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Zhang v Peng

Zhang v Peng

Case [2023] NSWDC 448 27 October 2023

Misrepresentation

Negligent Misrepresentation

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District Court

New South Wales

Medium Neutral Citation: Zhang v Peng [2023] NSWDC 448
Hearing dates: 3-6 April, 14, 16 June and 28 July 2023
Date of orders: 27 October 2023
Decision date: 27 October 2023
Jurisdiction: Civil
Before: Gibson DCJ
Decision:
(1)   Judgment for the plaintiff for $96,716.
(2)   Costs and interest reserved, with liberty to apply.
(3)   Exhibits retained until further order.

Catchwords:
CONSUMER LAW – applications pursuant to ss 12DA and 12DB of the Australian Securities and Investments Commission Act 2001 (Cth) or, in the alternative, s 18 of the Australian Consumer Law, and for negligent misrepresentation – defendant asserted to have misled plaintiff by representations about the desirability of investing in a complex and unregulated investment scheme, both orally and subsequently in WeChat posts - whether representations made – whether made in trade or commerce – whether investment scheme a financial product – whether representations conduct in relation to financial services – whether misleading or deceptive, or false or misleading – causation issues - whether representations negligent – whether duty of care owed – whether duty of care breached – quantum

Legislation Cited:
Australian Securities and Investments Commission Act 2001 (Cth), ss 12BB, 12DA, 12DB, 12GF
Competition and Consumer Act 2010 (Cth), s 131A; Sch 2 - Australian Consumer Law, ss 4, 18, 235, 236
Civil Liability Act 2002 (NSW), s 5D

Cases Cited:
Anchorage Capital Master Offshore Ltd v Sparkes [2023] NSWCA 88
Briess v Woolley [1954] AC 333
Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592; [2004] HCA 60
Commercial Banking Co of Sydney Ltd v R H Brown & Co (1972) 126 CLR 337
Gan v Xie [2023] NSWCA 163
Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435; [2013] HCA 1
Johnson v Mackinnon (No 2) [2022] NSWCA 22
Lantrak Holdings Pty Ltd v Yammine [2023] FCAFC 156
Li v Yeung [2023] NZHC 1374
Lloyd v Grace, Smith & Co [1912] AC 716
Mackinnon as plaintiff representative of 153 plaintiff group members v Partnership of Larter, Jones, Miraleste Pty Ltd t/as USG Partner and Johnson, t/as “STC Sports Trading Club” (No 8) [2019] NSWSC 1658
Perpetual Trustee Company Ltd v Milanex Pty Ltd (in liq) [2011] NSWCA 367
Samsung Electronics v LG Electronics (2015) 113 IPR 11
Tepko Pty Ltd v Waterboard (2001) 206 CLR 1; [2001] HCA 19
Tomasetti v Brailey [2011] NSWSC 1446
Tomasetti v Brailey [2012] NSWCA 399
Tomasetti v Brailey [2013] NSWSC 1282
Wan v Ji [2022] NSWDC 269
Watson v Foxman (1995) 49 NSWLR 315
Xuan v Xu [2022] FCA 508

Texts Cited:
Nil

Category: Principal judgment
Parties: Yajun Zhang (plaintiff)
Yan Peng (defendant)
Representation:
Counsel:
Mr B M Zipser (plaintiff)
Mr S Bell (defendant)
Solicitors:
Zhang Shijing Lawyers (plaintiff)
Lloyd Truman Sadiq Solicitors (defendant)

File Number(s): 2020/00007274
Publication restriction: Nil

Judgment

The plaintiff’s claim and the pleadings

The plaintiff, by statement of claim filed on 9 January 2020 (as amended, in the second further amended statement of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Zhang v Peng

Details

AGLC: Zhang v Peng [2023] NSWDC 448
Case: [2023] NSWDC 448
Decision Date: 27 October 2023

CaseChat Overview and Summary

In the Federal Circuit Court of Australia, Zhang sued Peng for alleged misleading or deceptive conduct and negligent misrepresentation. The plaintiff claimed that the defendant misled him about the merits of investing in an investment scheme, both verbally and through WeChat posts. The court had to determine whether the representations were made, whether they were in trade or commerce, if the investment scheme was a financial product, and whether the conduct related to financial services. The court also had to consider if the representations were misleading or deceptive, if a duty of care was owed and breached, and the extent of any negligence.

The court found that the representations were indeed made and were in the context of trade or commerce. It was determined that the investment scheme qualified as a financial product and that the conduct related to financial services. The representations were found to be misleading or deceptive and constituted conduct in relation to financial services. The court further held that the defendant owed a duty of care, which was breached, and that the plaintiff suffered loss as a result of the defendant's negligence.

The court ruled in favour of the plaintiff, awarding damages of $96,716. The court reserved the right to order costs and interest and retained the exhibits pending further order. The plaintiff was thus successful in his claim for misleading or deceptive conduct and negligent misrepresentation.

Orders

Orders of the court

(1) Judgment for the plaintiff for $96,716.

(2) Costs and interest reserved, with liberty to apply.

(3) Exhibits retained until further order.

Background

Background to the litigation

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Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

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Citations

AGLC Citation

Zhang v Peng [2023] NSWDC 448

Cases citing this decision · 0 of 0 shown

No citing cases yet.

Cases cited in this decision · 20 of 20 shown

Lantrak Holdings Pty Ltd v Yammine
[2023] FCAFC 156 Para 12

…essing of evidence from the parties where actions of this kind are brought, notably Gan v Xie [2023] NSWCA 163 and Lantrak Holdings Pty Ltd v Yammine [2023] FCAFC 156.…
Gan v Xie
[2023] NSWCA 163 Para 12

…ount recent decisions on the correct approach to the assessing of evidence from the parties where actions of this kind are brought, notably Gan v Xie [2023] NSWCA 163 and Lantrak Holdings Pty Ltd v Yammine [2023] FCAFC 156.…
Li v Yeung
[2023] NZHC 1374 Para 24

…Halley J’s description of MFC is cited and adopted by Fitzgerald J in Li v Yeung [2023] NZHC 1374 at [2]. In Gan v Xie (at [42]-[46]), the Court of Appeal held that the MFC investment scheme met the description of “pyramid scheme” for the purposes of s 45(1) of the ACL. This was because funds invested by new partic…
Anchorage Capital Master Offshore Ltd v Sparkes
[2023] NSWCA 88 Para 177

…The relevant principles have recently been considered by the Court of Appeal in Anchorage Capital Master Offshore Ltd v Sparkes [2023] NSWCA 88 where the Court stated the following at [266]:…
Wan v Ji
[2022] NSWDC 269 Para 162

…e $720,000 after 20 months. (Although Falconaire is another widely recognised Malaysian Ponzi scam which collapsed in 2017 ( Wan v Ji [2022] NSWDC 269), the defendant was not cross-examined about her other financial activities, so I draw no conclusions about her recommending Falconaire to the plaintiff, other than…
Xuan v Xu
[2022] FCA 508 Para 1

…makes no difference to the form and content of the relief sought, as the plaintiff essentially sought the same relief as that set out in Xuan v Xu [2022] FCA 508 (at [2]). Additional grounds for the alternative claim under s 131A(2)(a) of the Competition and Consumer Act 2010 (Cth), namely that the claim is made…
Johnson v Mackinnon (No 2)
[2022] NSWCA 22 Para 164

…ste Pty Ltd t/as USG Partner and Johnson, t/as “STC Sports Trading Club” (No 8) [2019] NSWSC 1658 (appeal dismissed: Johnson v Mackinnon (No 2) [2022] NSWCA 22) at [75]:…
Mackinnon as plaintiff representative of 153 plaintiff group members v Partnership of Larter, Jones, Miraleste Pty Ltd t/as USG Partner and Johnson, t/as “STC Sports Trading Club” (No 8)
[2019] NSWSC 1658 Para 164

…3 plaintiff group members v Partnership of Larter, Jones, Miraleste Pty Ltd t/as USG Partner and Johnson, t/as “STC Sports Trading Club” (No 8) [2019] NSWSC 1658 (appeal dismissed: Johnson v Mackinnon (No 2) [2022] NSWCA 22) at [75]:…
Samsung Electronics Australia Pty Ltd v LG Electronics Australia Pty Ltd
[2015] FCA 227 Para 155

…re matters” (s 4 of the ACL and s 12BB of the ASIC Act) and the explanation of these matters as set out in Samsung Electronics v LG Electronics (2015) 113 IPR 11 at [84] is accepted by the parties. This means that if the defendant made a representation with respect to a future matter (for example, that while other p…
Tomasetti v Brailey
[2013] NSWSC 1282 Para 187

…e, who did not have such skills, was in fact successful in her appeal and awarded damages ( Tomasetti v Brailey [2012] NSWCA 399; Tomasetti v Brailey [2013] NSWSC 1282); her actions and knowledge are more comparable to that of the plaintiff in these proceedings. If anything, it is the defendant who has high qualific…
Google Inc v Australian Competition and Consumer Commission
[2013] HCA 1 Para 1

…levant facts and circumstances at the time the conduct takes place: Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435; [2013] HCA 1 at [6]-[15] (French CJ, Crennan and Kiefel JJ).…
Tomasetti v Brailey
[2012] NSWCA 399 Para 187

…any inquiry whatever. However, his wife, who did not have such skills, was in fact successful in her appeal and awarded damages ( Tomasetti v Brailey [2012] NSWCA 399; Tomasetti v Brailey [2013] NSWSC 1282); her actions and knowledge are more comparable to that of the plaintiff in these proceedings. If anything, it…
Hamod v State of New South Wales
[2011] NSWCA 367 Para 186

…rely upon that cause of action which produces the most favourable results for him or her ( Perpetual Trustee Company Ltd v Milanex Pty Ltd (in liq) [2011] NSWCA 367 at [84] - [89]).…
Tomasetti v Brailey
[2011] NSWSC 1446 Para 185

…issue in relation to the claim for negligent misrepresentation, raising what was asserted to be the factually similar case of Tomasetti v Brailey [2011] NSWSC 1446. Mr Tomasetti, a Senior Counsel, claimed his accountant made representations about investments which the trial judge referred to as “astounding” and as d…
Butcher v Lachlan Elder Realty Pty Ltd
[2004] HCA 60 Para 5

…spect of that individual, including the factual circumstances surrounding the conduct: Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592; [2004] HCA 60 at [37] (Gleeson CJ, Hayne and Heydon JJ).…
Tepko Pty Ltd v Water Board
[2001] HCA 19 Para 163

…d, if those factual matters are established, that her reliance upon the representations was reasonable ( Tepko Pty Ltd v Waterboard (2001) 206 CLR 1; [2001] HCA 19 at [47]).…
Watson v Foxman
[1995] NSWCA 497

…WSC 1446 Tomasetti v Brailey [2012] NSWCA 399 Tomasetti v Brailey [2013] NSWSC 1282 Wan v Ji [2022] NSWDC 269 Watson v Foxman (1995) 49 NSWLR 315 Xuan v Xu [2022] FCA 508 Texts Cited: Nil Category: Principal judgment Parties: Yajun Zhang (plaintiff) Yan Peng (defendant) Representation: Counsel: Mr B M Zipser (plaintif…
Commercial Banking Co of Sydney Ltd v R H Brown & Co
[1972] HCA 24 Para 163

…n as a matter of fact ( Lloyd v Grace, Smith & Co [1912] AC 716; Briess v Woolley [1954] AC 333; Commercial Banking Co of Sydney Ltd v R H Brown & Co (1972) 126 CLR 337) and, if those factual matters are established, that her reliance upon the representations was reasonable ( Tepko Pty Ltd v Waterboard (2001) 206 CLR…
[1912] AC 716
[1912] AC 716 Para 163

…The plaintiff must prove that she relied on the relevant representation as a matter of fact ( Lloyd v Grace, Smith & Co [1912] AC 716; Briess v Woolley [1954] AC 333; Commercial Banking Co of Sydney Ltd v R H Brown & Co (1972) 126 CLR 337) and, if those factual matters are established, that her reliance upon the…
[1954] AC 333
[1954] AC 333 Para 163

…e plaintiff must prove that she relied on the relevant representation as a matter of fact ( Lloyd v Grace, Smith & Co [1912] AC 716; Briess v Woolley [1954] AC 333; Commercial Banking Co of Sydney Ltd v R H Brown & Co (1972) 126 CLR 337) and, if those factual matters are established, that her reliance upon the r…

Legislation cited in this decision · 3

Australian Securities and Investments Commission Act 2001 (Cth)
12BB, 12DA, 12DB, 12GF 4 mentions
Competition and Consumer Act 2010 (Cth)
131A 3 mentions (from Para 1)
Civil Liability Act 2002 (TAS)
5D 2 mentions (from Para 182)

Medium Neutral Citation:	Zhang v Peng [2023] NSWDC 448
Hearing dates:	3-6 April, 14, 16 June and 28 July 2023
Date of orders:	27 October 2023
Decision date:	27 October 2023
Jurisdiction:	Civil
Before:	Gibson DCJ
Decision:	(1) Judgment for the plaintiff for $96,716. (2) Costs and interest reserved, with liberty to apply. (3) Exhibits retained until further order.
Catchwords:	CONSUMER LAW – applications pursuant to ss 12DA and 12DB of the Australian Securities and Investments Commission Act 2001 (Cth) or, in the alternative, s 18 of the Australian Consumer Law, and for negligent misrepresentation – defendant asserted to have misled plaintiff by representations about the desirability of investing in a complex and unregulated investment scheme, both orally and subsequently in WeChat posts - whether representations made – whether made in trade or commerce – whether investment scheme a financial product – whether representations conduct in relation to financial services – whether misleading or deceptive, or false or misleading – causation issues - whether representations negligent – whether duty of care owed – whether duty of care breached – quantum
Legislation Cited:	Australian Securities and Investments Commission Act 2001 (Cth), ss 12BB, 12DA, 12DB, 12GF Competition and Consumer Act 2010 (Cth), s 131A; Sch 2 - Australian Consumer Law, ss 4, 18, 235, 236 Civil Liability Act 2002 (NSW), s 5D
Cases Cited:	Anchorage Capital Master Offshore Ltd v Sparkes [2023] NSWCA 88 Briess v Woolley [1954] AC 333 Butcher v Lachlan Elder Realty Pty Limited (2004) 218 CLR 592; [2004] HCA 60 Commercial Banking Co of Sydney Ltd v R H Brown & Co (1972) 126 CLR 337 Gan v Xie [2023] NSWCA 163 Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435; [2013] HCA 1 Johnson v Mackinnon (No 2) [2022] NSWCA 22 Lantrak Holdings Pty Ltd v Yammine [2023] FCAFC 156 Li v Yeung [2023] NZHC 1374 Lloyd v Grace, Smith & Co [1912] AC 716 Mackinnon as plaintiff representative of 153 plaintiff group members v Partnership of Larter, Jones, Miraleste Pty Ltd t/as USG Partner and Johnson, t/as “STC Sports Trading Club” (No 8) [2019] NSWSC 1658 Perpetual Trustee Company Ltd v Milanex Pty Ltd (in liq) [2011] NSWCA 367 Samsung Electronics v LG Electronics (2015) 113 IPR 11 Tepko Pty Ltd v Waterboard (2001) 206 CLR 1; [2001] HCA 19 Tomasetti v Brailey [2011] NSWSC 1446 Tomasetti v Brailey [2012] NSWCA 399 Tomasetti v Brailey [2013] NSWSC 1282 Wan v Ji [2022] NSWDC 269 Watson v Foxman (1995) 49 NSWLR 315 Xuan v Xu [2022] FCA 508
Texts Cited:	Nil
Category:	Principal judgment
Parties:	Yajun Zhang (plaintiff) Yan Peng (defendant)
Representation:	Counsel: Mr B M Zipser (plaintiff) Mr S Bell (defendant) Solicitors: Zhang Shijing Lawyers (plaintiff) Lloyd Truman Sadiq Solicitors (defendant)
File Number(s):	2020/00007274
Publication restriction:	Nil