Yakun Shao v Qian Peng

[2016] NSWSC 1444

Supreme Court

New South Wales

Medium Neutral Citation:	Yakun Shao v Qian Peng and Others [2016] NSWSC 1444
Hearing dates:	10 October 2016
Date of orders:	10 October 2016
Decision date:	11 October 2016
Jurisdiction:	Equity - Expedition List
Before:	Sackar J
Decision:	See paragraphs [13] and [19]
Catchwords:	EQUITY – breach of trust – repayment of trust monies
Cases Cited:	Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484 Young v Murphy [1996] 1 VR 279 Wickstead v Browne (1992) 30 NSWLR 1
Category:	Principal judgment
Parties:	Yakun Shao (Plaintiff and cross-defendant) Qian Peng (Defendant and cross-claimant)
Representation:	Counsel: M Einfeld QC and P Newton (Plaintiff) Unrepresented (Defendant) Solicitors: Yau & Wang Lawyers (Plaintiff) Juris Cor Legal (Defendant)
File Number(s):	2016/68834
Publication restriction:	N/A

EX TEMPORE Judgment

1. The plaintiff (Ms Shao) and the defendant (Mr Peng) were married in October 2013 in China. They separated on 12 April 2015 and divorced on 7 July 2016.

2. In these proceedings, Ms Shao seeks the recovery of monies which she alleges were wrongfully used and appropriated by Mr Peng on two separate occasions after they had separated. The substantial part of the claim relates to monies technically invested by Ms Shao and Mr Peng with Crown Global Capital Pty Limited (‘Crown’) but repaid only to Mr Peng. The other part of the claim concerns monies withdrawn by Mr Peng from a joint account with the Commonwealth Bank of Australia (‘CBA’).

3. By way of Amended Cross-Claim, Mr Peng had sought various declarations and orders in relation to monies in bank accounts, loans, a property purchased by Ms Shao in Belrose prior to their marriage, “investment properties”, shares and the adjustment of property interests pursuant to ss 78 and 79 Family Law Act1975 (Cth).

4. On Friday last, 7 October 2016, at approximately 1:55pm, my Associate received an email from the defendant’s solicitor informing me that the defendant would not participate in the trial and would only make a submitting appearance. That was formalised by a document entitled “Submitting Appearance” which stated that “Qian Peng Defendant/Cross-Claimant appears and submits to the making of all orders sought, and the giving or entry of judgment in respect of all claims made.”

5. The matter proceeded before me today accordingly and took the form of an ex parte hearing. At my request the defendant’s solicitor briefly appeared to confirm his instructions and was then excused from further attendance.

The claim for $1,000,000

6. It is common ground that in March 2015, Ms Shao withdrew the sum of $1,000,000 from two of her bank accounts (one with Westpac, one with CBA). That sum was then lent in the joint names of she and her husband to Crown. The loan was to be for one year at 12 per cent interest per annum. The loan arrangement was formalised by written agreement.

7. Mr Peng admits that he responded on 17 February 2016 to a request from Crown by nominating his own bank account, for Crown’s repayment, which was then paid into that account, together with interest, (Statement of Defence [23(d)]). He also concedes that he then paid the monies received by him to his father and step-mother in China (Statement of Defence [27]), also affidavit of Mr Peng, 4 March 2016 at [13]-[16]).

8. The defendant does not in any way seek to justify the receipt by him alone of those monies.

9. Independently of those concessions the bank statement (CB Volume 4, pages 13 and 14) clearly indicates that approximately $1 million was deposited into the defendant’s account on 25 February 2016. It was withdrawn by Mr Peng in two tranches.

10. There is no doubt on the evidence that all the monies loaned to Crown came from Ms Shao alone. The evidence discloses that $865,000 came from her account with Westpac and $135,010 came from her account with the CBA. In any event, there is simply no evidence to the contrary.

11. The agreement pursuant to which monies were loaned to Crown, defines “Lender” as Ms Shao and Mr Peng (CB volume 2, pages 5-14) – see also the description of “Lender” at page 5 in the terms and conditions at cl 4. The repayment of monies should have been to both persons or to an account of one, but only with the consent of the other. But, this is not what occurred. Mr Peng had no right pursuant to the loan agreement, nor did he ever have Ms Shao’s consent, to the monies being repaid to him alone, let alone sent to a third party’s account. Mr Peng therefore had no authority or entitlement to deal with the monies in the way that he did. In my view upon receipt of the funds from Crown, he became immediately obliged to account to Ms Shao for those proceeds, and became in law, a trustee holding those monies on trust, in my view, for her.

12. Having received those monies as a trustee, he was bound not to disperse them and remains liable to account for those funds: Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484 at 499; Young v Murphy [1996] 1 VR 279 at 300. The breach of trust gives Ms Shao a right to enforce her claim against Mr Peng for those monies as an equitable debt: Wickstead v Browne (1992) 30 NSWLR 1 at 14.

13. Accordingly, Ms Shao is entitled to the reinstatement of the whole of the monies which Mr Peng received from Crown and used for his own or his family’s benefit.

Monies taken from the CBA offset account

14. Mr Peng accepts that in August 2015, he withdrew $600,000 from an offset account in the parties’ joint names with the CBA without Ms Shao’s consent (Affidavit of Yakun Shao sworn 17 March 2016). Ms Shao immediately commenced proceedings for repayment of the $600,000.

15. Ms Shao gives evidence of an agreement reached with Mr Peng on 11 August 2015 whereby Ms Shao would discontinue the proceedings in return for Mr Peng’s promise to repay the $600,000 that he had withdrawn from the account (Affidavit of Yakun Shao sworn 17 March 2016 [28]-[31]).

16. Almost immediately, Mr Peng repaid $460,000 in two amounts (a) $450,000 into an account of Health Go Pty Ltd, a company in which both were shareholders and (b) $10,000 into an account with CBA). However, he has failed to pay the balance of $140,000.

17. No case has been mounted as to why that amount is not due and owing.

18. It seems to me on the evidence that a contract was made between the parties on 11 August 2015 in which Ms Shao agreed to discontinue the proceedings for the immediate repayment of the $600,000, in full. The evidence clearly discloses that agreement has been breached.

19. In my view, Ms Shao is entitled to judgment for the outstanding amount of $140,000.

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Decision last updated: 14 October 2016