that she had to entrust her investment to Allen because she does not speak English[321] and could not do so lacks credibility, given Jiyun’s evident ability to navigate the management of Allen’s accounts with Morgan Stanley.[322] The Defendant also submits that Jiyun’s evidence that after transferring her ‘life savings’ to Allen she was content to have no oversight of the accounts, or even to find out her bank account statement, because she completely trusted Allen lacks credibility.[323]
[321]T163.10–4.
[322]Defendant’s Written Closing Submissions, [30].
[323]Defendant’s Written Closing Submissions, [30].

The Defendant goes on to highlight that if Allen had told Jiyun he had set up an account in Yi Xu’s name, Jiyun could simply have asked him for the account number and transferred the AUD11 million into that bank account, as she had with all the other sums comprising the AUD11 million.[324] The Defendant says Jiyun attempts to evade questioning on that issue, which call her credibility strongly into question.[325] Furthermore, the Defendant notes that obtaining details of a bank account and transferring money into it are not things that require any knowledge of English and in fact they were things that she did with all the other investment sums.[326]
[324]Defendant’s Written Closing Submissions, [31].
[325]T167.12–169.12, T169.20–23; Defendant’s Written Closing Submissions, [31].
[326]Defendant’s Written Closing Submissions, [31].

There are clearly fundamental issues with the credit of each of the opposing party’s witnesses, namely Jiyun and Allen’s evidence, and, accordingly, where possible I must rely on the contemporaneous documentary evidence available. I consider primary reliance on the contemporaneous documents in evidence is preferred, including the ‘three letters’, over the evidence of Jiyun and Allen, having regard to the observations of Lee J in Webb v Getswift (No 5) and the principles summarised above taken from Gestmin SGPS SA v Credit Suisse (UK) Ltd & Anor and as cited by approval by this Court. Where it is not possible for me to rely on documentary evidence, I must make findings based solely on the witnesses’ account of the relevant events.

Orders

For the preceding reasons, the remainder of the Jiyun Funds (AUD3,902,789.28) are to be returned to Jiyun. The Bennelong Property was purchased with the Jiyun Funds and, accordingly, is also to be returned to Jiyun. If, however, Jiyun were entitled to the recovery of all the Jiyun Funds and the property purchased using the Jiyun Funds, she may recover in excess of the funds transferred to Allen—perhaps creating an undesirable outcome. Equally, however, equity necessarily dictates that a wrongdoer should not be entitled to the proceeds of their actions and, accordingly, it would not be appropriate to allow Allen to benefit from any capital gains from the Bennelong Property.

Evidence was also adduced during trial that Allen has recently rented out the Bennelong Property and receives approximately $780 per week in rental income.[327] Absent consent by Jiyun that Allen could retain these proceeds, evidence of which was not adduced during trial, it necessarily follows that Jiyun is also entitled to the net proceeds of income derived from the Bennelong Property.
[327]T257.28–31.

The Haymarket Property was not purchased with the Jiyun Funds, but subject to a separate transfer of funds from Jiyun to Allen and, accordingly, is to be treated separately from the Bennelong Property.

In these circumstances, I will make an order that both the Haymarket and Bennelong Properties are held by Allen on trust for Jiyun. I will order that Allen return the remainder of the Jiyun Funds and the net proceeds of rental income derived from the Bennelong Property less the purchase price and related costs incurred by Allen in purchasing the Bennelong Property (‘Net Jiyun Funds’). If any improvements have been made by Allen in relation to the Bennelong Property, the costs of such improvements are to be accounted for in the Net Jiyun Funds. The parties are to confer and provide a draft agreed form of orders to give effect to these reasons with respect to the return of the Net Jiyun Funds and other matters to which reference has been made.

There is also the following matter which I raised with the parties at a hearing mid‑mediation on 14 May 2025, at which I said, among other things, with respect to the possible outcome of the trial:

Whilst the ultimate outcome may be orders as requested in the trial pleadings there are other matters which may arise in the course of the final disposition and decision making by the Court. By way of illustration of other matters of this kind I draw the attention of the parties to the decision of The Hon Justice Delany in Timeless Sunrise Pty Ltd v Big Enterprises Pty Ltd (No 10) [2023] VSC 524. Reference should be made to paragraphs 1583 and 1584 of that judgment. On the basis of the evidence I have heard in this case I would, at the conclusion of closing addresses, anticipate raising the referral of proceedings question in a similar manner as did Justice Delany. It follows from the nature of these proceedings that relevant authorities that might be anticipated to be the subject of and recipients of a referral (and the provision of all papers and evidence in the trial) would, include, those responsible for immigration, visas, taxation and foreign investment.

I will arrange, subject to any submissions in this respect which the parties may wish to make before final orders are made, for a copy of my reasons for judgment to be provided to the Department of Home Affairs, the Australian Tax Office, the Department of Foreign Affairs and Trade, and the Australian Securities and Investments Commission. Should any of these authorities wish to access the Court Books and/or transcript of this proceeding, I will order that a copy be provided to that organisation upon request. It will be a matter for those authorities to take such action as they deem appropriate.

The question of costs is reserved, and the parties will be heard on this issue as required.

---

Appendix

No.	Issue	Reference to Judgment
Agreement between Jiyun and Allen in relation to the advancement of funds to Allen
1.	Was there an agreement between Jiyun and Allen?	[41]
2.	If so, what were the terms of the Agreement between Jiyun and Allen?	[41]
3.	If the Agreement was made, was there an amendment made to the Agreement?	[41]
4.	If the Agreement (or an amended agreement) was made, did Allen breach the terms of the Agreement? by: a. not opening the New Account? b. not promptly transferring the Disputed Funds to the New Account? c. not assisting with the remittance of the Disputed Funds to Australia?	[41]
5.	Were the Disputed Funds, or any part thereof, transferred to the Defendant (Allen) between 26 July 2021 and 26 May 2022: a. pursuant to the Agreement, or the Agreement as amended; or b. as a gift?	[11], [41]–[42]
Had and received
6.	What amount did the Defendant (Allen) receive from Jiyun between 26 July 2021 and 26 May 2022 (Disputed Funds)?	[103]–[109]
7.	Were the Disputed Funds received by Allen monies had and received?	[109]
Misrepresentation
8.	Did Allen represent to Jiyun that: a. he would arrange for an account to be opened in Australia to assist Jiyun in the repatriation of funds from China; and b. he had successfully opened an account with Morgan Stanley for that purpose? (Representations) and if so did Jiyun rely on the Representation.	[110]–[116]
9.	Did Jiyun transfer the Disputed Funds to Allen in reliance upon a misrepresentation made by Allen?	[110]–[116]
10.	Did Allen promise to repay the balance of the Disputed Funds to Jiyun in or about June 2022?	[110]–[116]
11.	What sum from the Disputed Funds was transferred to Jiyun from Allen’s Morgan Stanley account, and how was it transferred?	[110]–[116]
Illegality
12.	Were the Disputed Funds transferred to Allen in contravention of Chinese law and, if so, does that prevent Jiyun from recovering the Disputed Funds?	Issue abandoned – see [5], [24]
Presumption of Advancement
13.	Does the presumption of advancement apply so as to preclude Jiyun from recovering the Disputed Funds?	[83]–[102]
Is the Haymarket Property held on trust for Jiyun?
14.	Is the property at 2202/81 Harbour Street, Haymarket, New South Wales: a. held on trust by Allen on behalf of Jiyun; or b. was it a gift to Allen.	[42], [168], [187], [189]
Is the Bennelong Property held on trust for Jiyun?
15.	Is the property at 6092 Bennelong Parkway, Wentworth Point in New South Wales (Bennelong Property) held on constructive or resulting trust from Jiyun?	[42], [187], [188], [189]
Is Jiyun estopped from recovering the money?
16.	Did Jiyun induce Allen to believe she was giving him the Disputed Funds for his own use and benefit (Assumption) and if so, is she estopped from recovering the money? Did Allen act in reliance on the Assumption? Will Allen suffer detriment if Jiyun is permitted to resile from the Assumption? Would it be unconscionable for Jiyun to depart from the Assumption? Did Allen act in good faith on the Assumption that he was entitled to deal with the Disputed Funds as he wished? Did Allen change his position to his detriment and in reliance on the Assumption by using the Disputed Funds for his own use and the use of his friends and associates so that the Disputed Funds and by purchasing the Bennelong Property? Would Allen be placed in a worse position if ordered to make restitution than if he had not received the Disputed Funds in the first place?	[121]
Was there a valid General Power of Attorney?
17.	Did Jiyun request that Allen provide her with a General Power of Attorney?	Does not arise having regard to these findings – Allen agreed to grant this power of attorney.
18.	Is the Power of Attorney a Prescribed Power of Attorney for the purposes of s 8 of the Powers of Attorney Act 2003 (NSW)?	[125]–[128]
19.	What duties did Jiyun have pursuant to the Power of Attorney?	[143]–[145]
Was there a breach of the terms of the General Power of Attorney?
20.	Did Jiyun transfer or arrange for the transfer of investment products (Transferred Amount) to an account in the name of Yi Xu, without Allen’s authority and in breach of the Power of Attorney?	[161]
21.	Did Jiyun transfer $8,182 to De Brennan Property on 12 September 2022 without Allen’s authority, and in breach of the Power of Attorney?	[161]
22.	Did Allen suffer loss as a result of any breach by Jiyun of the Power of Attorney?	[161]
23.	Is the Transferred Amount held by Jiyun on constructive or resulting trust for Allen?	[166]
Haymarket Power of Attorney
24.	Did Jiyun request that Allen provide her with a Power of Attorney in respect of the Haymarket Property (Haymarket POA)?	Does not arise having regard to other findings, and Allen agreed to grant this power of attorney.
25.	Is the Haymarket POA a Prescribed Power of Attorney?	[125]–[128], [147]
26.	What were Jiyun’s duties pursuant to the Haymarket POA?	Does not arise.
27.	Was Jiyun’s lodgement of a caveat in breach of the Haymarket POA?	[164]
28.	Did Allen suffer loss and damage by any breach by Jiyun of the Haymarket POA?	[164], [167]

Note: The pinpoint references to the reasons must be read in the context of the contents of the reasons as a whole. Moreover, it should be noted that establishing 28 (plus multiple sub‑categories) staccato ‘Agreed Issues’ in a proceeding such as this is misconceived and unhelpful. Among other things, this is likely to produce confusion, delay and further costs. There is great wisdom in the system of pleadings, which has been applied to define issues for many centuries.

[2025] VSC 361

20 June 2025