Wang v NHG Project Management Pty Ltd - [2021] WADC 30

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CHAMBERS

LOCATION:   PERTH
CITATION:   WANG -v- NHG PROJECT MANAGEMENT PTY LTD [2021] WADC 30
CORAM:   DEPUTY REGISTRAR HEWITT
HEARD:   19 MARCH 2021
DELIVERED          :   15 APRIL 2021
FILE NO/S:   CIV 2830 of 2020
BETWEEN:   JIANPING WANG
First Plaintiff
FENG YANG
Second Plaintiff
AND
NHG PROJECT MANAGEMENT PTY LTD
Defendant

Catchwords:

Practice and procedure - Application for summary judgment - Turns on its own facts

Legislation:

Migration Act 1958 (Cth), s 245

Result:

Application dismissed

Representation:

Counsel:

First Plaintiff	:	Mr C P K Russell
Second Plaintiff	:	Mr C P K Russell
Defendant	:	Mr M Caratti

Solicitors:

First Plaintiff	:	Gandhi and Shaw
Second Plaintiff	:	Gandhi and Shaw
Defendant	:	Michael Caratti

Case(s) referred to in decision(s):

Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498
Nelson v Nelson (1995) 184 CLR 538

DEPUTY REGISTRAR HEWITT:

In this matter I am required to deal with a chamber summons filed on 4 September 2020 seeking a summary judgment of $250,000 together with a certain amount of accrued interest.
The plaintiffs are Chinese nationals and at the relevant time the second plaintiff was working in Australia pursuant to the provisions of a 457 visa which permitted the first plaintiff to reside in Australia whilst that visa remained valid. The first named plaintiff had an ambition to obtain permanent residency in Australia and that avenue was not open to her as the spouse of a 457 worker. It was therefore necessary, if the plaintiff wanted to pursue her ambition to become a permanent resident of this country, that she obtain a 187 visa. In order to do that it was necessary for her to obtain employment in Australia and that required a sponsor who would provide her with employment. To achieve these ambitions the plaintiffs consulted one Lily Chen a lawyer and migration agent to assist them in this process. Through Ms Chen the plaintiffs were introduced to Robert John Hillier who was thought to be able to provide assistance in the matter. Mr Hillier was an employee of a corporate group named Next Horizon Group which comprised a number of companies including the present defendant and Milly Milly Pastoral Company WA Pty Ltd. After some negotiation it was agreed that Mr Hillier would assist the female plaintiff by sponsoring her as an employee of one of the companies of the group and in consideration for those efforts the plaintiffs would make a loan of $250,000 to Milly Milly Pastoral Company WA Pty Ltd. The ostensible purpose for such a loan was to assist the company in its pastoral business which was in need of a cash injection. On 10 January the plaintiffs executed a contract which had been prepared by Ms Chen the salient points of which were:
(a)      there would be a payment of $250,000;
(b)     the term of the advance would be for 2.5 years;
(c)      interest would be payable at 6%;
(d)the money paid was based on a successful visa application and was repayable if the visa was not approved; and
(e)that the money would be paid to a nominated account.
Mr Hillier signed the agreement on behalf of Milly Milly Pastoral Company WA Pty Ltd and in due course the advance was made as directed by that company.
The various companies comprising the New Horizon Group had as their sole director Mr Paul Thomas Williams. The evidence establishes Mr Williams was not aware of these arrangements until a later date and upon reviewing them was dissatisfied with the form of the agreement which had been prepared by Ms Chen. Mr Williams is a qualified solicitor and the reason for his dissatisfaction is obvious on a perusal of the document. Additionally on the face of the document it would appear that it infringes the provisions of various clauses of s 245 of the Migration Act 1958 (Cth) which prohibits in effect the purchasing of sponsorship.
In any event what Mr Williams set about, on behalf of the companies of which he was a director, was to draft a fresh agreement. That agreement was between the plaintiffs as lenders, the defendant as borrower and Milly Milly Pastoral Company WA Pty Ltd as guarantor. It is that document upon which the plaintiffs sue. That cause of action relies upon the proposition that the new agreement was intended to replace the old agreement, but that proposition has some difficulties when one considers that a new borrower has been substituted and the role of the Milly Milly Pastoral Company WA Pty Ltd has been changed from a borrower to that of a guarantor. In any event the advance of $250,000 had been made and with some encouragement payments of interest were made apparently pursuant to the second agreement. Subsequently the defendant company passed to the control of Mr John Caratti who is the present sole director of the defendant company.
A number of criticisms have been made of Mr Caratti suggesting his evidence is not reliable and should not be accepted. For the purposes of an application of this kind I take the view that such findings are not open save in an extreme case and in any event nothing that Mr Caratti has to say in his affidavits has a great bearing on what is in issue in this case.
After Mr Caratti took over the defendant company interest payments by it to the plaintiffs ceased. It also became apparent that no sponsorship was going to be provided to the plaintiff in furtherance of her 187 visa ambitions. At that point the position, already convoluted, became further clouded by the actions of Ms Chen. She wrote letters on behalf of the plaintiffs stating that they did not recognise the February agreement together with demands for payment of the principal sum and interest purportedly pursuant to the January agreement. That had the effect of making an already tangled situation even messier.
Summary judgment is only available to a plaintiff in the clearest of cases and I must therefore consider and evaluate the materials before me in order to determine if that is the case here. Amongst the issues which I must consider are:
1.Is it clear that the present defendant is the correct defendant to the action?
2.And related to point 1 above is whether the February agreement did in fact displace the January agreement, even though no mention of that is made within the document, such that the only existing contractual arrangements concerning this loan by the plaintiffs is that of February.
3.Is the whole transaction tainted with illegality which provides an impediment to the recovery of the monies pursued by the plaintiffs?
The January document was drafted by the defendant by its director Mr Williams and properly executed by the parties. In pars 2, 3 and 4 the deed provides:
2.Acknowledgement of Loan & Interest payable
2.1NHGPM irrevocably acknowledges that it is indebted to the Lender in the amount of the Loan.
2.2NHGPM will pay Interest upon the Loan to the Lender by way of consecutive monthly payments payable in arrears commencing on the final business day of the month immediately after the advance of the Loan.
3.Interest
3.1Interest is payable by NHGPM to the Lender on the Loan at the rate of 6% per annum, calculated on the balance of the Loan on the basis of a 365 day year.
3.2Interest will accrue from the day the Loan is advanced.
3.3If an Event of Default occurs in terms of clause 4, NHGPM covenants and binds itself to the payment of interest on the then balance of the Loan, until the outstanding balance of the Loan has been paid in full.
4.Default and enforcement
4.1It is an Event of Default under this Deed if at any time NHGPM fails to pay any Interest amount due under this Deed to the Lender when due.
Subsequent to execution of the deed the defendant made a number of interest payments but ceased doing so after Mr Williams ceased to be the director. It will be seen that the deed has provision for the event of default, which in effect requires the defendant to pay interest while and as long as there remains a loan balance outstanding. The deed does not provide that on default the whole of the loan becomes payable. For that to be the case the default would need to be characterised as a repudiation but I struggle to see how that can be the case when the deed contains provisions to a different effect.
To my mind the failure to pay interest does not amount to a repudiation but an actionable breach to the extent that interest is in arrears. I do not consider that the statements made by Ms Chen that her clients did not recognise the February deed and her demand for payment of the full sum can be regarded as acceptance of repudiation by the defendant.
I next turn to the issue of illegality. It is clear from the circumstances surrounding the transaction between the plaintiffs and the defendant that the purpose behind it was to procure a sponsor for the plaintiff's 187 visa application. On my reading of the January agreement the plaintiff was to waive her right to repayment of $250,000 if the defendant sponsored her and, as a result of that sponsorship, she was successful in obtaining the visa. The position was however varied by the execution of the February agreement which, in effect, sanitized the January agreement. Nonetheless the intentions of the parties remained the same.
It is not the case that illegality automatically extinguishes a right under a contract and in some instances a recovery may be made under such a contract as for instance in Nelson v Nelson (1995) 184 CLR 538. In other instances, of which Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 is an example the illegality was a bar to recovery.
In the present case the contract upon which the plaintiffs sue contains nothing which would require an illegal act. It is the substratum and purpose behind the agreement which may be tainted. Whether that is sufficient to defeat the plaintiffs' claim is a matter of debate and must remain an issue to be resolved at a later stage.
These waters are very muddied and in order to obtain a summary judgment it is necessary for a plaintiff to present a clear case and demonstrate that there is no defence available to the claim. That is far from the case in the present circumstances. At every turn there is doubt and there are obstacles. The documentation, at least in the early stages, was poorly drafted and internally inconsistent in some respects. The second document introduced a new borrower and relegated the original borrower to be a guarantor. The February document appears to have been what I have described as an attempt to sanitise the January agreement. All these matters in combination lead me to the view that there are issues to be tried in this case and it would not be appropriate to grant a summary judgment on the materials which have been presented to me.

I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
NF
Registrars Associate
15 APRIL 2021