Wang v Fan - [2024] NSWSC 1339

Supreme Court

New South Wales

Medium Neutral Citation: Wang v Fan [2024] NSWSC 1339
Hearing dates: 19 September, 12, 13 December 2023 and 21, 22 February, 7, 22, 28 March 2024. Further written submissions received on 12 April and 9 May 2024, submission regarding a joint statement of issues 19 August 2024
Date of orders: 24 October 2024
Decision date: 24 October 2024
Jurisdiction: Common Law
Before: Walton J
Decision:
(1) The plaintiff shall bring in Short Minutes of Order reflecting this judgment within 28 days of this judgment. Those Short Minutes shall incorporate a program for the resolution of any issues remaining as to the form of the Orders to reflect the judgment and interest and costs which are reserved. In the case of interest and costs, the directions may also make provision for the receipt of evidence.
(2) In the event that the defendant disputes the form of the Orders filed in accordance with Order (1) then the defendant shall file the alternative form of Orders including directions as to the receipt of submissions as to the form of Orders, interest and costs within 49 days.
(3) In the event that the parties settle the terms of Orders and Short Minutes of Order, the Short Minutes of Order shall be filed with a corresponding note to that effect and the Court shall deal with the Orders administratively in Chambers.

Catchwords:
CONTRACT – construction and interpretation – whether loan agreement – implied terms – whether payment a gift – payments made to and between third parties – whether defendant monies were paid pursuant to plaintiff’s directions – cross-claim
RESTITUTION – where plaintiff paid defendant in consideration for a promise to marry – defence – cross-claim – unjust enrichment – failure of consideration – claim for money had and received

Legislation Cited:
Evidence Act 1995 (NSW)
Civil Procedure Act 2005 (NSW)

Cases Cited:
Antov v Bokan [2018] NSWSC 1474
Australian Competition and Consumer Commission v Air New Zealand Ltd (No 1) (2012) 207 FCR 448; 301 ALR 326; [2012] FCA 1355
Australian Mutual Provident Society v Specialist Funding Consultants Pty Ltd (1991) 24 NSWLR 326
Australian Securities & Investments Commission v Rich (2005) 191 FLR 385; [2005] NSWSC 417
AWA Ltd v Exicom Australia Pty Ltd (1990) 19 NSWLR 705
Carpenter & Anor v Morris & Anor [2023] NSWCA 154
CBRE (V) Pty Ltd v City Pacific Ltd (in liq) [2022] NSWCA 54
David Securities Pty Ltd v Commonwealth Bank (1992) 175 CLR 353
Dewar v Dewar [1975] 2 All ER 728
Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; [2012] HCA 7
Falcke v Scottish Imperial Insurance Company (1886) 34 Ch D 234
Federal Commission of Taxation v Cassaniti (2018) 266 FCR 385; [2018] FCAFC 212
Gregg v R [2020] NSWCCA 245
Israel v Foreshore Properties Pty Ltd (in liq) (1980) 30 ALR 63
Jones Lang LaSalle (NSW) Pty Ltd v Taouk [2012] NSWCA 342
Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd (No 3) [2014] WASC 162
Lederberger v Mediterranean Olives Financial Pty Ltd (2012) 38 VR 509
Liu v Lam [2024] NSWSC 1306
Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; (2008) 232 CLR 635
National Australia Bank Ltd v Rusu (1999) 47 NSWLR 309; [1999] NSWSC 539
NZI Capital Corporation Pty Ltd v Child (1991) 23 NSWLR 481
Pavlis v Pavlis [2021] NSWSC 1117
Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154
Progressive Pod Properties Pty Ltd v A & M Green Investments Pty Ltd [2012] NSWCA 225
R v New Queensland Copper Co Ltd (1917) 23 CLR 495
Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516
Saloman v Saloman & Co Ltd [1897] AC 22
Young v Queensland Trustees Ltd (1956) 99 CLR 560

Texts Cited:
I Ramsay and R Austin, Ford Austin & Ramsay’s Principles of Corporations Law (17th ed, 2017 LexisNexis)
K Mason, J Carter and G Tolhurst Mason & Carter's Restitution Law in Australia (4th ed, 2021, LexisNexis)
S Odgers, Uniform Evidence Law (19th ed, 2024, Thomson Reuters)
W Covell, K Lupton and L Parsons, Principles of Remedies (8th ed, 2022, LexisNexis)

Category: Principal judgment
Parties: Jingsi Wang (Plaintiff)
Haiyang Fan (Defendant)
Representation: Counsel:
P Russell (Plaintiff)
P Newton SC and T Buterin (Defendant)
Solicitors:
Maxim Legal Pty Ltd (Plaintiff)
Grandwin Legal (Defendant)

File Number(s): 2023/00062954
Publication restriction: Nil

JUDGMENT

This matter concerns payments between Ms Jingsi Wang (“the plaintiff”), and Mr Haiyang Fan (“the defendant”). The primary claims brought by the plaintiff concerned:

the plaintiff lending the defendant RMB 10,000,000 (“the RMB loan”); and

the plaintiff paying the defendant $248,500 (“the $248,500 payment”) in consideration for the defendant’s promise to marry the plaintiff.

(together “the December 2022 payments”)

Soon after receiving monies from the December 2022 payments, the defendant ended the romantic relationship with the plaintiff. The plaintiff sought a declaration that the defendant was liable to repay the RMB loan and the $248,500 payment to the plaintiff.
In response to this claim, the defendant filed a cross claim which alleged that the monies paid in December 2022 by the plaintiff were, in effect, partial repayment of previous debts (“the alleged previous debts”) made to the defendant by the plaintiff with an outstanding amount owed to the defendant in Renminbi (expressed as “RMB”) and the plaintiff in Australian dollars (expressed as “$” unless the context requires reference to AUD). The alleged previous debts were said to have accrued between August 2018 and February 2022 and concerned some payments made to and between third parties including individuals and companies whom the defendant claimed were made at the request of the plaintiff.
The plaintiff was, at the close of the proceedings, the director and sole shareholder of Anson One International Pty Ltd (“Anson One”) and had been from 14 November 2013 when the company was registered. The plaintiff was additionally the director of Pfizer Group Ltd (“Pfizer”) from 13 November 2015, the date the company was incorporated in the Republic of Seychelles, until 20 October 2021 when her mother, Ping’e Yuan (“the plaintiff’s mother” or “Ms Yuan”), took over. The plaintiff’s mother was, at all times, the sole shareholder of Pfizer.
The defendant was the director and sole shareholder of Func International Ltd (“Func”) from 23 June 2017, the date the company was incorporated in the Territory of the British Virgin Islands. It is unclear on the evidence whether the defendant retains those shares and his role as director.¹ The defendant was also the director and sole shareholder of Syat Pty Ltd (“Syat”) from 1 March 2012 to, on the defendant’s evidence, 2017 when the company stopped trading. However, an ASIC search conducted on Syat Pty Ltd on 9 February 2023 showed that the defendant remained a director and shareholder of the company at that time.

Procedural history

On 24 February 2023, the plaintiff filed a Statement of Claim (“SOC” or “the claim”) commencing these proceedings against the defendant. On the 11 April 2023, the defendant filed a Defence and a Statement of Cross-Claim which were twice amended. The Further Amended Defence (“Defence”) and Further Amended Statement of Cross-Claim (“SCC”) were filed on 22 September 2023 by the defendant. On 13 October 2023, the plaintiff filed a reply to the Defence (“Reply”) and a Defence to the SCC (“DSCC”).
Both the plaintiff and the defendant filed extensive closing written submissions. The defendant was given leave to file a supplementary submission concerning authorities in relation to payments on request creating an immediate debt and a second note on credit to the Court (the submission was received on 12 April 2024). The plaintiff was given leave to make reply submissions generally in writing by consent of the defendant. Those submissions were filed on 9 May 2024. Neither party sought leave to make any further submissions after the reply submissions were filed and served by the plaintiff, except for submissions made by the parties in response to the Court’s request for a joint statement of issues.

Issues

Throughout the hearing consistent requests were made to the parties to provide a joint statement of issues (“JSOI”) to the Court.
A final request was made, on the last day of the hearing, for a JSOI to be provided to the Court with the supplementary submissions (which were delayed in the plaintiff’s case) or in the alternative, if there was a dispute as to the JSOI, that should be raised.
Following these requests no JSOI was provided to the Court. Nor was any issue raised regarding a dispute between the parties in that respect.
On 6 August 2024, the Court sent an email to the parties requesting a JSOI be provided. No response was received. On 15 August 2024, the Court sent a second email directing the parties to provide a JSOI.
On 19 August 2024, Mr T Buterin, Junior Counsel for the defendant sent an email in reply which advised that the parties had been unable to agree on a JSOI and provided the defendant’s statement of issues. The plaintiff confirmed that position shortly after via email and provided the plaintiff’s statement of issues.
The end result was that the parties apparently wished to represent to the Court that there was not a single issue in common which could be identified, even though, at a sedimentary level, it must have been possible to identify common issues in the respective statement of issues the parties filed.
Much might be said about this failure. However, I do not propose to make any observations beyond stating that the approach of counsel has complicated and delayed the resolution of the matter and constituted, in my view, an approach inconsistent with the requirements of s 56(3) of the Civil Procedure Act 2005 (NSW).
Given that position, it is necessary at the outset of the judgment to identify, albeit in the absence of that assistance, what is the pith and substance of the parties’ cases. I will attend to those matters in the following section of this judgment.
Before turning to that analysis, it is well to mention that a particular issue arose during the course of the proceedings as to the authenticity of the WeChat conversations from WeChat accounts which became known in the proceedings as the Palm Beach and PUA WeChat accounts (“the Palm Beach conversations” and “the PUA conversations” respectively).
The plaintiff objected to the receipt of evidence concerning the Palm Beach and PUA conversations on the basis that the documents were not authentic. With the concurrence of the parties, the Court admitted the evidence on a provisional basis pursuant to s 57(1)(b) of the Evidence Act 1995 (NSW). In the result, the respective parties were cross-examined on the Palm Beach and PUA conversations which evidence then bore upon the authenticity of the documents. I will return to that question after outlining the respective cases of the parties and dealing with issues of credit and authenticity.

The case theories of the parties

This section of my judgment sets out my understanding of the essence of the parties’ cases. It is not intended to produce a full summary of the parties’ cases which, in substantial measure, but not exclusively, will be contained in the analysis of the transactions, which lie at the centre of the contest.

The plaintiff’s case

In closing written submissions, the plaintiff expressed their “Pleadings and Contentions” as follows:

“The plaintiff contends that she made the December 2022 payments because in the period from about 15 to 26 December 2022, the defendant promised to marry the plaintiff on condition that or in consideration for:
(a) the plaintiff lending to the defendant RMB10,000,000 (RMB loan); and
(b) the plaintiff paying to the defendant the sum of $248,500 ($248,500.00 payment).”

That expression of the claim aligned with the particulars of the SOC (at [12]) but was amended during closing submissions.
During oral submissions the Court sought to clarify the precise cause of action or causes of action in relation to the RMB loan and the $248,500 payment. The plaintiff made the following clarification:

“The way it's pleaded, your Honour, is relying upon, firstly, we say, well, a loan is a loan. There's an implied promise to repay that. Then we say in relation to the 248,500 that, because the circumstances contemplated by that payment did not arise, namely marriage, we are entitled under the law for restitution of that money pursuant to claim of money had and received.”

From that statement emerges two causes of action. The first is a claim for repayment of a debt on a loan based upon an implied promise to repay the RMB loan and the second is a claim for restitution for money had and received, namely the $248,500 payment, on the basis of unjust enrichment because the circumstances giving rise to the payment of the money did not occur.
In the alternative, the plaintiff sought to recover the total amount of the December 2022 payments by way of restitution for money had and received.
I will describe how the December 2022 payments were answered by the defendant below. However, I note that there was no dispute that these payments were made. The real issue in dispute is the characterisation of the December 2022 payments which is best explained after I deal with the Defence and SCC.
I note that there was no dispute as to the essential legal principles that should be applied to the resolution of the respective claims although a particular matter of principle was raised by the plaintiff as to restitutionary relief concerning payments to third parties. I will attend to those principles briefly after attending to the defendant’s case.

The defendant/cross-claimant’s case

During the course of the final day of hearing, I sought to clarify what the precise cause of action or causes of action the cross-claimant relied upon. However, it was not made entirely clear.
The defendant did not deny that the December 2022 payments were received but denied the characterisation of those payments as constituting either a loan or money had and received.
The Defence pleaded that, on or about 22 December 2022, the plaintiff and the defendant had a conversation during which the defendant demanded that the plaintiff pay him the “full amount the defendant paid for the watch and deposit (totalling $248,500)” and “the total amount he paid at the plaintiff’s request and direction less the amounts paid by the plaintiff at the defendant’s request” (“the demand”) and that the “plaintiff agreed to the demand”.
In broad terms, what the defendant contended was that the December 2022 payments were the repayment of existing debts owed to the defendant by the plaintiff arising from what I will discuss below as the transactions. The action that each debt rests upon was pleaded in the defence broadly as follows:

An agreement in August 2018 between the plaintiff and the defendant whereby the plaintiff agreed to convert payments to be made by the defendant in RMB into AUD. Payment was made by the defendant as directed by the plaintiff, however, “no consideration was given by the plaintiff for the benefit she received and retained from the payment made by the defendant at the plaintiff’s direction”.

From on or about August 2018 to on or about 11 February 2022 the defendant made payments to the plaintiff and third parties, namely, the plaintiff’s mother, Anson One, Haiyan Zhou and ‘Zhang’. It was further pleaded in the Defence and SCC that the defendant loaned to the plaintiff the monies he paid at her request to the plaintiff and there was an implied promise to repay the monies paid by him to third parties at the plaintiff’s request.

Additionally, the defendant made payments to Pfizer through his company Func at the request of the plaintiff.

These pleadings were crystallised in the defendant’s supplementary submissions which were as follows:

“3. Mr Fan sets out at DS [9] – [11] (with the exception of [11(b)]) the payments Mr Fan contends he made at Ms Wang’s request or direction.
4. The Further Amended Statement of Cross Claim [Exh 2 tab 10] pleads:
a. by agreement made in August 2018, Ms Wang agreed to convert payments to be made by Mr Fan from RMB to AUD (paragraph 1.1);
b. on 2 August 2018, Ms Wang directed Mr Fan to pay RMB into the Zhu Zhang Account (paragraph 1.2);
c. on 3 August 2018, Mr Fan paid RMB2,544,020 into the Zhu Zhang Account (paragraph 1.3);
d. in breach of the agreement, Ms Wang failed to pay to Mr Fan RMB2,544,020 or its AUD equivalent (paragraph 1.7);
e. Ms Wang has been enriched by the payment made at the expense of Mr Fan and is liable to Mr Fan for the payment (paragraph 1.11).
f. from in or about August 2018 to on or about 1 February 2022, at the request of the cross defendant, the cross claimant made payments to Ms Wang and third parties (paragraph 6);
g. Mr Fan loaned to Ms Wang the moneys he paid at her request to Ms Wang (paragraph 6.1(a));
h. there was an implied promise to repay the moneys paid by him to third parties at Ms Wang’s request (paragraph [6.1(b), (c)).”

The essence of the defendant’s case arising out of these pleadings was encapsulated in the defendant’s oral submission on the final day of the hearing:

“…in defence to the so‑called RMB loan and the payment of $248,000, the defendant, Mr Fan, says before those payments were made, by agreement between the plaintiff and defendant and at the plaintiff's request, "I made a series of payments either to you or as directed by you, and when I made those payments that created an immediate debt that had to be repaid and you had not repaid those amounts", and it's only when the plaintiff advanced the RMB 10 million and the $248,500 that she became in credit by a minor amount that the defendant has conceded on the cross‑claim and on the defence. It's our position that this case is truly an accounting exercise.”

My understanding of what senior counsel for the defendant meant by ‘an accounting exercise’ is that on the defendant’s case the payments that were made by her were payments in the nature of payments due as a result of the earlier sums paid by him at her direction.
Thus, the disputed payments that were relied upon as having been made by the defendant at the request of the plaintiff, in that respect, were as follows:

On 4 August 2018, the defendant, through his mother, paid RMB 2,544,020 (being AUD 500,000) to ‘Zhu Zhang’ ("Foreign exchange transactions”).

On 30 October 2018, the defendant made 3 transfers of RMB 1,000,000 to the plaintiff’s mother (“the alleged gift transaction”).

On 16 June 2020, the defendant transferred RMB 332,214.50 to Haiyan Zhou (“Haiyan Zhou payment”).

On 29 September 2021, the defendant transferred $50,000 into the account of Zhang (“Zhang payment”).

On 29 April 2019, the defendant transferred to Anson One the sum of $950,000.

On 17 June 2019, the defendant transferred to Anson One the sum of $500,000.

On 27 December 2022, the defendant transferred to Anson One the sum of $100,000.

(These 3 transactions shall be collectively referred to as “Money transferred to Anson One”)

On 30 August 2019, the defendant, through Func, transferred Pfizer $300,000.

On 10 March 2020, the defendant, through Func, transferred to Pfizer the sum of $82,910.70.

(These 2 transactions shall be collectively referred to as “Money transferred to Pfizer”)

Collectively, the disputed payments shall be referred to as such or as ‘the transactions’.
On the defendant’s final accounting, the defendant alleged:

the plaintiff is liable to the defendant for RMB 7,477,215 less RMB 7,628,215 = RMB 151,000; and

the defendant is liable to the plaintiff for $2,911,579.20 less $2,752,910.70 = $158,668.50.

I note, in this respect, that attached to this judgment and marked as Annexure A is a document produced by the defendant marked as Exhibit B in the proceedings. The document is attached because it provides a useful guide to monies paid or received as between the plaintiff and the defendant or as between either party and third parties. It is also somewhat useful in identifying disputed transactions (or at least part of them) by the marking of those transactions in red.

The attachment of this document to the judgment should not be taken as in any way definitive of the Court’s views about the transactions as they are described in that document by the defendant. For example, items 11 to 14 and 30 concern whether various payments made by the defendant to Anson One on the dates shown were loans as between the plaintiff and the defendant or Anson One and the defendant such that the fundamental issue was whether Anson One or the plaintiff were parties to the loan from the defendant. Annexure A does not and does not purport to grapple with that issue between the parties in that way where it refers to, in the headings to the fifth and sixth columns to “AUD paid by plaintiff” and “AUD paid by defendant”. Nor does it purport to be a means of reflecting upon the true character of the transactions which will be dealt with during the course of this judgment.
I note for completeness that the plaintiff also produced tables of transactions in her affidavit which were less amenable to being made an attachment to this judgment whereas Annexure A was better capable of giving a bird’s eye view of the flow on monies between the parties and third parties.
Nonetheless, the most appropriate way of identifying the true character of the payments is to examine each transaction in turn, provided careful attention is given to the overall context in which the transactions occurred. That process will be undertaken below.
Questions were raised during the proceedings as to what the precise basis upon which it was said the plaintiff owed a legal obligation to the defendant in relation to each transfer of monies. As mentioned, this was never made entirely clear but in broad terms it was expressed by the defendant, in closing written submissions as “[t]he causes of action relied on by Mr Fan are: breach of contract; failure of consideration; unjust enrichment; and money had and received”.
Further, the plaintiff contended that the payments made between the parties and the liabilities for loans give rise to a right of set-off to determine the amount owing: AWA Ltd v Exicom Australia Pty Ltd (1990) 19 NSWLR 705 and Australian Mutual Provident Society v Specialist Funding Consultants Pty Ltd (1991) 24 NSWLR 326 at 328. The defendant alternatively placed reliance upon s 21(1), Civil Procedure Act 2005 (NSW) which is in the following terms:

21 Defendant’s right to set-off
(1) If there are mutual debts between a plaintiff and a defendant in any proceedings, the defendant may, by way of defence, set off against the plaintiff’s claim any debt that is owed by the plaintiff to the defendant and that was due and payable at the time the defence of set-off was filed, whether or not the mutual debts are different in nature.
(2) This section extends to civil proceedings in which one or more of the mutual debts is owed by or to a deceased person who is represented by a legal personal representative.
(3) This section does not apply to the extent to which the plaintiff and defendant have agreed that debts (whether generally or as to specific debts) may not be set off against each other.
(4) This section does not affect any other rights or obligations of a debtor or creditor in respect of mutual debts, whether arising in equity or otherwise.
(5) This section is subject to section 120 of the Industrial Relations Act 1996.
(6) In this section, debt means any liquidated claim.

LEGAL PRINCIPLES

Loan

The plaintiff relied upon NZI Capital Corporation Pty Ltd v Child (1991) 23 NSWLR 481 in this respect. The relevant passage at 489 per Rogers CJ is as follows:

“In the case of every loan of money there is an implication of a general obligation to repay the loan. That was recognised by the High Court in R v New Queensland Copper Co Ltd (1917) 23 CLR 495. However, such an implication may be deflected by specifying a particular source of repayment and restricting the lender to that source.”

That principle appeared to be accepted by both parties and, in my view, is the current status of the law, bearing upon the claim for repayment of a loan.

Restitution for money had and received

Restitutionary claims for money had and received only arise where there is no contract or an ineffective contract. Once there is an effective contract between parties, that contract covers the field and any such restitution claims will fail.^[1]
1. The defendant suggested the company was shut down in 2022, but in oral evidence he suggested that the shares may still have value.
Another expression of this distinction is that, while the law of restitution seeks to reverse the defendant's gain, the law of contract seeks to compensate for the plaintiff's loss.^[2]
2. K Mason, J Carter and G Tolhurst Mason & Carter's Restitution Law in Australia (4th ed, 2021, LexisNexis) (“Mason and Carter”) at [215]
The principles outlined in “Principles of Remedies” by W Covell, K Lupton and L Parsons^[3] are useful in understanding the taxonomy of the plaintiff’s claim in this respect:

“For practicality, we have organised the cases according to the traditional forms of action in quasi-contract, because that is how Australian courts, including the High Court, continue to approach the subject, based upon precedent and the uncertain status of the unjust enrichment principle. This applies especially to the action fully known as money had and received by the defendant to the use of the plaintiff. In Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd (No 3), Edelman J said: 'In broad summary, a plea of money had and received is a plea in the "taxonomic category" of unjust enrichment."" While the modern law is no longer bound by the forms of action, the terminology of quasi-contract continues in active usage by the highest appellate courts”.
3. W Covell, K Lupton and L Parsons, Principles of Remedies (8th ed, 2022, LexisNexis) at 169.

French CJ, Crennan and Kiefel JJ in Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; [2012] HCA 7, citing David Securities Pty Ltd v Commonwealth Bank (1992) 175 CLR 353, expressed an approach for determining such claims (at [30]):

“30. In David this Court explained the part played by unjust enrichment in a claim for money had and received (in that case for recovery of a payment made under mistake of law). That explanation may be expressed, at a fairly high level of abstraction, as an approach to determining such claims. In summary:
• recovery depends upon enrichment of the defendant by reason of one or more recognised classes of “qualifying or vitiating” factors;
• the category of case must involve a qualifying or vitiating factor such as mistake, duress, illegality or failure of consideration, by reason of which the enrichment of the defendant is treated by the law as unjust;
• unjust enrichment so identified gives rise to a prima facie obligation to make restitution;
• the prima facie liability can be displaced by circumstances which the law recognises would make an order for restitution unjust.

Unjust enrichment therefore has a taxonomical function referring to categories of cases in which the law allows recovery by one person of a benefit retained by another. In that aspect, it does not found or reflect any “all-embracing theory of restitutionary rights and remedies”. It does not, however, exclude the emergence of novel occasions of unjust enrichment supporting claims for restitutionary relief. It has been said of Lord Mansfield's judgment in Moses v Macferlan that it was his view that “the grounds for obtaining relief in money had and received were not to be considered static and the remedy could be made available in any case in which money had been paid in circumstances where it was unjust for the defendant to retain it”.”

The plaintiff relied on Roxborough v Rothmans of Pall Mall Australian Ltd (2001) 208 CLR 516 at [14] to [16] where Gleeson CJ, Gaudron and Hayne JJ considered failure of consideration as the basis for a money had and received claim:

“Failure of consideration is not limited to non-performance of a contractual obligation, although it may include that. The authorities referred to by Deane J, in his discussion of the common law count for money had and received in Muschinski v Dodds, show that the concept embraces payment for a purpose which has failed as, for example, where a condition has not been fulfilled, or a contemplated state of affairs has disappeared. Deane J, referring to “the general equitable notions which find expression in the common law count”, gave as an example “a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it”.

The plaintiff additionally referred to the recent case of Carpenter & Anor v Morris & Anor [2023] NSWCA 154 at [6] where Bell CJ stated:

“Subject to defences such as change of position or bona fide purchaser for value without notice, a common money count for moneys had and received may be brought and sustained against a defendant who never had any entitlement to receive money not given as a gift. Neither mistake nor total failure of consideration is required to be established although they may separately sustain a claim for restitution.”

Payments to third parties

At the conclusion of oral submissions, the Court provided an opportunity for the parties to make supplementary submissions as to the principles applicable to circumstances where a request is made by “party B” to another, “party A”, to pay money to a third party. In reliance on Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 566 (“Young”), the defendant had submitted that a request of that kind constituted a loan of money payable on request which created an immediate debt owed by the plaintiff.
In the supplementary submissions for the defendant reliance was placed upon Progressive Pod Properties Pty Ltd v A & M Green Investments Pty Ltd [2012] NSWCA 225 (“Progressive Pod Properties”) and CBRE (V) Pty Ltd v City Pacific Ltd (in liq) [2022] NSWCA 54 (“CBRE”). The plaintiff submitted that neither judgment supported the defendant’s submission that the mere request by party B to party A to pay money to a third party immediately created a debt owing by party B to party A. Before turning to those authorities, I propose to briefly mention the authority in Young. The defendant in Young admitted that each of the loans alleged by the plaintiff had, in fact, been made to him by the plaintiff (a deceased person) but pleaded that he had repaid such loans.
The plaintiff is correct to submit that Young is authority for the following propositions:

a loan of money payable on request creates an immediate debt (page 566). A debt is conceived as a detention of a sum of money and not merely as a sum certain for an executed consideration on a mere breach of contract (see page 567); and

in such circumstances, the defendant must allege and prove payment by way of discharge as a defence to an action for indebtedness in respect of an executed consideration (see pages 569-70).

The facts and circumstances in ProgressivePod Properties were amply summarised by the defendant in what follows.
The issue in ProgressivePod Properties was whether the respondents (the “Greens”) were entitled to claim half of the cost of building a roundabout from the appellant (“Progressive”). The parties obtained approval to develop land they each owned on opposite sides of a road. One of the conditions of Council’s approval was that a roundabout be built to facilitate entry to their properties, the cost of which would be shared between the Greens and Progressive. It was contemplated that Council would construct the roundabout and charge the cost to the parties. However, the Greens took it upon themselves to construct the roundabout and claimed half of the cost from Progressive, which refused to pay. In reliance upon, among other things, Progressive’s agreement to share the cost of the construction of the roundabout, which was a condition of the grant of approval, the trial judge found Progressive had impliedly requested Greens to construct the roundabout for their joint benefit and at their mutual cost.
On appeal, Macfarlan JA, with whom Young AJA and Barrett JA agreed, found that, while the Greens assumed Progressive would pay half of the costs, the Greens did not seek its agreement or act on any request from Progressive to do the work.
In his reasons, Macfarlan JA stated at [5] to [9] as follows:

“5. In summary, I consider that the appeal should be allowed and judgment entered for Progressive because:
(a) The evidence did not establish that Progressive requested Greens to construct the roundabout or that, if there was a request, Greens relied on it in deciding to proceed; and
(b) Greens' application for leave to amend its pleading should be refused as the points it sought to raise were ones that might have been defeated by further evidence being adduced.

6. This result is not in my view discordant with the concept of unjust enrichment which underlies both the "long-established and well-recognised category of cases constituted by claims for work and labour done or money paid at the request of another" and other bases for restitutionary relief (see Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; 232 CLR 635 at [79], [85] and [86] and also more generally Equuscorp Pty Ltd v Haxton [2012] HCA 7; 86 ALJR 296 at [26] - [32] and Gummow J, "Moses v Macferlan: 250 years on"(2010) 84 Australian Law Journal 756).
7. Greens no doubt assumed that Progressive would pay half of the roundabout costs if Greens proceeded to construct the roundabout to meet its own time constraints without waiting for the Council to do so. However, it did not seek Progressive's agreement to pay half the cost, nor act on any request from Progressive to do the work when it did.
8. If Greens had sought confirmation from Progressive that it would pay half of Greens' construction cost, it is quite possible, in light of the evidence at the trial, that Progressive might have responded that it did not want the work done and did not wish to incur the costs at that stage as it had no plans for any immediate development of its land. Indeed, Progressive sold most of its land, in an undeveloped state, soon after.
9. Moreover it is unclear what, if any, benefit Progressive derived from Greens' construction of the roundabout. It can be assumed that Progressive's sale price was to some extent enhanced by the existence of the development consent but whether it was enhanced also by the existence of the roundabout in an amount equivalent to half of Greens' construction cost, or some part of it, is a matter of speculation.”

Young AJA identified (at [51]) the key questions for determination as being whether there was any implied request by Progressive to the Greens and, if so, whether payment/construction by the Greens was made in reliance on that request. This, his Honour said, was determinative of a case on a common money count for money paid by the Greens for Progressive at its request, being the only cause of action on which his Honour considered the Greens could succeed: [49].
From [53], Young AJA summarised the development of the law in this area which is instructive for present purposes:

“53. As is the case with quantum meruit, the common count for money paid lies both for situations of contract and where there is no contract, but the court can see that the circumstances are such that the defendant should reimburse the plaintiff for what the plaintiff has paid for the benefit of the defendant. The usual circumstance is where the plaintiff has been requested either expressly or impliedly by the defendant to make the payment.
54. In common with other indebitatus counts, promises to pay and requests could be inferred from all the circumstances even if it were clear that there was no express request. However, in the case of money paid, the courts were less inclined to infer a request than in other cases. One reason for this may be that if the money were paid without a prior request, there was a problem with the payment being past consideration for a later promise.
55. The earliest type of case in which the law inferred a request was where the defendant's close relative died whilst either the relative or the defendant was overseas and the plaintiff paid for the burial, see eg Jenkins v Tucker (1788) 1 H Bl 90: 126 ER 55.
56. There were four other classic situations where a request would usually be inferred, (1)…
(4) where the defendant is benefited by the plaintiff's payment and a reasonable person in the defendant's position would have expected that reimbursement was required unless he or she rejected the benefit within a reasonable time, see eg Falcke v Scottish Imperial Insurance Company (1886) 34 Ch D 234, 248; Brenner v First Artists' Management Pty Ltd [1993] 2 VR 221.
57. I need to make two comments about that list. First, it is not exhaustive. For instance, in one of the cases cited to us, Paynter v Williams (1833) 1 Cr & M 810; 149 ER 626, a local authority was liable to a doctor who was attending one of its pensioners, because the court found that the authority knew of what the doctor was doing, knew he was not acting for free and never protested.
58. Secondly, the fourth example must be distinguished from the suggested case of unjust enrichment that probably developed from it where there is acceptance of an incontrovertible benefit without any request, see eg L Goff & G Jones, The Law of Restitution, 7th ed (2007) Sweet & Maxwell at 1-019 (omitted from the 8th edition) and Rowe v Vale of White Horse District Council [2003] EWHC 388 (Admin); 1 Lloyd's Rep 418, but see Lumbers v W Cook Builders Pty Ltd [2008] HCA 27; 232 CLR 635.
59. The hallowed 3rd edition of E Bullen & S Leake, Precedents of Pleadings (1868) Stevens & Sons, says at p 42,
"A request will generally be implied where the defendant has notice of the payment being made for him and does not dissent."

60. I find it difficult to accept that such a wide statement follows from the authorities the authors cite. The proposition can be made out in some situations, vide Paynter v Williams, and it is probably true in situations where a reasonable person would have been expected to register dissent, but, outside those cases, it is questionable.
61. It is appropriate to record the aphorism of Pollock CB in Taylor v Laird (1856) 25 LJ Ex 329 at 332,
"One cleans another's shoes. What can the other do but put them on."

62. The law does not generally compel a person to pay for a benefit another has provided merely because that other has taken it into his or her mind to provide the benefit: Sumpter v Hedges [1898] 1 QB 673, 676, a passage approved by Dixon J in Steele v Tardiani [1946] HCA 21; 72 CLR 386, 403. It is an a fortiori case where the action also benefits, even primarily benefits, the person who provided the benefit.
63. This is where the matter of reliance comes into the picture. A person who provides a benefit both to himself and the defendant must show that it was not just a case of the defendant gaining a side benefit from an act done in the actor's own interest, but the act was one done at the request of the defendant.”

Progressive Pod Properties has recently been applied by the Court of Appeal in CBRE. At [33] to [36], Leeming JA, with whom Bell CJ and Brereton JA agreed, observed:

“33. The decisions upon which the primary judge expressly relied turn upon an implication of not merely a request for funds, but also an implicit promise to indemnify or reimburse those funds. That may be seen most clearly in the paragraphs from O3 Capital Pty Ltd v WY Properties Pty Ltd (2016) 49 WAR 517; [2016] WASCA 82 to which the primary judge referred. There the joint judgment of Newnes and Murphy JJA and Mitchell J said at [74] that “restitution at law has been seen to be grounded on an implicit promise by the defendant to indemnify or reimburse the plaintiff”. Their Honours added at [76], by reference to Falcke v Scottish Imperial Insurance Co (1886) 34 Ch D 234 that “in a commercial context, it might (generally speaking) readily be inferred that a party laying out money for another person would have an expectation to be repaid, and that the other person, knowing of the payment, might be inferred to have knowledge of that fact”. Further, at [77], by reference to Bank of England v Cutler [1908] 2 KB 208, their Honours said that “both the request and the promise of indemnity implied therefrom may be implied from conduct and circumstances, including the relation of the parties as one of the circumstances”.

34. True it is that Israel v Foreshore Properties Pty Ltd [(1980) 30 ALR 631], to which the primary judge also referred, supports the proposition that where money is paid without consideration by a party at the request and for the benefit of another, then the person who acts on the request is entitled to an indemnity. Aickin J, writing for the Court, who formulated the “general principle” in those terms made it quite clear that it was the opposite of an absolute rule to be applied in all cases. His Honour had earlier observed that whether a right of indemnity arises when one party makes a payment or incurs an obligation at the request of another party without consideration, depending on all the circumstances, “depends upon the common law, general equitable principles or upon an implied contract”: at 634-35. And immediately following the formulation of principle, Aickin J observed that the appellants sought to challenge its application by reason of a contrary intention being indicated. Israel v Foreshore Properties Pty Ltd is not authority for the proposition that in every case a person who makes payment without consideration at the request and for the benefit of another is entitled to an indemnity. In fact, the fact that the proposition was styled as a “general principle”, its being grounded in a concept of implied contract, and the references to equitable principles and the possibility of identifying a contrary intention all tell against there being any such rule. Yet that is how the decision seems to have been applied in the passage reproduced above in the judgment at first instance.
35. The passage from the second edition of what is now K Mason, J Carter and G Tolhurst, Mason & Carter’s Restitution Law in Australia (4th ed LexisNexis, 2021) on which the primary judge relied is considerably expanded in the current edition. All four editions have noted that “[t]he claim could be defeated, for example, by proof of an arrangement whereby B agreed to make a gift to A”. The current edition goes further, and states, emphatically, that that “[n]ot every requested payment generates liability”. It also refers to the following passage from Young AJA’s judgment in Progressive Pod Properties Pty Ltd v A & M Green Investments Pty Ltd [2012] NSWCA 225 at [59]-[60]:
“The hallowed 3rd edition of E Bullen & S Leake, Precedents of Pleadings (1868) Stevens & Sons, says at p 42,
‘A request will generally be implied where the defendant has notice of the payment being made for him and does not dissent.’

I find it difficult to accept that such a wide statement follows from the authorities the authors cite. The proposition can be made out in some situations, vide Paynter v Williams, and it is probably true in situations where a reasonable person would have been expected to register dissent, but, outside those cases, it is questionable.”

Further, and as Barrett JA noted at [47], later editors of Bullen & Leake became more circumspect. The fifth and sixth editions in 1897 and 1905 replaced “will generally” by “may sometimes”. The third member of the Court, Macfarlan JA, also expressed scepticism of the principle as stated in the third edition of Bullen & Leake: at [36].
36. This aspect of the reasons of the primary judge, and the written submissions of the plaintiffs/respondents on which it is closely based, would have benefited from recourse to the current edition of the work, which correctly made it clear that the principle was highly qualified, especially in a case such as the present of a payment made by a parent company discharging the liability of its wholly owned subsidiary.”

The defendant relied upon these authorities to submit that the “evidence and submissions” made in his case warrant a finding that the plaintiff requested (in each transaction) the defendant to make the contested payments and the defendant made those payments in reliance on those requests.
This contention is expressed at a reasonably high level of abstraction. My overall impression is the defendant failed to identify in his pleadings, with particularity, the material facts upon which it was alleged, within a recognised category, the basis upon which the plaintiff is alleged to be required to make restitution to the defendant for payments made by him to third parties.
The plaintiff provided a summary of the Defence and SCC on the allegations brough by the plaintiff in the pleadings as to alleged payments by the defendant to third parties. I consider that that summary is accurate and is as follows:

As mentioned above, it was pleaded that from in or about August 2018 to on or about 11 February 2022:

the defendant agreed to loan to the plaintiff payments the plaintiff requested from the defendant;

at the request of the plaintiff, the defendant made payments to Ping’e Yuan, Anson One and to the plaintiff’s friends or acquaintances ‘Haiyan Zhou’, and ‘Zhang’; and

at the request of the plaintiff, the defendant made payments to Pfizer through Func; and

in the circumstances:

the defendant loaned to the plaintiff the monies paid by the defendant to the plaintiff (at her request) which the plaintiff became liable to repay at once without the need for making any request or demand or alternatively, upon demand;

there was an implied promise to repay the monies paid by the defendant to third parties (Ping’e Yuan, Anson One and the plaintiff’s friends or acquaintances ‘Haiyan Zhou’ and ‘Zhang’) at the request of the plaintiff upon demand; and

the plaintiff became liable to repay to the defendant [those monies].

It would appear from those pleadings that it is alleged that there was a loan with respect to each payment to each third party or a claim for restitution for payments made to third parties at the request of the plaintiff. The plaintiff contended, with some force, that the pleadings do not allege that the plaintiff received any benefit from such parties. A further question arising is, if there was a reliance on an implied loan, what the pleading is with respect to an implicit promise to repay (CBRE at [32]).
Returning to the issue of principle raised with respect to monies paid to a third party, without consideration, and at the request of the plaintiff, it is necessary at this juncture to identify three important matters:

Neither Progressive Pod Properties nor CBRE stand for the proposition that the mere request by party B to party A to pay money to a third party C immediately created a debt owing by party B to party A.

There is not a general principle that, where a person pays money without consideration at the request and for the benefit of another that such person is entitled to an indemnity. Nor does the law cast an absolute obligation on the person who requested and received the benefit of the payment to a third party to pay or repay the payment to the payor.

A claim for restitution based upon “money paid” requires proof that a person, in this case, the defendant, pays money without consideration to a third party at the request of and for the benefit of another person, in this case the plaintiff.

The first and second propositions are well established by the judgment of Leeming JA in CBRE at [33] – [35].
As to the third proposition, it was well established in Progressive Pod Properties that, not only must it be shown that there was reliance on the request in deciding to proceed (in that case, the Greens’ reliance) but it is also necessary to demonstrate that the party requesting the payment received a benefit from the payment: Progressive Pod Properties at [5(a)] and [9] (MacFarlan JA) and [51] and [56(4)] (Young AJA).
In Progressive Pod Properties, it was unclear what benefit Progressive derived from the Greens construction of the roundabout. As Macfarlan JA observed, whether any enhancement in Progressive’s sale price would have occurred as a result of the construction of the roundabout (when considered in the light of the cost of the construction of the roundabout) was a matter of speculation (see also the observations of Young AJA at [64]).
Furthermore, reference may also be made to Falcke v Scottish Imperial Insurance Company (1886) 34 Ch. D. 234 (“Falcke”) and Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; (2008) 232 CLR 635 (“Lumbers”).
Falcke involved a claim by a plaintiff for restitution of a payment made by the plaintiff of a premium on a policy of life assurance which had been mortgaged by the plaintiff to the defendant. On the facts, the plaintiff failed because he could not prove that the defendant requested the payment.
In Lumbers at [80], the majority of the High Court approved the following passage from the judgement of Bowen LJ in Falcke at 248, namely:

“The general principle is, beyond all question, that work and labour done or money expended by one man to preserve or benefit the property of another do not according to English law create any lien upon the property saved or benefited, nor, even if standing alone, create any obligation to repay the expenditure. Liabilities are not forced upon people behind their backs any more than you can confer a benefit on a man against his will.”

Bowen LJ went on to find exceptions to that general principle including where the circumstances are such that the person whose property was preserved or benefited by the payment requested the payment.
Aside from situations where money is paid for consideration such as a contract for loan, there are recognised categories in which a court may impose an obligation on a defendant to restore a plaintiff or find an implicit obligation to repay where a defendant has made a payment or laid out money to a third party at the request of and for the benefit of the defendant.
In the instant case, with respect to claims for restitution, those categories may include:

where it is not sufficient to establish enrichment of a defendant (i.e. benefit to the defendant) that the defendant made a request, even if the request was satisfied: see Mason & Carter at [156];

where the payment discharges a debt owed by Party B to Party C or is in payment of a guarantee given by Party A to Party C for Party B's debt: see Mason & Carter at [116]; Progressive Pod Properties at [56](1); Israel v Foreshore Properties Pty Ltd (in liq) (1980) 30 ALR 631 at 633; and

where the payment was to preserve or benefit the property of party B: see Falcke at 241 (per Cotton LJ) and 248 – 249 (per Bowen LJ).

CREDIT

I will say more about credit when I examine the parties evidence into disputed transactions, however, because credit, in my view, is an important consideration in the adjudication upon the purported claims and counter claims, I propose to make some general observations about the credit of the plaintiff and the defendant as witnesses at the outset.
In approaching credit in that way, I have borne actively in mind the observations of Kunc J in Pavlis v Pavlis [2021] NSWSC 1117 (“Pavlis”) at [159]-[167] with which I broadly agree.
The principles set out in Kunc J in Pavlis are, of course, not principles of law to be applied on every occasion. Rather they are matters stated to be derived and applied from particular cases based on the facts of those cases. Ultimately, it is up to the Court to assess the whole of the evidence presented, including, in that respect, issues concerning credit, and make its own findings based on that evidence.
For present purposes, I rely upon the statement of principle in Liu v Lam [2024] NSWSC 1306 (at [58] – [60]) as follows:

“58. At the opening of these findings, it is appropriate to deal with some issues of credibility of the witnesses but not exhaustively as the topic will be revisited at the end of the general narrative of facts and in light of further findings made therein. Some issues of principle might be firstly mentioned.
59. The assessment of credibility of a witness may be based upon whether the accounts of a witness is inherently probable or given against interest. It does not follow that a witness who has been found not to be honest or unreliable about one matter should necessarily be disbelieved about everything else: Cubillo v Commonwealth (No 2) (2000) 103 FCR 1; [2000] FCA 1084 at [118] (O’Loughlin J). Nor does the disbelieving of a witness as to a particular proposition necessarily mean that the proposition has been proven: Steinberg v Commissioner of Taxation (Cth) (1975) 134 CLR 640; [1975] HCA 63 at 694.
60. Further, as Basten JA observed in Sangha v Baxter [2009] NSWCA 78 (with whom Handley AJA agreed), considerable caution should be exercised in making global credibility findings. His Honour observed:
“[155] There are risks in making global findings about credibility of any particular witness. Because a witness has not told the truth with respect to a particular matter does not mean that other parts of his or her evidence are untruthful. Where possible, an assessment should be made of the reasons for the untruthfulness in order to see if other aspects of the evidence are likely to be infected by the same concern. Further, evidence may be rejected because it is apparently unreliable, possibly mistaken or deliberately untruthful or capable of being categorised in a variety of ways which are unlikely to be capable of clear delineation in some cases.
[156] Further, findings of credibility are not usually findings with respect to factual issues in the case, but are rather subsidiary findings on the way to determination of issues. Like many aspects of the evidence in a trial, the evidence of a witness who is believed to have lied in a particular respect, will nevertheless be able to bear some weight and should be placed into a balance, with other material evidence, before a conclusion is reached in relation to a critical fact. The rejection of a witness in total, absent corroboration is likely to mean that, even where corroborated, little attention will be paid to the evidence of the witness and less to the possible consequences which might flow from the fact that particular evidence is shown to be truthful: see generally, King v Collins [2007] NSWCA 122 at [44].”

Mr P Russell, counsel for the plaintiff, made the following broad submissions on the defendant’s credit in closing written and oral submissions:

In cross-examination, the defendant accepted that an honest person is somebody who is truthful in what they do or say. Further, that honest person would not do anything to lie, cheat or steal in what they say or do. The defendant considers himself an honest person and wanted the Court to accept him as an honest person.

However, it has been established that the defendant has been thoroughly dishonest in relation to:

the defendant’s personal tax returns lodged with the Australian Taxation Office for the financial years 2018 to 2022;

Syat’s application for a $990,000.00 loan from the ANZ in March/April 2019;

the defendant’s dealings with CITIC bank in relation to an ‘internal risk assessment’ being conducted by them of the account held and operated by the defendant’s company, Func;

the defendant’s application to the AMP for a home loan for $2,480,000.00 in September 2017 so as to purchase a property in Stanhope Road, Killara (“Killara property”);

the defendant’s application to the CBA in February 2022 to refinance the home loan for the Killara property in the sum of $2,529,843.00; and

the defendant’s backdating of a Deed of Loan Acknowledgment.

It cannot be said that the defendant “readily conceded when documents contained statements that were not true or inaccurate”. First, in many instances the defendant objected to giving particular evidence and did not do so until the Court issued Certificates under s 128 of the Evidence Act. Secondly, the defendant in most, if not all instances, conceded such matters because, in the circumstances, it was obvious on their face they were not true or were inaccurate.

Evidence given by the defendant to the Court was often dishonest or otherwise contradictory, evasive or, if accepted, irrational. In the result, a finding should be made in favour of the plaintiff in relation to two WeChat accounts (“the Palm Beach account” and “the PUA account”)^[4] that the plaintiff says are not authentic and the messages presented to the Court by the defendant were, therefore, not sent or received by the plaintiff.
4. W Covell, K Lupton and L Parsons, Principles of Remedies (8th ed, 2022, LexisNexis) at 170

In terms of broad issues of credit, senior counsel for the defendant, Mr P Newton, did not gainsay the broad adverse credit findings that might be made in regards to the circumstances outlined in subparagraph (3) above. In any event, in my view, all of the contentions made by the plaintiff as to the defendant’s credit may be readily accepted. Although I will return to deal separately with the question of authenticity, there is a relationship between my findings of credit and that issue.
Mr Newton submitted that the Court should not use broad credit findings of the kind found in subparagraph (3) above to impugn the defendant’s evidence about particular transactions. Expressed in that way senior counsel’s contentions were unexceptional, provided it is understood some of the illustrations related directly to the defendant’s evidence on particular transactions.
He went further to submit that particular credit findings made with respect to the defendant’s evidence going to particular transactions should not result in general findings as to the plaintiff’s evidence or necessarily impact upon the plaintiff’s evidence with respect to other transactions. I do not accept that submission in this case for a number of reasons.
First, the submissions of the plaintiff’s counsel that I have accepted above (see [78]) have more global implications. Secondly, I will make adverse findings of fact with respect to the defendant’s evidence as to particular transactions which, in my view, reflect not only upon the defendant’s honesty in giving evidence in those respects but more generally as to his evidence. That conclusion may arise by the Court inferring similar dishonesty from surrounding related transactions or from the Court’s analysis of the evidence across the entirety of the transactions where in many cases dishonesty has been found.
Thirdly, and by any measure and experience, the defendant presented as an extremely unsatisfactory witness in such a way as to reflect upon his honesty and reliability as a witness.
As to the third reason, I accept that as a general rule there are limits to drawing such conclusions from the mere observation of a witness but, in this case, my conclusion derives not only from a close reading of the evidence in the proceedings (which is referred to in the discussion of the various transactions) but from the strong impressions created from my direct observations of the defendant in giving his evidence over an extended period of cross-examination.
The plaintiff submitted that the defendant lacked any credibility as a witness whatsoever and that the Court should not accept the defendant’s evidence unless it is established by other evidence.
Based upon my overall assessment of the defendant’s evidence as discussed above, when combined with the further adverse credit findings regarding the defendant’s evidence in the section of the judgment dealing with transactions, I have such concerns about both the honesty and reliability of the defendant’s evidence that, mindful of the aforementioned principles, his evidence, in general, must nonetheless, be approached with great caution.
Overall, I have found that the defendant is not a truthful and reliable witness and that his evidence should be approached with such caution except to the extent that it is against his interests, is consistent with the plaintiff’s evidence (who I will find below was substantially honest and reliable) or is corroborated by contemporaneous documentary evidence or objective facts.

As to the credit of the plaintiff, Mr Newton made the following submissions:

The plaintiff is a very intelligent woman who is across the dates and events. She was able to deal with transactions many years in the past and is able to provide accounting evidence in relation to transactions in the witness box. It was submitted that, keeping in mind the ability of recall of the plaintiff, it is improbable that she cannot recall particular details.

In relation to the denied authenticity of WeChat messages from the Palm Beach and PUA accounts by the plaintiff, senior counsel for the defendant submitted that, when the plaintiff was asked if she could remember why she sent a WeChat message of a QR code to the defendant on 9 October 2018, she could not remember why she sent it. It was submitted that it “becomes inherently improbable that a woman of the intelligence and capacity of recall that Ms Wang demonstrated in the witness box couldn’t remember why she sent a WeChat message to the defendant with a QR code and together with instructions on how to access the QR code”.

It was contended by the defendant that, where the plaintiff’s evidence is inconsistent with the surrounding facts, matters and circumstances or contemporaneous documents (comprising WeChat messages and invoices), or contained discrepancies, displayed inadequacies or otherwise lacks probative force, the evidence ought to be rejected and inferences that arise from the surrounding facts, matters and circumstances or contemporaneous documents ought to be preferred.
As a general proposition I have found the plaintiff to be an impressive witness who generally answered questions under close cross-examination in a direct, frank and intelligent manner.
This is not to suggest that the plaintiff’s evidence was without blemish. I accept the defendant’s criticism of that part of her evidence as to the authenticity of the Palm Beach and PUA WeChat messages which concerned her recollection of the reason for sending the QR code. This also appeared to me to be disingenuous. A further matter going to the plaintiff’s credibility, albeit confined, was her evasive evidence given in relation to one aspect of her dealings with respect to the transaction concerning the money paid to Pfizer. I do not find, however, that the plaintiff’s evidence as to the alleged gift transaction reflects adversely on her credibility as a witness even though I have rejected the plaintiff’s case in that respect. The resolution of that issue did not attract such consideration.
However, that is the full extent of my concerns as to the plaintiff’s evidence which, on my observations was, as I have mentioned, very credible.
Returning to the disputed Palm Beach and PUA WeChat conversations, I have analysed the evidence in considerable detail below and formed the view in that light that they are not authentic. A conclusion which is overall confirmatory of the plaintiff’s evidence in that respect.
Finally, I note that I do not accept the defendant’s submission as to how the Court should broadly approach the plaintiff’s evidence and further note that the plaintiff appeared unshaken in her evidence under cross-examination.

AUTHENTICITY OF THE PALM BEACH AND PUA WECHAT ACCOUNTS

As mentioned, there is a dispute about the authenticity of the Palm Beach and PUA WeChat accounts and, in particular, the authenticity of the conversations recorded in the screenshots from those accounts of conversations as between the plaintiff and the defendant.
Senior counsel for the defendant made the following submissions on this issue:

The defendant received WeChat messages from the following accounts:

an account showing the image of the plaintiff. The plaintiff has a WeChat account which she signed up for in 2012. The plaintiff’s username includes two Chinese characters, followed by the word “Isabella”, (this WeChat account will be referred to as “Isabella’s account”). I note it is not disputed that the defendant had one WeChat account which was opened in the name of “seal” (“the defendant’s account”) that he used to communicate with Isabella’s WeChat and allegedly the Palm Beach and PUA accounts. The defendant’s WeChat account displayed a picture of a seal most of the time;

an account showing the image of Palm Beach (I shall describe the account as the “Palm Beach account”); and

an account showing the image of a head and shoulders (I shall describe the account as the “PUA account”). I interpose to note that the ‘head and shoulders’ image appears to be a default picture which shows a blank silhouette of a head and shoulders.

In cross-examination, the plaintiff admitted that, on 23 July 2018, she sent from the Isabella account a QR Code and a series of messages. In these WeChat messages, the plaintiff gave instructions on how to activate the QR Code. The plaintiff sent the instruction: “Click the picture to identify the QR Code in the picture”. Exhibit 12 is a blown up image of the picture of the QR Code scanned and sent by the plaintiff to the defendant.

Upon scanning the QR Code with a mobile phone, access was granted to the Palm Beach account.

As mentioned, the plaintiff could not remember why she sent the QR Code. However, she admitted she sent the QR Code together with the instructions “Click the photo, and it will recognise the QR Code in the photo” to enable the defendant to get access to the Palm Beach account.

The defendant gave evidence that he received messages from the Palm Beach and PUA account that contained photographs of the plaintiff’s son, her mother, the plaintiff and personal messages.

One of the personal messages sent from the Palm Beach account was: “Have you had dinner yet, Fairy Fan” (in cross-examination, it was put to the defendant that the plaintiff sometimes referred to the defendant as “Fairy Fan”, but the defendant stated that she never called him by that name).

The plaintiff could not explain how these messages were sent to the defendant.

The “incontrovertible evidence” was that, on 23 July 2018, the plaintiff sent, from the Isabella account to the defendant, the QR Code together with instructions on how to activate the code. Upon scanning the code with a mobile phone camera, the defendant was given access to the Palm Beach account. The defendant received on the Palm Beach account, photographs of the plaintiff’s son and mother together with messages about her son and mother to which the defendant responded to.

The “incontrovertible evidence” established, on the balance of probabilities, that the plaintiff sent messages to the defendant on the Palm Beach account. This conclusion has a greater degree of likelihood than the plaintiff’s denial that she sent messages on the Palm Beach account.

The “incontrovertible evidence” was that the defendant received messages on the PUA account that included messages about what the plaintiff was wearing, photographs of the plaintiff, and a photograph of the plaintiff’s son. The defendant responded to these messages.

The “incontrovertible evidence” established, on the balance of probabilities, that the plaintiff sent messages to the defendant on the PUA account. This conclusion has a greater degree of likelihood than the plaintiff’s denial that she sent messages on the PUA account.

Counsel for the plaintiff submitted that the plaintiff denied that she owned or was the holder of the Palm Beach and PUA accounts and that none of the alleged messages that appear in the defendant’s evidence were sent or received by her. Mr Russel’s submissions on this issue were as follows:

Throughout their relationship from 2018 to 2023, the plaintiff and the defendant communicated via WeChat.

Until 14 September 2023, there had been no suggestion in these proceedings, including any affidavits sworn in these proceedings, that the plaintiff and the defendant had communicated with each other on WeChat other than through the Isabella account.

On about 14 September 2023, the defendant made and served an affidavit of that date together with HF-2 in Exhibit 2, in which the defendant gave evidence for the first time claiming he had other WeChat messages with the plaiiff on two other alleged WeChat accounts of the plaintiff, namely the Palm Beach and PUA accounts (I note that this was after the two prior amendments to the Defence and SCC).

At paragraph 7 to 25 of the plaintiff’s affidavit made 17 November 2023, the plaintiff gave detailed and clear evidence of the steps taken by her to establish, maintain and operate her one and only WeChat account, being that with the WeChat user ID of “hellojingjing”. In particular, the plaintiff gave evidence that all of her usernames have included the Chinese characters of ”jingjing” and that she has never used any other usernames without those Chinese characters. Also, the plaintiff gave evidence that she always uses a photograph of herself as her WeChat profile photo because she used the account both for her personal and her business dealings and she believed a photograph of herself made her WeChat account appear more personal and trustworthy. She also gave evidence that the only WeChat account associated with her is the “hellojingjing” account (Isabella account).

The plaintiff denied she was a party to any of the apparent conversations through the Palm Beach and PUA accounts. In particular, at paragraph 38 of her affidavit of 17 November 2023 the plaintiff gave evidence of the inconsistencies in the use of the seal image on some of the Palm Beach messages.

The plaintiff gave evidence that she would never use the letters PUA as her WeChat username because it was a derogatory reference to “Pick Up Artist”.

The defendant’s reliance upon the nature of the images, including those of the plaintiff’s mother and her children, as evidence that these messages were sent or received by the plaintiff, is misplaced. Those pages of apparent WeChat conversations of Palm Beach and PUA are merely two dimensional representations of the same. They do not prove that the plaintiff is the owner of those WeChat accounts or that she sent or received those pictures or words.

The Court must first accept that those images or words were sent or received between the plaintiff and the defendant on the defendant’s phone.

The plaintiff requested to inspect the defendant’s phone and by a Notice to Produce dated 20 November 2023 sought copies of, inter alia, all WeChat conversations for the PUA and Palm Beach. Eventually, an ‘inspection’ of sorts took place at the chambers of junior counsel for the defendant on 6 December 2023.

Given the defendant’s lack of credibility, the circumstances in which he produced for the first time the alleged WeChat conversations of Palm Beach and PUA and the steps taken by the defendant to ensure that neither the plaintiff nor her legal representatives had access to his device or phone, those WeChat conversations ought to be rejected.

In relation to the Palm Beach WeChat alleged conversations, the following give rise to further or other reasons as to why these conversations should be rejected:

In cross-examination, the defendant gave evidence that he agreed in general with the contents of paragraphs 7 to 21 of the plaintiff’s affidavit made 17 November 2023 as to the steps involved in setting up a WeChat account. In particular, the defendant agreed that, a QR code for a WeChat account contains the person’s profile photo in the middle and in the top left hand corner, the username beside that profile photo.

In cross-examination, the defendant gave evidence that he has only ever seen an image of Palm Beach as the profile photo on the Palm Beach account.

In cross-examination, the defendant gave evidence that the only username he has seen on the Palm Beach account is a point or a full stop.

The defendant also gave evidence in cross-examination that he had never at any time heard or seen the plaintiff referred to as “Collect Demons”.

At paragraph 10 of the defendant’s affidavit made 20 October 2023 and pages 1 and 2 of HF-3 in Exhibit 2, the defendant stated that he received from the plaintiff a QR code which leads to an image showing Palm Beach, a username of “.” and a WeChat ID of ”queenis9“.

However, objectively, there is no evidence that this QR code belongs to the plaintiff or that it otherwise led to an authentic conversation between the plaintiff and the defendant on the Palm Beach account because:

contrary to paragraph 10(b) of the defendant’s affidavit made 20 October 2023, the message from the plaintiff at the top of page 1 of HF-3 in Exhibit 2, an official translation of which is attached by the defendant at page 1 of HF-4 in Exhibit 2, reads “Could you accept the WeChat word invitation”. There is nothing in those words to suggest that the plaintiff is claiming it is her WeChat invitation or her QR code;

the plaintiff also made submissions as to technical aspects of the operation of the QR code within the WeChat application; and

according to Exhibit 13, being the apparent WeChat calendar for the Palm Beach account, the defendant agreed that the Palm Beach account had only been used on 23 to 8 August; 10 to 15 August; 22 August, 28 August to 14 September; 16 to 30 September; and 1 to 14 October 2018, and on 1 and 4 January 2019. Further, nowhere in the defendant’s evidence did he given an account as to why these Palm Beach WeChats took place on a separate account.

As to the alleged WeChat account of PUA, the following gives rise to other reasons requiring the PUA WeChat messages be rejected:

According to the alleged WeChat calendar for PUA at Exhibit 14, the only time that activity took place on the account was from 9 September 2021 to 23 October 2021.

According to the defendant’s evidence in cross-examination, when one taps the picture on his device for PUA, one gets the image or result at Exhibit 15 which states “the account is not available”.

The defendant admitted in cross-examination that in his affidavit evidence, he gave no account for and made no reference to the existence of this page that comes up on his phone and which contains the words the account is not available.

In cross-examination, the defendant admitted that he made no reference and did not mention that the PUA account was only used for the period from 9 September 2021 to 23 October 2021, that is, about two months.Further, the defendant admitted that, in his affidavits, he had given no account as to how the PUA WeChat account came to be and how it finished.

In the circumstances, the Court should reject all the purported evidence of the Palm Beach WeChat messages and the PUA WeChat messages.

Mr Russell made further submissions on this issue in written submissions in reply:

Many of the defendant’s submissions are not supported by the evidence cited, are ill-founded and are not ‘incontrovertible’. For example:

as to paragraph 24, the words “to enable Mr fan to get access to the Palm Beach account” are not supported by the transcript references. Indeed, they are contrary to the defendant’s denial immediately following in those transcript references;

as to paragraph 25, the defendant ignored and did not refer to his cross-examination where he denied that the plaintiff ever referred to him as “Fairy Fan”;

as to paragraph 26, in circumstances where the plaintiff denied she sent or received Palm Beach and PUA WeChat messages, the plaintiff cannot be criticised for not giving an account as to how the defendant says he received or sent those messages to the plaintiff;

the matters said to be ‘incontrovertible’ in the defendant’s submissions are not so and are very much in dispute.

The plaintiff repeats her objections, made twice, to the evidence given by the defendant in re-examination of an alleged statement from the plaintiff’s solicitor to the plaintiff which the defendant said he ‘overheard’ at the ‘inspection’ at his counsel’s chambers and which is relied on by the defendant.

Where there is not in evidence by a WeChat manual, expert opinion or evidence from someone (independently) who can cast light on these matters, the Court is not in a position to forensically make an assessment of the parties’ respective assertions, where there is dispute, as to the matters the defendant needs to prove to establish that these WeChat messages are authentic and admissible.

Consideration: authenticity

At the outset of the trial, counsel for the plaintiff objected to the Palm Beach and PUA WeChat messages although accepted those messages may be provisionally admitted under s 57(1) of the Evidence Act and accepted the questions raised may be determined in the Court’s final judgment after the receipt of all the evidence.
Whilst that submission was expressed in terms of relevance, the underlying basis for the objection was the authenticity of those messages.
The approach preferred by the plaintiff was adopted by the Court without objection by the defendant. It was clearly available as an approach under s 57(1)(b) of the Evidence Act because a finding of authenticity (on which relevance depends) need not be ascertained before the evidence is found to be relevant and admissible, subject to further evidence being admitted at a later stage of the proceedings that will make it reasonably open to make that finding.
The plaintiff made a submission as to the proper approach to determining the question of authenticity which evokes further attention to the questions raised by the objection. The plaintiff submitted that the defendant needed to prove:

the plaintiff is the owner of each of the Palm Beach and PUA WeChat accounts;

the plaintiff sent or received, as the case may be, the messages that are said to have occurred on those WeChat accounts.

That submission resonates with one aspect of the judgment of Bryson J in National Australia Bank Ltd v Rusu (1999) 47 NSWLR 309; [1999] NSWSC 539 (“Rusu”) in which his Honour determined, in relation to a question on authenticity, that what must be proved, on the balance of probabilities, was that a document ‘is what it is alleged to be’ (see also Australian Securities & Investments Commission v Rich (2005) 191 FLR 385; [2005] NSWSC 417 at [117] (Austin J)).
The correctness of Rusu has been widely discussed.^[5] However, it would seem that Bryson J’s judgment, in that respect, has not been overturned, although has largely been confined to its own facts and circumstances.^[6]
5. The PUA account is sometimes referred to by the defendant as the Head and shoulders account but was acknowledged, by the parties, to be the same account. For the purposes of this judgment that account will be referred to as the PUA account.
6. Federal Commission of Taxation v Cassaniti (2018) 266 FCR 385; [2018] FCAFC 212 at [65]; Gregg v R [2020] NSWCCA 245 at [368] (Bathurst CJ, Hoeben CJ at CL and Leeming JA); Jones Lang LaSalle (NSW) Pty Ltd v Taouk [2012] NSWCA 342 at [42]
That said, in my view the approach by Perram J in Australian Competition and Consumer Commission v Air New Zealand Ltd (No 1) (2012) 207 FCR 448; 301 ALR 326; [2012] FCA 1355 at [92] (“Air New Zealand”) is, in my view, and with respect, correct. His Honour there stated:

“92. It is useful to begin with some basic propositions:
1. There is no provision of the Act which requires that only authentic documents be admitted into evidence. The requirement for admissibility under the Act is that evidence be relevant, not that it be authentic. On some occasions, the fact that a document is not authentic will be what makes it relevant, ie, in a forgery prosecution. In other cases, there may be a debate as to whether a particular document is or is not authentic, for example, a contested grant of probate where it is said that the testator’s signature is not genuine.
2. In cases of that kind, the issue of authenticity will be for the tribunal of fact to determine. In cases heard by a judge alone, this will be the judge at the time that judgment is delivered and the facts found. In cases with a jury, it will be the jury.

The defendant simply took a screenshot of his exchange with Mr Zhong and forwarded it to the plaintiff. The defendant and the plaintiff continued to have a WeChat conversation in relation to Ms Zhong’s request for documents about the AUD 380,000 payments from Anson One to Func and the AUD 380,000 payments from Func to Pfizer. Nowhere in those discussions does the defendant ask the plaintiff to create documents. Despite that, the plaintiff responds by sending the defendant two invoices from Func to Anson One (totalling $383,059.20), and two invoices from Pfizer to Func (totalling $383,059.20) in answer to the bank’s request for documents. The invoices purport to be in respect of the supply of products. In cross-examination, the plaintiff conceded that she created invoices in answer to the bank’s request.

The plaintiff’s creation of the invoices is consistent with the defendant’s account that she had asked him to cause Func to onforward money to Pfizer.

The creation of the invoices is entirely inconsistent with the plaintiff’s account that Func had loaned money to Pfizer. When asked why the plaintiff did not simply provide a statement as director of Pfizer saying that it had received AUD382,000 by way of loan from Func, the plaintiff responded:

“Q. So, why didn’t you simply provide that record to Mr Fan so he could provide it to Mr Jong, together with a statement from you as a director of Pfizer Group saying that Pfizer Group had received $382,000 by way of loan from Func?
A. INTERPRETER: First of all, at the moment, I’m chasing up the money - the money owed by Mr Fan. And it’s personal. It’s personal. And now you are talking about the money between Func and Pfizer Group, do you think they are the same? And also, no matter the personal transfer of $20,000 from Mr Fan, which was omitted or the company’s transfer of $100,000, which was also omitted. He didn’t mention that but I included those for him.”

The plaintiff’s answer was non-responsive, illogical and entirely inconsistent with the claim that Func loaned monies to Pfizer.

As indicated, the payments made by Func to Pfizer must be seen in the context of the prior transfers from Anson One to Func. The timing of the payments from Anson One to Func and then from Func to Pfizer demonstrate that, on balance, the defendant’s account that the plaintiff had asked him if she could in effect use Func as an intermediary for payments to Pfizer is inherently probable.

The plaintiff has not provided any contemporaneous documents supporting her claim that Func Ioaned monies to Pfizer. The plaintiff’s response to the request from the bank for documents relating to the payments to Pfizer does not support her claim that Func loaned Pfizer monies.

The evidence established that the inherent probability is that Anson One made two payments to Func totalling AUD383,059.20 which, at the request of the plaintiff, Func paid to Pfizer. The evidence does not support a finding that Func loaned monies to Pfizer as claimed by the plaintiff.

Counsel for the plaintiff made the following submissions in relation to the monies paid to Pfizer:

The defendant submitted that each of the payments from Anson One to Func and then to Pfizer were made at the request of the plaintiff because she had told the defendant that Anson One and Pfizer had a business relationship. There is no basis for this submission or for any finding by the Court that such payments were a loan from the defendant to the plaintiff.

Each of the payments from Anson One to Func were repayments by Anson One of the loans from the defendant to Anson One and were made at the direction of the defendant. Further, each of the payments from Func to Pfizer were loans from Func to Pfizer. The defendant denied this.

There are simply no allegations or evidence that:

the payments from Func to Pfizer were advances or payments by or on behalf of the defendant;

there were any promises by the plaintiff to pay or repay those monies to the defendant; and

there was any relevant ‘benefit’ to the defendant from those payments from Func to Pfizer.

At no time in any of the defendant’s dealings with Mr Zhong of CITIC Bank did the defendant assert or suggest that the monies received from Anson One and paid by Func to Pfizer were not Func’s monies.

There was a WeChat conversation between the defendant and Mr Zhong on 12 March 2021 which was forwarded to the plaintiff. A conversation ensued between the plaintiff and the defendant and the plaintiff created four invoices which she sent to the defendant.

It is obviously apparent from the messages, from the defendant to the plaintiff in their WeChat conversation, that the defendant had clearly read those invoices on 12 March 2021 and that if the amounts in the bank’s remittance records, which the defendant was waiting for, matched with those in the invoices the plaintiff sent, the defendant would forward those invoices to the bank.

The defendant was cross-examined on these matters and gave the following evidence:

the defendant agreed that Func has never traded and that the only transactions that have ever taken place on its account were these [Anson One/Pfizer] transactions;

the defendant knew from the WeChat conversation with Mr Zhong that CITIC Bank’s internal risk control required the defendant to produce documents and answer some questions about these transactions including the business nature and background of Func and that they required invoices;

while the defendant denied he had any conversation with the plaintiff, he admitted that he wanted her to produce something;

the defendant denied that he looked at the invoices when he received them from the plaintiff. Indeed, the defendant’s said that the first time he looked at the invoices was after the plaintiff sued him, although it is clear from his cross-examination that he knew they were invoices;

the defendant agreed, when asked to look at the invoices, that they were clearly false. Func had never sold goods to Anson One and Pfizer had never sold any goods to Func;

the defendant could provide no sensible response as to why, upon being contacted by Mr Zhong, he did not immediately tell the bank what were the true nature of the payments between these companies and that he must have known that the invoices provided by the plaintiff to him were fake;

the defendant understood at that time from his WeChat conversations with Mr Zhong that he needed a document to show that Func was trading;

when it was pointed out to him that he waited from 12 March to 25 March before he sent the invoices to the bank, the defendant said he did not remember looking at the invoices in that time;

when taken to his statement to Mr Zhong that “my company does trade” and that after that he sent through the four invoices, the defendant agreed that he said those words to Mr Zhong and forwarded him those four invoices to prove that Func did trade.

It was put to the defendant that he had lied or misled the bank in what he had done, the following exchange took place:

“Q. It says, "My company does trade"; do you see that?
A. Yeah.
Q. That's a lie, isn't it?
A. No, that's not a lie.
Q. It's not a lie?
A. I didn't use that to trade, but I - it's kind of I lend my account, lend my company for plaintiff. She used that to - for trade, just two times.
Q. He then sent you a photo of his business card, didn't he?
A. Yeah.
Q. Then after that you sent through the four invoices?
A. Yeah.
Q. So you said to him that, firstly, your company does trade and you forwarded to him those four invoices to prove it?
A. Yeah.
Q. You lied, didn't you?
A. I lie what?
Q. Sorry?
A. What I lie?
Q. You lied in what you told the bank on that occasion, didn't you?
A. No, I didn't.
Q. You misled them? You've told them that the company has traded. It's not true, is it, on your own evidence?
NEWTON: It's been asked and answered, what the witness believes what he meant by "the company does not trade".
RUSSELL: I'm allowed to test it, your Honour.
HIS HONOUR: You can test it.
RUSSELL
Q. Could you answer the question?
A. Yeah. I say that this company never traded by me, but I did lend this account to plaintiff and she did two transactions.
Q. You never told the bank that?
A. I don't have to because this happened. Bank only asks me to provide these documents for these two transaction, and I ask plaintiff to do that because she used this company to do this trade.
Q. So on your understanding of what you just said, that the bank asked to you provide documents for these transactions--
A. Yeah.
Q. --your answer was to say it traded, which is not true; do you accept that? That's what you say there, don't you, "My company does trade"?
A. For these two transactions because that's trade.
Q. Then you handed to the bank those false invoices?
A. How I know this is false invoices?
Q. You looked at them, didn't you?
A. No, I didn't.
Q. You made these statements to the bank in circumstances where you knew it was an inquiry by their internal risk team or an internal risk process?
A. Sorry, what's your question?
Q. You made these statements to the bank knowing that they were making an internal risk assessment?
A. I made a statement? Which statement?
Q. You knew at the time it was for the purposes of the bank's internal risk assessment, didn't you?
A. Yeah.
Q. The outcome of that was the bank never contacted you after that, did they, regarding this?
A. No.
Q. You got them off your back, didn't you?
A. Yeah.

The defendant’s evidence in this passage of his cross-examination was clearly dishonest, as was his dealings with CITIC bank.
In my view, the defendant requested the plaintiff to prepare those false invoices. Further, he read them after the plaintiff sent them to him. Also, the defendant proffered those invoices to his bank to prove that Func did trade. The defendant deceived his Bank in the course of its ‘internal risk control’ enquiries, which got the bank “off his back”.

Consideration: Money paid to Pfizer

My considerations in this respect will be directed to both transactions between Func and Pfizer.
There was no dispute that the following transactions occurred in mid-2019 and early 2020 in this respect as follows:

on 23 August 2019, Anson One paid $300,000 to Func at its CITIC Hong Kong bank account;

on 30 August 2019, Func paid $300,000 to Pfizer at its Hong Kong bank account;

on 27 February 2020, Anson One paid $83,059.20 to Func at its CITIC Hong Kong bank account;

On 10 March 2020, Func paid $82,910.70 to Pfizer at its Hong Kong bank account.

The defendant was correct to submit that the transactions as between Anson One and Func and Func and Pfizer were, in a temporal sense, in close proximity to one another. However, the evidence also demonstrates that the payments from Anson One to Func were repayments by Anson One of a loan from the defendant to Anson One and were made at the direction of the defendant.
It was also common ground that, at the time the payments were made, the defendant was the sole director and shareholder of Func and the plaintiff was the sole director of Pfizer (the plaintiff’s mother was the sole shareholder of Pfizer).
Nor would there seem to be any dispute in the evidence, and in any event, I find that:

the defendant opened Func for the purpose of some business, but he cancelled that plan. Hence, he never used the company and never used the companies account for his business. In short, Func did not operate;

the only two transactions on Func’s bank account were the above mentioned transactions;

Func does not trade and has never traded; and

the defendant never received any income from Func.

The plaintiff conceded in cross-examination, there were no terms for the loan and no security was obtained. That fact is relevant to whether the plaintiff can demonstrate, on the evidence, that Func gave a loan to Pfizer.
The defendant’s case, was, in essence, that the plaintiff had asked him to use Func as an intermediatory for payment by the defendant to Pfizer. In the plaintiff’s written submissions, it was contended that the evidence does not support a finding and that the payment from Func to Pfizer constituted a loan from Func to Pfizer.
It is quite unclear how the defendant sought to demonstrate, as was at least implicit in his defence and cross claim, that the plaintiff personally owed to the defendant the equivalent of the monies paid from Func to Pfizer. It would seem that the defendant relied upon the existence of a loan from the defendant to the plaintiff equivalent to the combined payments from Func to Pfizer of $383,059.20.
There may also be a claim in restitution although, again, it is not clear how the defendant prosecuted any such proposition. Returning to some remarks made at the commencement of my judgment, that is a less than satisfactory basis upon which to determine the claim.
If that is the basis upon which the defendant sought to establish this transaction as, for example, providing the basis for an offset then, in my view, it must fail and it also must fail on any of the other bases which I have discussed as a potential basis for the SCC above.
Even on the defendant’s evidence, the plaintiff asked if she could use Func’s bank account as a means to make a payment from Anson One to Pfizer. When Func made the payments to Pfizer, on the defendant’s evidence, it was in accordance with the plaintiff’s request and direction that Anson One, not herself, make a payment through Func to Pfizer. In my view, the plaintiff made the request as a director of Anson One.
Furthermore, the plaintiff is correct to submit that the defendant made no pleadings or allegations or called in evidence any of the following:

the payments from Func to Pfizer were advances or payments by or on behalf of the defendant;

there were any promises by the plaintiff to pay or repay those monies to the defendant; and

there was any relevant ‘benefit’ to the defendant from those payments from Func to Pfizer.

I return then to the plaintiff’s contention that the transactions represented a loan from Func to Pfizer.
It is true that there is come objective evidence pointing against that contention, in favour of Func acting as an intermediatory, because of the temporal connection, as I have mentioned, between the payments between Anson One and Func and Func and Pfizer. Also weighing against the finding of the existence of such a loan was the absence of any contemporary documents supporting the existence of a loan or any form of security.
However, there are significant countervailing considerations in favour of the plaintiff’s position in addition to my earlier remarks under this heading. In the defendant’s dealing with the CITIC Bank, he did not, at any time, state that the monies received from Anson One and paid by Func to Pfizer were other than Func’s monies.
Further, I do not accept the submission of the defendant that the creation of the fake invoices by the plaintiff was entirely inconsistent with the plaintiff’s account that Func had loaned money to Pfizer. The plaintiff’s evidence, in this respect, as I have noted, is not entirely satisfactory but it is clear on the evidence, as I have analysed it above, that the defendant’s evidence that he did not have a conversation with the plaintiff requesting or desiring the production of the invoices, or at least business records necessary to satisfy his bank, must be rejected.
Additionally, I consider, as earlier mentioned, that the defendant did look at the invoices when he received them and forwarded them to his bank knowing that they were clearly false. Func had never sold goods to Anson One and Pfizer had never sold any goods to Func.
As I have earlier found, in my view, the defendant forwarded the invoices after being contacted by Mr Zhong, as a means of deceiving the bank as to the true nature of the payments between the respective companies. In particular, it was a deception about Func actually trading.
Those circumstances cast a different light on the transactions and should result in a rejection of the defendant’s evidence about the transactions. On balance, the monies forwarded to Pfizer by Func were Func’s monies. This and my proceeding analysis are consistent with there being a loan from Func to Pfizer, neither of which are parties to the proceedings.
Whether viewed through the prism of any claim by the defendant as to the existence of a loan between the defendant and the plaintiff, restitutionary relief being sought in relation to the transactions, or through the prism of their existing a loan between Func and Pfizer, in my view, the plaintiff is not liable for the total sum paid from Func to Pfizer in 2019 and 2020.

CONCLUSION

The relief claimed by the plaintiff in the SOC consisted of various claims for declarations, judgment of monetary sums expressed in Australian dollars and Renminbi together with interest from 17 January 2023 to judgment and costs.
Whilst the plaintiff, in her first claim for relief under the SOC, sought a declaration that the defendant promised to marry the plaintiff in the period from 15 to 26 December 2022 on the condition that, or in consideration for, the plaintiff lending to the defendant RMB 10 million and the plaintiff paying to the defendant the sum of $248,500, counsel for the plaintiff effectively amended that claim in oral submissions so as to confine the first declaration to the payment by the plaintiff of the sum of $248,500 on the basis of that promise.
On the evidence, I have found the existence of the promise to marry referred to in the plaintiff’s pleadings in the first prayer for relief in the SOC and, in all of the circumstances, I propose to make a declaration in terms of the first claim for relief in the SOC in the terms proposed but confining the relief to the payment of $248,500.
The claim for RMB 10 million, which I have referred to throughout my judgment as the RMB loan, was pursued on the basis of a loan by the plaintiff to the defendant in that sum, even though the payments were not advanced in a lump sum but by a series of transfers or payments in AUD and RMB between the plaintiff and the defendant between 15 and 23 December 2022.
I have found the existence of that loan and those payments and accordingly, in due course, I will grant the second prayer for relief claimed in the SOC by making declarations in the manner proposed by the plaintiff. To the extent the plaintiff needs to amend first prayer for relief or bring a further prayer for relief (in addition to the fifth claim for relief) for a declaration as to the RMB loan, I am inclined to do so.
The payment of $248,500 was made on 26 December 2022 by transferring that sum from the plaintiff’s Westpac Banking Corporation account to the defendant’s Commonwealth Bank of Australia account. Accordingly, a declaration may be made in terms of the third claim for relief in the SOC. It would seem unnecessary to grant the fourth claim for relief having regard to the above conclusions. However, I leave open that question in the provision for further submissions that I have made in the Orders and Directions below.
The fifth prayer for relief sought a declaration that the defendant was liable to repay the RMB loan to the plaintiff. That declaration is also available upon the findings made in this judgment, provided that the loan is understood to be the amounts advanced in the second prayer for relief and subject to the next part of my conclusions.
By the Defence and SCC, the defendant sought to bring to account what I have referred to in my judgment as the transactions as well as other monies to offset or otherwise reduce the judgment sum payable by the defendant with respect to the payments made by the plaintiff to the defendant between 15 and 23 December 2022 (the RMB loan).
On the ‘accounting exercise’ advocated by the defendant, the remainder of monies owed by the defendant to the plaintiff was relatively confined and not disputed. However, I have found, contrary to the defendant’s case, that the plaintiff is not liable by virtue of a loan, in restitution or on any other basis relied upon by the defendant for the monies paid in the transactions, save for what I have described during the course of the judgment as the alleged gift transaction. In that respect, I have found that the defendant did not pay the sum of RMB 3 million to the plaintiff’s mother as a gift. Rather the payment constituted a loan (whether express or implicit) from the defendant to the plaintiff’s mother at the direction of the plaintiff. That same conclusion flows through to any consideration of an offset.

It follows that any declaration made arising from the fifth prayer for relief or any judgment given with respect to the RMB loan in the eighth prayer for relief will be affected by the necessity to make adjustments with respect to, at least, the alleged gift transaction.
In the Defence and in the SCC the defendant placed reliance upon various other transactions between the parties which did not fall within the basket of the transactions, that is, as to disputed transactions. The submissions of the parties were essentially focused upon the RMB loan and the $248,500 payment and the transactions with little attention being directed to those other acknowledged transactions although I acknowledge that they form part of what the defendant had described as an overall accounting exercise.
Before I make a declaration and enter judgment with respect to the RMB loan, I propose to give the parties an opportunity to consider just how those other transactions might be brought to account in any order for judgment (or declaration) in the Short Minutes of Order filed and served in accordance with the orders of the Court and whether any further submissions should be made, in that respect (for which leave is granted by the Orders and Directions).
In my view, it is appropriate to make the declaration sought in the seventh relief claimed. It is unclear whether the plaintiff pressed the declaration sought in the sixth relief claim and, accordingly, I shall make no determination in that respect at this time.
The judgment sum sought of $848,500 in the prayer 8(a) of the prayers for relief in the SOC consisted of a claim with respect to the AUD payments made by the plaintiff with respect to the RMB loan between 15 and 16 December 2022 together with the claim for the $248,500 payment made on 26 December 2022. It is not appropriate to enter judgment in that respect at this time until the balance of the issues I have referred to above are resolved.
The Court did not receive any submissions as to interest and costs and accordingly those matters will be reserved for further attention corresponding to the orders and directions below.

ORDERS AND DIRECTIONS

The Court makes the following Orders and Directions:

The plaintiff shall bring in Short Minutes of Order reflecting this judgment within 28 days of this judgment. Those Short Minutes shall incorporate a program for the resolution of any issues remaining as to the form of the Orders to reflect the judgment and interest and costs which are reserved. In the case of interest and costs, the directions may also make provision for the receipt of evidence.

In the event that the defendant disputes the form of the Orders filed in accordance with Order (1) then the defendant shall file the alternative form of Orders including directions as to the receipt of submissions as to the form of Orders, interest and costs within 49 days.

In the event that the parties settle the terms of Orders and Short Minutes of Order, the Short Minutes of Order shall be filed with a corresponding note to that effect and the Court shall deal with the Orders administratively in Chambers.

**********

Annexure A

Annexure A - text version (261626, rtf)

Annexure B

Annexure C

Endnotes

Decision last updated: 24 October 2024

Medium Neutral Citation:	Wang v Fan [2024] NSWSC 1339
Hearing dates:	19 September, 12, 13 December 2023 and 21, 22 February, 7, 22, 28 March 2024. Further written submissions received on 12 April and 9 May 2024, submission regarding a joint statement of issues 19 August 2024
Date of orders:	24 October 2024
Decision date:	24 October 2024
Jurisdiction:	Common Law
Before:	Walton J
Decision:	(1) The plaintiff shall bring in Short Minutes of Order reflecting this judgment within 28 days of this judgment. Those Short Minutes shall incorporate a program for the resolution of any issues remaining as to the form of the Orders to reflect the judgment and interest and costs which are reserved. In the case of interest and costs, the directions may also make provision for the receipt of evidence. (2) In the event that the defendant disputes the form of the Orders filed in accordance with Order (1) then the defendant shall file the alternative form of Orders including directions as to the receipt of submissions as to the form of Orders, interest and costs within 49 days. (3) In the event that the parties settle the terms of Orders and Short Minutes of Order, the Short Minutes of Order shall be filed with a corresponding note to that effect and the Court shall deal with the Orders administratively in Chambers.
Catchwords:	CONTRACT – construction and interpretation – whether loan agreement – implied terms – whether payment a gift – payments made to and between third parties – whether defendant monies were paid pursuant to plaintiff’s directions – cross-claim RESTITUTION – where plaintiff paid defendant in consideration for a promise to marry – defence – cross-claim – unjust enrichment – failure of consideration – claim for money had and received
Legislation Cited:	Evidence Act 1995 (NSW) Civil Procedure Act 2005 (NSW)
Cases Cited:	Antov v Bokan [2018] NSWSC 1474 Australian Competition and Consumer Commission v Air New Zealand Ltd (No 1) (2012) 207 FCR 448; 301 ALR 326; [2012] FCA 1355 Australian Mutual Provident Society v Specialist Funding Consultants Pty Ltd (1991) 24 NSWLR 326 Australian Securities & Investments Commission v Rich (2005) 191 FLR 385; [2005] NSWSC 417 AWA Ltd v Exicom Australia Pty Ltd (1990) 19 NSWLR 705 Carpenter & Anor v Morris & Anor [2023] NSWCA 154 CBRE (V) Pty Ltd v City Pacific Ltd (in liq) [2022] NSWCA 54 David Securities Pty Ltd v Commonwealth Bank (1992) 175 CLR 353 Dewar v Dewar [1975] 2 All ER 728 Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; [2012] HCA 7 Falcke v Scottish Imperial Insurance Company (1886) 34 Ch D 234 Federal Commission of Taxation v Cassaniti (2018) 266 FCR 385; [2018] FCAFC 212 Gregg v R [2020] NSWCCA 245 Israel v Foreshore Properties Pty Ltd (in liq) (1980) 30 ALR 63 Jones Lang LaSalle (NSW) Pty Ltd v Taouk [2012] NSWCA 342 Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd (No 3) [2014] WASC 162 Lederberger v Mediterranean Olives Financial Pty Ltd (2012) 38 VR 509 Liu v Lam [2024] NSWSC 1306 Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; (2008) 232 CLR 635 National Australia Bank Ltd v Rusu (1999) 47 NSWLR 309; [1999] NSWSC 539 NZI Capital Corporation Pty Ltd v Child (1991) 23 NSWLR 481 Pavlis v Pavlis [2021] NSWSC 1117 Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 Progressive Pod Properties Pty Ltd v A & M Green Investments Pty Ltd [2012] NSWCA 225 R v New Queensland Copper Co Ltd (1917) 23 CLR 495 Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516 Saloman v Saloman & Co Ltd [1897] AC 22 Young v Queensland Trustees Ltd (1956) 99 CLR 560
Texts Cited:	I Ramsay and R Austin, Ford Austin & Ramsay’s Principles of Corporations Law (17th ed, 2017 LexisNexis) K Mason, J Carter and G Tolhurst Mason & Carter's Restitution Law in Australia (4th ed, 2021, LexisNexis) S Odgers, Uniform Evidence Law (19th ed, 2024, Thomson Reuters) W Covell, K Lupton and L Parsons, Principles of Remedies (8th ed, 2022, LexisNexis)
Category:	Principal judgment
Parties:	Jingsi Wang (Plaintiff) Haiyang Fan (Defendant)
Representation:	Counsel: P Russell (Plaintiff) P Newton SC and T Buterin (Defendant) Solicitors: Maxim Legal Pty Ltd (Plaintiff) Grandwin Legal (Defendant)
File Number(s):	2023/00062954
Publication restriction:	Nil