Un v Lee

[2023] NSWSC 586

Supreme Court

New South Wales

Medium Neutral Citation:

Un v Lee [2023] NSWSC 586

Hearing dates:

16-18 May 2023

Date of orders:

1 June 2023

Decision date:

01 June 2023

Jurisdiction:

Equity

Before:

Darke J

Decision:

Order made that money held in Court be paid out to the defendants.

Catchwords:

CONTRACTS – unconscionable conduct – special disability or disadvantage – unjust contracts – Contracts Review Act 1980 (NSW) (“the Act”) – where real property was transferred to defendants by the plaintiff without monetary consideration – where plaintiff seeks to have the transfer to the defendants declared void or set aside on various grounds – whether transfer is an unconscionable dealing – whether transfer should be held to be an unjust contract within the meaning of the Act – whether defendants committed a breach of trust by failing to establish a family trust – whether transfer should be declared void on the ground of non est factum – whether the transfer was procured by fraud – held that the plaintiff was not under any special disability which was taken advantage of at the time of the transfer – held further that the transfer was not unjust in the circumstances relating to it at the time it was effected – held further that the plaintiff did not raise the topic of establishing a family trust with the defendants and no agreement to establish a family trust was reached between the parties – held that the plaintiff was well aware of the nature of the transfer to the defendants – allegations that transfer was procured by fraud rejected – held that defendants as registered proprietors of the property were entitled to sell the property and are entitled to the proceeds of sale

Legislation Cited:

Contracts Review Act 1980 (NSW), ss 7(1), 9(1), 9(2)

Cases Cited:

Blomley v Ryan (1956) 99 CLR 362

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447

Category:

Principal judgment

Parties:

Chi Keong Un (Plaintiff/Cross-Defendant)
Kitty Jie Lee (First Defendant/First Cross-Claimant)
Sumino Kan (Second Defendant/Second Cross-Claimant)

Representation:

Counsel:
Ms M Tibbey (Plaintiff/Cross-Defendant)
Mr D Neggo (Defendants/Cross-Claimants)

Solicitors:
Armstrong Legal (Plaintiff/Cross-Defendant)
Macpherson Kelley Pty Ltd (Defendants/Cross-Claimants)

File Number(s):

2021/318964

Publication restriction:

None

Judgment

Introduction

1. These proceedings concern a family dispute over the ownership of a property at 621 Canterbury Road, Belmore (“the property”). The property was sold to a third party in late 2021, and the proceeds of the sale, being $712,977.10, have been paid into Court. The dispute has thus become a dispute over who is entitled to the money in Court.

2. At the time of the sale, the property was owned by the defendants, Ms Kitty Lee and Ms Sumino Kan, as joint tenants. They became the registered proprietors of the property on 5 May 2014, pursuant to a transfer without monetary consideration from the plaintiff, Mr Chi Un. Ms Lee and Ms Kan are his daughters.

3. The plaintiff’s wife, and the mother of the defendants, was known as Mrs Chan. She died in 2015. The plaintiff and his wife also had a son, but he is not a party to the proceedings and seems not to have been involved in the relevant events.

4. The plaintiff seeks to have the 2014 transfer to the defendants declared void or set aside on various grounds, including that the transfer was procured by fraud or unconscionable conduct, or was an unjust contract within the meaning of the Contracts Review Act 1980 (NSW). The plaintiff claims that the proceeds of the sale of the property should be declared to be held on trust for him, and that the proceeds be paid to him accordingly.

5. The defendants deny that the transfer is liable to be impugned as alleged. They assert, by way of a Cross-Claim, that the entitlement to the proceeds of sale rests with them, or with Ms Lee alone. The Cross-Claim, which could be described as a defensive cross-claim, alleges the existence of various oral agreements in relation to the property, which was initially acquired in the plaintiff’s name in about May 1998. It is alleged that the 2014 transfer was effected in accordance with those oral agreements.

6. In the plaintiff’s case, five affidavits of the plaintiff were read (5 November 2021, 9 December 2021, 25 February 2022, 3 June 2022 and 5 May 2023), together with two affidavits of his solicitor, Mr Mal Zraika (17 June 2022 and 9 May 2023). The plaintiff was cross-examined. In the defendants’ case, affidavits of Ms Lee (18 May 2022 and 8 July 2022), Ms Kan (6 May 2022 and 5 July 2022), Mr Eddy Lee (7 July 2022) and Ms Ella Walters, solicitor (10 May 2023), were read. Mr Eddy Lee is Ms Lee’s husband. Ms Lee, Mr Lee and Ms Kan were cross-examined. In addition, a number of documents were admitted into evidence that had been produced on subpoena by various banks and by the solicitors who acted in relation to the 2014 transfer.

7. Before embarking upon a summary of the salient evidence, I note that whilst the relevant events span a considerable period of time, from about the 1990’s to the present, the most significant events can be identified as:

1. the circumstances surrounding the acquisition of the property in the plaintiff’s name in 1998;

2. the circumstances in which Ms Lee repaid the mortgage over the property in April 1999; and

3. the circumstances surrounding the transfer of the property into the names of Ms Lee and Ms Kan in 2014.

Summary of salient evidence

8. The plaintiff and his wife lived in China with their three children until about the early 1980’s. In about 1982, the parents and their son (the eldest child) left China to live in Macau. The two daughters remained in China. The youngest, Kitty Lee, was then about 17 years old, and Sumino Kan was about 22 years old. About 5 years later, Sumino Kan left China to live in Japan. She has lived there ever since.

9. Kitty Lee came to Australia to study in early 1988. She has lived in Australia ever since, apart from a period from about 1999 to about early 2003, when she lived with her husband and children in the United States of America.

10. Kitty Lee’s husband, Eddy Lee, came to Australia in 1987. It is clear that he and Kitty Lee had known each other in China, although they each gave different descriptions of their relationship. In any event, the pair were living together in Australia by some time in 1989. They were married in December 1991. It seems that, in the meantime, they had each married, and divorced, another partner. These marriages may have assisted them in obtaining favourable changes to their visa status, but nothing of significance turns upon that.

11. In early 1990, Kitty Lee and Eddy Lee purchased a property in Oyster Bay for a price of $148,000. They each gave evidence to the effect that the purchase was funded in part by savings and in part by a mortgage in favour of the State Bank of New South Wales. The couple moved in to live at the Oyster Bay property.

12. Shortly thereafter, Mr Un and Mrs Chan came to Australia to visit as tourists. Mr Un deposed that they decided to emigrate to Australia. Mr Un and Mrs Chan visited Australia again in December 1992, not long before Kitty Lee had her first child.

13. In the second half of 1993, Mr Un and Mrs Chan moved to Australia on a permanent basis. They commenced living at the Oyster Bay property.

14. There is a dispute between the parties as to the extent to which the parents thereafter advanced money to Kitty Lee, and as to the nature of such advances. This evidence will be referred to in more detail later in these reasons. It is sufficient to note here that Mr Un claims that he and Mrs Chan gave Kitty Lee $150,000 to buy a house for them in their names, but that Kitty Lee instead used the funds to buy properties in Sutherland and St Georges Basin. Kitty Lee denies that claim. She says, however, that in late 1993 or early 1994, her mother gave her $16,000 to assist with living expenses.

15. Kitty and Eddy Lee in fact purchased properties in Sutherland and St Georges Basin in about April 1994 and March 1996 respectively. The Sutherland property was purchased for $188,000, with $170,000 coming from the State Bank of New South Wales. The deposit of $18,800 came out of an account held by Eddy Lee. The Sutherland property was sold in September 1997 for $250,000. The St Georges Basin property was purchased for $167,000, with $145,000 coming from the State Bank of New South Wales. The deposit of $16,700, and a further amount of about $5,700, came out of an account held by Eddy Lee. The above matters were clearly established by documents that were in evidence. They were further supported by the testimony of Eddy Lee (who I regard as an honest and impressive witness).

16. Mr Un and Mrs Chan continued living at the Oyster Bay property until about early 1997. At that time, they moved into rental accommodation. Kitty Lee gave evidence that she gave her parents $20,000 at around that time to help with moving expenses. She says that the payment included the “return” of the $16,000 that her mother had earlier given to her.

17. Kitty Lee gave evidence that, in around late 1997 or early 1998, she had discussions with her parents about buying a house for them to live in. She deposed that in the course of these discussions there was a conversation to the following effect:

Mr Un:   We have gone to look at one of the retirement units at Yagoona. We don’t like it. It’s too small. I wouldn’t be able to do anything. I want to have space, a garage to play around in.

Ms Lee:   I think there is more value in moving into a retirement unit. It is only $50,000 and you can live in it for your lifetime. We won’t need to get a bank loan. The family should be able to get about $50,000 together.

Mrs Chan:   Yes, you are right, but your Dad doesn’t like it.

Mr Un:   If we put more money in now, and if you can help us, it will benefit you because we will give the house back to you. It benefits each of us. We do not have enough savings to buy a house on our own. I cannot get a loan. We would like you to help us. If we all contribute money to the purchase price we will have enough. Then we can get a loan. Would you help is with a deposit and go on the loan? With our pensions we may need help paying off the loan.

Mrs Chan:   We will have a lifetime of happiness living in a home of our own.

Ms Lee:   Yes, I will help you.

18. Kitty Lee further deposed:

At some stage at around this time, I had a conversation with my parents which included words to the following effect:

Mr Un:   Sumino is also going to contribute some money to the purchase of the house. If you go on the loan and assist us to purchase the house, your mother and I will give the property to you and your sister. The property will be yours, as long as we can continue to live in it until it is not suitable for us anymore.

Ms Lee:   Okay.

Mr Un:   It is a great idea. Your mother and I will have a lifetime living in the house together. The property will come back to you and Sumino.

19. Mr Un denies the conversation set out above, and denies that he ever asked his daughters to put in money to purchase the house. He also deposed that Kitty Lee “owed us $50,000 by that stage” and the reason why the bank loan was sought was that she could not repay the $50,000 at that time. Mr Un deposed that neither Kitty nor Sumino contributed any money to the purchase of the property.

20. However, it is clear that, on about 19 March 1998, Kitty Lee paid $20,000 to her parents. She says that was a contribution to the acquisition of the property; her father says it was part of the repayment of a loan. It is also clear that around that time Sumino Kan paid $20,000 to her parents. She says that she understood that her parents were going to use the money towards the purchase of the property; her father says that the money was to be used to pay tuition fees in Australia for Sumino Kan’s nephew.

21. In any event, the purchase of the property was completed on 19 May 1998. The purchase was in the name of Mr Un alone. The documents in evidence establish that the purchase price was $153,000, and that a deposit of $15,300 was paid. The balance of the purchase price evidently came from a loan of $80,000 from the Colonial State Bank, and about $58,000 from other sources. This evidence is at odds with Mr Un’s evidence to the effect that he contributed $100,000 to the purchase, with the balance paid by the Colonial State Bank, and his evidence that he had a deposit of $115,000 at that time and that there was a loan of $80,000 only $60,000 of which was required. I note that a loan statement in evidence indicates that the loan was in the names of Kitty Lee and Mr Un.

22. The Colonial State Bank loan was repaid, and the security over the property was released, in May 1999. This was effected by a payment of $76,952.74 made by Kitty Lee. The payment was largely funded by amounts of superannuation and lump sum payments (totalling $70,878.16) she received from Ansett Australia Limited after her position with that company became redundant.

23. Ms Lee deposed that at about the time of the redundancy, she had a conversation with her father to the following effect:

Mr Un:   You could use your superannuation and redundancy to pay off the remainder of the loan over the property. Then we will all have peace of mind. Your mother and I will continue living in the property until it is not suitable for us, but we will transfer it to you and give it to you because you will have used your superannuation to pay the mortgage. You will own the property to compensate for your superannuation loss. It is up to you and your sister to work that out in the future. The property will be yours and you will be able to use it for your retirement if you pay off the remainder of the loan with your superannuation and redundancy pay.

Ms Lee:   Okay, that seems like a good idea. I will pay off the remainder of the loan with my superannuation and redundancy pay on the basis that the property will then pass to me.

24. Mr Un denies that such a conversation occurred. He further deposed that any repayment of the loan “was only a repayment owing to me and my wife prior to Kitty and her husband leaving for the United States”.

25. Ms Lee deposed that around this time her mother told her that Ms Kan was happy that the property would pass to Ms Lee “because you have used your own money to pay off the loan”. Ms Kan deposed that she was very happy that her sister had looked after her parents in this way, and she says that it was her understanding that the property “would pass to Kitty” as she was the child in Australia most involved in looking after the parents, and had now paid off the mortgage.

26. Shortly after the repayment of the mortgage, Mr Un made a will which provided for the property to pass to his wife, unless she predeceased him, in which case the property would pass to the two daughters equally. The will was witnessed by Mr Ken Ma, solicitor, of Ma & Company Solicitors. Mr Ronald Ma of that firm had acted for Mr Un on the purchase of the property in 1998.

27. Mr Un and Mrs Chan continued to live at the property. Kitty Lee deposed that in about 2010 she had a number of conversations with her parents about transferring the property to her. She deposed that there were conversations to the following effect:

Mrs Chan:   Your father and I are getting old and we think it is best that we transfer the house to you soon. We are worried about what will happen to the property if something was to happen to us.

Mr Un:   I think we should transfer the property to both you and your sister. In case anything happens to either of you, the property will still be in the other sister’s name, so it will remain in family. If we put it just in your name, if something happens to you, the property could pass to your husband and be out of reach of our family and it is possible that Eddy’s parents might not let us live in the property.

Ms Lee:   Yes, I understand. I think it is a good idea to transfer the property to us soon.

28. However, no steps were taken in relation to any transfer until 2014. The parties are sharply at odds as to what occurred around that time. Mr Un deposed that, in about January 2014, after his wife had been diagnosed with cancer, they had a discussion to the following effect:

Mr Un:   We need to pass our property to our children, for them to keep and use for future generations.

Mrs Chan:   Yes. We should set up a family trust to benefit all the children.

29. Mr Un further deposed:

After discussion with my wife, I instructed my daughter Kitty to establish a family trust and transfer title to the property to the trust. Neither I nor my wife had any experience in such an undertaking, so I asked Kitty to make the arrangements. By that time there was no mortgage on the property, although it had been bought with a mortgage. Kitty and I had a conversation to the following effect:

Mr Un:   Kitty, your mother will probably die before me. Please set up a family trust, so that after I die, this property can benefit all our children and grandchildren.

Ms Lee:   I will do that Dad.

30. Ms Lee denies having any such conversation with her father. She deposed that she had a conversation with him in early 2014, prior to her sister coming to Australia to visit, to the following effect:

Mr Un:   It is a good idea to transfer the property to you and Sumino while Sumino is in Australia. She might not visit for a few more years. I will arrange a meeting with Lawyer Ma, my solicitor, to get the property transferred to you both while Sumino is here.

Ms Lee:   Yes, I agree it is a good idea to arrange the meeting while Sumino is here.

Mr Un:   Ok. I will arrange a meeting with Lawyer Ma. He was the solicitor I used to buy the house.

31. This conversation is denied by Mr Un, who maintained that “a trust was to be set up”.

32. Ms Kan deposed that shortly before her visit, she had a telephone conversation with her mother to the following effect:

Mrs Chan:   We are getting older and we are concerned about the ownership of the house. We think it is time to transfer it to you and Kitty so that if anything happens to Kitty, the house will remain in the family. I don’t want the house to pass to Kitty’s husband’s family if anything happens to her, I want the property to be transferred to both you and Kitty.

Ms Kan:   I am happy to help.

Mrs Chan:   Your father has made the arrangements with a lawyer so we can finalise the documents required when you are here visiting.

Ms Kan:   Okay.

33. Mr Un deposed that “in order to set up the family trust” he and his wife searched for the certificate of title to the property, but could not find it. He deposed that Ms Lee told him that a solicitor would be required to get a replacement certificate of title. Mr Un says that he suggested Ma Chi Kin, known as Ken Ma.

34. Ms Lee deposed that her father told her that “Lawyer Ma” said the certificate of title was needed before the transfer could be done. She says that she and her parents looked for the certificate of title, but could not find it. She says that a few days later her father said to her:

I have spoken with Lawyer Ma and told him we cannot find the certificate of title. He said he can arrange for a new certificate of title when we meet with him to do the transfer.

35. There is a dispute between Mr Un and Ms Lee as to who made the arrangements, but it is clear that the firm in which Ken Ma worked, namely Machiao Lawyers, was retained.

36. Machiao Lawyers opened a file (no. 18380) in the name of Mr Un, headed “Transfer”. The file is described as:

UN TRANSFER TO LEE & KAN

Property: 621 Canterbury Road, Belmore

The date upon which the file was opened is not clear.

37. Before turning to the respective accounts of the witnesses in relation to what took place with the solicitors, I set out below various matters that appear from the documents in evidence that were obtained from the solicitor’s file.

38. The file contains a copy of a form of Transfer without monetary consideration in respect of the property. The form provides for a transfer from Mr Un to Kitty Lee and Sumino Kan as joint tenants. The form was apparently signed by Mr Un as transferor, and his signature appears to be witnessed by Ken Ma. The form is undated, and it is not clear precisely when it was signed. However, Mr Un accepts that it is his signature on the form.

37. It seems that on 28 March 2014, Mr Un made a statutory declaration in relation to the lost certificate of title. The statutory declaration was apparently witnessed by Ken Ma, solicitor. The statutory declaration appears to have formed part of an Application for Replacement of Certificate of Title (AI 493760).

38. Also on 28 March 2014, Ken Ma sent an email to Ms Lee requesting her to supply photographs of the property, to show its run down condition, “if you wish to obtain a lower valuation of the property”.

39. On 29 March 2014, Ms Lee sent an email to Ken Ma attaching a copy of her father’s citizenship certificate.

40. On 31 March 2014, Ms Lee sent three emails to Ken Ma, each attaching a photograph of a part of the property. Also on 31 March 2014, Ken Ma ordered a valuation of the property from Mr Wal Dobrow.

41. On 1 April 2014, Machiao Lawyers issued a tax invoice in the matter to Mr Un in the amount of $1,224. An office account receipt for that amount, in payment of the invoice, was issued by the firm on the same day.

42. On 2 April 2014, Mr Dobrow of Stamp Duty Valuations Pty Ltd, issued a Certificate of Value in respect of the property in the amount of $450,000.

43. On 4 April 2014, Mr Ma sent an email to Ms Lee that attached the valuation. The email stated that the valuer had been asked to reconsider the valuation “given the photos you have submitted”, and noted that if that was not successful, “then the stamp duty is $15,760”.

44. On 14 April 2014, a replacement certificate of title was issued for the property (edition 3).

45. On 17 April 2014, Mr Ma sent an email to Ms Lee attaching a copy of “the certificate of title issued”. The email stated that the valuer was unable to reduce the value. Further, the email contained a request to Ms Lee for $15,760 to be placed into the firm’s trust account “or send a bank cheque to us in favour of “OSR” so we can arrange the transfer of title to your name as agreed”.

46. It seems that a bank cheque dated 29 April 2014 was provided by Ms Lee as requested. A copy of the cheque is on the file, and an email from Ms Lee to Mr Ma on 30 April 2014 refers to the posting of a bank cheque on the previous day. The funds for the purchase of the bank cheque appear to have come from an account in the names of Kitty Lee and Eddy Lee.

47. It is clear that the transfer was effected on 5 May 2014. On that day, a Notice of Sale or Transfer of Land form was completed and signed by Ken Ma. The Transfer form itself was stamped for an amount of duty of $15,740. The Transfer was then registered (AI 553894). Ms Lee and Ms Kan accordingly became registered proprietors as joint tenants. Another edition (edition 4) of the Certificate of Title was issued.

48. On 7 May 2014, Ken Ma sent an email to Ms Lee, stating that the “original certificate of title” was in the office “for your collection”. It can be inferred that this was a reference to the new Certificate of Title which showed Ms Lee and Ms Kan as the joint registered proprietors. It is likely that Ms Lee thereafter attended the solicitor’s office to collect the Certificate of Title. Kitty Lee’s evidence that she obtained the new Certificate of Title from her parents is very likely incorrect.

49. Mr Un gave evidence about a document that he typed, which bears the date 5 May 2014, and was apparently signed by both Mr Un and Mrs Chan. This document is not amongst the documents in evidence that were obtained from the solicitor’s file. The document largely consists of script in Chinese characters. A translation of the document is in the following terms:

WILL

Hereby transfer the real estate located at 621 Canterbury RD Belmore NSW 2192 under the name of Chi Keong Un to under the names of Sumino Kan and Kitty Jie Lee for operation of family trust fund later on. WaiHeng Chan and Chi Keong Un have the decision-making right to the operation and use of the fund. The beneficiaries are Sumino Kan, Kitty Jie Lee and Lan Un. Among the three children, the two of us took care of Sumino Kan the least. The incomes of the operation of the fund shall be used to look after Sumino Kan in priority. Upon the death of WaiHeng Chan and Chi Keong Un, Sumino Kan has the decision-making right to the operation of the fund. We hope that this property will forever be passed on to our children, grandchildren and their descendants.

05/05/2014

This will is made by: Wai Heng Chan and Chi Keong Un

52. As mentioned, the document is not amongst those that were produced from the solicitor’s file. However, the file shows that Machiao Lawyers were further involved after the completion of the transfer. This involvement concerned statutory declarations that were made by Ms Lee (on 26 June 2014) and by Mr Un (on 27 June 2014).

53. On 24 June 2014, Mr Un sent an email to Ken Ma on the subject of “Centrelink”. The email had an attachment which is described by reference to the address of the property. The script on the attachment largely consists of Chinese characters, but also includes, in English, the address of the property and the plaintiff’s name. The document is dated 24 June 2014. No translation of the document was put into evidence. However, in cross-examination, Mr Un agreed that the document commenced with the words:

My father transferred the property located at 621 Canterbury Rd, Belmore to me.

Mr Un also confirmed that the document continued with the words:

I guarantee that he can live in this property.

54. Mr Un gave evidence that the document had been prepared by his daughter (presumably Ms Lee) and that he had forwarded it to Mr Ma. Mr Un denied that he sent the document to Mr Ma so he could put it into the form of a statutory declaration for his daughter (again, presumably Ms Lee) to sign. However, Mr Un then said that he was asking Mr Ma “to prepare a statutory declaration for the usage with [sic] Centrelink in relation to my age pension”.

55. Later on 24 June 2014, Ken Ma sent an email to Ms Lee that attached “statutory declarations for you and Mr Un to sign in the presence of a JP or a solicitor like myself.”

56. As already mentioned, Ms Lee made a statutory declaration on 26 June 2014. She says that the document was provided to her by her father, and had been prepared without any discussion with her. Her evidence about how she came to be provided with the document seems to be in error. In any event, the declaration, which was made at Macquarie Park before a Justice of the Peace, is in the following terms:

1.   My father Chi Keong Un transferred the property 621 Canterbury Road Belmore NSW 2193 “the Property” to me and my sister Sumino Kan on or about 5^th May 2014.

2.   I warrant that my sister and I will allow my father to continue to reside there.

3.   In the event the Property is no longer suitable for my father to reside in, I must relocate him to a more suitable place.

57. Mr Un deposed, in his affidavit of 5 November 2021, that prior to early 2016 (when he says that he found the statutory declaration) he had not been aware that Kitty Lee was arranging to have such a statutory declaration signed. In his affidavit of 9 December 2021, Mr Un deposed that the statutory declaration had never been discussed with him.

58. On 27 June 2014, Mr Un made a statutory declaration before Ken Ma, solicitor. This declaration is in the following terms:

1.   I am a current occupier of the property situated at and known as 621 Canterbury Road, Belmore, being the whole of the land in certificate of title 14/A/3206;

2.   Even if I would be required to relocate in the future because the property is no longer suitable, I declare I will not apply for rental assistance nor apply for public housing.

59. Mr Un deposed, in his 5 November 2021 affidavit, that when he signed the statutory declaration he did not know or suspect that the property had been transferred to Kitty and Sumino on 5 May 2014. He deposed that this “did not occur to me as a possibility” and that he “had never given instructions for that to occur”.

60. The witnesses gave very different accounts as to what took place with the solicitors.

61. Mr Un deposed that he and Ms Lee went to the office of Machiao Lawyers on 29 March 2014, and did so to obtain assistance in obtaining a replacement Certificate of Title. He deposed:

The solicitors of Machiao Lawyers spoke Cantonese (my native tongue) and did not use an interpreter. I was asked to enter a small office. A man attended us who was not Mr Ken Ma, who I remember from the time he attended us when we bought our home. He was shorter and fatter than Ken Ma. I am also sure that it was not Ken Ma because later I approached Ken Ma and asked for his help as a solicitor. He was not the person who I saw on 29 March 2014. Kitty appeared to know the man we saw on 29 March or be familiar with him. She remained with me throughout the meeting with that male person. I do not recall his name or whether he was a solicitor.

62. Mr Un deposed that the man handed him a document, and told him that the document “helps you get back your CT”. Mr Un deposed that he signed the document (two or three times) without any further explanation being given to him. The document he says he signed is identified as the Application for Replacement Certificate of Title and the attached statutory declaration of Mr Un that is dated 28 March 2014.

63. As already mentioned, Mr Un accepts that his signature appears on a form of Transfer without monetary consideration. He deposed that he had not seen the document until he sought legal advice in 2016. Mr Un deposed:

There was no explanation given to me by Kitty or the man who attended us in the solicitor’s office that I was signing a document to transfer ownership of my property. I could not read the English words on the document and relied on the oral explanation of it from Kitty and the man who attended us.

64. Mr Un further deposed that he did not know that he signed a Transfer of the property, although he also says that Ms Lee said to him:

This is the proper approach to transfer your property to the family trust as you wish to do.

65. Mr Un says that at no stage was any explanation given to him that he was agreeing to ownership of the property being transferred to his two daughters.

66. Mr Un deposed that around the time of the visit to the solicitor’s office, Ms Lee requested, and received from him, $15,000 to cover the cost of setting up the family trust. Mr Un later changed that evidence to say that the $15,000 had been provided to Ms Lee by his wife. Ms Lee denied that she received $15,000 from her parents as alleged.

67. Mr Un denies that he went to the solicitor’s office in March/April 2014 with his wife or Sumino; he says he went only with Kitty.

68. Ms Kan deposed that in late March or early April 2014, she travelled with her family to Australia to visit her parents and sister. She deposed that during that visit she attended a meeting with a lawyer at their office. She says that she attended with both her mother and her father, and that Ms Lee did not attend the meeting. She says that, at the meeting, she signed some documents the lawyer handed to her. Ms Kan deposed:

The meeting was conducted in Cantonese. I cannot now remember the name of the lawyer that conducted the meeting but during the meeting, in the presence of my father, he said words to me to the following effect:

Lawyer:   Here are the documents you need to sign to transfer the property to both you and Kitty. Can you please sign these documents?

Mr Un:      Yes, I can.

Lawyer:   Kitty is not here but we will make another appointment for her to sign the documents when she is available. The property will then be transferred jointly into your name and Kitty’s name.

69. Ms Lee deposed that arrangements had been made by her father for her to attend a meeting with Mr Ma (together with her parents and Sumino), but on the day of the meeting she could not attend due to work commitments. She deposed that her father later told her that he and Sumino “had signed the transfer documents that Lawyer Ma prepared” and that he would arrange another meeting “for you and me so that we can finalise the transfer”.

70. Ms Lee deposed that “within a few days or so later”, between around 29 April 2014 and 5 May 2014, she and her parents attended the office of Machiao Lawyers. She says she was introduced by her father to “Lawyer Ma”. Ms Lee further deposed:

It was a short meeting. I was only there for approximately 15 minutes. Lawyer Ma spoke to my father and me together in Cantonese, and the conversation included words to the following effect:

Mr Ma:   I explained everything to your father about the transfer. I will give your father a copy of the transfer documents once everything is finished and the transfer is done.

Ms Lee:   Okay. I want to ensure that once the property is transferred, if anything happens to me the property will stay with my sister.

Mr Ma:   Yes, that is correct, it will be in your name and your sister’s name so if anything happens to you it will stay with your sister.

71. Ms Lee says that she signed some documents in the presence of her father and Lawyer Ma, and says that there was then a discussion about obtaining a valuer for stamp duty purposes.

72. Mr Un denies that his wife ever attended the solicitor’s office with Kitty and himself.

73. The evidence given by the witnesses as to what took place with the solicitors will be returned to later in these reasons. The evidence given by Mr Un about those events is obviously central to his claim that the transfer of the property to his daughters should be declared void or set aside.

74. After the transfer was effected, Mr Un and Mrs Chan continued to live at the property. However, Mrs Chan died in November 2015. Mr Un continued to live at the property thereafter, until about late 2019 or early 2020 when he moved into an aged care facility. After a short time, he moved into a different aged care facility, although it seems that he did not like living there so he returned to the property in about August 2020. However, in circumstances that are contentious, he was removed from the property. Mr Un has since that time lived with friends. Mr Un claims that various items of equipment and personal effects owned by him were wrongfully removed from the property and disposed of by Ms Lee. That is denied by Ms Lee.

75. In February 2021, the plaintiff lodged a caveat against the title to the property, claiming an interest as a beneficiary of a constructive trust. The caveat lapsed in September 2021, following the service of a lapsing notice. It seems that the notice, whilst validly served, may not have come to the notice of the solicitors whose address was the address for service, as service occurred in the midst of a “lockdown” during the COVID-19 pandemic. In any event, the plaintiff lodged a further caveat in October 2021, claiming an estate in fee simple on the basis that the transfer that occurred on 5 May 2014 was “fraudulently obtained”. A lapsing notice was issued in respect of this caveat in November 2021. By that time, the property was the subject of a contract for sale to a third party. Notwithstanding the dispute between the parties as to the ownership of the property, the sale was allowed by the parties to proceed to completion on the basis that the proceeds of sale were paid into Court.

Determination

76. The plaintiff’s claim to impugn the 2014 transfer of the property to his daughters rests upon several grounds, as identified in closing submissions.

77. First, it is alleged that the transfer is liable to be set aside based upon the principles concerning unconscionable dealings, as referred to in cases such as Blomley v Ryan (1956) 99 CLR 362 and Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, or that in all the circumstances (including Mr Un’s age, state of health, lack of understanding of English and need for legal advice about what he was signing) the transfer should be held to be an unjust contract within the meaning of the Contracts Review Act. It was emphasised that there was no consideration paid for the transfer.

78. Secondly, it was put that in failing to establish the family trust as agreed, the defendants committed a breach of trust such that a remedial constructive trust should be imposed. I understood the submission to be that the trust should be imposed over the proceeds of sale of the property, and that the plaintiff, as the beneficiary of that trust, was entitled to have the proceeds paid to him.

79. Thirdly, it was submitted that the transfer should be declared void on the ground of non est factum, in circumstances where Mr Un had no knowledge that he was signing a transfer of the property in favour of his daughters.

80. Lastly, it was alleged, at least against Ms Lee, that the transfer was procured by fraud.

81. The case was broadly encapsulated as one where the elderly Mr Un (who was 79 years of age at the time of the transfer) was taken advantage of by his unscrupulous daughters, and as a consequence he has lost his only substantial asset.

82. The financial situation the plaintiff now finds himself in is unfortunate. However, having given careful consideration to his evidence, I find myself unable to accept many aspects of his testimony, including, most significantly, the essence of his account of what occurred in relation to the 2014 transfer.

83. Mr Un’s evidence to the effect that he and Mrs Chan gave Kitty Lee $150,000 to buy a house for them in their names, and that she instead used the funds to purchase properties in Sutherland and St Georges Basin, was unsatisfactory. Mr Un said in cross-examination that this evidence (and the evidence that Kitty Lee had repaid about $100,000), was actually based on what he was told by his wife, who was described as the manager of “the finance of our home”. If so, the evidence was not based on any direct knowledge held by Mr Un, but the evidence was not qualified in that way in his affidavits. Moreover, the evidence that $150,000 (or indeed any substantial sum) was provided by the plaintiff or his wife and used by Kitty Lee and Eddy Lee to purchase the Sutherland and St Georges Basin properties is falsified by the documentary evidence referred to earlier that clearly shows the sources of the funds for those purchases. That documentary evidence is also inconsistent with the evidence given by Mr Un in cross-examination to the effect that he and his wife provided the money for the deposits on those properties. Mr Un’s evidence about these matters formed the basis of his explanation of why Kitty Lee paid off the mortgage on the property in May 1999. He says that she was merely repaying a debt she owed. I reject Mr Un’s explanation for that repayment. I prefer Ms Lee’s evidence as to the circumstances in which she agreed to repay the mortgage.

84. Mr Un’s evidence about contributing $100,000 to the purchase of the property in 1998, and his evidence that he had a deposit of $115,000 at that time and that only a $60,000 loan was required, is also inconsistent with the documentary evidence in relation to the purchase.

85. Further, Mr Un would not accept in cross-examination that $80,000 of the purchase price of the property had come from funds provided by the Colonial State Bank, despite being shown a letter to that effect.

86. Mr Un also gave evidence about having a $100,000 bank cheque prepared in relation to purchase. This evidence seemed to me to be fanciful, and confused. The cross-examination about it (at Transcript 40 lines 12 to 27) was as follows:

Q.   Mr Un, your solicitors were writing by this letter to tell you that $80,000 of the purchase price had been contributed by the Colonial State Bank loan. Do you accept that?

A.   INTERPRETER:   No.

Q.   What you have said about a bank cheque for $100,000 being prepared on your behalf is wrong. Do you agree?

A.   INTERPRETER:   Yeah. You can check the bank record. It was a cheque that I did it myself. Could it be that my daughter put my cheque into her own account and withdraw money to pay for the purchase price, and borrow from the Colonial State Bank as well? Yeah, this – this fraud case started a long time ago, not just now.

Q.   You have not said anything in your affidavits about a $100,000 bank cheque being taken advantage of by your daughter, have you?

A.   INTERPRETER:   I wasn’t aware it until now.

Those answers suggested a willingness to make up evidence on the run, and to speculate in a manner designed to impugn Ms Lee’s honesty.

87. Mr Un’s recollection of events was also shown to be unreliable. An example is his evidence concerning his involvement with a company of which he was a director, namely, Opal (Australia) Industrial Pty Ltd. Despite the plain fact that the company was not incorporated until 2002, Mr Un would not concede that he might be wrong in saying that he was doing work with the company in 1995.

88. In addition to the above, important parts of Mr Un’s evidence concerning the critical events in 2014 were problematic.

89. First, Mr Un deposed that around the time he went to Mr Ma’s office on 29 March 2014, he provided $15,000 to Ms Lee at her request “to cover the cost of setting up the family trust”. This was denied by Ms Lee in her first affidavit. Mr Un then changed the evidence to say that his wife told him that she had given Ms Lee $15,000 to establish the family trust. He further deposed that the stamp duty for the transfer of the property “was paid from mine and my wife’s bank account from the $15,000 given to Kitty by my wife to set up the family trust”. However, there is no documentary evidence to support the contention that the parents provided $15,000 to Ms Lee around the time of the transfer in 2014. There is documentary evidence that clearly establishes that the stamp duty of $15,760 was paid by Ms Lee from funds obtained from an account she holds with her husband. I am not prepared to accept Mr Un’s evidence on this matter; indeed, I reject it as a fabrication. I accept Ms Lee’s denials that she ever received $15,000 for the purpose of setting up a family trust.

90. Secondly, Mr Un gave evidence that when he signed the statutory declaration on 27 June 2014, he did not know or suspect the property had been transferred to his daughters on 5 May 2014. He deposed that that did not occur to him as a possibility. However, the attachment to the email he sent to Mr Ma on 24 June 2014 contains a clear statement that the property had been transferred by Mr Un. During cross-examination, Mr Un volunteered that the content of his message to Mr Ma was “something that my wife told me, knowing that even [if] the names are transferred, I could continue to live there”. It is likely that the attachment was drafted by Mr Un (for the purpose of having a statutory declaration prepared for Ms Lee), but even if it was drafted by Ms Lee, it is very likely that Mr Un would have read it before sending it to Mr Ma. In these circumstances, I cannot accept Mr Un’s evidence that he did not know or even suspect that the property had been transferred. I find that he in fact knew, as at 24 June 2014, that the property had been transferred to his daughters. I further find that Mr Un was aware of that because he participated in the effecting of the transfer, including by signing the Transfer form in the presence of Ken Ma.

91. I formed an overall impression of Mr Un as a witness lacking credibility and reliability, particularly in relation to the significant events as identified earlier in these reasons (at [7] above). I consider that he is a witness quite prepared to invent evidence in the perceived interests of his case, including in an attempt to impugn Ms Lee’s honesty. I would not be prepared to accept his evidence on any contentious matter of significance, unless it was corroborated by evidence that was likely to be reliable. I made that assessment after making due allowance for the fact that the relevant events occurred many years ago.

92. I have also carefully scrutinised the evidence given by Ms Lee. Some parts of her evidence are incorrect. In my view she is wrong, for example, in saying that she received the new Certificate of Title from her parents. It is more likely that she collected it herself from the office of Machiao Lawyers. Further, her evidence was somewhat vague as to when she attended the solicitor’s office, and as to what occurred there. Both she and Ms Kan gave evidence that they signed documents at the solicitor’s office, but the file does not contain any documents signed by either of them, and it was not necessary for either to sign the form of Transfer without monetary consideration. These matters call for her evidence to be treated with caution when it is not corroborated by reliable evidence. However, many aspects of her evidence, including as to important events, are supported by reliable documentary evidence. In addition, I formed the impression that Ms Lee was a witness who was attempting to understand the questions put to her, and trying to answer those questions as accurately as her recollection would allow. Where there is conflict between her evidence and the evidence given by Mr Un on any matter of significance, I would prefer her evidence unless it was shown by reliable evidence to be incorrect.

93. Ms Kan also struck me as a witness who was attempting to understand the questions put to her, and trying to answer those questions as accurately has her recollection would allow. Notwithstanding the reservations I have concerning her evidence about signing documents at the solicitor’s office, I would also prefer her evidence to that of Mr Un, on any matter of significance, unless her evidence was otherwise shown to be incorrect.

94. As I have already said, I prefer Ms Lee’s evidence to that of Mr Un as to the circumstances in which she agreed to repay the mortgage on the property in May 1999. That is to say, I accept that she agreed with her father (in whose name the property was then held) that she would repay the mortgage of almost $77,000 on the basis that the property would eventually pass to her, and her parents would continue to live in the property for so long as it was suitable for them.

95. It is not necessary to make any determination as to whether Mr Un thereafter held his legal title to the property subject to any equitable obligations, or indeed whether, prior to the repayment of the mortgage, he held the property on any resulting trust arising from contributions made by Ms Lee and Ms Kan towards the acquisition of the property. It may be assumed, favourably to the plaintiff, that he held the property without owing any such obligations. Even so, the fact that the property was acquired in 1998 using funds contributed by Ms Kan and Ms Lee as well as Mr Un and Mrs Chan, and the circumstances in which Ms Lee repaid the mortgage in 1999, lend support for the contention, made by both Ms Lee and Ms Kan, that in early 2014 the parents made it known that they wanted to transfer the property to their two daughters. I accept the evidence given by the two daughters, over that of their father, to the effect that the parents made it known that they wanted to transfer the property to the daughters when Ms Kan came to Australia to visit.

96. Having regard to the documents in the solicitor’s file, including the file coversheet and the invoice made out to the plaintiff, the likelihood is that Mr Un, who had earlier used Ken Ma and Ronald Ma as his solicitors, gave instructions to Machiao Lawyers (probably to Ken Ma) to act for him in effecting a transfer of the property to Ms Lee and Ms Kan. That is not to say that Ms Lee had no involvement with the solicitors, even at an early stage. It is clear that she was in contact with Mr Ma, concerning the valuation of the property, by 28 March 2014, the day Mr Un apparently signed his statutory declaration in support of the application for a replacement Certificate of Title. However, I do not accept Mr Un’s evidence to the effect that Ms Lee made the necessary arrangements with the solicitors, and that he merely attended the office and signed documents, not knowing that there was to be a transfer from him to his daughters.

97. I accept the evidence of Ms Lee and Ms Kan over that of their father in relation to the attendances at the solicitor’s office. I therefore accept that Ms Lee and Ms Kan each attended the office on one occasion, in the company of their parents, but at separate times. That Ms Kan attended the office (contrary to Mr Un’s evidence) is supported by the fact that there is a copy of her passport on the file. It is not clear upon what dates the daughters attended the solicitor’s office, but it seems likely that they occurred in late March to early April 2014. It is also not clear whether Mr Un attended on only those two occasions. It does appear that one attendance by Mr Un occurred on 28 March 2014, when he signed the statutory declaration. (Mr Un also appears to have attended the office on 27 June 2014, after the transfer had been effected, to sign another statutory declaration.)

98. I am unable to accept Mr Un’s evidence about the circumstances in which he executed the form of Transfer, including his evidence to the effect that he was only told that the documents were for the purpose of obtaining a new Certificate of Title. The likelihood is that having given instructions to Mr Ma to act for him in effecting the transfer, Mr Ma attended to that task. It is likely that Mr Ma, who speaks Mr Un’s preferred language of Cantonese, would have explained to Mr Un that the effect of the transfer would be to place the ownership of the property into the names of his daughters. There is no file note in evidence of such an explanation, but the absence of a file note does not persuade me that no explanation was given. A relatively brief explanation would have been sufficient to inform Mr Un of the nature and effect of the transaction. There is no reason why Mr Un could not have asked questions of Mr Ma were he in any doubt about what he was doing or what he was signing. I find that Mr Un was well aware that he was transferring the property into the ownership of his daughters.

99. I should add that I specifically reject Mr Un’s evidence that he did not meet with Ken Ma. It is inherently unlikely that Mr Ma would falsely witness a statutory declaration made by Mr Un, and falsely witness Mr Un’s signature on the form of Transfer. I think that Mr Un’s evidence on this matter is another fabrication on his part, designed to advance his case. I do not accept the suggestion made in submissions to the effect that such conduct might be the result of the solicitor having a busy practice.

100. It is noteworthy that there is nothing in the solicitor’s file to suggest that Mr Un ever raised the topic of a family trust. Again, I prefer the evidence of Ms Lee to the effect that she had no discussions with her father in which he asked her to establish a family trust, or in which she agreed to do so. I also accept Ms Kan’s evidence that she was not told by her mother in 2014 that Mr Un wanted to set up a family trust. I further find that Mr Un did not raise the topic of a family trust with his solicitor at that time. It was put to Mr Un in cross-examination that if he had wanted to set up a trust, the obvious person to speak to would have been Mr Ma. Mr Un seemed to agree with that proposition, and then added: “I haven’t come to that step yet…”.

101. I have not overlooked the evidence concerning the “will” document that was apparently signed by Mr Un and Mrs Chan and which bears the date 5 May 2014. However, insofar as any cogent intention about a family trust can be discerned from the document, it seems that the trust was intended to operate after the transfer of the property to Ms Lee and Ms Kan. By the time the document was prepared (assuming that to have occurred on 5 May 2014), Mr Un had already done everything necessary to effect the transfer. As it happened, the Transfer was registered on that day. There is no acceptable evidence that Mr Un had made it known to anyone that the transfer was not to operate unless and until a trust was established. In that regard, I do not accept Mr Un’s evidence that he gave the “will” to Ms Lee on 5 May 2014 “as part of setting up the family trust”, or the evidence he gave in cross-examination that “on that day, I showed her the will as well as gave her the money”. I consider that evidence to be yet another fabrication on his part.

102. The factual findings I have made, as set out above, undermine each of the bases of the plaintiff’s claim to impugn the 2014 transfer.

103. The unconscionable dealings case is not made out. I do not think that Mr Un was labouring under any “special disability” by reason of his age, state of health, lack of understanding of English, and a need for legal advice. He was 79 years of age at the time of the transfer, but there is no evidence of any relevant deficiency in his physical or mental health at that time. His lack of understanding of English is not significant in circumstances where he had the benefit of a solicitor with whom he could speak Cantonese, and I have found that it is likely that the solicitor explained to Mr Un the effect of the transfer. In my opinion, there was no unconscionable taking advantage of any “special disability” in this case, notwithstanding that no monetary consideration was paid at the time of the transfer.

104. The question whether a contract is an unjust contract within the meaning of the Contracts Review Act depends upon whether the contract (or a provision of the contract) is unjust in the circumstances relating to the contract at the time it was made (see s 7(1) of the Act). The Court is required to have regard to the public interest and to all the circumstances of the case, including those referred to in ss 9(1) and 9(2) of the Act.

105. Having considered those matters, including those identified by the plaintiff in submissions, I do not think that the transfer was unjust in the circumstances relating to it at the time it was effected. The transfer arose in the context of a property that had been acquired in 1998 in the plaintiff’s name, using funds from a variety of family sources. The mortgage over the property had been repaid in 1999 by Ms Lee in circumstances where it was agreed that the property would eventually pass to her, and her parents would continue to live in the property for so long as it was suitable for them. It seems that in early 2014, her parents made it known to her, and to her sister, that they wanted to transfer the property to them. Arrangements were made by Mr Un for that to occur whilst Ms Kan was visiting Australia.

106. Mr Un retained a Cantonese speaking solicitor to act on the transaction. I have found that it is likely that the solicitor explained the effect of the transfer to Mr Un, and that Mr Un could have asked questions of the solicitor if he was in any doubt about what he was doing or signing. I have further found that Mr Un was well aware that he was transferring the ownership of the property to his daughters. Moreover, I have found that Mr Un did not raise the topic of a family trust with either the solicitor or Ms Lee.

107. I accept that Mr Un probably expected that he would be able to continue to live in the property for so long as it was suitable for him, and I accept that the terms of the transfer did not guarantee that would be the case. However, I think it is likely that he was content for that informal understanding to remain just that. Mr Un did not seek to raise that as an issue, and I am not persuaded that he was in any way incapable of doing so. I consider that Mr Un was capable of looking after his own interests in the transaction, with the assistance of Mr Ma available to him if required. Furthermore, I do not think that Ms Lee or Ms Kan, either alone or together, sought to take advantage of their father in the transaction that was, after all, advanced to them by their parents.

108. In all the circumstances, including the lack of a monetary consideration, I do not regard the transfer as a contract that is unfair or unjust at the time it was made. It is not necessary to consider whether this claim is in any event defeated by the time bar in s 16 of the Act.

109. The plaintiff’s case for breach of trust, in failing to establish the family trust, cannot be sustained due to my findings that Mr Un did not raise that topic in his discussions with Ms Lee, and that she did not agree to establish any family trust.

110. Similarly, the case of non est factum fails in circumstances where I have found that Mr Un was well aware that he was transferring the property into the ownership of his daughters.

111. Lastly, the case that the transfer was procured by fraud must be rejected. The evidence given by Mr Un about being tricked by Ms Lee into transferring the property, believing that he was merely obtaining a replacement Certificate of Title, is not accepted. Rather, I accept Ms Lee’s denials in that respect. The allegations of fraud made against her are firmly rejected.

112. It follows from the above that the plaintiff’s claims to have the 2014 transfer declared void or set aside must be dismissed. The defendants, as the registered proprietors of the property, were entitled to sell the property and are entitled to the proceeds of the sale. I note that the plaintiff did not seek to advance a case that he was wrongfully deprived of a life estate, or a right of residence, such that the defendants are obliged to account to him for the value of such an estate or right.

113. It is not necessary to determine the issues on the Cross-Claim. The defendants’ entitlement to the proceeds of sale is established by their status as registered proprietors at the time of the sale. They held that status unaffected by any equitable obligations owed to the plaintiff, his claims in that regard having failed.

114. The plaintiff also made a claim against the defendants for wrongfully disposing of and selling certain items of personal property. However, that claim also fails. Again, I prefer the evidence of Ms Lee to that of Mr Un as to these matters. Further, there was no admissible evidence of the value of the property said to have been wrongfully dealt with.

Conclusion

115. For the above reasons, the Court will order that the Statement of Claim be dismissed. The Court will further order that the proceeds of sale that were paid into Court be paid out to the defendants. They are entitled to that money equally, even if Ms Kan has stated in an affidavit that if she is entitled to receive any funds from the sale of the property, she intends to provide those funds to Ms Lee. The Cross-Claim will otherwise be dismissed.

116. Costs should follow the event. Accordingly, the Court will also order that the plaintiff/cross-defendant pay the defendants/cross-claimants’ costs of the proceedings.

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Decision last updated: 01 June 2023