Wang v Sun - [2022] NSWSC 644

Supreme Court

New South Wales

Medium Neutral Citation: Wang v Sun & Anor [2022] NSWSC 644
Hearing dates: 14, 24 – 28 May, 15 June 2021, and an application to reopen proceedings resolved on 15 October 2021 through a statement of agreed facts.
Date of orders: 20 May 2022
Decision date: 23 May 2022
Jurisdiction: Equity
Before: Slattery J
Decision:
Plaintiff’s claim dismissed with costs.

Catchwords:
MISLEADING AND DECEPTIVE CONDUCT – plaintiff transfers approximately $3.8 million from China to an Australian bank account and gives the defendant authority to operate the account – plaintiff alleges that the defendant was authorised to apply the funds to assist the plaintiff in obtaining a business investment visa for him to migrate to Australia – plaintiff alleges the defendant misrepresented the amount that was required for him to apply for a business investment visa from the Australian Government, which in fact was only $3,000,000 – plaintiff says that but for the misrepresentation he would not have transferred the additional $800,000 to the account, which funds were allegedly lost because of the misrepresentation.
ACCOUNT – claim for an account in equity – plaintiff alleges the defendant misapplied the funds for purposes other than those for which she was authorised to conduct the account – whether the defendant misapplied the funds in the Australian bank account – whether an account should be ordered against the defendant.

Legislation Cited:
Australian Consumer Law, s 236

Category: Principal judgment
Parties: Plaintiff: Mr Wang Wang
First Defendant: Ms Sun Sun
Second Defendant: Vip Corp (Aust) Pty Ltd
Representation:
Counsel:
Plaintiff: C. D. Wood SC; M. Darian-Smith
First and Second Defendants: D. Cook SC
Solicitors:
Plaintiff: Brighton Lawyers
First and Second Defendants: William Chan & Co

File Number(s): 2019/00231227
Publication restriction: No

Judgment

The plaintiff, Mr Jiaqiang Wang, and the first defendant, Ms Wei Sun are cousins. Mr Wang’s late mother, Mrs Cuifang Sun, was the elder sister of Ms Sun’s father, Mr Mingcai Sun. Mr Wang lives in the People’s Republic of China (“the PRC”). Ms Sun was born in the PRC but emigrated to Australia in 1999.
Before the Covid-19 pandemic, Mr Wang regularly visited Australia to visit family and for leisure. During one such trip in February 2017, he opened a bank account with the Bank of China (“BOC”) branch in Haymarket, in the central business district of Sydney. Over the following months he transferred $3,824,912.69 into this account and granted Ms Sun unrestricted authority to operate it.
Beyond these core facts, the parties presented vastly different cases about why Mr Wang deposited these funds, and the purpose of Ms Sun’s authorisation to operate the BOC account.
Mr Wang’s case is that he deposited the $3,824,912.69 to secure his eligibility for an Australian business investment visa to migrate to Australia and to fund lawyers and migration agents to oversee and promote that visa application. He says he entered into an oral agreement with Ms Sun for her to act as his agent to represent him in connection with his migration application, because his English language skills were not sufficient to engage a lawyer and a migration agent. He alleges that Ms Sun told him that to obtain an Australian visa he needed to deposit $3.8 million into an Australian bank account and to establish an Australian business. He says he acted in reliance on her representations to open the BOC account, and to deposit the funds, and on 15 May 2017 to incorporate VIPCorp (Aust) Pty Ltd (“VIPCorp”), the second defendant. Mr Wang’s case is that he earmarked these funds for his migration to Australia, and to purchase a house, motor vehicles and to cover future living expenses.
On Mr Wang’s primary case, Mr Wang not only says that these representations were misleading, but that Ms Sun’s authority was limited to withdrawing and using money from the BOC bank account for the sole purpose of funding his migration. Mr Wang says he was shocked to discover in October 2017 that Ms Sun had withdrawn various sums from his BOC account for what he says was her personal use and that $1.9 million had been transferred to VIPCorp for it to fund the establishment of a Chinese restaurant. By early 2020 the restaurant had failed and soon afterwards VIPCorp was placed in liquidation. Mr Wang lost all the funds invested in it.
Mr Wang’s Statement of Claim filed 10 October 2019 seeks: (1) a declaration that Ms Sun holds all moneys she withdrew from the BOC account, or the traceable proceeds thereof, on constructive trust for Mr Wang, (2) repayment to Mr Wang of all moneys held by Ms Sun on constructive trust for Mr Wang; and (3) an order for an account by Ms Sun of the funds in the BOC account that she dealt with; and (4) damages and interest, including damages under Australian Consumer Law, s 236, as well as equitable compensation.
Ms Sun’s case contrasts strongly with Mr Wang’s. She contends Mr Wang deposited the approximately $3.8 million in the BOC account to bring investment funds to Australia to fund a joint business venture and to further his application for a business investment visa. She contends that with Mr Wang’s express oral authority she used part of these funds in late April or early May 2017 to acquire a share in a Sydney restaurant, the Wai Tan restaurant (referred to as the Waitan Restaurant in the evidence and in these reasons). She says Mr Wang incorporated VIPCorp on 15 May 2021 as the corporate vehicle through which the funds in his BOC account would fund the purchase of the restaurant. Her case is that the restaurant, renamed the Royal Pavilion Seafood Restaurant (“Royal Pavilion”), officially opened on 26 October 2017 with Mr Wang in attendance. And the following April 2018, shares in VIPCorp were issued to Mr Wang.
Ms Sun’s case accepts that Mr Wang may have had a second objective of becoming eligible for an Australian business investment visa by remitting these funds to Australia but that this was ancillary to and not inconsistent with his investment in the Waitan Restaurant. She rejects the claim that she procured the purchase of the restaurant business by fraud, or in any way without Mr Wang’s knowledge. Ms Sun says this litigation is a vengeful response by her wealthy cousin who blames her for the failure of the business venture.
Mr Wang conducted an alternative case, concerning funds transferred into Ms Sun’s account. He contended that even if Ms Sun had authority from Mr Wang to invest Mr Wang's funds in the Royal Pavilion restaurant that some of her payments with his money had exceeded that authority. She contested that claim.
Such a case should probably have been pleaded in reply to Ms Sun’s Defence. When the case commenced, no reply had been filed. So, the Court dealt with the matter informally on the second day of the trial, indicating that it would conduct the case on the basis that Mr Wood SC could challenge those expenses, as if a reply had been filed. All that the Court required was the contested expenses be clearly identified.
The Royal Pavilion Restaurant failed in early 2020 after Mr Wang commenced these proceedings against Ms Sun as first defendant and VIPCorp as second defendant. When VIPCorp was placed into administration Mr Wang’s claim against VIPCorp was stayed by operation of law. These proceedings have since continued against Ms Sun.
The proceedings were heard in person over five consecutive days commencing 24 May 2021. Due to the Covid-19 pandemic, Mr Wang was unable to obtain a visa to enter Australia to attend the hearing in person. Mr Wang therefore remained in the PRC and was assisted by a NAATI-accredited interpreter operating from the Courtroom in Sydney to give oral evidence from Guangzhou. Mr Wang then listened in to and watched the proceedings by audio-visual link from Guangzhou. He was assisted in this by the interpreter who provided him with a translation of the proceedings via telephone from the Courtroom.
While Ms Sun has a basic proficiency in English, the concepts involved in her evidence meant that she needed to be assisted by a different NAATI-accredited interpreter. This interpreter assisted Ms Sun in the Courtroom to listen to Mr Wang’s evidence and also with the translation of her oral evidence from the witness box in Sydney.
Mr C.D. Wood SC leading Mr M. Darian-Smith of counsel, instructed by Mr J. Jin Shing Wong of Brighton Lawyers, appeared for the plaintiff. Mr D. Cook SC of counsel, instructed by Mr W. Chan of William Chan & Co, solicitors, appeared for the first and second defendants. The Court was much assisted by the presentation of the case on behalf of the parties by senior and junior counsel and the solicitors.

Credibility of Witnesses

Mr Wang. Mr Wang’s credibility was difficult to assess in a different language and by audio visual link. But he was at times prepared to adhere to improbable versions of the facts, which made acceptance of his account difficult. He could not provide from his recollection additional detail to explain and describe his version of the facts. Some of his responses dealing with questions that challenged his version of events were vague and presented a degree of uncertainty that did not give the Court confidence that he had a good recollection of the events of which he was speaking. These features of his evidence made it difficult to accept many aspects of his version of his interactions with Ms Sun.
Ms Sun. Ms Sun revised her affidavit evidence. She signed her first affidavit of 28 May 2020 during the early stages of the Covid-19 pandemic. She deposed an amended affidavit in May 2021 that altered the content of the conversations deposed to in the earlier affidavit. The Court accepts that the first affidavit was sworn under trying circumstances and did not represent her true evidence. This was in part because to make that affidavit she had used an interpreter who was more familiar with Cantonese than Mandarin, her first language.
Ms Sun was confident and clear in her answers. Her account of events was internally coherent, and it is generally accepted. Ms Sun had a reliable recollection and gave evidence that attempted to draw upon a genuine memory of events. She made appropriate concessions against interest and conceded error when it was clear that she made a mistake. No major troubling internal inconsistencies emerged within her case.
And Ms Sun could spontaneously add detail to her account of events, even under strong questioning. She adhered to a precise account of the history of these transactions and could draw upon additional facts consistent with her recollection, to explain her motivation and her conduct. She could give reasonable and consistent explanations for the actions that she took during the contested events before the Court.
Mr Wang challenged Ms Sun’s credibility. He contends she changed her evidence after VIPCorp went into liquidation. He says her motive for changing her evidence was to gain ownership of the restaurant without the encumbrance of owing a debt to Mr Wang. But the Court does not accept this case theory. Ms Sun did change her evidence in places, but the change was necessary because of the chaos of Covid-19 and the difficulties with an interpreter who was not fully proficient in Mandarin.
Mr Raymond Van Le. Mr Van Le is a seafood wholesaler. He operates his own seafood shop known as the Central Fish Market. Once the Royal Pavilion restaurant opened, he managed it for Ms Sun, Mr Wang, and the other investors. Mr Van Le volunteered to assist in establishing the Royal Pavilion without any financial reward. He was an excellent witness. His evidence was not strongly challenged and is wholly accepted. He had a natural caution about investing in the restaurant. He wanted altruistically to provide his services without charge in the short term to Ms Sun and Mr Wang to ensure the restaurant’s success. His evidence was independent, and more valuable for that reason. He paints a clear picture of Mr Wang’s involvement in and financial control of the restaurant from its earliest conception.
Mr Van Le has known Ms Sun and Mr Wang for almost the same length of time. He first met Ms Sun in 2015 and was first introduced to Mr Wang as Ms Sun’s cousin, during Chinese New Year 2016. He had no obvious bias in favour of Ms Sun either by reason of longer or closer association with her.
Mr Peng Tian. Mr Tian was a middleman in the sale of the Waitan restaurant. When VIPCorp acquired the restaurant Mr Tian was asked to invest funds himself in a manner perhaps akin to vendor finance for the transaction. He ultimately did not invest in the restaurant for financial reasons. And his lack of financial ties to the transactions, the restaurant and the parties also makes him an independent witness. He gave a most compelling account of Mr Wang and Ms Sun’s involvement in the purchase. He was an excellent witness whose evidence can be wholly accepted. He gave direct and clear answers to all questions asked of him. And his answers were based on a sound and readily accessible recollection of essential events. He could add spontaneous detail to his account of events by drawing upon a good recollection of them.
The following is a narrative of the relevant history. This narrative represents the Court’s findings on the matters covered, except to the extent that the context indicates that only the parties’ allegations are being recorded in these reasons. For reasons of economy this narrative does not include reference to versions of the facts that have been rejected.

Mr Wang, Ms Sun, and the BOC Account – 2016 to 2020

Family Relationships Before 2017

Mr Wang’s and Ms Sun’s families had been close until the dispute in these proceedings arose. Mr Wang’s mother, Mrs Cuifang Sun, lived in Harbin, the capital of the northern province of Heilongjiang bordering the Russian Federation. In 1994 and 1995 Cuifang Sun was suffering from lung cancer and needed medical treatment in Beijing, which is over 1200 km by road from Harbin. Ms Sun’s father, Mingcai Sun lived in Beijing. He made Cuifang Sun and her family welcome at their family home as guests when they were visiting Beijing for her treatment.
Ms Sun decided to emigrate to Australia in 1999. Her mother and Mingcai Sun followed Ms Sun to Australia and settled in Sydney in 2004. Mr Wang remained in the PRC, where he conducted a successful property development enterprise with interests in several cities, including Harbin and Guangzhou. Despite living in different countries, the families remained in contact. And Mr Wang became a regular visitor to Australia. For example, in 2010 and 2012 Ms Sun and her parents hosted Mr Wang and his family in Sydney.
Mr Wang was grateful and gracious for being hosted in this way in Sydney. He gave cash payments to Ms Sun’s family during his visits. These payments were to assist his Australian uncle and aunt and his cousins in the purchase of household goods and groceries. He even gave them a $10,000 recreational fund for gambling at the Star Casino.
But some incidental controversy exists in these proceedings about the transactions between the families arising out of these early trips. During the 2012 trip, Mr Wang became interested in establishing a Buddhist Shaolin Temple in Australia. To pursue this business venture, he appointed Ms Sun as his agent, entrusting her to invest in this opportunity on his behalf. He deposited $2 million into an HSBC account in Australia, authorising Ms Sun to access and to apply these funds for the purpose of progressing this project.
Ms Sun’s father, Mingcai Sun, is an artist specialising in Chinese paintings. That same year, 2012, Ms Sun claims that Mingcai Sun gifted Mr Wang 10 valuable paintings by Chinese artists. Ms Sun estimates the paintings to be worth approximately RMB 4 million (about $840,000). Mr Wang denies receiving any paintings. The Court does not have to resolve this dispute or the other earlier disputes. But the differences between the two versions are one measure of the loss of affection within the family.
By the end of 2013 the Shaolin Temple project had failed. Ms Sun transferred the remaining funds in the Australian HSBC account back to Mr Wang’s bank account in China. Surprisingly their relationship was not strained by this failure and remained sound despite the unfortunate outcome of this mixing of family and business affairs. Mr Wang is a man of substantial wealth and seems to have been prepared to overlook the dollar value of this loss.
Between 2013 and 2018 the families remained in contact. Mr Wang and his family continued to stay at the home of Ms Sun and her family in Sydney from time to time when they visited Sydney. And in 2016, when Mr Wang suffered a foot injury, he stayed with Ms Sun and her parents in Australia while he convalesced.
Further differences of view exist in relation to Wang’s visits during this later period. Ms Sun says that once again, in 2015 Mingcai Sun gifted Mr Wang six more Chinese artworks, worth approximately RMB 700,000 (about $147,000). Mr Wang denies receiving any paintings from Mingcai Sun. Once again the Court does not have to resolve these issues in these proceedings.

Mr Wang’s Migration to Australia and Lin Tang & Co – 2016 and 2017

Mr Wang is a property developer in the province of Heilongjiang. He has been working in the industry for over 10 years. He was previously involved in the business of manufacturing pharmaceutical products for animals after leaving university at the age of 22. His first language is Mandarin. He is not proficient in English.
He first began visiting Australia in 2006. But in January 2016 he began to look for investment in migration opportunities in this country. He spoke to Ms Sun about his wish to explore migration opportunities to migrate to Australia and she offered to assist him, as she was well placed to do so. Through Ms Sun’s assistance and inquiries Mr Wang ultimately engaged a Mandarin speaking solicitor and migration agent, Mr Lin Tang from Lin Tang & Co.
The parties contested when Ms Sun first instructed Mr Tang on Mr Wang’s behalf and the extent to which Mr Wang may have instructed Mr Tang himself. But it is not contested Ms Sun was Mr Wang’s principal intermediary with Mr Tang. Mr Wang says that Mr Tang was engaged by mid-2016. But Ms Sun says it was much later and the Court prefers her account. A migration agent appointment agreement with Mr Tang was signed by Ms Sun, apparently on behalf of Mr Wang, on 18 August 2017. But there is no mid-2016 correspondence from Mr Tang in evidence indicating that he was actively engaged on behalf of Mr Wang that early. And WeChat messages between Mr Tang’s office and Ms Sun are very desultory until late July 2017, approaching the signing of the migration agent agreement.
Mr Wang says that he did not get a copy of the costs agreement made on his behalf with Lin Tang & Co until 2019 and that he had no contact with that firm directly and did not receive direct advice from them. The Court accepts that Mr Wang did not receive the costs agreement until this late. But Mr Wang had direct contact with Mr Tang’s firm at least in 2019. Mr Tang was not called as a witness by either party to these proceedings. He is not obviously in the camp of either party and a Jones v Dunkel inference cannot be drawn from either party’s failure to call him.
On Mr Wang’s account, during a conversation in mid-2016 Ms Sun gave him very specific migration advice about how much he needed to invest in Australia to advance his migration opportunities here. Ms Sun strongly contests Mr Wang’s account of this conversation. Mr Wang alleges the conversation was to the following effect:

“Ms Sun: “I have made enquiries for you with a solicitor who I know very well. You will be eligible for a what they called a ‘Subclass 132 application’. It’s a visa which gives you permanent residency directly and there is no mandatory stay in Australia. You will be able to travel between China and Australia without restriction.”

Mr Wang:   “That’s good. So, what do I need to do?”
Ms Sun:   “It’s very simple. You just need to prove to immigration that you have a deposit of $3.8 million in an Australian bank account under your name.”
Mr Wang:   “All right. I can arrange such funds to be transferred. I will use such monies to buy a property for me to live in, do some investment, purchase my health and life insurance and as well as my general expenses”.
Ms Sun:   “No problem. I will tell you what I need from you later.”

Mr Wang’s gave several accounts of this conversation but in substance it was much the same in each version, the thrust being that Ms Sun represented that he had to deposit $3.8 million and an Australian bank account before he could put a realistic case for a business immigration visa to Australia.
Mr Wang says that Ms Sun also provided him via text message with a list of the documents that were required from him. But he said that because of a recent change in his telephone number he could not retrieve previous data including this text message. He claimed that Ms Sun did not tell him why the subclass 132 application was suitable for him and what other options that he had to apply for permanent residency. Mr Wang says that he followed her instructions and relied upon her and arranged for the funds requested to be transferred to Australia.
Ms Sun denies that she had this conversation with Mr Wang. The Court accepts her denial. This is for two main reasons. First, having seen Ms Sun in the witness box the Court does not assess her as a person who would have purported to give authoritative migration advice of this kind about a subject in which she was not an expert. Nor was she a person who would have been prepared to take responsibility for her cousin transferring $3.8 million based on her advice in an area of some legal complexity, without thorough advice from Mr Tang. And the second reason is that the Court does not have enough confidence in Mr Wang’s testimony on this subject to accept it.
Ms Sun had conversations with Mr Wang and gave some instructions to Mr Tang on his behalf about migration matters. But she says that her detailed discussion about migration with Mr Wang occurred in April 2017 after he had opened the BOC accounts and was considering investment in the Waitan restaurant. She says that Mr Wang said, “I want to migrate to Australia” and that at his request she then agreed to find a migration lawyer for him. The Court accepts this version of events and that she found Mr Tang in April 2017 after that conversation, as is confirmed by her WeChat messages with him.
The evidence in the case on both sides discussed several different Australian visa types at a high level of generality. But the precise distinctions between those visas was not the subject of any detailed analysis by either party. Nor was there any clear account of Ms Sun’s dealings with Mr Tang. The parties’ cases focused upon the conversations and transactions between Mr Wang and Ms Sun.

The BOC Accounts are Opened – February 2017

The BOC accounts were opened at its Haymarket branch in February 2017. The parties gave different evidence as to what preceded the account opening.
Ms Sun says that Mr Wang travelled to Australia that month and when he was here the cousins had the following exchange about opening bank accounts in Sydney:

Mr Wang: “I want to open bank accounts in Sydney for financial investments. I want you to have access to my bank account and pay for my investments, if any.”
Ms Sun: “Ok, let’s go to the Bank of China to open the accounts.”

The Court accepts this version. Mr Wang was initially interested in general investment in Australia not necessarily directly connected with a migration application. The idea of using the investment to assist his migration arose later.
But Mr Wang denies this exchange took place. He puts a different version. He says that she told him that the whole of the $3.8 million they had discussed would have to be transferred to Australia before a visa application for migration to Australia could be completed. Mr Wang says he inquired of Ms Sun whether he could transfer money in stages, that she said that was not possible, and that all his money to support his visa application would need to be in his bank account in Australia.
The Court does not accept Mr Wang’s evidence about this conversation. Mr Wang’s recollection is that Ms Sun told him that the money could not be transferred in stages. But that is exactly what happened, a course of action against which he did not demur, and which did not cause him to question Ms Sun’s advice to him. Mr Wang transferred the funds to Australia in increments commencing with a $1600 deposit on 14 February 2017 and concluding on 6 February 2018 with a deposit of $9,982, although the substance of the funds had been transferred by 17 August 2017.
Both parties agree that on 14 February 2017 Mr Wang, accompanied by Ms Sun, opened accounts at the Haymarket branch of BOC where Ms Sun had a personal connection, a bank employee who was present with Mr Wang and Ms Sun when the accounts were established at the Haymarket branch.
Three accounts were opened that day. The first was a high-interest savings account, ending in the numbers 217. The second was a transaction account, ending in the numbers 240. The third was an account, ending in the numbers 262. On 14 February, an initial deposit of $1,600 was deposited into the 217 account. Operations on accounts 240 and 262 did not feature significantly in these proceedings.
Both parties agree that Mr Wang authorised Ms Sun to operate the BOC account. This authorisation was in English. No translation in Mandarin Chinese was shown or given to Mr Wang. He was informed by the BOC bank personnel that he would be unable to undertake telephone or online banking from China. Mr Wang appointed Ms Sun as a signatory to these accounts, granting her full authorisation to manage them. Ms Sun also opened a bank account of her own at the same branch of the BOC.
The parties have very different accounts of the authority Mr Wang gave Ms Sun to operate the BOC accounts. The authority Mr Wang says that he gave Ms Sun was to operate the account to pay his legal costs with Lin Tang & Co. Mr Wang says the following exchange occurred with Ms Sun before they opened the accounts:

Mr Wang: “When I am not in Australia in the future, you can settle the legal costs for me from my bank account.”
Ms Sun: “Yes ok. Once you sign an authority on your account then I can take money from your account.”

As recorded earlier in this section of these reasons, Ms Sun gives a much broader account of her authority to operate the BOC accounts. She says that her authority was to use the accounts to pay for Mr Wang’s general investments, rather than just be limited to paying legal costs. This is the more probable version. Apart from the Court’s preference for Ms Sun’s evidence over Mr Wang’s, Ms Sun had not yet engaged Mr Tang in February 2017. And $3.8 million was a disproportionately large fund for the very limited purpose that Mr Wang was authorising Ms Sun to use the funds deposited. The better view is that Mr Wang knew that he wanted to invest in Australian investments and was prepared to advance the funds to do so, and for Ms Sun to apply it at his direction.
Mr Wang filled out several forms to open the accounts at the BOC with the assistance of the BOC employee who was a friend of Ms Sun. He does not read English and it can be accepted that without explanation he would not have understood the documents that he was signing that day. But the Court does not accept his evidence that he believed that the documents were an authority to Ms Sun to operate the accounts only to pay for his legal costs.
From 14 February 2017 to 6 February 2018 the total amount of $3,824,912.69 was deposited into the BOC accounts. This was done through money transfers of RMB to Rongqiau Investments Pty Ltd, a foreign exchange company that converted the RMB to AUD before transferring the transferred funds into the BOC accounts.

Operations on the BOC Accounts

Of the three accounts that Mr Wang opened on 14 February 2017, the 217 account was the channel into which he deposited funds that he remitted from the PRC, and it is the principal account from which the allegedly unauthorised withdrawals occurred. After his initial $1600 deposit into account 217, Mr Wang made deposits totalling a little over $1.2 million by 12 April 2017 into the same account. Mr Wang’s last payment into the 217 account was made on 6 February 2018. His total payments into account 217, together with interest earned upon that account were $3,824,912.69.
Ms Sun was responsible for all the withdrawal transactions on account 217 up until 19 March 2018. Mr Wang himself withdrew the remaining balance of $72,689 out of account 217 on 10 September 2018. Two areas of dispute arose in these proceedings about Ms Sun’s withdrawals from account 217.
The first area of dispute, representing Mr Wang’s primary case, relates to approximately $1.9 million that Ms Sun paid out of account 217 to VIPCorp between May 2017 and January 2018. This $1.9 million was comprised of the following payments: $100,000 on 17 May 2017, $500,000 on 26 May 2017, $100,000 on 25 August 2017, $350,000 on 1 September 2017, $200,000 on 3 October 2017, $300,000 on 11 October 2017, $150,000 on 11 December 2017, $150,000 on 4 January 2018 and $50,000 on 25 January 2018. Mr Wang says that Ms Sun made these payments totalling $1.9 million without his authority. Ms Sun says that the payments were made to implement Mr Wang’s decision to invest in the acquisition of the Waitan restaurant and then to establish the Royal Pavilion restaurant.
The second area of dispute arises in Mr Wang’s alternative case. That case accepts that Mr Wang invested in the Royal Pavilion and that Ms Sun was authorised to apply his funds toward that investment. But that alternative case says that some of Ms Sun’s expenditure was for her own benefit and was not related to the Royal Pavilion. By 13 April 2017 Ms Sun had made two payments out of account 217 totalling $1.2 million ($200,000 on 29 March 2017 and $1,000,000 on 13 April 2017) to another BOC account she controlled (“Ms Sun’s BOC account”). In fact, she paid a total of $1,236,000 into her BOC account. Accepting that these payments into her BOC account were authorised as payments relating to the Royal Pavilion, Ms Sun claims that all the amounts she paid out of her BOC account were for that purpose. Mr Wang contends that some of those payments amounting to approximately $180,000 were for her own benefit and not for the Royal Pavilion. The disputes concerning these individual payments are dealt with later in these reasons.
These reasons do not set out all the payments into and out of account 217 and Ms Sun’s BOC account. Rather they focus upon the disputed payments and the major movements of funds.
Some of the most substantial short-term movements of funds out of account 217 was the transfer from it of the $1.2 million into Ms Sun’s account between 29 March and 13 April 2017. According to Ms Sun this transfer is explained in the following conversation, which she says took place before 18 April 2017. She says Mr Wang initiated a phone call to her and said:

Mr Wang: ‘China’s government is investigating overseas investment for all government officers and their associates. My wife has not declared my saving in Australia. You need to transfer all my deposit from BOC account to yourself as soon as possible. If I have any investment needs, I will notify you [how] to use this money.’
Ms Sun: ‘I see.’

The Court accepts that a conversation like this took place but probably not in these precise terms. The Court does not accept that Mr Wang said that Ms Sun needed to transfer “all my deposit” (emphasis added) because the transactions that followed did not involve all his money being deposited into account 217 being transferred into her name. The movements in the account are generally consistent with this kind of conversation taking place in the second week of April 2017. On 12 April 2017 Mr Wang caused an amount of $500,000 and an amount to $500,050 to be transferred into account 217 and the following day Ms Sun transferred $1,000,000 from account 217 into her BOC account. But during the rest of April and early May 2017 almost $1,000,000 was paid into account 217 and a substantial proportion of those funds remained in account 217 until about 7 June. This is not consistent either with Mr Wang having any continuing concern about investment funds being held in his name in Australia in account 217, or Ms Sun acting on that concern. The inference that fits these facts is that whatever concern Mr Wang had about this issue, it was only temporary.
Unless such a conversation had taken place between Mr Wang and Ms Sun these transfers from account 217 into her account would have been an unauthorised misapplication of the funds that Mr Wang transferred to Australia and arguably a fraudulent act. The Court does not accept that Ms Sun was motivated to misapply her cousin’s funds, without his knowledge, or that she did so by these transfers. Mr Wang bears a robust onus under Evidence Act1995, s 140 in attempting to establish such intentional misconduct on her part and he has not discharged that onus. The Court does not assess Ms Sun as a person who was trying to deceive her cousin or take advantage of him without his knowledge.

Purchase of the Waitan Restaurant – late April to Early May 2017

In late April 2017/early May 2017, Ms Sun purchased the Waitan restaurant in a written agreement in Chinese characters. She used Mr Wang’s funds for the acquisition. The accounts of the parties differ about important aspects of this acquisition and the evidence is confused. Ultimately the Court prefers and accepts Ms Sun’s account.
The essential differences between the versions relate not to whether Mr Wang would invest in the new restaurant at all but rather as to the extent of his investment. Ms Sun’s case is that Mr Wang was very interested in the acquisition of the Waitan restaurant and was prepared to fund that acquisition substantially himself. In contrast, Mr Wang’s case is that he was prepared to invest up to $800,000 in the restaurant, representing 40% of approximate purchase and establishment costs of $2,000,000. He says that Ms Sun’s application of approximately $1.9 million of his funds from account 217 towards VIPCorp for the purchase of the Waitan and establishment of the Royal Pavilion through VIPCorp, together with the $1.2 million she transferred to her BOC account were unauthorised beyond $800,000.
Mr Wang’s version is that sometime after “he had transferred all the money to Australia” one day Ms Sun said to him that the financial statements which Mr Wang had provided for his company in China did not meet the requirements for a subclass 132 visa (‘132 visa’) and that “we will need to change your application to subclass 188” (hereafter, ‘188 visa’). Mr Wang says that he had the following exchange with Ms Sun the subject.

Ms Sun: “The financial statements which you provided for your company in China does not meet the requirement of a subclass 132 visa. Some columns are not compliant and will not pass immigration. We will need to change your application to subclass 188. You will need a ‘physical investment’ so you will need to invest in a restaurant business. I will set up a company, purchase a restaurant and you will own 40% of the shares. I will also invest in the restaurant myself. I will get personnel who are experienced in the restaurant business. You will need to own over 40% of shares, stay for 2.5 years in Australia over 4 years after the visa is granted.”
Mr Wang: “Oh ok”.

Mr Wang said he never asked, and was never told, why he did not qualify for the 132 visa and why he may instead satisfy the 188 visa. Ms Sun says, and the Court accepts, she did have a conversation with Mr Wang about changing from a 132 visa to a 188 visa, but this was much later, between November 2017 in January 2018, long after the Royal Pavilion had been launched.
Mr Wang says that he did not question her advice about the change in the type of visa that he would need. He says that a few days later she said to him:

“I will give you 40% of the restaurant business. I will need to purchase the business at $1.1 million, plus kitchen equipment and stock. We will split the costs with other investors. There will be four of us, being myself, the chef of Ah B Abalone restaurant, Peng Tian who is the owner of the restaurant ‘Waitan’ which we are purchasing, and Raymond from ‘Central Seafood’ near Chinatown who is the boss and will be supplying seafood to us.”

Mr Wang says that Ms Sun then estimated “the start-up capital will be $2,000,000” and he agreed to proceed on that basis. He said he did his own calculations afterwards, concluding his investment would be about $800,000. He says the expertise on hand for the fledgling restaurant was decisive for him proceeding. He said he trusted Ms Sun “given her extensive contacts in Australia and that she is my cousin”. But he said that in any event “my funds were already transferred to Australia”. He says Ms Sun never provided him with any budget in relation to the restaurant and that he found out about VIPCorp later; and at that time was not given any formal documents in relation to VIPCorp.
Mr Wang’s version emphasises in several places that this conversation occurred after all his funds had been transferred to Australia. The last substantial transfer of $120,431.73 occurred on 21 August 2017 although a small sum of $9,982 was paid into account 217 from the PRC on 6 February 2018. This would place the conversation no earlier than August 2017. But as will be seen, this timing contradicts independent evidence of Mr Wang’s involvement in the Royal Pavilion long before August that year.
Ms Sun’s version differs as to timing and content. She says, and the Court accepts, that after Mr Wang had started to transfer money to Australia for investment purposes but before he had completed those transfers, she discussed with him on several occasions his interest in purchasing the restaurant business of the Waitan, or at least a share in it. Mr Wang’s interest in the Waitan made specific his general intent, already communicated to Ms Sun that he wanted to use the funds in the account for business investment. Once the Waitan was a prospect before him, he also said to her:

“If for any chance we can take over Waitan, you can use the funds in the BOC account to buy the business.”

She says that these discussions took place by telephone when Mr Wang was in the PRC. She says and the Court accepts, that he said to her, probably on more than one occasion:

“If you can buy the Waitan for me, I will fund you to operate the business until it becomes profitable.”

Whilst such a statement is vague it implies Mr Wang would be taking substantial financial responsibility for the operations of the new restaurant. Mr Wang’s subsequent conduct is consistent with him understanding that he was bearing almost the entire financial burden of the purchase and establishment of the restaurant. Ms Sun’s evidence also suggests that these conversations occurred as early as late March or early April 2017. The Court accepts that this timing is correct as it fits well with the evidence of other witnesses and objective evidence.
It is likely that, as she says, Ms Sun discussed the subject of committing to acquire the Waitan restaurant on the telephone with Mr Wang, when he was in the PRC. But he had probably seen the restaurant before that with her and was able to converse with her over the telephone about the Waitan because he was already familiar with it. Such an interpretation of events is consistent with the evidence of two other witnesses, whose evidence the Court accepts, Mr Van Le and Mr Tian. Mr Tian puts the final date on which Mr Wang committed to acquire the restaurant as in the first week of April 2017.

Mr Van Le recalls that in early 2017 he, Mr Wang and Ms Sun were having dinner together at the Waitan restaurant when it was brought to their attention that the company through which the Waitan traded was going into liquidation and the restaurant would consequently be closing. The Court accepts this account as to how the idea of the purchase arose. Both Mr Wang and Ms Sun are somewhat vague on the topic of the origins of the idea of the acquisition. Mr Van Le’s account of the occasion was compelling. It is probable that this this dinner conversation took place in March 2017.
Soon after Mr Van Le discovered that the Waitan restaurant was about to close he initiated conversations with Mr Tian, who had an interest in the restaurant, about possibly taking it over. Mr Tian was a willing intermediary as an experienced businessman and property developer.
Buying the business intrigued Ms Sun and Mr Van Le. They also discussed the viability of the Waitan restaurant in detail with their friend, Mr Tian. Mr Cheng (also known as Ah B), a chef at the Master Ken Seafood Restaurant, also joined in these discussions.
It was clear to Mr Van Le that Mr Wang and Ms Sun had no experience in running restaurants. In contrast Mr Tian, Ah B and Mr Van Le had relevant experience, which they largely voluntarily committed to assist Mr Wang and Ms Sun. Once the decision to acquire the restaurant had been made Mr Tian, Ah B and Mr Van Le were heavily involved in the budgeting and planning for the new restaurant venture.
And this was high-quality and committed expertise. Ah B was the chef of Master Ken Seafood restaurant, then in Mr Van Le’s opinion the highest class Chinese restaurant in Sydney. Mr Van Le recalls that the idea was discussed among them that Ah B would take over a role as consultant to the Royal Pavilion. In the longer-term Mr Tian, Ms Sun, Mr Le and Ah B in fact stayed close to the operations of the Royal Pavilion. They all dined in the restaurant nearly every night. And Mr Wang joined them at dinner there regularly when he was in Australia.
Mr Tian remembers these conversations well. Mr Tian settles upon a clear date on Mr Wang’s decision to proceed to acquire the Waitan restaurant. Amidst all the conflicting evidence in this case it is a useful marker. He says, and the Court accepts, that on the morning of 4 April 2017 Ms Sun informed him via WeChat that she had just had a telephone conversation with Mr Wang and that they had both had made the final decision to proceed with the purchase of the Waitan restaurant. A screenshot of Ms Sun’s WeChat message to him that “we on this side will definitely proceed! I just spoke on the phone”, confirms Mr Tian’s otherwise credible evidence.
Mr Tian took this message as authority for him to proceed to assist Mr Wang and Ms Sun by first instructing a solicitor to draft a contract for the purchase of the Waitan and then to begin to engage contractors to undertake the necessary renovations. Ms Sun and Mr Wang delegated considerable authority discretion to Mr Tian and Mr Van Le to guide the course of the renovations, given their expertise in fine dining.
The decision to proceed being made in the first week of April 2017 is consistent with other events. Mr Wang made the first two large payments of $500,000 and $500,050 into account 217 on 12 April. VIPCorp was incorporated on 15 May 2017. A regular flow of money into account 217 followed between May and August as renovations occurred. And VIP Corp’s lease of the premises for the Royal Pavilion restaurant commenced on 14 August 2017.

Capital Planning and Incorporation of VIPCorp – April to May 2017

The Court accepts Ms Sun’s account that shortly before the registration of VIPCorp on 15 May 2017 that she Mr Wang, and Mr Tian agreed that Mr Wang would own 40% of the shares in the company to be incorporated to operate the new restaurant, Mr Tian would own 30% of the shares, she would own 30% of the shares and Mr Ken Cheng would receive 20% of the net profit without a shareholding.
Ms Sun also says that it was well understood that her 30% contribution would be in kind rather than by the injection of funds. Apart from the Court’s acceptance of her credible evidence, the lack of conversation about two subjects supports her evidence on this matter. Unlike Mr Wang, who was mostly in the PRC in 2017, she was involved day to day in establishing and operating the restaurant. If the expectation was that she would contribute funds to the venture rather than contribute in kind, then it is to be expected that she would have had a conversation with Mr Wang about how she would be compensated for the disproportionately large amount of time she was investing in the new restaurant compared to Mr Wang, who was keen to see that people were properly compensated for their work. Neither Mr Wang nor Ms Sun gives evidence of such a conversation. Nor do they give evidence of Mr Wang having conversations with Ms Sun about the timing of her injecting $600,000 into the business and from where she would be sourcing those funds, elementary questions that Mr Wang could be expected to ask her if he expected her to be a financial contributor to the venture.
Mr Tian and Mr Van Le confirm Ms Sun’s account that the agreed capital structure of VIPCorp was settled in late April or early May 2017 leading up to its incorporation. They offered considerable informal assistance to Mr Wang’s and Ms Sun’s new venture. In late March and early April, they met almost every day at the Golden Century seafood restaurant or at Ah B’s restaurant, where they discussed feasibility studies and the corporate structure of the new business.
They together participated in the decision to create the share structure for the new venture. And as summarised above, it was agreed that an appropriate distribution of shares would be Mr Wang 40%, Ms Sun 30%, and Mr Tian 30%. At that stage they contemplated that Mr Ken Cheng, who was associated with Ah B’s restaurant would be able to earn 20% of the net profit, without shareholding, apparently in exchange for lending his restaurant expertise to the venture.
Mr Van Le was present at this capital planning meeting with Ms Sun, Mr Tian and Ah B at Master Ken Seafood. He recalls a discussion as to the capital requirements for the purchase of the Waitan restaurant, the need for renovations and cash flow requirements. Mr Van Le recalls cautioning against the investment and saying that it was “not easy to run a restaurant” and warning “better not to do it”. But he recalls Mr Tian offering to assist Ms Sun with the budgeting. But Mr Van Le made clear, “I can help. But once it is on track, I will go. I have my own business to look after.” As events unfolded, he honoured this commitment. He also recalls Ms Sun indicating that Mr Wang would “back up the finance” and remit funds over to Australia for the purchase.
Mr Tian gives a good account of the capital structure and budget that was agreed among the participants from these discussions. He recalls being told by Ms Sun that Mr Wang would have 40% of the venture, she would have 30% and that he, Mr Tian would have 30% of the new entity. He recalls the budget for the purchase and renovations were set at $2,000,000 and that Ms Sun explained to him that he would need to contribute “about $600,000 as per your proportion”. He agreed and Ms Sun explained that they would “work out the exact amount when the project is finalised”.
But two factors ultimately influenced Mr Tian not to invest. The first was that he saw that the renovation costs were beginning to run over budget, and he realised his contribution would need to be more than the originally budgeted $600,000. And the second factor was that he was encountering his own cash flow problems.
He gave Ms Sun early warning that he may not be taking up shares in VIPCorp. He says, and the Court accepts, that about the time that VIPCorp was first incorporated in mid-May 2017 he and Ms Sun had the following conversation:

Ms Sun: “Wang’s Visa application is yet to be clear, so he won’t hold any shares at this stage.”
Mr Tian: “Okay. I have some problems too. I don’t want to hold any shares. You may hold my shares as well.”

Mr Tian ultimately declined to invest any funds in VIPCorp in a conversation he had with Mr Wang in April 2018. But until then he was assumed to be an investor who would put up about $600,000.
On 17 August 2017, during the renovation period, when Mr Wang was in Australia, he and Ms Sun attended Mr Tang’s office for a consultation. Mr Tang advised them both that he had lodged a 132 visa for Mr Wang. Ms Sun says, and the Court accepts, that she participated in most meetings between Mr Wang and Mr Tang, or his staff members between May 2017 and May 2019 and that she acted as something of a go-between connecting Mr Wang and Mr Tang at other times.

Renovations Underway – May to September 2017

Once VIPCorp was established the next task was renovating the restaurant to prepare it for opening. This took approximately four months from May until September 2017. The renovations ran over budget. Mr Wang’s evidence acknowledges that he had much involvement in the renovations or that he had conversations about their cost. But other evidence which the Court accepts supports the inference that he was closely involved.
The Court accepts Ms Sun’s evidence that when VIPCorp was established Mr Wang gave her authority to use the funds in the BOC account for its renovations and later its operations. She says the following conversation took place between them by telephone between April and June 2017:

Ms Sun: “I need money for Vipcorp business expenses and renovation costs.”
Mr Wang: “You can use the money in my Bank of China accounts to pay for the expenses and costs. You can spend any money you need to spend, you don’t need to inform me.”

The Court also accepts her account that she had another conversation in June 2017 with Mr Wang in words to the following effect about the burden of ongoing operational costs, after the cost of the renovations outstripped the budget.

Ms Sun: “The cost of operations have exceeded the budget, we need more money to fund the business.”
Mr Wang: “Just use the funds in BOC. I will fund it until it becomes profitable”

This conversation allowed her to withdraw money from these bank accounts without requesting permission from Mr Wang each time she required further funds. But Ms Sun was not seeking to hide what she was spending from account 217 and her BOC account from Mr Wang. She regularly discussed her expenditure on the restaurant with him as it was incurred.
Ms Sun says, and the Court accepts, that she had regular conversations with Mr Wang about individual payments in relation to the restaurant, to the point that he just gave her a general authority to apply the funds for the purposes of the Royal Pavilion restaurant. But Ms Sun knew that she was accountable for her payments on Mr Wang’s behalf. She made them through the banking system, where they could be scrutinised, with reasonably minimal cash payments, only as might be expected in a business such as the Royal Pavilion restaurant. She generally conducted herself as one who had nothing to hide in what she was doing with bank statements recording her every move. The only blemish on this picture is her slowness to give an account to Mr Wang after they had fallen out, leading to the commencement of these proceedings.
The evidence of Mr Van Le and Mr Tian, which the Court accepts, also supports Ms Sun’s version. According to Mr Van Le the kitchen and exhaust systems had to be upgraded in a manner which had not been anticipated, causing them to exceed the renovation budget. Mr Tian says that Mr Wang came to the restaurant and walked around it several times to inspect the progress of the renovation work.

The Royal Pavilion Trial Operating Period – September 2017

Commencing on 19 September 2017, the Royal Pavilion underwent a trial operating period before its formal grand opening. Mr Wang was engaged with the restaurant during this period. It commenced with a trial opening.
Mr Van Le attended the trial opening of the Royal Pavilion. He recollects that Ms Sun, her parents, Mr Wang, Ah B and Mr Tian were present on this occasion and that Mr Wang walked around the premises to inspect the renovations.
Mr Wang was clearly thoroughly interested and involved in the operations of the restaurant by this time and was eager to run the restaurant properly. Like Ms Sun he seems to have been ready to take advice from Mr Tian and Mr Le on every aspect of its establishment, renovation and opening.
Mr Wang was satisfied with this advice. At one stage after the Royal Pavilion’s trial opening Mr Wang and Mr Tian went to the balcony at the restaurant to smoke while having dinner. They had a conversation in Mandarin in which Mr Wang said:

“This is a very good restaurant. I really want to operate it as a top-class restaurant. I won’t be here all the time so I can only count on you. Please look after the restaurant for me.”

Mr Tian felt the responsibility that Mr Wang was placing upon him and was keenly aware Mr Wang wanted the Royal Pavilion to be a successful high-class restaurant. Mr Tian places Mr Wang close to the operations of the new restaurant.
Just prior to the trial operating period Mr Tian recalls a conversation with Ms Sun in Mandarin to the following effect:

Mr Tian: ‘As agreed, I should have $1,000 per week as salary. But the restaurant is [not] yet on the right track. I won’t take any salary until the Restaurant is making profit.’

Once the trial period commenced Mr Tian worked as manager for the Royal Pavilion restaurant without taking any salary. It can be inferred that Mr Wang became aware of this salary arrangement within the next six months if he was not aware of it immediately. In April 2018 Mr Wang had a conversation with Mr Van Le and Mr Tian in Mandarin, in Ms Sun’s presence. Mr Wang said to Mr Tian and Mr Van Le:

Mr Wang: ‘No one deserved to work for free. You and Raymond [Mr Van Le] should each get $1,000 per week as salary.’

Neither Mr Van Le nor Mr Tian expected Mr Wang’s offer. Nor did they accept it. Mr Tian continued to work as a manager for the restaurant without salary.

In late September – early October 2017, during the trial operating period Mr Wang flew to Sydney for a few days and inspected the renovations. Mr Wang says that during this trip he went to the BOC to check on his bank accounts and discovered that Ms Sun had withdrawn money without authority. Whether he conducted himself consistently with discovering unauthorised transactions on account 217 became a central test of his credibility.
Mr Wang’s principal affidavit of 21 July 2019 is somewhat vague about when he came to Sydney and when he discovered the alleged unauthorised transactions on account 217. He gives an account that Ms Sun requested him to come to Sydney in October 2017. But the affidavit does not mention that the opening of the restaurant was on the agenda during his visit to Sydney. He merely says that the restaurant “began operation in or around September 2017”, which he follows with the statement “as requested by someone, I arrived in Sydney in October 2017”. He then states that he went to the BOC to “check out the transaction records of my bank account” and “realised that all monies which I transferred were gone”.
According to Mr Wang this soon led to a confrontation with Ms Sun and her parents. Mr Wang says that he encountered Ms Sun’s parents at the Star Casino and queried them about where his money had gone and did not receive a satisfactory answer. He said that he tried to reach Ms Sun “several times” and had “a number of arguments” with her. On his account a few days later, he met with her at Royal Pavilion and had a conversation in words the following effect:

Ms Sun:   “Sorry I took your money and didn’t tell you. It’s my fault. The restaurant is mine, but you are the investor, so the restaurant is yours. I have purchased some tables, chairs and cutlery in the sum of around $490k RMB from my own money.”
Mr Wang:   “You know some of the money is to purchase property, some is for investment, and some is for living expenses.”
Mr Sun:   “I understand.”
Mr Wang:   “So how much money is currently left in the Company’s bank account?”
Ms Sun:   “Around $240k.”
Mr Wang:   “But I need the money to pay for a deposit for my house.”
Ms Sun:   “If you take away the money, then the restaurant will be in severe financial difficulty. I don’t expect you to stay on [the] street. You can still live at my place.”

The impression given by this evidence is that Mr Wang was discovering for the first time that Ms Sun had transferred money without any authority from his account 217 and invested it in the Royal Pavilion restaurant.
This is at odds with parts of his own case, his subsequent behaviour, Ms Sun’s evidence and the evidence of the independent witnesses, Mr Van Le and Mr Tian. The problems with his overall account will be discussed after examining some evidence in relation to the restaurant’s grand opening.

The Royal Pavilion Grand Opening – 26 October 2017

The Royal Pavilion formally opened on 26 October 2017. Mr Wang was present. The parties give conflicting evidence about aspects of the grand opening. Neither Mr Wang’s or Ms Sun’s principal affidavits in chief say much about the grand opening but considerable evidence was adduced in cross-examination on the subject, showing that Mr Wang was present and participating enthusiastically in the opening ceremony.
Mr Van Le also attended the grand opening in October. He recalls Mr Wang being present and that he had a slight altercation with him about an aspect of the decor. The Royal Pavilion was fitted out with a ceremonial altar near its entrance, which had lights on it. Mr Van Le thought the lighting on the alter was unsatisfactory. Mr Van Le upbraided the foreman in charge of the electrical team. Mr Wang overheard him while Mr Wang was also inspecting the same area and the following conversation took place between them:

Mr Wang:   ‘Don’t be upset. You don’t need to shout.’
Mr Van Le:   ‘Lots of money has been spent on it. Just look at the result.’
Mr Wang:    ‘We have a lot of money. Just do the right thing. Don’t worry about money.’”

Attempting to reconcile Mr Wang’s conduct participating in the grand opening of the Royal Pavilion with his case that he had just discovered Ms Sun had misapplied millions of dollars from account 217 is difficult. He affirmed in oral evidence that when he found out the money was missing by 1 October 2017, he believed that Ms Sun had taken it contrary to his instructions and that he asked for her to put it back, to which she responded that the money had been spent and she did not have it to repay at that time.
For the sake of argument his case can be accepted that he was by that time a committed 40% investor in the Royal Pavilion. But that would justify applying only $800,000 of his money to the venture. During cross examination he said he had discovered on his short trip to Sydney ending on 1 October 2017 that Ms Sun had transferred "a couple of million dollars" out of his BOC account.
If he had discovered that she had so seriously disobeyed his instructions by 1 October 2017 before he returned to China, it is difficult to understand why he would have then returned to Australia for the opening of the Royal Pavilion in the third week of October. Especially after the confrontation with her that he says occurred when he made his discovery.
When asked why he would want to go to the opening of a restaurant that she had funded contrary to his instructions, he gave the improbable explanation:

"Because we are relatives and when she is opening a new restaurant, I'm just here to, like add to the ambience, and also last time she told me that she will try her best to return the money as soon as possible."

It is improbable that after discovery of such a gross breach of fiduciary trust that Mr Wang alleges that he would respond to the invitation to be part of the restaurant opening in the way that he did.
He counters this with another explanation based on family relationships. This explanation came in various versions. In cross examination he said in response to a question whether he asked her to put the money back:

“She said that all the money is spent, it spent on the restaurant so she doesn't have money to repay at the moment and she will think of a way to recover that money.
Because we have known each other a very long time and I trust her, so I just wanted for her to repay the money."

Even if his explanation that she was family and he was prepared to extend his trust to her and keep up appearances is accepted, his overall behaviour still does not fit. Mr Wang approaches the grand opening with unrestrained joie de vivre. He does not attempt to take greater control of BOC account 217, seek a charge over the assets of the business, engage solicitors or immediately demand a detailed accounting of what had happened to his money. Trusting family and keeping up appearances does not require Mr Wang’s passive acquiescence in Ms Sun’s continued control of his money.
This critical period deserves closer analysis. Payments made into the 217 account are on their face consistent with his version. His last substantial payment into the account of $120,431.73 was made on 21 August 2017, before his alleged discovery of the misapplication of funds. But that is only part of the story and the cessation of payments at that point is consistent with the Royal Pavilion being on the threshold of generating its own revenue in the middle of the following month. But surprisingly for a man who says he has just been deceived by his cousin, Mr Wang does nothing to control account 217. He is a sophisticated businessman who knows how to control money flows if he wants to. Yet he allows Ms Sun to transfer $200,000 to VIP Corp on 3 October 2017, just after he leaves to go back to the PRC. She transfers or withdraws in cash a total of $935,000 from account 217 between 3 October 2017 and 19 March 2018. It can be accepted that Mr Wang did not speak English and Ms Sun was the signatory on the account. But he clearly had the capacity to make use of lawyers or other family members to freeze this account, had he wanted to do so. If his case is correct, Ms Sun’s conduct was an egregious breach of trust. His reaction is strangely muted for someone who says he had been so ill-treated.
According to Mr Wang, Ms Sun promised him that she would stop withdrawing money from her own account. That was easily enforceable by making someone else a co-signatory on the account or putting the account in the hands of his solicitor. Nor is it too much to expect such reactions of a man of Mr Wang’s sophistication. When it came to business affairs, he is no ingenue. He is a successful property developer in provincial China. He has estimated his Australian assets at varying amounts between $11 million and $55 million. He had a good relationship with Ms Sun’s father. He could have intervened in many ways that with appropriate diplomacy, should not have created a family rift.
Mr Wang’s account in cross examination of his confrontation with Ms Sun is implausible. Mr Wang says that he asked why Ms Sun paid out money contrary to his instructions. But apart from giving an account that Ms Sun said that she needed the money urgently, he says that she gave him no explanation. Indeed, he even said that she did not specify to him whether the funds had gone into the restaurant or not.
It seems inherently odd that Mr Wang would not want to know why Ms Sun would break her promise to him. He says he was prepared to continue to trust her promises because he judged her to have a “kind heart”. But someone of his sophistication in his position would nevertheless have been keen to assess the risk that such misconduct would happen again. It is difficult to accept that he would not have sought a more satisfactory explanation of what had happened to the money and in the absence of such explanation putting some controls in place. For example, the simple expedient of asking Ms Sun to send him copies of bank statements, would have required her to give some accountability of her conduct of the BOC accounts.
Mr Wang says that he did raise the question of Ms Sun’s misapplication of funds with her parents and said to them, “I am very angry with her”. But he does not seem to have asked for anything concrete from them either to contain or to remedy the situation.
Mr Wang repeatedly said that he was “angry” with Ms Sun for her misapplication of his funds. But his conduct on the night of the grand opening is inconsistent with such an emotion. It can be accepted for the sake of argument that if he was angry, and that he was perhaps attempting to repress that anger for the purpose of saving face for the family. But the evidence of witnesses such as Mr Van Le and Mr Tian and the photographs of the night are hardly consistent with a man smarting with the anger of financial betrayal. He explained his participation in moments such as this on the grounds that he had “a lot of alcohol” and that “in the Chinese culture when you are taking a photo with Chinese males you want to get close to them to show a close relationship”. Whilst that may be true of the moment, it is not consistent with his claimed state of anger.

Mr Wang Changes His Visa Application – November 2017 to March 2018

Mr Tang’s office advised Mr Wang in person in Sydney about his visa application. The Tang & Co file notes of meetings show that Mr Wang and Ms Sun attended together. The earliest file noted conference at Mr Tang’s office is dated 10 November 2017 and records Mr Wang and Ms Sun were both present. The file note speaks to the restaurant’s capital structure and investment numbers in the following terms:

“The company [VIPCorp] has one director now, may have three shareholders in the future, 40%, 30%, 30% respectively. Wei Sun told us they paid $550k buying the business, 450k bank guarantee for lease, $1.2 million the renovation, $2.2 million on facility and furniture.”

The 132 visa application required Mr Wang to hold a certain proportion of VIPCorp’s shares and to invest a minimum amount into the company and to declare to the Commonwealth and New South Wales Governments his intention to invest in and to operate the Royal Pavilion restaurant through VIPCorp.
By January 2018, Mr Wang’s application for a 132 visa had been rejected. Mr Tang advised Ms Sun that Mr Wang should withdraw his 132 visa application because Mr Wang’s business accounts in China were unsatisfactory. Mr Tang advised that Mr Wang could make a less demanding 188 visa application, which required a $1.5 million investment in Australia.
Ms Sun says, and the Court accepts that she explained to Mr Wang by telephone what needed to be done to rectify his application.

Ms Sun: “You failed the 132 application because there are false statements in your financial report. However, you can apply for 188 visa, which is easier to your situation. If you decide to do so, you need to invest at least $1.5 million into an Australian business. Do you want Lin Tang to apply [for] this visa for you?’”
Mr Wang: “Yes, tell him I want to do that.”

Ms Sun conveyed Mr Wang’s decision back to Mr Tang who lodged a 188 visa application on behalf Mr Wang when he came to Australia in the third week of March 2018. At dinner on 27 March 2018 when Mr Wang was in Australia Mr Tang advised him and Ms Sun that a bridging visa had been issued to Mr Wang that day after his 188 application had been lodged on 23 March.
On 6 February 2018, Mr Wang made his last substantial deposit into the BOC account. On 19 March 2018, Ms Sun made her last withdrawal from this account.

Mr Tian Fails to Invest – April 2018

Mr Wang was in Australia from 22 March to 11 April 2018. During that period the capital structure of VIPCorp was finalised. This involved Mr Wang having discussions with Mr Tian and the issue of shares to Mr Wang.
Mr Tian was originally proposed to be a 30% shareholder in VIPCorp. On 7 April 2018 he had a conversation with Mr Wang at the Royal Pavilion about his investment in VIPCorp. Mr Van Le and Ms Sun were also present. The following conversation took place between them:

Mr Tian:    “I have cash flow problems and are not able to raise capital to inject into the business. I just wonder if I could hold the shares under a loan for you.”
Mr Wang:    “As you cannot keep your promise to inject funds you are not entitled to have any shareholdings. Would rather have Ms Sun hold your shares in case others may show interest.”
Mr Tian:    “Sorry, it is not that I failed to keep my promise. I am financially tight.”

Mr Wang’s approach was poorly received by Mr Tian who rankled at the accusation that he could not keep his promises. He had devoted much of his time and expertise to the project. After Mr Wang rejected his request for more time to raise the funds, he began to lose interest in making an altruistic commitment to the restaurant. He ultimately gave up work as manager at the restaurant.
Mr Van Le also recalls Mr Tian was unable to raise the funds to meet the renovations and other initial costs. Because Mr Tian had entirely dropped out of the investment, Mr Van Le says that Ms Sun held 60% and Mr Wang 40% of the ordinary shares and Ah B had non-voting (Class E) shares, entitling him to 20% of the profit of the company. This appears to have been payment to Ah B for his consultancy. Some of the investors were therefore receiving share-based entitlements in exchange for the provision of services, which Ms Sun claims was the basis of her investment in the venture.
The departure of Mr Tian and this sale to Mr Wang is reflected in VIPCorp’s capital structure. Of the company’s 120,000 ordinary shares Ms Sun holds 72,000 (60%) and Mr Wang 48,000 (40%). Mr Cheng holds 20 class E shares, which entitle him to a share of the company’s income.
Both parties agree that on 9 April 2018 Ms Sun arranged for the transfer of shares to Mr Wang at dinner at the Royal Pavilion. Mr Van Le recalls, in evidence the Court accepts, the key parties were present, Mr Wang, Ms Sun, Ah B and some others. Mr Van Le recalls Mr Wang signing the share certificates for VIPCorp this day. Mr Wang was clearly assenting to the arrangements made that day. Mr Wang knows his own mind and the Court will not infer he would make any business decision unless he was sure of himself. Mr Wang was aware of the share transfers being made that day.
Ms Sun affirms that the minutes of a meeting of VIPCorp on 9 April 2018 correctly record a transaction in which she sold Mr Wang 48,000 shares in the company for $48,000. Why Ms Sun needed to sell 40% of VIPCorp to Mr Wang is unclear. These minutes appear to be a poor attempt to record the issue of 40% of VIPCorp’s shares to Mr Wang.
Ms Sun also recalls, and the Court accepts that during this visit to Australia Mr Wang was pressing her for VIPCorp’s accounts but they were not up-to-date. It is unclear whether she had management accounts available to her. But Mr Wang began to show signs of discontent that there were no other financial investors in the Royal Pavilion. He requested Ms Sun to look for more investors to raise funds for the company.
Mr Van Le also recalls, and the Court accepts, that at this same dinner on 9 April 2018 Mr Wang pressed him about accepting a salary for his work assisting the development of the restaurant’s business, in the following conversation:

Mr Wang:    ‘Do you have salary here?’
Mr Van Le:   ‘No, I won’t take any salary.’
Mr Wang:    ‘Why no shares for Raymond?’
Mr Van Le:   ‘I don’t want any shares.’
Mr Wang:   ‘No worries. Get 10% shares out from my shareholdings to Raymond.’

But Mr Van Le continued to decline a salary and never received one for his continuing work at the restaurant.

Mr Wang Visits Sydney and Changes Course – September 2018

Mr Wang visited Sydney in September 2018. Before the visit he telephoned Ms Sun on 18 September from China and said he was coming out to Australia for her father’s birthday.
According to Ms Sun, this September 2018 visit was a final turning point in her relationship with Mr Wang. Mr Wang visited the VIPCorp office when he was in Sydney. Ms Sun says and the Court accepts that his tone was initially conciliatory. He said to her:

“I am satisfied with VIPCorp’s operation but I want to participate more in its operation.”

But the next day he completely changed his tone. He said to Ms Wang in the presence of her father:

“I have no idea to the operation nor anything with the financial position of the business. I want to hold a meeting for the directors to report to me.”

Then Ms Sun received what she perceived to be a strange phone call from a solicitor from Lin Tang & Co apparently acting on behalf of Mr Wang, who said to her:

“Mr Wang wants you to repay all funds which he invests in VIP Corp. He wants to use the money to let his sister apply for a 188C Visa.”

After that there was little cooperative discussion about the operation of the restaurant between Mr Wang and Ms Sun. A few days later Mr Wang sent a WeChat message to Ms Sun demanding the return of the money spent on his visa application and invested in VIPCorp. He indicated he no longer wished to migrate to Australia. Mr Wang withdrew the remaining $72,689 in BOC account 217 on 10 September 2018.
Ms Sun says that she arranged a director/shareholders meeting that he requested and informed him of this. But she says that he left Australia the day before the meeting and did not attend the meeting.
Ms Sun had been open throughout in discussing with Mr Wang the application of his invested funds. But Ms Sun did not provide him with much information about the financial position of VIPCorp once he began to lose trust in her. His anxiety about this lack of information at the end is understandable. But this seems to have been a reaction on her part to his change in position.
In April 2019 Mr Wang’s lawyers asked for access to the books and records of VIPCorp and the company’s accountants declined. Ms Sun’s lack of openness when the dispute broke out in turn seems to have deepened Mr Wang’s mistrust of her.

Relationships Deteriorate – 2019 to 2020

By early May 2019 Ms Sun’s father was conveying messages to her from Mr Wang to the following effect:

“I got a message from Mr Wang demanding his money back for his investment or he will take legal action.”

The dispute could not be resolved, and Mr Wang commenced these proceedings in July 2019 against Mr Wang and VIPCorp. After they were commenced VIPCorp was placed into administration in 2020 and became a party to a deed of company arrangement, staying further action against it.

Specific Amounts Paid Out of Ms Sun’s BOC Account

The focus of the narrative above is account 217. But approximately $1,200,000 was transferred into Ms Sun’s BOC account in April 2017. The precise figure transferred was in fact $1,236,000. Whilst this sum was in Ms Sun’s BOC account it accrued interest of $11,461.03. Ms Sun contributed other monies of her own into her BOC account. She said that this sum of $1,236,000 was part of Mr Wang’s authorisation of her expenditure on the acquisition of the Waitan restaurant and the establishment of the Royal Pavilion restaurant.
Mr Wang’s alternative case accepted Ms Sun’s defence that she was permitted to use these funds paid into in the BOC account to pay restaurant related expenses. But it intended that at least some of the expenditure did not appear to be for the restaurant and could be recovered as not within the authority Mr Wang had granted. Mr Wang’s alternative case significantly reduced the areas of dispute from over $3.8 million to about $180,000. The precise figure is $179,058.91.
Ms Sun put on evidence seeking to explain each of the payments in question by way of a reconciliation attached to her affidavit of 26 May 2021, to supplement a previous explanation in her primary affidavit of May 2020. Many more of such payments had initially been in dispute. But in the end the contest was reduced to 7 payments. Ms Sun gave what the Court found was a satisfactory explanation of each of these seven items of expenditure as being related to the business of the Royal Pavilion restaurant.
The case against Ms Sun in relation to these payments invites the Court to disbelieve her, rather than to show that there is compelling contrary evidence to her evidence. But the Court accepts Ms Sun’s evidence about each of them. Her evidence fits the expenditure well without straining the facts. The evidence of Ms Sun which the Court accepts is the following. The disputed payments were made on the following dates to the following persons and in the following amounts. There is little evidence to the contrary.
(1) February 2018 - Way Xie Lu - $60,000. Ms Sun retained Guangzhou Leestar Exhibition & Design Co. Ltd to design light boxes, signs, the taking of films at the opening and the purchase of tea leaves in China for the Royal Pavilion restaurant. She was introduced to this company by Mr Way Xie Lu, who was the recipient of this payment. Ms Sun paid Mr Lu the RMB equivalent of AUD60,000 in China out of her own savings and the remaining. AUD60,000 in Australia, out of her BOC account.
(2) 30 May 2018 - Corrs Chambers Westgarth - $63,500. Ms Sun was unable to explain whether $63,500 paid from the account to the legal firm, Corrs Chambers Westgarth, had any relationship to the business of the Royal Pavilion restaurant. When the matter became an issue during final submissions the Court granted Ms Sun leave to issue a subpoena on Corrs Chambers Westgarth to identify the recipient of the $63,500 bank cheque drawn from the BOC account.
For this purpose, the matter was listed before the Registrar for a return of subpoena on 15 June 2021. Liberty was granted to the parties to put on submissions, and submissions in reply, on any documents produced. But Corrs Chambers Westgarth did not produce any documents and claimed legal privilege on behalf of their client.
But despite that claim Corrs Chambers Westgarth confirmed two matters. The first matter was that the names on the firm’s file covering the payment of the $63,500 were Jun Huang and Dong Ping Jiang and the second matter was that that the sum of $63,500 had been used as a deposit on an off-the-plan purchase of a property at Edmondson Park (together, “the non-production information”).
Ms Sun sought leave of the Court to reopen her defence to adduce further evidence and supplied to the Court further affidavit evidence she proposed to read. Both parties put on submissions. Mr Wang resisted Ms Sun’s application to reopen her defence, submitting that cross-examination on the Cross Chambers Westgarth payment would have been approached differently had this evidence been read at trial and that Mr Wang would be prejudiced were the Court to allow Ms Sun’s application, citing the “just resolution” of the proceedings being according to the forensic judgments made by the parties at trial: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175.
On Wednesday, 13 October 2021, the Court proposed in chambers that a way to provide fairness to both sides without delaying the proceedings, was to treat Corrs Chambers Westgarth’s non-production information as agreed facts of which judicial notice could be given. Mr Wang agreed with this course. On Friday, 15 October 2021, the first defendant confirmed that Ms Sun was prepared to proceed on the Court’s proposed course and the Court reserved judgment on that basis.
Ms Sun filed supplementary evidence in relation to this payment. The Court accepts her evidence on this subject. In summary that evidence is that the payment to Corrs Chambers Westgarth was at the direction of a supplier to the Royal Pavilion restaurant. Ms Sun says that the supplier asked her to pay an invoice for HK$375,175 (which had an approximate Australian dollar value at the time of $63,500) to Corrs Chambers Westgarth. The invoice was for goods supplied to the restaurant. All that had occurred that that instead of being paid direct, the supplier had asked for the money to be paid to Corrs Chambers Westgarth. The supply invoice in question is for HK $375,175, apparently for some form of seafood, as it was from a seafood supplier.

(3) July to September 2017 - Senior Monk Donations - $15,000. Ms Sun invited a senior monk from Vietnam to Sydney to bless the Royal Pavilion restaurant. He came to Sydney in July and September 2017 for a few days on each occasion. The purpose of the first visit was a feng shui arrangement and the second visit was for the blessing itself. A photograph shows this senior monk visiting the restaurant. Ms Sun explained that it was important for such religious and cultural ceremonies to take place before the opening of the restaurant to ensure its success within the Chinese community. These were restaurant related payments and were not expended outside Ms Sun's authority.
(4) 26 October 2017 - Dragon Dancing Red Pockets - $10,000. Ms Sun invited the Chinese Masonic Society Dragon Dance Team to perform a Dragon dance at the grand opening on 26 October 2017. The Dragon dancing team had almost 20 people in it and traditional Chinese gifts in red pockets were given to the team for the dances, which averaged out would have resulted in a payment of about $500 for each performer. It also covered flower arrangements and gift packs for persons at the grand opening. This was within Ms Sun’s authority to expend funds on the restaurant.
(5) 23 May 2017 - Master Ken Restaurant - $2,000. Ms Sun said that the $2,000 was spent for the putative investors in the Royal Pavilion to have a meal at a restaurant regarded as the most challenging competitor to the Royal Pavilion, the Master Ken Restaurant. The meal was to better understand the nature of the competition the restaurant would be facing. Like the other expenditure the Court accepts Ms Sun's account of the holding of this meal and there is no competing evidence to the contrary. Moreover, it is not inherently improbable, nor does it contradict any other part of her case. Winkling out information about the Royal Pavilion's potential culinary opposition was well within Ms Sun's authority to expend money on the restaurant.
(6) 2017 - BMW lease payments - $48,558.91. Mr Wang asked Ms Sun to purchase a Mercedes Benz vehicle to transport patrons to and from the restaurant. It was Ms Sun who suggested that the restaurant buy a BMW 5 Series instead of a Mercedes-Benz. Ms Sun has given a full account of the purchase. The purchase price of the BMW was $127,152.91, financed by cash from the account of the business of $48,558.91, and a car loan financed by way of lease of $78,594.
The BMW was purchased by Ms Sun’s company Lucia’s Pearl Pty Ltd not VIPCorp. Ms Sun explains this was because VIPCorp was not able to obtain a car loan, an unsurprising situation given the start-up nature of its business.
The BMW was mainly used by VIPCorp to provide transport to customers who were unable to drive because of having consumed alcohol during the Covid 19 pandemic. It was also used to deliver food from time to time. A luxury model was chosen because of the clientele that the Royal Pavilion was seeking to attract. Ms Sun anticipated that the restaurant would have to transport numerous wealthy clients back and forth from the Star City Casino and that a BMW would be appropriate. She parked the BMW at her own private home during the night for security purposes.
Ms Sun has offered the vehicle for collection by Mr Wang at any time and did so as an open offer during the proceedings. She has been repaying the car loan from her own savings. But upon condition of reimbursement for delivery of the vehicle to Mr Wang and an assignment of the lease and acceptance of its obligations, she is prepared to hand it over to Mr Wang. Ms Sun has been transparent about her use of this vehicle which was for the purposes of the restaurant. The Court will make supplementary orders about the ownership of this vehicle, or liabilities associated with it, if required to quell remaining disputes between the parties. Liberty to apply for this purpose has been allowed for in the orders.
(7) Chinese New Year Dragon Dancing and Cash Wages - $40,000. Ms Sun’s habit was to withdraw $10,000 to $20,000 every fortnight to pay for groceries and cash wages for the Royal Pavilion. But during the Chinese New Year period she withdrew $40,000 because of the higher volume of expenditure to meet the expectations of the restaurants’ clientele during that period of intense cultural celebration within the Chinese community. She retained the Dragon Dance team for a four-day performance during the Chinese New Year period. She also gave red pockets to staff, with each red pocket containing between $20 and $300 in cash for each employee. She explained that in traditional Chinese custom a good employer will give employees “lucky money” for the first working day in the New Year. The photographic evidence strongly supports the inference that the Dragon Dancing occurred at the Royal Pavilion during the Chinese New Year.
Various other payments from Ms Sun’s BOC account aroused Mr Wang’s suspicion and were used to cross examine Ms Sun to attempt to damage her credibility. One category deserves specific comment. This category comprised monies withdrawn from ATMs at the Star Casino. Mr Wang’s case was that his money had been spent by Ms Sun on gambling at the casino. The Court does not accept that Ms Sun had a gambling problem, particularly one that compelled her to misapply Mr Wang’s funds. The pattern of expenditure at the Star Casino is not consistent with Ms Sun having a gambling problem. The Court accepts her explanation of the need to make cash payments to various persons at the Star Casino to give them an incentive to refer customers of the Star Casino to the Royal Pavilion restaurant.

Analysis of the Plaintiff’s Case

The Court’s findings in the factual narrative mean that Mr Wang’s case must fail at the threshold, in the various ways that it is put. This is not a matter that requires an exposition of applicable legal principle, merely its application. Mr Wang alleges that Ms Sun engaged in misleading and deceptive conduct causing him loss and that she breached her fiduciary and agency duties to him entitling him in equity either to equitable compensation or to trace the funds that Ms Sun has allegedly misused. Each of these cases is dealt with here in turn.
Mr Wang alleges that in mid-2016 Ms Sun represented to him the financial and other requirements of the 132 Visa. Mr Wang alleges Ms Sun represented that he was eligible to apply such a visa and stated that he would be eligible for permanent residency in Australia provided he deposited the sum of $3.8 million into an Australian bank account in Ms Sun’s name and that there would be no residency requirement on Mr Wang apart from that.
This claim fails because Ms Sun made no such representation before Mr Wang deposited the $3.8 million into the BOC account 217. The Court’s findings in the factual narrative establish that Mr Wang deposited funds into the BOC account 217 giving Ms Sun a general mandate to operate the account to give effect to his investment decisions. Discussions about Mr Wang applying for a business investment visa of any kind in Australia only arose well after he had started playing funds into BOC account 217. Neither before Mr Wang paid the $3.8 million into BOC account 217, or afterwards, did Ms Sun ever take upon herself the responsibility of advising him about what payments he should make into bank accounts in Australia to qualify for a 132 Visa. She did assist in conveying to Mr Wang some information from Mr Tang, but this only began in earnest in August 2017. And from then on Mr Wang had sufficient contact directly with Mr Tang to take and rely upon advice about Australian visas from him, not Ms Sun. Questions of misleading conduct, causation and loss do not arise.
Mr Wang also contends that Ms Sun owed him fiduciary duties. He claims he appointed Ms Sun as his agent in Australia to represent him in connection with his migration application and to take all necessary steps to advance his application for the appropriate migration visa to Australia. Mr Wang pleads that it was a term of and within the scope of that agency that Ms Sun could access Mr Wang’s BOC bank accounts solely for the purposes of paying a migration agent and for no other purpose. Mr Wang also alleges that the circumstances placed him in a position of financial vulnerability vis-à-vis Ms Sun. Mr Wang identifies several matters implying his financial vulnerability and his trust in Ms Sun. These were that he was not a resident in Australia, he does not speak English, he entrusted Ms Sun with all third-party dealings and transactions in respect of the funds and that she rather than he had the authority to operate his accounts at BOC.
But as in all claims of breach of fiduciary duty, is necessary here to closely scrutinise and define the scope of any fiduciary duty Ms Sun is said to have owed Mr Wang before seeking to identify any position of conflict with that duty, or before other breaches of that claimed duty can be analysed.
Ms Sun’s case conceded that she was Mr Wang’s agent and fiduciary at least to the extent that she was required to follow his instructions in relation to BOC account 217 and the monies transferred into her BOC account. But she says that she had taken on no more responsibility than that. The Court’s narrative of findings shows that Ms Sun was authorised to access account 217 for the purposes of advancing investments in Australia that Mr Wang approved. Ms Sun discussed investments with Mr Wang for his approval, and he agreed with her to invest in the acquisition of the Waitan restaurant and the establishment of the Royal Pavilion restaurant. And she applied the funds in the account in accordance with his instructions for those purposes. Her authority to operate the BOC account 217 was not limited solely for the purpose of paying a migration agent and for no other purpose.
Although Mr Wang’s primary fiduciary case fails on the Court’s findings, he conducted two alternative cases for breach of fiduciary duty and for an account. But these alternative cases also fail at the threshold.
The first alternative case Mr Wang conducted was to contend that he had authorised investment in the restaurant only up to $800,000, that being 40% of the total expected budgeted investment by VIPCorp of $2,000,000 and that her payments beyond that amount, and specifically the sum of $1.9 million paid to VIPCorp were an unauthorised breach of her mandate as an agent. The answer to this case is simply that the Court accepts Ms Sun’s evidence that Mr Wang did authorise these payments, well beyond the limit of $800,000.
The second alternative case Mr Wang conducted involved the acceptance of a lack of success on Mr Wang’s primary case and the first alternative case. Although this alternative case was not clearly pleaded, the Court allowed it to be conducted and Ms Sun was ready to meet it. This case was a challenge to the seven items of expenditure Ms Sun made from her BOC account, which Mr Wang contended were not related to the Royal Pavilion restaurant. Many other items of expenditure of which an account was given in the proceedings were accepted and not further challenged. The analysis in the factual narrative establishes that these seven contested payments were related to the Royal Pavilion. This second alternative case also fails because the Court accepts Ms Sun’s explanations for the challenged items of expenditure.
The only blemish on this picture is Ms Sun’s slowness to give an account to Mr Wang after they had fallen out. This was unfortunate and understandably led to greater distrust of her on his part. This distrust and lack of transparency was one of the factors leading to him to commence these proceedings. But the proceedings have demonstrated that such distrust was ultimately unwarranted, as the affidavit evidence provides a full account and to the extent that it was contested demonstrates in every case that all Ms Sun’s expenditure was authorised. There is no basis for the Court now to order an account, Ms Sun has now given as detailed an account as may have ever been required through the evidence in the proceedings and because Mr Wang has not established any unauthorised expenditure.
The Court does not anticipate that the observations made in the preceding paragraph will have any implications for the awarding of costs in these proceedings, as Mr Wang had a very different view of the scope of Ms Sun’s authority from her view and it therefore appears likely that he would have been likely to commence these proceedings in any event based on that view. The Court will in default of any further application make an order for costs against the plaintiff, Mr Wang. But if he wishes to argue for a special costs order he may apply for such an order within 14 days. Similarly Ms Sun they wish to apply for a special costs order within the same period.

Conclusions and orders

For these reasons Court makes the following orders and directions:

Direct the plaintiff and the first defendant by 3 June 2022 to bring in agreed, or competing, short minutes of order if any party wishes to seek any further Court orders in these proceedings in relation to liabilities and benefits associated with the lease of the BMW Five Series motor vehicle leased by Lucia’s Pearl Pty Ltd and referred to in the plaintiff’s alternative claim;

Otherwise dismiss all the plaintiff’s claims for relief;

Order the plaintiff to pay the first defendant’s costs of these proceedings unless a different cost order is sought pursuant to a motion brought within the time provided for in order (4);

Should any party seek a special costs order or other consequential orders such party should do so by motion filed by Friday 3 June 2022 and made returnable on a date to be arranged with the associate to Slattery J;

Note that no order is made against or in relation to the second defendant, but the second defendant is at liberty to seek any consequential relief by motion filed by Friday, 3 June 2022 and made returnable on a date to be arranged with the associate to Slattery J; and

Exhibits may be returned after the expiry of 28 days from the date of these orders.

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Decision last updated: 23 May 2022

Medium Neutral Citation:	Wang v Sun & Anor [2022] NSWSC 644
Hearing dates:	14, 24 – 28 May, 15 June 2021, and an application to reopen proceedings resolved on 15 October 2021 through a statement of agreed facts.
Date of orders:	20 May 2022
Decision date:	23 May 2022
Jurisdiction:	Equity
Before:	Slattery J
Decision:	Plaintiff’s claim dismissed with costs.
Catchwords:	MISLEADING AND DECEPTIVE CONDUCT – plaintiff transfers approximately $3.8 million from China to an Australian bank account and gives the defendant authority to operate the account – plaintiff alleges that the defendant was authorised to apply the funds to assist the plaintiff in obtaining a business investment visa for him to migrate to Australia – plaintiff alleges the defendant misrepresented the amount that was required for him to apply for a business investment visa from the Australian Government, which in fact was only $3,000,000 – plaintiff says that but for the misrepresentation he would not have transferred the additional $800,000 to the account, which funds were allegedly lost because of the misrepresentation. ACCOUNT – claim for an account in equity – plaintiff alleges the defendant misapplied the funds for purposes other than those for which she was authorised to conduct the account – whether the defendant misapplied the funds in the Australian bank account – whether an account should be ordered against the defendant.
Legislation Cited:	Australian Consumer Law, s 236
Category:	Principal judgment
Parties:	Plaintiff: Mr Wang Wang First Defendant: Ms Sun Sun Second Defendant: Vip Corp (Aust) Pty Ltd
Representation:	Counsel: Plaintiff: C. D. Wood SC; M. Darian-Smith First and Second Defendants: D. Cook SC Solicitors: Plaintiff: Brighton Lawyers First and Second Defendants: William Chan & Co
File Number(s):	2019/00231227
Publication restriction:	No