Yoo v Toppro Pty Ltd

[2016] NSWSC 670

Supreme Court

New South Wales

Medium Neutral Citation:	Yoo v Toppro Pty Ltd & Ors [2016] NSWSC 670
Hearing dates:	30, 31 March, 1 April and 3 May 2016
Decision date:	26 May 2016
Jurisdiction:	Equity - Corporations List
Before:	Black J
Decision:	Order for rectification of share register of company and ancillary orders to be made in favour of Plaintiff. Cross-Claims dismissed. Second Defendant and Fourth Defendant to pay costs of Plaintiff as agreed or as assessed.
Catchwords:	CORPORATIONS — Application for rectification of company’s share register under s 175 of the Corporations Act 2001 (Cth) — where plaintiff sought declarations that purported transfers of shares to second and fourth defendants are void – whether there was an equitable assignment of the plaintiff’s equitable interest in shares by reason of delivery of the executed transfer form to the nominated transferee – whether plaintiff expressed an immediate intention to dispose of his equitable interest in shares so as to effect an equitable assignment – whether the plaintiff had revoked the offer, or any authority, to sell the shares to the nominated transferee before it was accepted or implemented – where the share transfer form was amended without being initialled by plaintiff and without communication with him – whether estoppel claims against the plaintiff established.
Legislation Cited:	- Conveyancing Act 1909 (NSW), s 184 - Corporations Act 2001 (Cth), ss 175, 1071B,1072F, 1073F, Pt 7.11 - Evidence Act 1995 (Cth), ss 136, 140
Cases Cited:	- Anning v Anning [1907] HCA 13; (1907) 4 CLR 1049 - Ashton v Pratt [2015] NSWCA 12; (2015) 318 ALR 260 - Australia & New Zealand Banking Group Ltd v Frenmast Pty Ltd [2013] NSWCA 459 - Beck v Tuckey Pty Ltd [2007] NSWSC 1065; (2007) 213 FLR 152 - Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 - Chidiac v Bhatt [2014] NSWSC 1253 - Combulk Pty Ltd v TNT Management Pty Ltd (1993) 113 ALR 214 - Commonwealth v Verwayen [1990] HCA 39; (1990) 170 CLR 394 - Comptroller of Stamps (Vic) v Howard-Smith [1937] VLR 15; (1936) 54 CLR 614 - Corin v Patton [1990] HCA 12; (1990) 169 CLR 540 - DHJPM Pty Ltd v Blackthorn Resources Ltd (formerly called AIM Resources Ltd) [2011] NSWCA 348; (2011) 83 NSWLR 728 - Equuscorp Pty Ltd v Glengallen Investments Pty Ltd [2004] HCA 55; (2004) 218 CLR 471 - Ku v Song [2007] FCA 1189; (2007) 63 ACSR 661 - Lysaght Bros & Co Ltd v Falk [1905] HCA 7; (1905) 2 CLR 421 - Midas Management Pty Ltd v Equator Communications Pty Ltd [2008] NSWSC 255 - Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 110 ALR 449 - Neonbrook Pty Ltd v Thusi Pty Ltd [1997] QCA 335 - Noonan v Martin (1987) 10 NSWLR 402 - Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 - Raftland Pty Ltd v Federal Commissioner of Taxation [2008] HCA 21; (2008) 238 CLR 516 - Re Casey’s Patents; Stewart v Casey [1892] 1 Ch 104 - Re Centura Global Holdings Pty Ltd [2016] NSWSC 62 - Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789; (2014) 101 ACSR 233 - Re McArdle (dec’d) [1951] 1 Ch 669 - Re Williams; Williams v Ball [1917] 1 Ch 1 - Riches v Hogben [1985] 2 Qd R 292 - Rosebanner Pty Ltd v Energy Australia [2009] NSWSC 43; (2009) 223 FLR 460 - Saba v Moit Projects [2014] NSWSC 1759 - Saleh v Romanous [2010] NSWCA 274; (2010) 79 NSWLR 453 - Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449 - Spalla v St George Wholesale Finance Pty Ltd [1999] FCA 1566; (1999) FCR 359 - Tszyu v Fightvision Pty Ltd; Fightvision Pty Ltd v Onisforou [1999] NSWCA 323; (1999) 47 NSWLR 473 - Vaughan v Duncan [2005] NSWSC 670 - Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; (1988) 164 CLR 387 - Whitlam v Australian Securities and Investments Commission (2003) 57 NSWLR 559 - Wright v Gasweld Pty Ltd (1991) 22 NSWLR 317
Texts Cited:	- EGL Tyler et al, Fisher & Lightwood’s Law of Mortgage, (3rd ed 2014, LexisNexis Butterworths) - JD Heydon et al, Meagher, Gummow & Lehane’s Equity Doctrines and Remedies (5th ed 2015, LexisNexis Butterworths) - S Worthington, Personal Property Law (2000, Oxford) - Snell’s Principles of Equity (1939, 22nd ed)
Category:	Principal judgment
Parties:	Il Nam Yoo (Plaintiff/First Cross-Defendant on First and Second Cross-Claims) Toppro Pty Ltd (First Defendant) Ok Ja Joo (Second Defendant/Cross-Claimant on First Cross-Claim) Jae Joo Kim (Third Defendant) Wealth Wisdom Investments Limited (Fourth Defendant/Cross-Claimant on Second Cross-Claim) Jin Hee Hong (Second Cross-Defendant on First and Second Cross-Claims)
Representation:	Counsel: J R Young (Plaintiff/First Cross Defendant) M Neil SC/S O’Brien (Defendants/Cross-Claimants) A R Zahra (Second Cross-Defendant)     Solicitors: Kim & Associates (Plaintiff/First Cross-Defendant) Alpha Lawyers (Defendants/Cross-Claimants) Sparke Helmore (Second Cross-Defendant)
File Number(s):	2014/186025

Judgment

Introduction

1. The Plaintiff, Mr Il Nam Yoo, seeks a range of relief against the Defendants, Toppro Pty Ltd (“Toppro”), Mrs Ok Ja Joo, Mr Jae Joo Kim, and Wealth Wisdom Investments Limited (“WWIL”). Mr Yoo acquired an equitable interest in the shares in Toppro in April 2012 and there is a dispute as to whether he subsequently disposed of the shares, or the equitable interest in them, to Mrs Joo or WWIL.

2. The First Defendant, Toppro, is a distributor of electronic equipment which, during the relevant period, it acquired from a Korean company, Topfield Co Ltd (“Topfield”) under a Distribution Agreement and then sold to retailers. The Second Defendant, Mrs Joo, is the wife of the chief executive of Topfield and the shareholder in a company which provides services to Toppro. The Third Defendant, Mr Kim, is currently a director of Topfield and was appointed by Mrs Joo as a director of Toppro. The Fourth Defendant, WWIL, is a company incorporated in the British Virgin Islands which is controlled by Mrs Joo, through another company also incorporated in the British Virgin Islands, Waymon Group Limited (“WGL”). WWIL was registered in the British Virgin Islands on 26 March 2012 (Joo 18.8.15, Annexure “C”) and WGL was registered in the British Virgin Islands on 5 April 2012, with Mrs Joo as its sole director and shareholder (Joo 18.8.15, Annexures “A”, “B”). WGL was the sole shareholder of WWIL and was appointed as director of WWIL, with a corporate director presumably being permitted under the law of the British Virgin Islands, on or about 10 April 2012 (Joo 18.8.15, Annexure “D”).

3. By his Fourth Amended Statement of Claim (“FAS”), Mr Yoo seeks declarations that a transfer or purported transfer of shares in Toppro to Mrs Joo on 20 June 2014 and a further transfer or purported transfer of shares of Toppro to WWIL on 3 September 2014 are void and of no effect and consequential relief. Mr Yoo seeks to impeach Mrs Joo’s or alternatively WWIL’s ownership of the shares in several ways in the Fourth Amended Statement of Claim, alleging that an individual involved in the transaction, Mr Choi, lacked authority to transmit the executed share transfer form to Mrs Joo; Mrs Joo and WWIL lacked authority to make subsequent alterations to the share transfer form without Mr Yoo’s consent; those alterations to the share transfer form were fraudulent; and lack of consideration.

4. Mrs Joo and WWIL in turn brought Amended Cross-Claims, in somewhat similar form, against Mr Yoo and, initially, against a solicitor who also had an involvement in the transactions, Mr Hong. By her Amended Cross-Claim filed on 21 April 2015, Mrs Joo seeks a declaration that a valid and binding agreement was formed on 20 June 2014 between Mr Yoo as transferor and Mrs Joo as transferee of all of Mr Yoo’s shares in Toppro, and a declaration that she is the legal owner or equitable owner of all of the shares in Toppro. By its Amended Second Cross-Claim also filed on 21 April 2015, WWIL seeks a declaration that a valid and binding agreement was formed on or about 3 September 2014 between Mr Yoo as transferor and WWIL as transferee of all of Mr Yoo’s shares in Toppro, and a declaration that it is the legal or beneficial owner of all of the shares in Toppro. There is a significant degree of overlap between the issues raised by Mrs Joo’s Defence and her and WWIL’s Cross-Claims, and several matters pleaded in the Defence appear to be directed to advancing the Cross-Claims, so I will generally deal with matters raised by the Defence and the Cross-Claims together. Fundamentally, the parties are at issue as to the effectiveness of the share transfer, so far as Mrs Joo and WWIL assert the effectiveness of that share transfer in their Amended Cross-Claims and those matters are denied by Mr Yoo.

5. Mr Yoo, and to a lesser extent Mrs Joo, conducted the large part of the case on the basis that he was the legal owner of shares in Toppro prior to the execution of the share transfer that is in issue in the proceedings. However, the transfer of shares in Toppro to Mr Yoo from their previous owner (or, more accurately, their equitable owner), Mr Yu, had never been recorded in Toppro’s share register and, indeed, Toppro did not maintain a share register at the time it occurred. Mr Young, who appeared for Mr Yoo, accepted in his oral closing submissions that the fact that Mr Yoo was not registered as the holder of the shares in Toppro had the result that no question of the transfer of legal title to the shares arose, because Mr Yoo was not the legal owner of the shares, although he rightly emphasised that Mr Yoo was the beneficial owner of the shares, in terms of his rights as against the previous owner of the shares, who he acknowledged may also not have been their legal owner in the absence of a share register (T178). Mr Neil, who appeared with Mr O’Brien for Mrs Joo and WWIL, contended in oral closing submissions that the Court should proceed, consistent with the evidence, on the basis that the question in issue involved the validity of the equitable assignment of an equitable interest in shares (T188). Mr Young also accepted, in oral submissions in reply, that he could not contend that Mr Yoo at any relevant time had anything more than an equitable interest in the shares (T208).

6. The proceedings must therefore be determined on the basis that they concern, not a transfer of a legal interest in shares in Toppro to which Part 7.11 of the Corporations Act 2001 (Cth) has any application, nor the assignment in equity of a legal chose in action, but the assignment in equity of an equitable chose in action, being Mr Yoo’s equitable right to the shares in Toppro arising from his ability to obtain specific performance of a contract for purchase of those shares from Mr Yoo. (In making that observation, I assume, without deciding, that specific performance could be ordered against Mr Yu and in favour of Mr Yoo although Mr Yu himself only had an equitable interest in the shares. It is not necessary to determine that question where the parties ultimately made their closing submissions on the common basis that Mr Yoo had acquired an equitable interest in the shares.)

7. I will generally first identify the parties’ pleaded cases concerning the key events, then the relevant evidence, and then address the parties’ submissions and reach conclusions as to each of those events. I will deal in less detail with those aspects of the parties’ submissions that were not relevant to the question whether Mr Yoo had assigned an equitable interest in the shares in Toppro to Mrs Joo or WWIL. There are some difficulties in identifying the relevant issues and addressing them in any logical order, because of the form of the parties’ pleadings and the parties’ limited focus in opening submissions on the transfer of the equitable interest in the shares. However, the pleadings have already been amended several times and the parties have already spent several days in hearing and no doubt incurred significant costs. It seems to me to be consistent with the overriding objective of the just, quick and cheap resolution of the real issues in dispute in the proceedings for the Court to do the best it can with the pleadings, evidence and submissions as they stand.

The affidavit evidence and the witnesses

8. Mr Yoo relied on his affidavit dated 23 June 2014, a second affidavit dated 27 June 2014 and a third affidavit dated 27 July 2015.

9. The Defendants, and Mrs Joo and WWIL as Cross-Claimants, rely on Mrs Joo’s affidavit dated 18 August 2015. Mrs Joo departed from substantial aspects of her affidavit evidence in her evidence in cross-examination, as I will note below. There were also some difficulties in Mrs Joo’s evidence in cross-examination. Mrs Joo significantly departed, in cross-examination, from her affidavit evidence as to a discussion as to her shares in Toppro with her accountant in February 2012, although she then further amended her evidence in cross-examination in a manner that sought to reduce the inconsistency with her affidavit evidence (T66–67). She initially recalled Mr Choi delivering documents relating to WGL and WWIL to her in March or April 2012, some of which were not created until late April 2012, before retreating to the proposition that she did not recall the relevant dates (T70–71). Mrs Joo’s evidence as to her investment in WGL and WWIL, to which I refer below, was contradictory and, in my view, at best incomplete. These matters lead me to conclude that I must approach Mrs Joo’s evidence with caution. The findings that I have reached largely do not turn on whether evidence of Mr Yoo on the one hand or Mrs Joo on the other should be accepted. However, Mrs Joo’s credit is relevant to her estoppel case to which I refer below.

10. Mrs Joo and WWIL also rely on a further affidavit of Mrs Joo and on the affidavit of Mr Kim. Mrs Joo’s further affidavit and Mr Kim’s affidavit both deal with a conference with counsel (to which I refer below) in identical terms (Joo 18.8.15 [19]–[22], Kim 1.10.15 [5]–[8]) including a common misspelling of the word “who’s” in each of paragraph 20 of Mrs Joo’s affidavit and paragraph 6 of Mr Kim’s affidavit. Their evidence provided no real explanation of the identity between their respective evidence as to that conference and their solicitor also did not give evidence to explain that matter. Given the findings that I have reached on other grounds and the limited relevance of the conference with counsel to the proceedings as between Mr Yoo and the Defendants, as distinct from the Cross-Claims brought by Mrs Joo and WWIL against Mr Hong, it is not necessary to determine whether the substantial identity of those parts of Mr Kim’s and Mrs Joo’s affidavits had the consequence that their affidavit evidence was substantially devalued: compare Rosebanner Pty Ltd v Energy Australia [2009] NSWSC 43; (2009) 223 FLR 460 at [324]–[326]; Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789; (2014) 101 ACSR 233 at [89]–[91]. Mr Kim’s evidence was also confusing as to whether he had seen his affidavit, at least in an English version, before he was cross-examined in the proceedings.

Events leading to the execution of the share transfer, its delivery to Mrs Joo on 1 May 2012

11. The events concerning Mr Yoo’s acquisition of an interest in Toppro, and his execution of a share transfer in favour of WWIL, at the end of April and in or about May 2012 respectively, are addressed in paragraphs 1–5 of the FAS and the corresponding paragraphs of the Defence. Mrs Joo’s and WWIL’s Amended Cross-Claims also contain a somewhat discursive pleading that addresses the same events. Mr Yoo pleaded that, on 30 April 2012, he acquired all of the shares in Toppro (FAS [1]) and that allegation was admitted in paragraph 1 of the Defence filed by Mrs Joo and WWIL. That admission was made in error and, as I noted above, the parties proceeded in closing submissions on the basis that Mr Yoo had acquired only an equitable interest in those shares in the absence of registration of any interest in the shares in Toppro’s share register.

12. Mr Yoo pleaded that, in May 2012, he was approached by Mr Choi, who was then a director of Topfield, with a proposal that he should sell his shares in Toppro and make a small profit in a short period of time (FAS [3]). Mrs Joo and WWIL admitted (Defence [3]) that Mr Yoo was approached by Mr Choi with a proposition that he execute a share transfer in favour of WWIL as purchaser of the shares and pleaded that:

“(a)   In or around April 2012 Yoo was selected by Topfield its servants or agents (including Choi) as transferee upon the sale of shares by the previous shareholder of Toppro.

(b)   Legal fees incurred by Yoo in relation to the transfer of Toppro’s shares to him were paid for out of Toppro’s funds.

(c)   In or around April 2012, Wealth Wisdom was selected as transferee of Yoo’s shareholding in Toppro by Topfield its servants or agents (including Choi).

(d)   At or around the time that Yoo acquired his shares in Toppro, Yoo agreed to sell his shares in Toppro to [WWIL] and signed the undated share transfer as a condition of the future supply of products to Toppro by Topfield.

(e)   The only profit to be made by Yoo at all material times was such profit as he might derive from the payment of US$12,000 consideration as s[t]ated on the executed undated share transfer.”

13. Mr Yoo also pleaded (FAS [4]–[5]) that he agreed with Mr Choi to execute a transfer form partly in blank in favour of WWIL, which stated the consideration for the transfer of the shares to WWIL as USD12,000 and was undated but signed by Mr Yoo and that, also in May 2012, he gave the partly executed transfer document to Mr Choi, instructed Mr Choi that the document and its effect was to lapse in three months and instructed Mr Choi not to take any step in relation to the transfer document after the expiry of three months. Mrs Joo and WWIL relevantly plead that, on or about 30 April 2012, Mr Yoo parted with the possession of the undated share transfer to Mr Choi in his capacity as Topfield’s agent and gave Mr Choi authority to transmit the undated executed share transfer to WWIL for completion (Joo Cross-Claim [3]–[4]; WWIL Second Amended Cross-Claim [4]–[6]). Mrs Joo pleads that the identity of the transferee of the shares was not material to Mr Yoo (Joo Cross-Claim [9]).

14. Mrs Joo in turn pleads the steps necessary for an equitable transfer of the shares (Amended Cross-Claim [10]) (on the premise that the shares, rather than an equitable interest in them, were in issue) namely that:

“By signing the undated Share Transfer and parting with possession of it to Choi:

a.   Yoo permitted the Share Transfer and/or agreement to transfer the shares to be completed and registered at a time which was entirely at the discretion of Topfield, its servants or agents and/or the transferee, its servants or agents;

b.   Yoo armed the transferee, its servants or agents, with all that was necessary to complete the Share Transfer and have it registered without further steps being taken by Yoo as transferor.”

15. WWIL broadly pleads the same matters as Mrs Joo (WWIL Second Amended Cross-Claim [1]–[9]), then pleads matters as to the structure of WGL and WWIL (WWIL Second Amended Cross-Claim [10]–[11]); then advances allegations as to suspicious banking transactions in Toppro and an unusual stock transfer to Toppro (Second Amended Cross-Claim [13]–[14]) which were not established by evidence led in these proceedings and may be the subject of other proceedings between the parties.

16. I now turn to the evidence concerning these matters. The circumstances in which Mr Yoo acquired an interest in Toppro is addressed only in his evidence, since Mr Choi, who played a significant role in the transactions, had subsequently resigned from Topfield and was not called by either party. Mr Yoo’s evidence in his first affidavit (Yoo 23.6.14 [3]) is that:

“In around March 2012, I execute a transfer of sh[a]reholding form. The original form was a transfer to [WWIL] incorporated in the British Virgin Islands. The form was not dated. I was required to sign as a director which I was not.”

17. In his second affidavit dated 27 June 2014, Mr Yoo’s evidence is that he purchased the shares in Toppro on 30 April 2012 (Yoo 27.6.14 [9]). As I have noted above, Mr Yoo then acquired only an equitable interest in those shares. Mr Yoo’s evidence is that he was considering selling the shares in May 2012 and was then approached by Mr Choi (Yoo 27.6.14 [10]). Those events were connected in a manner that Mr Yoo’s second affidavit did not make clear, which was addressed in his third affidavit.

18. In his third affidavit dated 27 July 2015, Mr Yoo gave an expanded account of events, and referred to an approach to him in March 2012 from Mr Choi, who had previously been his neighbour in Korea. Mr Yoo’s evidence is that Mr Choi said he was looking for a person to acquire the shares in Toppro and, if Mr Yoo had USD10,000 to invest, he could buy all of the shares of Toppro and “sell them in a couple of weeks for USD12,000” (Yoo 27.7.15 [20]). Mr Yoo refers to a further meeting with Mr Choi at the office of Toppro’s accountants where he gave USD10,000 in cash to Mr Yu, the previous shareholder (or, more precisely, the then holder of the equitable interest in the shares) for which he was given a receipt. Mr Yoo then refers to a meeting the next day, 1 May 2012, where Mr Choi said “I will now sell your shares for USD12,000 and you will make a quick USD2,000 profit” and produced a share transfer form to him and said that Mr Yoo must sign that form before Mr Choi could sell his shares (Yoo 27.7.15 [27]). The original transfer form signed by Mr Yoo recorded the name of the company which was the subject of the transfer, Toppro, referred to the consideration payable of USD12,000, identified the transferee as WWIL, left blank the address of the transferee, and was signed by Mr Yoo, albeit over a reference to “sole director” of the transferor rather than in the space provided for an individual transferor to sign.

19. Mr Yoo’s evidence is that he sought an explanation of the share transfer form and the reference to WWIL in it, and Mr Choi advised that Topfield did not want to hold the shares in Toppro for reasons to do with Korean law and taxation and Mr Yoo said (Yoo 27.7.15 [32]):

“This is making me slightly uncomfortable because British Virgin Islands is a tax haven but I guess if they are going to buy the shares quickly it doesn’t matter to me. If they don’t I might be quite happy to hold onto the shares since you told me [Toppro] was turning over $10m.”

Mr Yoo in turn refers to a further conversation with Mr Choi (Yoo 27.7.15 [33]) as follows:

“[Choi] said to me, “They are going to act on buying your shares and they will do it quickly, trust me.” I said to [Choi], “I need you to give me USD12,000 within the next three months. I need that money.” [Choi] said to me, “That is not a problem. It should all be fine.”

20. In cross-examination, Mr Yoo accepted that he had signed the share transfer form shortly after he acquired the shares, although both the cross-examination and Mr Yoo’s answers appeared to be based on an incorrect premise that there was then a dealing with a legal interest in the shares; he accepted, as he had accepted in his affidavit evidence, that he had been told by Mr Choi that Topfield required the signature of a share transfer as a condition of future supply; he accepted that he agreed to WWIL being shown as transferee because that was what Mr Choi had put on the share transfer form; and he accepted that the identity of the transferee did not matter to him; and that he gave possession of the share transfer to Mr Choi, knowing that Mr Choi would give that form to WWIL, and anticipating (reasonably enough) that he would be paid the promised consideration of USD12,000 when that occurred, and that he was content for Mr Choi to give that form to WWIL as soon as Mr Choi wished so that Mr Yoo could receive that money (T23–25).

21. The fact that Mr Yoo was permitted to buy the shares in Toppro (although, as I noted above, he in fact acquired only an equitable interest in them) and the proposal that he would then sell them to a nominee of Topfield within a relatively short time were plainly connected. However, none of the parties conducted the proceedings on the express basis that Mr Yoo was, to use a term used in the context of takeovers, “warehousing” the Toppro shares for Topfield for Korean tax or other reasons, although Mrs Joo referred in her cross-examination to shareholders “on paper” in a manner that hinted at that possibility. I do not proceed on that basis where the parties were not prepared expressly to put or acknowledge that possibility.

22. Mr Choi subsequently delivered the share transfer form executed by Mr Yoo and other documents to Mrs Joo. These matters are addressed only in Mrs Joo’s evidence, since, as I noted above, Mr Choi was not called by either party. Mrs Joo referred to a previous conversation with Mr Choi in early 2012 about difficulties with the then chief executive of Toppro, Mr Yu, who advised her in February 2012 that he no longer wanted to be the shareholder in Toppro. Mrs Joo then referred in her affidavit evidence to a discussion with her accountant, in February 2012, who discouraged her from purchasing the shares in Toppro (Joo 18.8.15) by reference to auditing regulations which would be imposed and complicated taxation issues. As I noted above, Mrs Joo substantially abandoned that evidence in cross-examination.

23. Mrs Joo’s affidavit evidence was that, with Mr Choi’s assistance, she had previously caused WWIL to be registered in the British Virgin Islands in March 2012 and caused its holding company, WGL, to be registered in the British Virgin Islands in April 2012 (Joo 18.8.15 [9]). As I will note below, Mrs Joo substantially departed from that evidence in cross-examination. Mrs Joo’s affidavit evidence was also that, on 30 April 2012, Mr Choi attended her offices and said to her that (Joo 18.8.15 [10]):

“I have an agreement for the sale of shares in Toppro from In Sang Yu to Il Nam Yoo. I also have another document, which is a share transfer form that Il Nam Yoo signed. It is a share transfer form to [WWIL]. Since [WGL] is the owner of [WWIL] and you are the director of [WGL], if you sign the form then the transfer is complete. When you sign this form you become the owner of Toppro.”

It is not necessary to express any view as to the correctness of Mr Choi’s view as to whether Mrs Joo, as shareholder and director in WGL, could sign documents on behalf of WWIL, where WGL and not Mrs Joo was a director of that company. It is, however, important to note that Mr Choi’s advice to Mrs Joo did not indicate any intention of Mr Yoo (or indeed Mr Choi, to the extent he was speaking on Mr Yoo’s behalf) that the share transfer be immediately effective, but contemplated that it would in future be completed if Mrs Joo signed it, and that she would in future become the owner of the shares in Toppro when she signed that form. In their opening submissions, Mrs Joo and WWIL similarly characterised that conversation as having the effect that “when Mrs Joo signs the form she becomes the owner of Toppro”.

24. Mrs Joo’s evidence in cross-examination (which she characterised as involving a “small difference in terms of meaning”) was that she did not know for what purpose WGL and WWIL were established and that, around March 2012, Mr Choi brought documents in relation to those companies to her (T59-60). Mrs Joo’s further evidence in cross-examination (T61), also inconsistent with her affidavit evidence, was that Mr Choi had “rocked up” to her office in March or April 2012 with the incorporation documents for WGL and WWIL and the transfer form from Mr Yoo to WWIL, and that there had been no previous discussion about these matters and she was not expecting these documents; he had given her the documents and she had made little or no further inquiry, and he had then left. Mrs Joo’s evidence in cross-examination was also that she had not had a previous conversation with Mr Choi about a transfer of shares and that she did not have a discussion about the documents he brought with him (T73). Mrs Joo said that she did not ask further questions of Mr Choi because she did not consider that it was prudent to be involved in business in the British Virgin Islands (T79); that view was, of course, entirely inconsistent with Mrs Joo’s acquiring ownership of two British Virgin Islands companies, WGL and WWIL, since any lack of prudence in that course was hardly reduced by making no further inquiry as to why it was occurring. Mrs Joo’s evidence, later in her cross-examination, was again that Mr Choi had just left the documents with her and that there had been only a single conversation about the share transfer (T80–81).

25. I am conscious of the possibility of cultural differences and I also recognise that Mrs Joo referred in cross-examination to cultural matters that might have limited the extent to which she would seek or be given an explanation of these matters by Mr Choi. Having recognised those matters, it still seemed to me that Mrs Joo was a relatively sophisticated businesswoman and she obviously has sufficient experience to conduct a business in Australia. I am not satisfied that, even allowing for cultural differences, a relatively sophisticated Korean businesswoman would allow herself to become the proprietor of two British Virgin Islands companies, and be provided a transfer of all of the shares in an Australian business, without seeking any explanation of the basis of the transactions. I recognise that Mrs Joo’s lack of inquiry as to these matters might have been more readily explicable if she had understood Mr Choi to be implementing the transaction at the direction of her husband, the chief executive of Topfield, and understood the transaction to have been organised by her husband, possibly for Korean tax purposes. However, that was not Mrs Joo’s evidence. On balance, after allowing for cultural differences, I am unable to accept Mrs Joo’s evidence of the conversations with Mr Choi and particularly of her lack of inquiry as to the basis of the transactions.

The extension of the time period for completion in August 2012 and the further conversation in late 2012

26. Mr Yoo pleads (FAS [6]–[7]) that, in August 2012, Mr Choi requested and he allowed an extension of three months to effect the share transfer and that Mr Choi’s authority to act upon the share transfer had been revoked, and Mr Choi was or ought to have been aware of that matter, by the commencement of 2013. Mrs Joo and WWIL do not admit those matters in their Defence to the Fourth Amended Statement of Claim and affirmatively plead that Mr Yoo authorised, consented to or permitted Mr Choi to transmit the executed and undated share transfer to a transferee selected by Mr Choi on behalf of Topfield, and, on or about 30 April 2012 or 1 May 2012, Mr Choi transmitted the executed undated transfer to Mrs Joo (Defence [6]–[7]). I have addressed the latter claim above.

27. Mr Yoo's evidence (Yoo 27.7.15 [35]) is that he had a further conversation with Mr Choi, three months after his initial signature of the transfer form, in late July or early August 2015, in which Mr Choi indicated that Topfield was pressuring Mr Choi to keep the transfer form for a further three months until WWIL could sign the form; Mr Yoo indicated that he really needed the money and would have to borrow it from someone else; and he extended the time for execution of the transfer form and payment of the money for a further three months and said:

“[Okay], but I can only give you another three months. If the deal is not going through, I am keeping the shares.”

28. Mr Yoo’s evidence (Yoo 27.7.15 [37]) is that he then had a further conversation with Mr Choi in late 2012, after he did not receive payment, when he advised Mr Choi that he was keeping the shares and was now the shareholder of Toppro and Mr Choi responded (in a conversation admitted with a limiting order under s 136 of the Evidence Act as proof of what was said and not as proof of the asserted fact) that:

“British Virgin Islands Company and Toppro understand that the deal about buying your share is finished. BVI Company and Topfield understand your position. I explained to them that the deal is finished and they understand that. I hope your shares in Toppro work out well for you.”

29. Mr Yoo’s evidence of these conversations was not falsified in cross-examination or by other evidence and is supported by the evidence that Mr Yoo thereafter took steps that are consistent with his believing that he had a real economic interest in Toppro that would be advanced by promoting its profitability. It seems to me that the revocation of Mr Choi’s authority to effect a sale in late 2012 was sufficient to bring any authority of WWIL to act upon the executed transfer form to an end, notwithstanding that there is no evidence that it was communicated to Mrs Joo, on the basis of my finding below that Mr Choi was acting as agent for WWIL, as well as Topfield and (in a more limited capacity) Mr Yoo during that period.

Mr Choi’s role

30. Mr Young submits that Mr Choi was Topfield’s and WWIL’s agent in obtaining the transfer form and securing Mr Yoo’s participation in the transaction at the instigation of Topfield and WWIL. Conversely, Mr Neil submits that Mr Choi was acting only as agent for Mr Yoo, that Mr Choi acted within authority in passing the share transfer form to Mrs Joo on or about 1 May 2012 for the purpose of effecting the sale of the shares and that Mr Yoo is bound by that step. Mrs Joo and WWIL rely on the rule that a principal is bound by the act of its agent, in a dealing with a person who deals in good faith with the agent without knowledge of the limitation of his authority: Lysaght Bros & Co Ltd v Falk [1905] HCA 7; (1905) 2 CLR 421 at 431, 433.

31. I am satisfied that Mr Choi was acting, at least in a limited capacity, as agent for Mr Yoo to the extent that he was authorised to act for Mr Yoo in attending to matters relating to the proposed sale of the shares in Toppro to WWIL. However, I am also satisfied that Mr Choi was acting as agent for Topfield and WWIL in a significantly wider role, which involved arranging for Mr Yu’s transfer of his interest in the shares to Mr Yoo, who it was then contemplated (at least by Topfield and Mr Choi) would hold them for a period until they were transferred to WWIL. The fact that Mr Choi was acting as agent for Topfield is admitted by Mrs Joo and WWIL in several paragraphs of their Defence and Cross-Claims to which I have referred above. I infer that Mr Choi was acting as agent for WWIL from, inter alia, Mrs Joo’s evidence that she had no involvement in the incorporation of WWIL and that he delivered the incorporation documents relating to WWIL to her, which can only have been done with its authority and took steps, on its behalf, to have it nominated as transferee on the share transfer form. That finding is consistent with, but does not depend on, the fact that Mr Choi also negotiated with Mr Yoo in August 2012 for an extension of time for the share transfer to WWIL to be executed and consideration paid, and spoke for WWIL (as well as Topfield) in acknowledging to Mr Yoo that the transaction was over in late 2012. (As I noted above, the evidence of the latter conversation was admitted on a limited basis.)

32. The fact that Mr Choi acted as agent for Mr Yoo (as proposed vendor of his interest in the shares), for WWIL (as proposed purchaser of Mr Yoo’s interest in the shares) and for Topfield involved a fundamental conflict of interest on his part and the existence of that conflict of interest would likely have prevented a third party such as Mrs Joo from relying on any ostensible authority which Mr Choi otherwise had as Mr Yoo’s agent: Lysaght Bros & Co Ltd v Falk above; Combulk Pty Ltd v TNT Management Pty Ltd (1993) 113 ALR 214 at 222; Midas Management Pty Ltd v Equator Communications Pty Ltd [2008] NSWSC 255 at [59]. However, Mr Young did not put a submission that the circumstances of the dealing between Mr Choi and Mrs Joo affected the extent of Mr Choi’s ostensible authority (see particularly T184). I place no reliance on that conflict or its effect on ostensible authority where it was not addressed by the parties in submissions.

The parties’ submissions as to the effect of execution of the share transfer and its delivery to Mrs Joo

33. The Defendants’ opening outline of submissions proceeded on the basis that Mr Yoo was initially the legal owner of the shares, in contending that Mrs Joo had become the owner of the shares, or alternatively WWIL had become the owner of the shares, by reason of the execution of a “proper instrument of transfer” by Mr Yoo, and on the basis that there was nothing further to be done by Mr Yoo to effect the transfer of shares by registration. The Defendants also made detailed submissions as to the regime for transfer of shares by registration under Pt 7.11 of the Corporations Act and pointed out that Toppro did not have a constitution and s 1072F of the Corporations Act therefore applied as a replaceable rule, with the consequence that Mr Yoo would not acquire legal title to the shares that Mr Yu had sold to him until a transfer to him was registered and his name was entered in the register of members in respect of the shares. As Mrs Joo and WWIL point out, no register of members was kept by Toppro until late September or early October 2014 (Joo 18.8.15 [42]). This had the consequence, later acknowledged by counsel in closing submissions, that Mr Yoo did not become the legal owner of the shares and held only an equitable interest in them.

34. The Defendants also made detailed submissions as to the concept of a “proper instrument of transfer” for the purposes of s 1071B of the Corporations Act. The question whether the share transfer executed by Mr Yoo, as later amended by Mrs Joo and further amended by WWIL, could constitute a “proper instrument of transfer” does not arise because no question of a transfer of a legal interest in the shares arises. The Defendants also made submissions as to the circumstances in which Toppro would have the right to refuse to register Mrs Joo or WWIL as holder of the shares in Toppro under s 1073F(4) of the Corporations Act, by reason of any objection to the form of the share transfer lodged with Toppro. That issue also does not arise, because the share transfer could not take effect under Pt 7.11 of the Corporations Act where Mr Yoo was not legal owner of the shares at any relevant time.

35. In their opening submissions, the Defendants submitted that equitable title in the shares passed irrevocably on 30 April or 1 May 2012 and referred to authorities that dealt with the equitable assignment of a legal interest rather than the equitable assignment of an equitable interest: for example, Anning v Anning [1907] HCA 13; (1907) 4 CLR 1049, Corin v Patton [1990] HCA 12; (1990) 169 CLR 540 and Ku v Song; [2007] FCA 1189; (2007) 63 ACSR 661 at [117]–[118]. In their written submissions in chief, Mrs Joo and WWIL submit that it is not, or ought not to be, in dispute that Mr Yoo intended to transfer the whole of his interest in the shares to the assignee in signing the undated share transfer form, although that submission partly relied on affidavit evidence of Mr Yoo, part of which was not read. Several additional questions, which I will address below, were not recognised by that submission, including whether Mr Yoo’s then intention was to bring about an immediate transfer of his interest in the shares or to do so only at some future time when WWIL had indicated its willingness to accept such a transfer and paid the relevant consideration, and whether any such intention was limited to that recorded in the transfer form, namely a transfer of the shares to WWIL. Mr Young responded that Anning v Anning above and the other decisions on which the Defendants relied related to circumstances where a person intended to make a gift of the relevant property and the question in issue was the effectiveness of that gift. The evidence does not support a characterisation of Mr Yoo’s intention as one of making a gift to WWIL at the relevant time. In any event, the issue that needs to be addressed is not whether the requirements for a transfer of a legal interest in the shares in equity are satisfied, but whether the requirements for the transfer of an equitable interest in the shares are satisfied.

33. In supplementary opening submissions, the Defendants alternatively submitted that WWIL became the equitable owner of the shares on or about 30 April 2012, and was thereafter entitled to dispose of its equitable interest in the shares as it saw fit. They refer to the decision in Comptroller of Stamps (Vic) v Howard-Smith [1937] VLR 15; (1936) 54 CLR 614 (“Howard-Smith”) in that respect, to which I will refer below. They submit that WWIL disposed of its equitable interest in the shares to Mrs Joo by means of the share transfer form as amended on 20 June 2014 or alternatively to Mrs Joo on 9 September 2014.

34. In their closing submissions, the Defendants submitted that, on or about 1 May 2012, there was an equitable disposition of Mr Yoo’s equitable interest in the shares in Toppro to WWIL by reason of his having provided the undated share transfer form to WWIL (or, more accurately, to Mr Choi who provided it to Mrs Joo); his having provided that undated share transfer form because he had been told by Mr Choi that it was a condition of future supply by Topfield to Toppro; his having agreed to WWIL being shown as transferee on the share transfer form; and his evidence that he was content for Mr Choi to give that form to WWIL as soon as he wished so that he could receive that money. The Defendants relied on Howard-Smith to contend that, on 1 May 2012, there was an equitable disposition of Mr Yoo’s equitable interest in the whole of the shares in Toppro to WWIL as a result of Mr Yoo signing the share transfer naming WWIL as transferee and Mr Choi, as Mr Yoo’s agent, delivering the share transfer to “Mrs Joo on behalf of WWIL”. There is, however, more than a degree of unreality in the proposition that Mrs Joo was acting as agent of WWIL on 1 May 2012, where her evidence in cross-examination was that she had no knowledge of that company until Mr Choi “rocked up” on that date and advised her of its existence.

35. In his oral closing submissions, Mr Neil accepted that the essential premise of that submission was that Mr Yoo had an immediate intention to dispose of the equitable interest of the shares on 1 May 2012 and relied on the signature of the transfer, the handing over of the transfer form to Mr Choi, knowing that Mr Choi would hand it on, and Mr Yoo’s affidavit evidence in that respect (T195). Mr Neil also submitted that, irrespective of whether Mr Choi was Mr Yoo’s agent, or Mr Yoo had held him out as having authority, Mr Yoo himself had evinced the relevant intention to transfer the equitable interest in the shares, by providing the signed document to Mr Choi and knowing that Mr Choi would action it (T196). Mr Neil submitted that Mr Yoo’s conduct, and the delivery by Mr Choi of the share transfer to WWIL, amounted to an intention immediately to dispose of the shares, and not a revocable mandate, and that any revocation after the share transfer form was provided to Mrs Joo was too late and that, in any event, no revocation occurred (T198–199). Mr Neil also put WWIL’s primary case on the basis that it ultimately did not need to rely on events after 1 May 2012, on the basis that WWIL had acquired its equitable interest in the shares on that date (T199). Mr Neil fairly accepted that Mrs Joo and WWIL were, at least at that time, volunteers who had not given consideration for any transfer of the equitable interest in the shares to them (T204).

36. In closing submissions, Mr Young referred to matters that might have supported the conclusion that there was no equitable transfer of a legal interest in the shares, had that been relevant. Mr Young also submitted that there was no equitable assignment as at 30 April or 1 May 2012, since the arrangement at that time contemplated that, at some future time, there would be a payment made to Mr Yoo and, implicitly, a transfer of shares (or, more accurately, the equitable interest in those shares) at that future time (T169). Mr Young also submitted that it had not been established that Mr Yoo had an immediate intention to dispose of the equitable interest on 1 May 2012 and that all that could be established was a revocable mandate, with the possibility that Mr Yoo would retain the shares if the transaction did not proceed (T208–209).

The principles applicable to an equitable assignment of equitable property

40. I turn now to the principles applicable to an equitable assignment of equitable property. In Re Casey’s Patents; Stewart v Casey [1892] 1 Ch 104 at 118, Fry LJ observed that:

[A]n agreement which does not exhibit the intention of the parties that the property shall pass at once does not take effect as an equitable assignment at once, but only when, from the terms of the agreement, it can be gathered that the intention of the parties is that the equitable property shall pass.”

In Re Williams; Williams v Ball [1917] 1 Ch 1 at 8, Warrington LJ observed that an equitable assignment could be effected by “any form of words which expressed a final and settled intention to transfer the property to the assignee”.

41. In Howard-Smith above, Starke J similarly observed at 619–620 that:

“A man may voluntarily dispose of his equitable estates or interests if he chooses to do so. No particular form of words is required for the purpose, but he must make clear his intention that he divests himself of the property and gives it over to another, or that he creates a trust in the property in favour of another. A mere mandate from a principal to his agent gives no right or interest in the subject of the mandate.”

In closing submissions, the Defendants relied primarily on the principles as stated by Dixon J in Howard-Smith above at 621–622. Dixon J there observed that a voluntary disposition of an equitable interest may take one of at least three forms. The first and third forms, which are not presently relevant, are a statement that the donor will hold the equitable interest upon trust for a beneficiary and a direction given to a trustee to hold equitable property upon trust for the intended donee. The second form of disposition, which is relevant, was described by Dixon J as follows:

“the disposition may consist of a sufficient expression of an immediate intention to make over to the persons intended to benefit the equitable interest vested in the donor, or some less interest carved out of it. In that case communication to the trustee or person in whom the legal title to the property is vested is not required in order effectually to assign the equitable property … Nor does it appear necessary that the intention to pass the equitable property shall be communicated to the assignee. What is necessary is that there shall be an expression of intention then and there to set over the equitable interest, and, perhaps, it should be communicated to someone who does not receive the communication under confidence or in the capacity only of an agent for the donor.”

It is also necessary to have regard here to the distinction between an immediately effective assignment of property and a mandate or authority that has effect only unless and until it is revoked, to which Dixon J referred in Howard-Smith at 623–624, in identifying the question whether the instruction in that case was merely an “authorisation having no dispositive effect until the trustee acts upon it”.

42. In Re McArdle (dec’d) [1951] 1 Ch 669 at 673, Evershed MR approved the summary of the relevant principle in Snell’s Principles of Equity (22nd ed, pp 57–58) that:

“[value] would seem to be unnecessary … for an assignment of an equitable [chose] in action … provided that the assignment is complete [and] perfect; there is no reason why a man should not be able to give away an equitable interest as freely as he can give away a legal interest” (emphasis added).

The Master of the Rolls went on to observe that (at 674):

“The sentence in that passage, ‘provided that the assignment is complete and perfect’, is important; also the further sentence, ‘there is no reason why a man should not be able to give away an equitable interest’. What the writer is saying there, and I accept it, is this: if what is done amounts to a gift, complete and perfect, of a subject-matter which is an equitable chose in action, then there is no reason in principle or in authority why the donee should not take the benefit just as much as he will if the giver gives him a pound note and puts it in his hand. Since the transaction is thus perfect, the question of consideration becomes irrelevant, for consideration is only necessary to support the assertion of a right to have made perfect something which is not yet perfect – for example, a contractual right.”

Jenkins LJ similarly observed at (676–7) that:

“I am further prepared to accept the proposition that an equitable assignment of an existing interest in property of a character capable of being assigned may be a valid and binding assignment notwithstanding that it is made voluntarily – that is to say, notwithstanding that it has no consideration to support it and is in the nature of a mere gift …

But I accept that last proposition with this reservation: a voluntary equitable assignment, to be valid, must be in all respects complete and perfect … with no further act on the part of the assignor remaining to be done to perfect the assignee’s title. Failing these conditions, the voluntary assignment suffers the fate of other incomplete gifts: the donor has a locus poenitentiae and can change his mind at any time.

No question of conscience enters into the matter, for there is no consideration, and there is nothing dishonest on the part of an intending donor if he chooses to change his mind at any time before the gift is complete.”

That decision is cited without criticism in the discussion of equitable assignment in ELG Tyler et al, Fisher & Lightwood’s Law of Mortgage, (3rd ed 2014, LexisNexis Butterworths) at 252.

43. In Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 at 30, Windeyer J observed that all that was required for an assignment of equitable property was a “clear expression of an intention to make an immediate disposition”.

44. In Noonan v Martin (1987) 10 NSWLR 402, Bryson J in turn addressed the distinction between an assignment and a revocable mandate and held that the provision to a donee of a signed blank withdrawal form, together with permission to access money in an account whenever he needed it, was only an authorisation, not an assignment, and was capable of revocation by the donor’s death before it was acted on.

45. Professor Worthington in turn summarises the effect of the case law in Personal Property Law ((2000, Oxford) at 262) as follows:

“Since promises to give cannot be enforced, if the donor acts before either legal or equitable title to the property has passed to the donee, then recall is possible.”

In JD Heydon et al, Meagher, Gummow & Lehane’s Equity Doctrines and Remedies, (5th ed 2015, LexisNexis Butterworths) at [6.425] the learned authors also observe that, unless there is an intention to divest the assignor’s rights and vest them in the assignee, there is not an assignment and merely a revocable mandate or authority.

Whether an equitable assignment was effected by the execution and delivery of the share transfer form

46. It seems to me that Mr Yoo’s acceding to Topfield’s requirement that a transfer be signed, referred to in his first affidavit dated 23 June 2014, did not indicate any intention immediately to dispose of his equitable interest in the shares. To the contrary, the course required by Topfield seems to have contemplated that WWIL could take a transfer of Mr Yoo’s interest in the shares at some future point that would be convenient to it and, implicitly, would leave Mr Yoo holding the equitable interest in the shares until that occurred. Mr Yoo’s second affidavit dated 27 June 2014, indicating that he signed the share transfer, does not take matters further. Mr Yoo’s account of his conversations with Mr Choi set out in his third affidavit dated 27 July 2015 seems to me to be inconsistent with any immediate intention on his part to dispose of the equitable interest in the shares, or to effect a completed transfer of the equitable interest in those shares, so far as Mr Choi suggested that the form be signed so that he could, implicitly in the future, sell Mr Yoo’s shares. Mr Yoo’s statement that he might be quite happy to hold onto the shares if WWIL did not buy them quickly is also wholly inconsistent with his having an intention immediately and completely to dispose of his interest in the shares on 30 April or 1 May 2012, which would necessarily exclude a possibility of continuing to hold them if WWIL did not acquire them thereafter.

47. Assuming, without deciding, that Mrs Joo’s evidence as to her conversation with Mr Choi were to be accepted, that conversation also would not indicate any immediate or complete disposition of the equitable interests in the shares by Mr Choi acting with Mr Yoo’s actual or ostensible authority. At best, Mrs Joo’s evidence is that Mr Choi advised her that she could in future bring about a transfer of the shares by executing the transfer form. I have referred above to paragraph 10 of Mrs Joo’s affidavit evidence which indicated that Mr Choi’s advice to her was directed to the share transfer having future effect, if she signed it, not immediate effect.

48. Mrs Joo confirmed that evidence in cross-examination, indicating that Mr Choi had told her that “if I sign this document, so any time Toppro will be, will belong to me” (T73) (emphasis added). That evidence is consistent with both conditionality, in the reference to “if I sign”, and futurity, in the reference to “any time” and “will belong”. Mrs Joo’s evidence in cross-examination (T80) was also that Mr Choi told her that:

“this document could be signed by me any time that I wanted and the company will become mine” (emphasis added).

That formulation also indicates that Mr Choi’s advice to Mrs Joo was not that Mr Yoo had, at that point, transferred his interest in the shares to her, but that she could bring about such a transfer if she chose in the future. That is also the effect of Mrs Joo’s evidence in cross-examination that, when Mr Choi brought the share transfer documents to her, he advised that “if I sign it the shares will be transferred to me” and that the shares “will be transferred to me once I sign it” (T81) (emphasis added). Mrs Joo reconfirmed her understanding of Mr Choi’s advice in cross-examination (T86) as having been that, at any time she signed the share transfer form, the Toppro shares would be transferred to her. Mrs Joo also confirmed in cross-examination (T96) that Mr Choi had told her, on bringing the share transfer form to her that, “this document as soon as it is signed by you will transfer the shares to you” (emphasis added). A representation by Mr Choi in that form indicated that a transfer would become effective, not immediately, but sometime in the future upon a further act by Mrs Joo.

49. In these circumstances, the requirements identified in the case law to which I have referred above, including Howard-Smith, for a disposition of equitable property were not satisfied as at 30 April or 1 May 2012, either by any communication by Mr Yoo to Mr Choi or by any communication by Mr Choi to Mrs Joo. The conversations to which I have referred above do not indicate an “immediate intention” in the part of Mr Yoo to convey the relevant equitable interest to WWIL, still less to Mrs Joo.

50. Alternatively, the Defendants submit there was an equitable assignment to Mrs Joo on or about 1 May 2012, relying on the proposition that Mr Yoo agreed to transfer the shares to whomever Mr Choi selected as transferee. I do not accept that submission. That submission fails because, for the reasons noted above, it has not been established that Mr Yoo intended to bring about an immediate disposition of the equitable interest in the shares. Mr Yoo’s acceptance that he agreed to transfer the shares to whomever Mr Choi selected as transferee does not take the matter further, where that agreement was without consideration and was revocable and Mr Choi had selected WWIL (rather than Mrs Joo) as transferee by inserting its name on the share transfer form executed by Mr Yoo.

51. In closing submissions, Mr Young also drew attention to several decisions that are relevant to circumstances in which an instrument may be delivered subject to a condition or in escrow, including Spalla v St George Wholesale Finance Pty Ltd [1999] FCA 1566; (1999) FCR 359, Neonbrook Pty Ltd v Thusi Pty Ltd [1997] QCA 335 and Saba v Moit Projects [2014] NSWSC 1759. It is not necessary to determine any question referable to those cases, given the requirements for an equitable assignment of equitable property without consideration, to which I have referred above. Mr Young also submitted that the share transfer form was not itself an agreement to transfer the shares and any agreement was made between Mr Yoo and Mr Choi. It is not necessary to address that submission since the Defendants ultimately did not rely on a contractual claim, at least as at 30 April or 1 May 2012. There would also have been no consideration for such an agreement since WWIL had not then paid or made any enforceable promise to pay the amount recorded in the share transfer. Mr Young also submitted that Mr Yoo would not have involved himself in subsequent activities with Toppro in 2013 and 2014 if he believed that the shares in it were about to be transferred to WWIL. While that proposition is plausible, the characterisation of the initial transaction does not depend solely on Mr Yoo’s subjective intent, and I give little weight to this matter.

The alteration to the share transfer form in favour of Mrs Joo in June 2014

52. As I noted above, Mr Yoo seeks declarations that a transfer or purported transfer of shares in Toppro to Mrs Joo on 20 June 2014 is void. By her Amended Cross-Claim filed on 21 April 2015, Mrs Joo conversely seeks a declaration that a valid and binding agreement was formed on 20 June 2014 between Mr Yoo as transferor and Mrs Joo as transferee of all of Mr Yoo’s shares in Toppro, and a declaration that she is the legal owner or equitable owner of all of the shares in Toppro.

53. In her Amended Cross-Claim, Mrs Joo pleads (Amended Cross-Claim [11]–[12]) that, on or about 20 June 2014, she signed the share transfer as transferee and paid an amount of USD12,000 to Mr Yoo. That was, of course, nearly two years after Mr Yoo had executed the share transfer and 18 months after he had advised Mr Choi that the transaction would not proceed. Mr Yoo attacks the execution of that document in the Fourth Amended Statement of Claim, pleading (FAS [9]–[12]) that Mrs Joo fraudulently and without authority altered the share transfer in several respects and that Mrs Joo did not seek Mr Yoo’s consent to those alterations and, in pursuit of the alleged fraudulent intention, submitted the altered transfer document to the Australian Securities & Investments Commission. Paragraphs 13–16 of the Fourth Amended Statement of Claim plead matters relating to the cheques forwarded by Mrs Joo which I will address below and paragraph 16A pleads a claim for conversion in respect of the amendment of the share transfer form in June 2014.

54. Turning to the evidence as to events in June 2014, Mrs Joo’s affidavit evidence is that she became a permanent resident of Australia in May 2014, that she was unable to obtain access to bank accounts of Toppro in June 2014 and that she attended a conference with a barrister retained by Mr Hong, a solicitor who appears to have been acting for Topfield rather than Mrs Joo, on 19 June 2014 at which the share transfer was discussed. Mrs Joo then refers in her affidavit evidence to the circumstances in which the share transfer form was executed, Mr Hong crossed out the reference to WWIL and her name was inserted in the share transfer on 20 June 2014 (Joo 18.8.15 [23]–[28]). The share transfer form was also dated with that date and Mrs Joo’s address and her signature were inserted on it. It seems to me that, at this point, Mrs Joo intended to become the sole shareholder of Toppro in place of WWIL, as she accepted in cross-examination (T138). That course would have assisted in seeking to regain control of Toppro, for herself or possibly indirectly for Topfield, which she then took steps to do. Also on 20 June 2014, Mrs Joo instructed Mr Hong to send Mr Yoo a letter enclosing the altered and executed transfer form and a bank cheque for USD12,000 which was described as being made out to the “transferor” but was in fact made out, in error, to Mrs Joo. Little turns upon that because, at least by 25 June 2014, a replacement cheque made out to Mr Yoo was sent by Mr Hong and returned by Mr Yoo’s solicitors.

90. I should note, for completeness, that Mrs Joo offered, for the first time in closing submissions, to pay interest in respect of the lengthy period for which Mr Yoo had not been paid the amount provided in the share transfer. It seems to me that, had Mrs Joo or WWIL otherwise been successful, it would have been necessary for Mrs Joo to pay such interest in order to do equity, at least for the period from late 2012 (the point to which Mr Yoo had extended the time for payment) until that payment was tendered in June 2014. The parties had also agreed the basis on which interest should be calculated, if Mrs Joo or WWIL were ultimately successful in the proceedings. I need not address that question further, where Mrs Joo and WWIL have not been successful in the proceedings for the reasons noted above.

Orders and costs

93. I will make an order for the rectification of the share register of Toppro in favour of Mr Yoo and any appropriate ancillary orders. The Cross-Claims should be dismissed. Mrs Joo and WWIL should jointly and severally pay Mr Yoo’s costs of the proceedings, as agreed or as assessed. I will not make an order for costs against Mr Kim, who appears to have had a limited role in the relevant events and in the proceedings, or against Toppro, where that could have the result that Mr Yoo is left to bear the costs of the proceedings that he brought to vindicate his interest in that company. The parties should bring in agreed short minutes of order to give effect to this judgment within 7 days.

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Decision last updated: 27 May 2016