Wu v Zhao

[2018] NSWSC 1182

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Wu v Zhao [2018] NSWSC 1182

Hearing dates:

13 June 2018

Date of orders:

03 August 2018

Decision date:

03 August 2018

Jurisdiction:

Common Law

Before:

Davies J

Decision:

(1) Extend the time for the commencement of the proceedings to 9 February 2018.

 

(2) Set aside the orders made by Magistrate Price on 19 December 2017.

 

(3) Order that the proceedings be remitted to the Local Court of New South Wales to be determined by a different Magistrate according to law.

 

(4) Order that the costs of the proceedings in the Local Court be determined by the magistrate who hears the remitted proceedings.

 

(5) Order that the defendant pay the plaintiff’s costs of the proceedings in this Court.

 (6) Order that the defendant have a certificate under the Suitors Fund Act 1951 (NSW) if she is otherwise so entitled.

Catchwords:

APPEALS – appeal from Local Court – question of law – whether Magistrate failed to give adequate reasons in respect of material findings of fact – loan by parents to daughter – whether repaid - competing oral and documentary evidence relevant to repayment of the loan – credit issues raised by the evidence – failure of the Magistrate to resolve credit issues – failure to deal with documentary evidence - appeal upheld

Legislation Cited:

Limitation Act 1969 (NSW)
Local Court Act 2007 (NSW) s 39
Suitors Fund Act 1951 (NSW)
Uniform Civil Procedure Rules 2005 (NSW) r 50.11

Cases Cited:

Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430
Coote v Kelly; Northam v Kelly [2017] NSWCA 192
Mifsud v Campbell (1991) 21 NSWLR 725
Mitchell v Cullingral Pty Ltd [2012] NSWCA 389
Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39
Palmer v Clarke (1989) 19 NSWLR 158
Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110
Sellers v Marchant [2008] NSWSC 120
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247

Category:

Principal judgment

Parties:

Jao Wu (Plaintiff)
Ying Zhao (Defendant)

Representation:

Counsel:
J C Lee (Plaintiff)
D Oliveri (Defendant)

  Solicitors:
Fang Wang & Co Legal Pty Ltd (Plaintiff)
Phoenix Attorneys (Defendant)

File Number(s):

2018/44182

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Local Court of NSW

Jurisdiction:

Civil

Citation:

Nil

Date of Decision:

19 December 2017

Before:

D Price LCM

File Number(s):

2017/185527

Judgment

1. The plaintiff, as executor of the will of his father Yun Shu Wu, sued the defendant, who was his sister, for repayment of the balance of a loan made by the parents of the parties to the defendant on 21 November 2002. The loan was for $73,000. The defendant had repaid part of the loan with the result that the plaintiff was claiming $57,939.

2. The defendant asserted that she repaid the balance of the loan on 18 July 2009 at the Bankstown Aged Care Facility where her parents resided. In support of that she relied upon a document signed by her parents and two other family members which acknowledged the loan and said “this amount of loans (sic) has been repaid off (sic) in full”. The defendant also relied on a Limitation Act 1969 (NSW) defence on the basis that the loan was repayable on demand and proceedings had not been commenced within six years of the loan being made.

3. The proceedings were heard before Magistrate Price in the Local Court at the Downing Centre. The Magistrate rejected the defence based on the Limitation Act but held that, because there were equally competing versions of what occurred in relation to the repayment of the loan, he could not be satisfied on the balance of probabilities that any debt remained owing at the time that it would have passed to the estate of the plaintiff’s father. Accordingly, his Honour entered a judgment for the defendant and ordered the plaintiff to pay the defendant’s costs.

4. The plaintiff now appeals to this Court in reliance on s 39 of the Local Court Act 2007 (NSW). Although two grounds were originally pleaded in the summons, only ground one is now relied upon. That ground is as follows:

The Magistrate erred in law by failing to give adequate or proper reasons in relation to:

(a)   failing to make any finding in relation to whether monies were paid by the defendant to her parents on 18 July 2009;

(b)   failing to resolve the issues of credit between the witnesses called by the plaintiff and the witnesses called by the defendant in relation to what occurred at the 18 July 2009 meeting;

(c)   failing to make any finding in relation to which documents, if any, were executed on 18 July 2009, and by whom;

(d)   failing to make any reference or have any regard to the email sent by the defendant on 11 January 2016.

The documents relating to the loan

5. A number of documents tendered in evidence were translations of documents written and signed in Mandarin. The loan agreement was one such document. In translation it provided:

This document is prepared that for the purpose of purchasing a property, the undersigned borrow a loan of seventy-three thousand Australia dollars (A$73,000.00) from our parents and guarantee that the repayment of the above loan should be made any time as required in order to let our aged parents use their money when they are alive.

The signatories:

The father: Yun Shu WU (signature)

The mother: Meng Qin ZHAO (Signature)

The daughter: Ying ZHAO (signature)

The son-in-law: (Blank)

I have not borrowed any other loans except the above one and all the loan borrowed is from their bank term deposit (no cash).

Ying ZHAO (signature)

21/11/2002

6. The document relied upon by the defendant to establish that she had repaid the loan provided in translation:

This is evidence that in November 2002 Ying ZHAO borrowed seventy three thousand Australian dollars (A$73,000.00) from her parents and this amount of loans (sic) has been repaid off (sic) in full.

The Father: Yun Shu WU (Signature)

The Mother: Meng Qin ZHAO (Signature)

The Witness: Hao WU (Signature)

The Witness: Di WU (Signature)

18 July 2009

7. The plaintiff gave evidence in his affidavit that a few days before his mother died on 31 May 2010 she gave him an envelope containing documents. She said to him in Mandarin words to the following effect:

Mother:   You must properly keep these documents. You must get back the money Ying Zao took away.

Plaintiff:   Yes I will.

The plaintiff said that he saw that there were handwritten Chinese characters on the envelope which said:

Inventory of usage for money borrowed by Ying Zao from parents.

He recognised the handwriting to be that of the defendant.

8. After his father died in July 2014 the plaintiff opened the envelope. He found two certificates written in Mandarin signed by his parents and his brother Hao Wu. One of the documents, described in the proceedings as Annexure C to Exhibit 1, in translation, read as follows:

This is to certify that Ying ZHAO has paid off the loan with the amount of AU$73,000 that she borrowed from her parents in November 2002 for the purpose of purchasing a real estate property.

(Father): Yunshu WU (Signed)

(Mother): Mengqin ZHAO (Signed)

Witnessed by: Hao WU (Signed)

18/07/2009

9. The other document, described as Annexure D to Exhibit 1, in translation, read:

This is to certify that Ying ZHAO is responsible for our AU$56,600 which is mainly used for our living expenses. If there is any remaining balance after we pass away, the remaining balance shall be equally divided among Jao WU, Hao WU, Di WU and Ying ZHAO.

Mengqin ZHAO (Signed)

(Father): Yunshu WU (Signed)

(Mother): Mengqin ZHAO (Signed)

Witnessed by: Hao WU (Signed), Mengqin ZHAO (Signed)

18/07/2009, Mengqin ZHAO (Signed)

10. There was also tendered in the proceeding an email from the defendant to the plaintiff of 11 January 2016. That email became Exhibit 3. In translation, it read in part:

Hao Wu came to Australia in July, not June, you have remembered wrongly. Each July is when I am the busiest of the year. I want to keep this job which brings me feeble income, therefore I can only attend the meeting on weekend. I express my gratitude to Hao Wu for his understanding. On 18th July when I went to attend the meeting, I was prepared to distribute to three of you the money of the parents which is kept in my hands. (I) hope that you can sign an agreement which is acceptable to everyone, and then I distribute the money to you. I had no intention to "put you on shelf". I did not expect that outcome would be like that.

When I leant that you had sued Di Wu in China, (I) expressed my shock. Therefore, (I) sent you three letters one by one trying to persuade you from taking the action. I never helped only one of you, I have always tried to mediate from the beginning. I do not like to see that the dispute among my family members would be exposed to and laughed at by all the people in the community. In (sic) seems that I do not have the capacity to persuade you.

As to what you have described me as "frantically spent Ren Min Bi 45,000", I do not agree. Di Wu was authorised by parents, after mother passed away, (he) instructed me to ask for rent twice from tenant, first time ¥18,000, the second time ¥24,000, altogether ¥42,000. In addition, Di Wu passed on to me "consolation money". Everyone has this, you also have. If only you give your account numbers in Chinese bank to Di Wu, he will transfer the money to you. I have already written in the agreement, which Di Wu agreed.

11. A further document tendered in the proceedings which became Exhibit 4 was, in translation, headed “A Detailed List of Parents' Money Expenditure Managed by Ying ZHAO”. The document disclosed the following:

Date	Description	Amount
1984-1990	Labour fee for doing housework, shopping, cleaning, changing water and gas, clothes making and alteration, going to hospital and buying medicines	$11,872.50
1992-2002	Labour fee for doing housework, shopping, cleaning, hair cutting, clothes making and alteration, washing dirty pants	$ 17,160.00
2002-2003	Going to the nursing home for more than 60 times, $15 for each time (handwriting)	$900.00
May-July 2009	Receiving Hao WU and Guizhi GAO; The second brother asked money from our parents for his marriage proposal (handwriting)	$771.00
July 2009 – January 2010	Expenditure	$481.00
2010	Expenditure	$869.00
2011	Expenditure	$343.20
2012	Expenditure	$487.00
January – June 2013	Expenditure	$571.70
July 2013 – July 2014	Expenditure	$200.00
Newspaper for 2015 x 25%	Expenditure	$3,044.60
1st August 2014	Meal (total $1,180; $ 550 is paid by Di WU); we are not sure who they had dinner with (handwriting)	$630.00
1992	I paid ¥ 600 for Beihang Gas System which was returned to Guifang ZHANG by Beihang after I left	$150.00
2000 - 2001	CNY 20,000 (already received by others); AUD: CNY 1:4 (handwriting)	$5,000.00
Total used amount	$42,480.00
The amount of our parents’ money kept in my hands	$56,600.00
The remaining balance divided among four of us	$14,120.00
The amount that each person receives	$3,530.00

12. A further document was tendered and became Exhibit 5. In translation it said this:

List of Money Zhao Ying Borrowed from Parents

21 November 2002

Borrowed from parents Australian dollars:      $73,000 dollars

Returned:

23 November 2002 (handled by Xu Xueda)       $3,000 dollars

Mother's examination in hospital

28 December 2002 (handled by Xu Xueda)       $10,100 dollars

Making tomestone for parents

16 April 2005 (handled by Di Wu)         $2,200 dollars

Father's air ticket to return to Beijing

14 August 2005 (handled by Di Wu)         $1,100 dollars

Di Wu returned to Beijing to carry out formalities for the property and decoration

Debt balance:               Australian dollars: 56,600

Exchange rate at the time 1:6

Equivalent to Ren Min Bi ¥339,600 yuan.

Three hundred and thirteen nine thousand and six hundred yuan

13. The judgment of the Magistrate was given on 19 December 2017. The summons was filed on 9 February 2018. An extension of time is therefore needed by the plaintiff. The explanation for the delay in filing the summons is that there was a delay in obtaining the transcript and reasons for judgment from the Local Court. It is not suggested that there is any prejudice to the defendant by the delay. The explanation is a reasonable one and the delay is for a relatively short period. An extension of time should be granted.

14. The defendant purported to file a Notice of Contention on 10 April 2018. The Notice of Contention should have been filed within 14 days of the date of filing of the summons: r 50.11(3) Uniform Civil Procedure Rules 2005 (NSW). No leave was sought for the late filing of the Notice of Contention. At the hearing the defendant said that she would not rely on the Notice of Contention.

The judgment of the Magistrate

15. The learned Magistrate delivered an ex tempore judgment after lunch on the second day of the hearing. The evidence and submissions concluded before lunch on that day. His Honour first noted that it was a decision delivered without the benefit of the transcript.

16. His Honour went on to say this:

I have received evidence in these proceedings, firstly, by way of statements or affidavits from a number of witnesses, each of whom was cross-examined. Given the pressing time constraints this afternoon, I will not be able to provide a detailed analysis of all of that evidence, however, I would note that I have had reference to it, I have considered it and the evidence forms part -obviously forms a fundamental part of my assessment of the overall validity of the case.

…

It is therefore necessary for me to turn to the substantive matter. As stated earlier, given the time constraints this afternoon, it will not be available to me to provide a detailed examination of all of the evidence. On the authorities that I have raised, in my respectful view, it is neither necessary nor appropriate for me to make comment about the honesty of the relevant witnesses who have given evidence. Many of these matters occurred quite some time ago and as demonstrated by the Court of Appeal decision in Coote v Kelly and the Court of Criminal Appeal Decision in Misiepo v R, it is often the case that honest witnesses are in error about the details of events.

It appears to me, however, that there is little, if any, dispute between the parties that an amount of approximately $73,000 was loaned by the parents of the defendant to the defendant in or about November 2002. The defendant strongly asserts that she repaid this amount in full by approximately July 2009 and in evidence there is a document that is purporting to be a discharge of that loan. It is my understanding that that is annexure C to exhibit 1. It appears that that document was signed by both the father and the mother of the defendant and there has been evidence adduced by the husband of the defendant that he was present around about this time and there was also some evidence by one of the brothers of the defendant in this respect.

There is also a dispute about another accompanying document, being annexure D to exhibit 1 and that this, arguably, created some form of evidence, it is asserted, about a balance of around about $56,000 having not been paid off. Taking into account all of the evidence that has been provided, it appears to me that there is a real issue in these proceedings as to what exactly occurred in or about 2009. It appears to me that there are strongly competing versions of events.

It is a sad but unavoidable situation in the current circumstance that family members are pitted against each other in terms of their recollection of events and it appears that we have a situation where perceptions or self-interests have become involved, as noted by the Supreme Court in the aforementioned authority of Management Services Australia v PM Works and that in terms of an assessment of all of the evidence, it appears to me that there are equally competing versions that give rise, in my view, to mere conjecture as to what actually occurred in the relevant time.

It appears to me, personally, on the evidence that has been adduced, that it is equally probable that the accused did actually repay the debt in full in July 2009, as the assertion that she did not. It appears to me, for example, that annexure C of exhibit 1, being the document that was signed by both the parents, makes it quite clear that the defendant has paid off the loan I note that there is an issue in relation to the health of the father at this stage. In my view, although there is some reasonable suggestion that he suffered from some form of Alzheimer's at this point, there has been insufficient expert evidence for it to be affirmatively held or insufficient overall evidence for it to be affirmatively held that he signed this document whilst he was experiencing an episode in relation to Alzheimer's.

In any event, it is my understanding that the document was countersigned by the mother of the defendant and even though she was elderly, there is no suggestion, as far as I am aware, that she signed the document under any form of duress and that at the time she was under an infirmity of mind that would have meant that she did not have the ability to understand what she was signing.

In relation to annexure D I note that the defendant strongly denies that she, as far as I understand, that she signed that document. There is some ambiguity in relation to the other evidence, being the evidence of the husband, as to which documents were relevantly signed on the date. However, I also do not specifically interpret that document as making it clear that the $56,000 in question was necessarily an ongoing debt that was owed by the defendant in conjunction with the debt that was purportedly discharged on the same date, being 18 July 2009, and being the original $73,000 debt.

Overall, I return to where I started, being the onus of proof. I note there is no cross-claim in this matter and I note that the onus falls on the plaintiff to prove its case on the balance of probabilities. In my respectful view, the plaintiff has not done so. In my respectful view, there are equally competing versions of what occurred and in my view the Court cannot be satisfied on the balance of probabilities that any debt remained owing at the time that it would have passed to the estate of the relevant deceased and forms the foundation of the

ability of the plaintiff to bring this action as the executor of the relevant estate.

CONSEQUENTLY THERE WILL BE A VERDICT FOR THE DEFENDANT.

Submissions

17. The plaintiff submitted that there were six key factual issues which required resolution in the reasons of the Magistrate. Those issues were these:

(1)   Was the balance of the $73,000 loan repaid by the defendant in cash on 18 July 2009?

(2)   Was the document known as Annexure D to Exhibit 1 a document created by the defendant and signed by the parents at the meeting on 18 July 2009?

(3)   Was Mr Di Wu present at the meeting on 18 July 2009?

(4)   If he was present, did he witness the signing of Annexure C to Exhibit 1 at that meeting?

(5)   Did the defendant make an admission in Exhibit 3 (the email from the defendant to the plaintiff of 11 January 2016)?

(6)   Did the defendant create and hand the documents being Exhibits 4 and 5 to Hao Wu?

18. The plaintiff submitted that the judgment does not deal with most of those factual issues. To the extent that they were mentioned, the reasoning was not appropriate, not proper, and did not grapple with the issues that presented themselves.

19. The defendant submitted that the plaintiff repeatedly treats the failure to give an adequate statement of reasons as an error of law as an excuse to challenge the adequacy of the reasons of the court below on factual matters.

20. In relation to ground 1(a), the defendant submitted that because the Magistrate found it was equally probable that the defendant did repay the loaned monies as that she did not, his Honour did not fail to make such a finding.

18. In relation to ground 1(b), the defendant submitted that the Magistrate did resolve the issue of credit between the witnesses by accepting that each of them was honest, but by not accepting that any of them was reliable.

19. In relation to ground 1(c) concerning findings from documents, the defendant submitted that the Magistrate made a finding that Annexure C of Exhibit 1 was signed on 18 July 2009 which was correct. The defendant submitted that it was a significant document which supported the defence. On the other hand, the Magistrate was not persuaded about Annexure D because there was a dispute about its signature. It was said that those findings demonstrate that the claim in ground 1(c) is baseless.

20. In relation to ground 1(d), the defendant submitted that not making reference to every document in the judgment does not amount to an error of law. The fact that his Honour did not mention Exhibit 3 did not mean he did not consider it. The email of 11 January 2016 was a document created some seven years after the events and his Honour had already considered the document when it was tendered in evidence. The defendant submitted that the email was not determinative of any issue because, as his Honour noted during the hearing, it was not, on its face, relevant to the issues.

21. The defendant submitted that when his Honour found on the balance of probabilities that the competing versions of the facts given by the plaintiff and the defendant were equally probable, he clearly did so because he found all witnesses unreliable although honest.

22. The defendant submitted that the plaintiff’s submissions did not seriously engage with the question whether the relevant reasons were adequate in their extent, but concentrated on the question of whether the Magistrate’s conclusion might have been different if he had made alternative findings in relation to documents and credit. In this way, the plaintiff was seeking to raise a question of fact.

23. The defendant submitted that the reasons do not have to extend to every matter of fact or law which was raised in the proceedings. The defendant submitted that many of the complaints by the plaintiff were complaints about the Magistrate’s findings of fact.

Consideration

27. In my opinion, the Magistrate failed to give adequate or proper reasons in relation to a number of issues in the proceedings which needed to be determined. Indeed, his Honour simply failed to resolve a number of issues.

28. The first issue concerned Annexure C. This was the document referred to in [8] above, being one of the documents given to the plaintiff by his mother. The defendant’s version of the document is set out at [6] above. It relevantly said that the document was evidence of, or certification, that the defendant had borrowed $73,000 from her parents in November 2002 and that it had been repaid in full.

29. It was the defendant’s evidence in her affidavit of 20 October 2017 that three copies of what she described as the “loan repayment receipt” were signed. The first copy was kept by her parents, the second copy was kept by her, and the third copy was kept by her brother Hao Wu.

30. The significant matter touching this document is that the copies of the documents retained by Hao Wu and the parents, the latter of which made its way to the plaintiff in the envelope referred to at [7] above, contained three signatures only. Those signatures were of the father, the mother and Hao Wu. The certificate put in evidence by the defendant at the hearing contained a fourth signature being the signature of Di Wu, another brother of the plaintiff and the defendant. In that regard, it is relevant to note that there was a dispute about whether Mr Di Wu was actually present at the meeting on 18 July.

31. It was necessary for the Magistrate to make a finding about whether Mr Di Wu was present at the meeting because that was an issue at the hearing. Whether he was present or not was relevant to the authenticity of the document that the defendant put forward which contained Mr Di Wu’s signature, although the other two copies of the same document did not do so. Coupled with that is the unexplained fact that, although Mr Di Wu was, on the defendant’s account, a witness to the document, he was never given a copy of it. On the other hand Mr Hao Wu was given a copy of it but his copy was not signed by Mr Di Wu.

32. Secondly, there was an issue about whether any money was in fact paid to the parents on that occasion notwithstanding whether the document just discussed was signed. The defendant said in paragraph 6 of her affidavit that she repaid the balance of $73,000 in full to her parents at the Bankstown Aged Care Facility on that day. She said it was paid in cash. The defendant’s husband, Huai Bin Xu, said that the defendant repaid the balance of $73,000 to her parents at the Bankstown Aged Care Facility. In his affidavit he did not say if he saw her do that or in what form the payment was made. In cross-examination he said that he saw the money but he could not say if it was in 50s or 100s, and he didn’t pay close attention to how the money was paid.

33. Mr Di Wu in his affidavit says nothing about money being paid. Mr Hao Wu’s was asked in cross-examination if he could have missed any exchange of documents or envelopes, and he said (T 19/12/17 p 12):

I, I don’t know that. I only notice there was no money – I mean, transferring.

34. I observe in passing that if the money was repaid in cash as the defendant asserts, even if it had all been in one-hundred dollar notes, the repayment would have consisted of a sizeable bundle of money. In addition, if it was counted, that would have taken some time, raising issues about the evidence or lack of it regarding the exchange, from those present at the meeting.

35. The Magistrate says nothing in his reasons about whether money was repaid on that day.

36. Thirdly, Annexure D to the plaintiff’s affidavit (set out at [9] above) needed to be considered in resolving the principal issue of whether the money had been repaid. That document was purportedly signed on the same date by the parents and Mr Hao Wu. Mr Hao Wu says that this was one of two documents that the defendant produced and asked him and his parents to sign at the same time as the repayment note was signed. Both the defendant and her husband are silent about this document.

37. The Magistrate referred to Annexure D by first noting that it arguably created some form of evidence about a balance of about $56,000 having not been paid off. His Honour then returned to Annexure D a few paragraphs later by noting that the defendant strongly denied that she signed the document. It was not suggested by anyone that the defendant had signed the document, and the document does not bear her signature. Moreover, that observation by the Magistrate did not engage with what the document asserted, particularly when it had been signed by the parents on the same occasion and, on its face, was inconsistent with the assertion that the defendant had repaid the money. Indeed, during the hearing the Magistrate said this of Annexure D (T 18/12/17 p 43):

Yes, so you would say it’s a piece of evidence that goes to an assertion that as at 2009, 18 July 2009, you say that is a document that evidences that $56,000 was still owing as at that date.

CARNEY: That’s correct.

38. Fourthly, the evidence required consideration of two other documents being Exhibits 4 ([11] above) and 5 ([12] above). The Magistrate did not refer to these documents at all.

39. As to Exhibit 4, the Magistrate was somewhat critical of counsel for the plaintiff for producing this document during the trial without having disclosed it in the filed evidence. The Magistrate asked its provenance and counsel said, without demur by the defendant, that it had been handed to the plaintiff by the defendant. After the defendant looked at both the original and translation of it she indicated that she had no objection and it was admitted as Exhibit 4. In her evidence she denied writing the document.

40. On its face, the document appears to be an accounting by the defendant of monies she had expended in looking after her parents. Significantly, the third- last entry reads:

The amount of our parents’ money kept in my hands $56,600

That amount is precisely the same amount as the amount mentioned in Annexure D and Exhibit 5.

41. Exhibit 5 was tendered in the same way. Counsel for the plaintiff said a copy of it had been shown to the defendant. The brother Hao Wu said that it was a document handed to him by the defendant. He said:

This is Ying Zhao handed to me, she said the money kept by her and she wrote this list.

Again, the defendant denied writing the document. She asserted Hao Wu wrote the document.

42. These were significant documents which bore upon the issue of whether the money had been repaid, upon the defendant’s credit and upon Hao Wu’s credit, given the denials about writing them and her assertion that Exhibit 5 was written by Hao Wu. The Magistrate noted at the time the documents were tendered (T 19/12/17 p 9):

Everyone is now on notice, the defendant disputes the propositions that are being put by the plaintiff in relation to those documents.

In those circumstances, it might have been expected that some reference would be made to these documents in the judgment when it came to determining the issue of whether the money had been repaid as the defendant asserted and the plaintiff denied.

43. Exhibit 5 was also dated the same date as the meeting where the money was said to have been repaid. On one view it gave credence to the second document found by the plaintiff in the envelope given to him by his mother, but that meant the Magistrate needed to determine who wrote it.

44. All of these matters meant that it was not possible for the Magistrate to determine the matter without making an assessment of the credit, at least, of the defendant and Hao Wu, and that assessment was likely to go to their honesty because of what was contained in the documents and what was asserted and denied about who wrote the documents. The learned Magistrate’s reference to Coote v Kelly; Northam v Kelly [2017] NSWCA 192 was not to the point. In that case it was not suggested that any witness was not honest. The critical matter was whether the witnesses were reliable. In the present case, the issues raised by the documents and the seemingly inconsistent evidence went to the honesty of the defendant and the other persons said to have been present at the Aged care Facility on 18 July 2009.

45. Coupled with those assessments was a determination about the genuineness of a number of the documents which pointed in different directions on the principal issue of whether the money had been repaid.

46. Although, in relatively rare cases, a judicial officer might reach a conclusion that, in the light of competing evidence, a plaintiff had failed to discharge its onus on the balance of probabilities, it would be necessary for the judicial officer concerned to consider the competing evidence to show how he or she could not be satisfied that the onus had been discharged.

47. In Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430 Meagher JA, having discussed the requirement to provide sufficient reasons and referred to what was said in Mifsud v Campbell (1991) 21 NSWLR 725 at 728 and Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 281, went on to say (at 443):

It follows, that reasons need not necessarily be lengthy or elaborate: Ex parte Powter; Re Powter (1945) 46 SR (NSW) 1 at 5. The scope of the reasons to be given is, as Mahoney JA said in Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 386, related “to the function to be served by the giving of reasons”. Accordingly, the content of the obligation is not the same for every judicial decision. No mechanical formula can be given in determining what reasons are required. However, there are three fundamental elements of a statement of reasons. which it is useful to consider. First, a judge should refer to relevant evidence. There is no need to refer to the relevant evidence in detail, especially in circumstances where it is clear that the evidence has been considered. However. where certain evidence is important or critical to the proper determination of the matter and it is not referred to by the trial judge, an appellate court may infer that the trial judge overlooked the evidence or failed to give consideration to it: North Sydney Council v Ligon 302 Pty Ltd (1995) 87 LGERA 435 . Where conflicting evidence of a significant nature is given, the existence of both sets of evidence should be referred to.

Secondly, a judge should set out any material findings of fact and any conclusions or ultimate findings of fact reached. The obvious extension of the principle in North Sydney Council is that, where findings of fact are not referred to, an appellate court may infer that the trial judge considered that finding to be immaterial. Where one set of evidence is accepted over a conflicting set of significant evidence, the trial judge should set out his findings as to how he comes to accept the one over the other. But that is not to say that a judge must make explicit findings on each disputed piece of evidence, especially if the inference as to what is found is appropriately clear: Selvanayagam v University of the West Indies [1983] 1 WLR 585 . Further, it may not be necessary to make findings on every argument or destroy every submission, particularly where the arguments advanced are numerous and of varying significance: Rajski v Bainton (CA (NSW), 9 June 1991, unreported).

Thirdly, a judge should provide reasons for making the relevant findings of fact (and conclusions) and reasons in applying the law to the facts found. Those reasons or the process of reasoning should be understandable and preferably logical as well.

48. In Palmer v Clarke (1989) 19 NSWLR 158 Kirby P (with whom Samuels JA agreed) said (at 170):

… bald findings on credit, where there remain substantial factual issues to be dealt with, may not constitute an adequate compliance with the judge's common law duty to provide the parties, and the appellate court, with the basis of his decision;

49. In Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 Allsop P (with McColl JA agreed) said at [2]:

[C]entral controversies put up for resolution by the parties must be dealt with. The competing evidence directed or relevant to such controversies must be analysed and resolved.

50. In Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 McColl JA said at [66]:

Because a primary judge is bound to state his or her reasons for arriving at the decision reached, the reasons actually stated are to be understood as recording the steps that were in fact taken in arriving at that result. Where it is apparent from a judgment that no analysis was made of evidence competing with evidence apparently accepted and no explanation is given in the judgment for rejecting it, it is apparent that the process of fact finding miscarried. This is because, so far as the reasons reveal, no examination was made of why the evidence which was accepted was to be preferred to that of other witnesses: Waterways Authority v Fitzgibbon; Mosman Municipal Council v Fitzgibbon; Middle Harbour Yacht Club v Fitzgibbon [2005] HCA 57; (2005) 79 ALJR 1816 (at [130] – [131]) per Hayne J (with whom McHugh J (at [26]) and Gummow J (at [27]) agreed)); see also Najdovski v Crnojlovic [2008] NSWCA 175 (at [21]) per Basten JA (Allsop P and Windeyer J agreeing).

51. Bearing in mind the principles expressed in those cases, I consider that the learned Magistrate has not provided adequate reasons for his decision. He has failed to make credit findings where that was necessary. He has failed to consider documentary evidence which bore upon the credit of witnesses and a determination of the issue in question in the proceedings.

52. Contrary to the submissions of the defendant, the challenges made by the plaintiff to the Magistrate’s reasons were not attempts to challenge factual findings but to demonstrate that the Magistrate ought to have made findings one way or the other on particular matters that were before him for resolution.

Conclusion

53. The approach taken by the Magistrate demonstrates that the proceedings were not determined according to law. Neither party made submissions about whether, if I was minded to remit the matter, the matter should be remitted to a magistrate other than the Magistrate who first heard the proceedings.

54. In Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39 Davies and Foster JJ said (at 42):

If a decision has been set aside for error and remitted for rehearing, it will generally seem fairer to the parties that the matter be heard and decided again by a differently constituted tribunal. This is because the member constituting the Tribunal in the original inquiry or hearing will already have expressed a view upon facts which will have to be determined in the rehearing. The aggrieved party may think that a rehearing before the Tribunal as originally constituted could be worthless, for the member’s views have been stated. Thus, if a decision of the Administrative Appeals Tribunal has been set aside and the matter remitted for rehearing, the President of that Tribunal ordinarily allocates to the rehearing a different member of the Tribunal. There are, of course, cases where it is convenient for the Tribunal as previously constituted to deal with the matter. And occasionally the Court expresses such a view, so as to make clear that it would not be improper for the Tribunal as previously constituted to consider the matter again.

55. In Sellers v Marchant [2008] NSWSC 120 Price J had reason to cite that passage with approval in a case where a magistrate had refused to recuse himself on the remittal of a matter that he had first heard before the appeal. Price J said:

[13] …The judgments, … had been set aside in their entirety which required the proceedings to be re-determined. Moreover, as his Honour’s reasons were inadequate, it is impossible to determine how his assessment of the honesty and reliability of the witnesses had impacted upon the ultimate decisions which he made.

[14] It seems to me that this is a case where, if the proceedings continued before his Honour and the judgments remained the same, it would be very difficult to persuade a reasonable person in the shoes of the aggrieved plaintiff that justice had been done. A reasonable apprehension of bias by reason of prejudgment in my opinion has been firmly established. An error of law has been identified. The proceedings are to be remitted to another Magistrate for hearing.

56. In the present case it was the Magistrate’s failure to make necessary credit findings, and his view that no such findings were needed, that made his reasons inadequate. However, his ultimate conclusion was that, because the evidence was fairly evenly balanced, the plaintiff had failed to discharge he onus. In reaching that view, there might be a reasonable apprehension of bias if the matter was to be heard by the same Magistrate.

57. Accordingly, I make the following orders:

(1)   Extend the time for the commencement of the proceedings to 9 February 2018.

(2)   Set aside the orders made by Magistrate Price on 19 December 2017.

(3)   Order that the proceedings be remitted to the Local Court of New South Wales to be determined by a different Magistrate according to law.

(4)   Order that the costs of the proceedings in the Local Court be determined by the magistrate who hears the remitted proceedings.

(5)   Order that the defendant pay the plaintiff’s costs of the proceedings in this Court.

(6)   Order that the defendant have a certificate under the Suitors Fund Act 1951 (NSW) if she is otherwise so entitled.

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Decision last updated: 03 August 2018