Applicants v Respondent

Applicants v Respondent - [2018] VSC 6 - VSC 2018 case summary — Zoe

[35]

In all the circumstances, Mr Wen Tao Wei, the son of the applicants, the driving force in the purchase of the two units, 'separating' husband of Ms Yu and author of the IOU is a person central to the facts and circumstances surrounding the characterisation of the $60,000 and whether or not it might be regarded as a loan to the respondent. Mr Wen Tao Wei was not however called by the applicants to give evidence and no reason was advanced by Mr Chen Wei or Ms Xia for their son's failure to attend. The witness Mr Luo did give evidence that Mr Wen Tao Wei did not now like to see people and that he was told by the parents that he had a cold, at least on the first day of the hearing. Mr Wen Tao Wei also did not appear at the second day of the hearing conducted around 2 months later.

Mr Wen Tao Wei's evidence could have assisted the Tribunal in understanding important facts and circumstances concerning the purported loan of $60,000. His evidence could have shed light on why the IOU dated 5 July 2012 did not amount to an acknowledgement by him of a debt owing by him to his parents in the sum of $38,000. His evidence could also have explained how it could be that his later letter dated 2 August 2014, a few days before the hearing, denying he was the borrower could somehow be consistent with the earlier more contemporaneous IOU, as asserted by his father in evidence. The failure to call Mr Wen Tao Wei, apart from the generalised observations of Mr Luo, remains unexplained.

In these circumstances, the Tribunal is entitled to make an inference Jones v Dunkel ((1959) 101 CLR 298) and to infer that the direct evidence of Mr Wen Tao Wei and any evidence in respect of his contemporaneous IOU letter would not have assisted the applicants in their argument that a loan had been made to the respondent or in their interpretation of their son's IOU letter that it was proof of their being a loan to the respondent. For this additional reason, the Tribunal finds that there is substantial doubt concerning the evidence of the applicants as to their being a loan made to the respondent of which $38,000 is claimed as the outstanding balance.

[59]

As I show below when discussing the evidence, the Applicants' case is that Mrs Xia had the crucial conversations with Na Yu. Nevertheless, Mr Wei demonstrated that he was in charge of the Applicants' case. He gave his evidence in the form of a submission, containing propositions of law and 'facts' which were based on what others had told him. He did so without notes or reference to documents. It was apparent that he had memorised a version, and an interpretation, of events. I have no doubt that he sincerely believes that version. However, two things must be said about it:

(a) it is highly subjective and illogical. Mr Wei believes Na Yu to be an evil woman who planned to cheat Mr Wei and Mrs Xia out of $60,000.00 / $38,000.00. This belief ignores the facts that Wen Tao Wei became a violent drug addict who abandoned his wife and baby, and who lost his ability to pay for the apartments when it came time to settle. It also ignores the fact that Na Yu is from a wealthy family, who supported her financially for some three years after the birth of her child. It is implausible that Na Yu would plan to marry, become pregnant, and give up her job to raise the baby, in order to obtain $38,000.00 from Mr Wei and Mrs Xia when she was able to borrow some $400,000.00 from her own parents when Wen Tao Wei ceased providing financial support.

(b) Mr Wei's sincere belief in his theory caused him to misbehave in the hearing, on several occasions. To be blunt, when a witness - including Mrs Xia - gave evidence which was not in accord with Mr Wei's script, he would loudly interrupt. Having been directed to elements of the transcript of the first Tribunal hearing, I see that he did the same thing there. These interruptions were not 'objections' to questions. They were disgraceful attempts to cause the witness to change their evidence. For example, during the crossexamination of Mrs Xia, she said that Wen Tao Wei had borrowed $87,250.00 which he was still liable to repay, which had been used to purchase apartments, and that she was seeking repayment from Na Yu for the benefit of Wen Tao Wei. She was in the middle of saying that she was upset because she perceived that Na Yu had the benefit of the loan of $38,000.000, which she had received shortly before the separation, when Mr Wei interrupted. I had explained to Mr Wei that he was entitled to object to a question, but that he was not entitled to interrupt witnesses' evidence, on many occasions and he persisted in doing so. Mr Wei's conduct in this respect was unfair and inappropriate. To her credit, though, Mrs Xia seemed not to change her evidence in line with Mr Wei's attempted coaching. Mr Wei's interruptions of witnesses' evidence only served to highlight aspects of the evidence which did not support his theory.

[61]

(a) I accept the evidence of Ms Wen Tai Wei, that she lent $60,000.00 to Mr Wei and Mrs Xia on 8 May 2012, on the understanding that they would lend it to Na Yu who needed it to settle the purchase of an apartment. Ms Wen Tai Wei expected $30,000.00 to be repaid within weeks. Her understanding was based on what Mrs Xia told her. Ms Wen Tai Wei had no discussions with Na Yu.

(b) Wen Tao Wei's evidence was of no assistance. He admitted having a drug problem in 2012 but did not see that it had anything to do with the case. He said he was unaware that if he was unable to settle the purchase of the apartments he would lose the deposits of $87,250.00 which he had borrowed from his parents, and I reject that evidence because it is absurd and because it is contradicted by his nomination of Na Yu as purchaser. One of his reasons for nominating Na Yu as purchaser was that he recognised that she had better prospects of getting a bank loan than he did, which shows that he understood the importance of complying with the contracts of sale. He said that he did not know that Na Yu had borrowed money from his parents and would not have consented to her doing so, which ignores the reality of the need to pay for the apartments which he had contracted to buy. Other aspects of his evidence were remarkable: he said that Na Yu had disrespected his parents by not helping with housework, and had embarrassed him in front of his friends, in April and June 2012 (when the baby was 1 and 3 months old). He denied having borrowed $60,000.00 or $38,000.00 but admitted having signed the IOUs. He was sullen, selfcentred and withdrawn when giving evidence and appeared to me to have washed his hands of his loans of $87,250.00 and of his marriage.

(c) Mr Yizheng Luo was a friend of Wen Tao Wei and Na Yu. He was reluctant to be dragged into this family dispute. He gave evidence in the first Tribunal hearing that he had been present when Wen Tao Wei persuaded his parents to lend him the $60,000.00. He literally gave evidence in the hearing before me that this was not the case. The best I could say about Mr Luo is that he probably wanted to help. Objectively though, I conclude that he saw his role of 'helping' as being more important than his obligation to give truthful evidence. Mr Luo did not give truthful evidence in the hearing before me.

(d) Mrs Xia is understandably loyal to her son Wen Tao Wei and disappointed in the breakdown of his marriage and the consequent loss of her contact with her grandchild. There are some inconsistencies between the evidence of Mrs Xia and Mr Wei concerning the drafting of the IOU of 5 July 2012, and I prefer her evidence on those matters. There is [an] air of unreality in her evidence about the $60,000.00 loan, as she emphasised Na Yu's request for the loan in isolation from the effects of Wen Tao Wei's drug addiction and the options of either settling the purchases of the apartments or losing the $87,250.00 previously lent to Wen Tao Wei. Mrs Xia's attempts to explain the meaning of the IOU of 5 July 2012, which on its terms does not say that Na Yu was the borrower, and the absence of any IOU or similar document made by Na Yu were illogical and unconvincing, and appear to be the result of a reconstruction of events in order to create a case against Na Yu. She believes Na Yu tricked her into lending $1,600.00 in August 2012. Mrs Xia seems more upset with the relationship issues that [sic] with the alleged loan of $60,000.00.

(e) Mr Wei was not a party to the conversations which are crucial to the Applicants' case. Whilst he made submissions, and asserted facts on the basis of his understanding of what other people had done, his evidence was of little value.

(f) Na Yu was a credible witness. She has been adversely affected by this litigation. She said Wen Tao Wei's drug addiction was not predicted, and did not develop until after the marriage, and that it fundamentally changed his personality. Wen Tao Wei did not attend the birth of their child. She was adamant that she did not borrow the $60,000.00. She gave evidence that the litigation, including I gather the Supreme Court appeal, has cost Na Yu approximately $70,000.00 in legal fees, and she is now the respondent in Family Court proceedings issued by Wen Tao Wei at the instigation of Mr Wei. She agreed to be nominated as purchaser of the apartments because Wen Tao Wei was contemplating bankruptcy and was being pursued by creditors. She has serviced the mortgage on Apartment 211 and supported her child with no financial support from Wen Tao Wei, Mr Wei or Mrs Xia. I accept her evidence.

[64]

It follows from Thomas v Hollier that in the current case the mere signing by Wen Tao Wei of the 5 July 2012 IOU did not create a debt to Mr Wei and Mrs Xia. It could only amount to evidence of a liability he already had. Even though Mr Wei and Mrs Xia are self represented, they said that they wanted the IOU as 'proof' and it seems that their reasoning was consistent with that of the High Court, whether or not they understood that at the time.

Mr Wei and Mrs Xia have the burden of proof and they have not proven that Na Yu borrowed $60,000.00:

(a) Wen Tao Wei signed the IOU for $38,000.00 but denies having borrowed the $60,000.00. Wen Tao Wei read the IOU before signing it. Wen Tao Wei accepts that his 2010 IOUs evidence a debt, but he disclaimed the July 2012 IOU. Wen Tao Wei has an incentive to say that Na Yu borrowed the $60,000.00, because he has been unable to pay the $87,250.00 which was the subject of not only his previous IOUs but a consent Order, and he knows that Na Yu has wealthy parents. Wen Tao Wei gave no evidence as to how the money needed for settlement was to be raised. I do not consider Wen Tao Wei to be a credible witness. I do not accept his denial of having borrowed the money.

(b) Mr Luo gave evidence in the August 2014 hearing that he was present when Wen Tao Wei persuaded his parents to lend him $60,000.00, and I have found that Mr Luo's evidence of August 2014 is to be preferred to his misguided and false evidence before me to the contrary.

(c) Mrs Xia says she lent $60,000.00 to Na Yu, which she and Mr Wei themselves had to borrow, but that at the time of the alleged loan she saw Wen Tao Wei as becoming an owner of the apartments (after settlement) and she drafted the IOU which expressly calls Wen Tao Wei the 'Borrower', and refers to Na Yu's 'account' but does not call her a 'borrower'. Mrs Xia also gave evidence that when Wen Tao Wei told her he intended to nominate Na Yu as purchaser, she had said words to the effect, 'If you swap the name don't come to us for help', and I take the word 'help' in this context to refer to financial assistance. As such the statement is inconsistent with Mrs Xia lending Na Yu $60,000.00 after the nomination. The fact that Mrs Xia and Mr Wei had to borrow $60,000.00 from Wen Tai Wei, strongly suggests that Mrs Xia would require [any] borrower from her to sign a loan agreement or acknowledgement of some kind. The amount is so great that I cannot accept Mrs Xia's evidence that she could not ask Na Yu to sign a document if the loan was made. The absence of a document supports the view that Na Yu did not borrow $60,000.00.

(d) In her written statement and oral evidence, Wen Tai Wei did not say that Mrs Xia said that Na Yu was "borrowing" money when Mrs Xia sought the $60,000.00. Wen Tai Wei is a somewhat independent witness and this part of her evidence is significant.

(e) Mr Wei was not present when it is alleged that Na Yu asked for a loan of $60,000.00 and his sincere belief that this occurred, and his belief that Na Yu is evil, does not make it true. Mr Wei is so passionate in his hatred of Na Yu that his credibility is affected. His denial of having interrupted Mr Luo in the 2014 hearing, in the face of a transcript and a recording which showed that he did precisely that, shows his lack of objectivity in this matter. His interruption of Mrs Xia's evidence in the hearing before me does the same. Mr Wei's delivery of his evidence/submission suggested that he had memorised a story. To the extent that he purported to give evidence of what other people had done, it was not evidence at all. To the extent that he gave evidence of his own activities, I cannot believe him. The fact that Mr Wei and Mrs Xia sued Na Yu for the $87,250.00, which they had lent Wen Tao Wei before he had even met her, is very damaging to their credit.

(f) Na Yu denied having borrowed the $60,000.00. While it could be said that she has an incentive to deny having borrowed the money, one must look at all the facts in context. By May 2012 Na Yu had left her job, had a young baby and a drug addicted dysfunctional husband. She had been nominated as purchaser, when Wen Tao Wei was being pressed by creditors and contemplating bankruptcy. Wen Tao Wei gave no evidence as to how the money needed for settlement was to be raised, if he did not borrow it. That the $60,000.00 was deposited in her bank account is consistent with her being a nominee or stakeholder in respect of Wen Tao Wei's borrowing. Na Yu's payment of $22,000.00 on instruction from Wen Tao Wei is also consistent with being a nominee. Na Yu has not been unjustly enriched by being nominated as purchaser: she was left with the task of obtaining bank finance before the settlement, and has had to support herself and the child since. The $60,000.00 was borrowed before the separation. It was after the separation on 17 June 2012, which Na Yu says occurred after Wen Tao Wei had been bailed on a criminal charge and after he assaulted her, that she ceased to regard Wen Tao Wei as having an interest in the apartments. Given the powers of the Family Court to adjust property interests, there is nothing remarkable in her taking this view.

(g) The draft contract of February - March 2013 does not operate as a contract because it was not executed. That it provided for Mr Wei and Mrs Xia releasing Na Yu is not evidence of an admission that Na Yu had borrowed the $60,000.00 / $38,000.00. If - which has not been proven - Na Yu instructed Fong & Co to draft the contract it would seem to have been after Na Yu obtained the intervention order against Wen Tao Wei in the contested hearing, in which it is apparent Mr Wei considers Na Yu to have given false evidence. It would be understandable that Na Yu would want a release after having a serious falling out with Mr Wei. In any event, Na Yu denied that she had instructed Fong & Co to draft the Contract.

The alleged loan of $1,600.00

Mr Wei and Mrs Xia have the burden of proof and they have not proven that Na Yu borrowed $1,600.00. It is not credible to suggest that Mrs Xia would lend Na Yu this money after the separation.

Their interpretation of the SMS messages as showing that Na Yu lied and tricked Mrs Xia into lending $1,600.00 is not made out. There is no written evidence of such a loan. Na Yu denies it and it is a case of word against word. I am not satisfied on the balance of probabilities that Na Yu borrowed $1,600.00 from Mr Wei and Mrs Xia.

At a glance

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Judgment (208 paragraphs)

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Legislation Cited (3)

Cases Cited (4)