Cong v Shen - [2021] NSWSC 947 - NSWSC 2020 case summary — Zoe

NSWNSWSC

Cong v Shen

[2021] NSWSC 947

Supreme Court of NSW|2020-12-17|Before: Ward CJ

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2020-12-17

Before

Ward CJ

Source

Original judgment source is linked above.

Judgment (288 paragraphs)

[1]

dence Act 1995 (NSW), ss 38, 97, 140 Family Law Act 1975 (Cth), s 90 Probate and Administration Act 1898 (NSW), ss 44, 61, 74 Succession Act 2006 (NSW), ss 6, 32, 59, 60, 65, 66, 78, 81, 83 Supreme Court Rules, r 78.19 Trade Practices Act 1974 (Cth), s 46 Uniform Civil Procedure Rules 2005 (NSW), r 7.10 Cases Cited: Accordent Pty Ltd v Bresimark Nominees Pty Ltd (2008) 101 SASR 286; [2008] SASC 196 Ahmad v Ahmad [2002] NSWSC 579 Alexander v Jansson (2010) 6 ASTLR 432; [2010] NSWCA 176 Allen v Roughley (1955) 94 CLR 98 Amit Laundry Pty Ltd v Jain [2017] NSWSC 1495 Anderson v McPherson [No 2] [2012] WASC 19 Andrews v Australia and New Zealand Banking Group Ltd (2012) 247 CLR 205; [2012] HCA 30 Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 Astridge v Pepper [1970] 1 NSWR 542 Australian Competition and Consumer Commission v Geowash Pty Ltd (2019) 368 ALR 441; [2019] FCA 72 Bailey v Bailey (1924) 34 CLR 558 Baltic Shipping Co v Dillon (1991) 22 NSWLR 1 Bank of Montreal v Stuart [1911] AC 120 Banks v Goodfellow (1870) LR 5 QB 549 Barns v Barns (2003) 214 CLR 169 Barry v Butlin (1838) 2 Moo PCC 480 Bechara v Bechara [2016] NSWSC 513 Berkeley v Hardy (1826) 5 B & C 355 Bertei v Feher [2000] WASCA 165 Beswick v Beswick [1968] AC 58 Birmingham v Kirwan (1805) 2 Sch & Lef 444 Birmingham v Renfrew (1937) 57 CLR 666 Black Uhlans Inc v New South Wales Crime Commission (2002) 12 BPR 22,421; [2002] NSWSC 1060 Blackwell v Blackwell [1929] AC 318 Bloch v Bloch (1981) 180 CLR 390; [1981] HCA 56 Boughton v Knight (1873) LR 3 P & D 64 BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 Brand v Monks [2009] NSWSC 1454 Bridgewater v Leahy [1997] QCA 36 Broadlands International Finance Ltd v Sly (1987) 4 BPR 9420 Brown v Brown (1993) 31 NSWLR 582 Brown v Gregson [1920] AC 860 Brown v McEnroe (1890) 11 LR (NSW) Eq 134 Brown v New South Wales Trustee and Guardian [2012] NSWCA 431 Buffrey v Buffrey (2006) 12 BPR 23,619; [2006] NSWSC 1349 Bull v Fulton (1942) 66 CLR 295 Burger King Corporation v Hungry Jack's Pty Limited [2001] NSWCA 187 Burke v Burke [2015] NSWCA 195 Byers v Overton Investments Pty Ltd (2001) 109 FCR 554; [2001] FCA 760 Callaghan v Myers (1880) LR 1 (NSW) 351 Calverley v Green (1984) 155 CLR 242 Camernik v Reholc [2012] NSWSC 1537 Carr v Homersham (2018) 97 NSWLR 328 Cash v The Nominal Defendant (1969) 90 WN (NSW) (Pt 1) 77 Central Exchange Ltd v Anaconda Nickel Ltd (2002) 26 WAR 33; [2002] WASCA 94 Chelsea and Walham Green Building Society v Armstrong [1951] Ch 853 Chen v Marcolongo (2009) ALR 353; [2009] NSWCA 326 Clarence City Council v Commonwealth of Australia [2020] FCAFC 134 Collings v Vakas [2006] NSWSC 393 Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447; [1983] HCA 14 Commissioner of Stamp Duties (NSW) v Bone (1976) 135 CLR 223 Commonwealth Bank of Australia v Barker (2014) 253 CLR 169; [2014] HCA 32 Concrete Constructions Pty Ltd v Government Insurance Office of NSW [1966] 2 NSWR 609 Cong v Shen [2019] NSWSC 1675 Cook v Fountain (1676) 3 Swan 585; 36 ER 984 Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 Coorey v Coorey (Supreme Court of New South Wales, Powell J, 22 February 1986, unrep) Coote v Whittington (1873) LR 16 Eq 534 Cope v Keen (1968) 118 CLR 1 Corin v Patton (1990) 169 CLR 540 Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 Craig-Bridges v NSW Trustee and Guardian [2017] NSWCA 197 Cropper v Smith (1884) 26 Ch D 700 Croton v R (1967) 117 CLR 326 Currie v Hamilton [1984] 1 NSWLR 687 D'Apice v Gutkovich (No 2) [2010] NSWSC 1333 Darmanin v Cowan [2010] NSWSC 1118 Day v Perisher Blue Pty Ltd [2005] NSWCA 110 De Bruyne v De Bruyne [2010] EWCA Civ 519 Deigan (as executrix for the estate of the late Lockrey) v Fussell (2019) 19 BPR 39,853; [2019] NSWCA 299 Delaney v Jones [2008] NSWSC 229 Delehunt v Carmody (1986) 161 CLR 464; [1986] HCA 67 Dellios v Dellios [2012] NSWSC 868 Derrington v Caldbeck (1990) 20 NSWLR 212 Dialog Pty Ltd v Addease Pty Ltd [2003] FCA 1359 Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317; [2003] HCA 51 Drever v Drever [1936] ALR 446 Drivas v Jakopovic (2019) 100 NSWLR 505; [2019] NSWCA 218 Du Maurier v Wechsler [2001] NSWSC 4 Duggan v White [2018] NSWSC 364 Dyer v Dyer (1788) 2 Cox Eq Cas 92; (1788) 30 ER 42 E Co v Q [2018] NSWSC 442 Eade v R (1924) 34 CLR 153 Eastern Express Pty Ltd v General Newspapers Pty Ltd (1992) 35 FCR 43; 106 ALR 297 Elddin v Hamed (No 2) [2015] NSWSC 654 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 Elkofairi v Permanent Trustee Co Ltd (2002) 11 BPR 20,841; [2002] NSWCA 413 Ell v Hunter District Water Supply & Sewerage Board (1927) 27 SR (NSW) 437 Estate of Nitopi (No 2) [2021] NSWSC 748 Estate Reid; Roberts v Moses and Palmer [2018] NSWSC 1145 Ex parte Bear; Re Jones (1945) 46 SR (NSW) 126 Ex parte Callan; Re Smith (1968) 87 WN (Pt. 1) (NSW) 595; (1968) 1 NSWLR 443 Fell v Fell (1922) 31 CLR 268; [1922] HCA 55 Fincham v Edwards (1842) 163 ER 656 Fiorentini v O'Neill (New South Wales Court of Appeal, 4 December 1998, unreported Fitness First Australia Pty Ltd v Fenshaw Pty Ltd (2016) 92 NSWLR 128; [2016] NSWCA 207 Forster v Elvet Colliery Company Ltd [1907] 1 KB 629 Fowkes v Pascoe (1875) LR 10 Ch App 343 Franklins Pty Limited v Metcash Trading Ltd [2009] NSWCA 407 Garcia v National Australia Bank Ltd (1998) 194 CLR 395; [1998] HCA 48 Gardner v Lachlan (1836) 8 Sim 123 Gate Gourmet Australia Pty Ltd (in liq) v Gate Gourmet Holding AG [2004] NSWSC 149 Glynne v NSW Trustee & Guardian [2011] NSWSC 535 Gorton v Parks (1989) 17 NSWLR 1 Grant v Roberts [2019] NSWSC 843 Gregg v Perpetual Trustee Co (1918) 18 SR (NSW) 252 Grey v Australian Motorists & General Insurance Co Pty Ltd [1976] 1 NSWLR 669 Guthrie v Spence (2009) 78 NSWLR 225; [2009] NSWCA 369 Hall v Carney [2012] SASCFC 76 Hamed v Elddin [2016] NSWCA 9 Harmer v Armstrong [1934] 1 Ch 65 Harvey v Barton [2013] NSWSC 1779 Hayim v Citibank NA [1987] AC 730 Hewitt v Gardner [2009] NSWSC 705 Hilliard v Eiffe [1874] LR 7 HL 39 Hiralal v Hiralal [2013] NSWSC 984 Hobbs v Tinling (CT) & Co Ltd [1929] 2 KB 1 Hoff v Atherton [2004] EWCA Civ 1554 In Re Applebee; Leveson v Beales [1891] 3 Ch 422 In Re Berger (deceased) [1990] Ch 118 In Re Courage Group's Pension Schemes [1987] 1 All ER 528 In Re Horrocks (deceased) [1939] P 198 In Re Keen; Evershed v Griffiths [1937] Ch 236 In the matter of Reserve Hotels Pty Limited [2021] NSWSC 376 In the Will of Severs (deceased) (1887) 13 VLR 572 In the Will of Steward (deceased) [1964] VR 179 Jack v Smail (1906) 2 CLR 684 Jeans v Commonwealth Bank of Australia Ltd (2003) 204 ALR 327; [2003] FCAFC 309 Jenkins v Wynen [1992] 1 Qd R 40 Jobson v Beckingham (1983) 9 Fam LR 169 Johnson v Buttress (1936) 56 CLR 113 Jones v Smith [2016] VSCA 178 Jones v Sutherland Shire Council [1979] 2 NSWLR 206 Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25 Kerr v Badran; Estate of Badran [2004] NSWSC 735 Korda v Australian Executor Trustees (SA) Ltd (2015) 255 CLR 62 Kowalczuk v Accom Finance Pty Ltd (2008) 77 NSWLR 205; [2008] NSWCA 343 Le Meilleur Pty Ltd v Jin Heung Mutual Savings Bank Co Ltd [2011] NSWSC 1115 Leary v NSW Trustee and Guardian [2017] NSWSC 1113 Ledgerwood v Perpetual Trustee Co Ltd (1997) 41 NSWLR 532 Lee v Russell [1961] WAR 103 Legal Profession Complaints Committee and Wells [2014] WASAT 112 Lindsay v McGrath [2015] QCA 206 Lord Napier and Ettrick v R F Kershaw Ltd [1999] 1 WLR 756 Lucent Technologies Inc v Krone Aktiengesellschaft (No 3) [2000] FCA 100 Mackay v Dick (1881) 6 App Cas 251 Macquarie Developments Pty Ltd v Forrester [2005] NSWSC 674 Malzy v Eichholz [1916] 2 KB 308 Manning v Hughes; Estate of Ludewig [2010] NSWSC 226 Marcolongo v Chen (2011) 242 CLR 546; [2011] HCA 3 Marley v Rawlings [2012] EWCA Civ 61; [2013] 2 WLR 205 Marshall v D G Sundin & Co Pty Limited (1989) 16 NSWLR 463 Martech Energy Systems Pty Ltd (in liq) v Bell [2005] VSC 198 Martin v Martin (1959) 110 CLR 297 Matouk v The Entrance Seabreeze Pty Ltd [2010] NSWSC 649 Mayfield v Public Trustee [2009] NSWSC 330 McFadden v Snow (1952) 69 WN (NSW) 8 Micheletto (Trustee) v El-Debel [2020] FCA 1031 Moate v Moate [1948] 2 All ER 486 Moody v Condor Insurance Ltd [2006] 1 WLR 1847 Mordecai v Mordecai (1988) 12 NSWLR 58 Morgan v Pike (1854) 14 CB 473 Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37 Murtagh v Murtagh [2013] NSWSC 926 Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78 Napier v Public Trustee (WA) (1980) 55 ALJR 1 Nelson v Nelson (1995) 184 CLR 538; [1995] HCA 25 Nicholas v Tubb [2016] TASSC 53 Nock v Austin (1918) 25 CLR 519 Nolan v Nolan [2004] VSCA 109 Nominal Defendant v Gabriel (2007) 71 NSWLR 150; [2007] NSWCA 52 O'Connor v S P Bray Ltd (1936) 36 SR (NSW) 248 Ong v Lottwo Pty Ltd (in liq) [2013] SASCFC 57 Page v Hull-Moody [2020] NSWSC 411 Page v Page [2016] NSWSC 1218 Paraskov v Paraskos [2002] WASC 109 Pennimpede v Pennimpede [2009] NSWSC 85 Peters v Leeder (1878) 47 LJQB 573 at 574 Phillips v James (2014) 85 NSWLR 619; [2014] NSWCA 4 Phillips v Phillips [2017] NSWSC 280 Pitcher v Langford (1991) 23 NSWLR 142 Pratt v Estate of O'Sullivan [2005] NSWSC 1046 Ramage v Waclaw (1988) 12 NSWLR 84 Re Elsmore Resources Ltd (2016) 114 ACSR 297; [2016] NSWSC 856 Re Estate McNamara [2018] NSWSC 1661 Re Estate of Badger (deceased) [2021] SASC 25 Re Gordon's Will Trusts [1978] Ch 145 Re Griffith; Easter v Griffith (1995) 217 ALR 284 Re Hodges; Shorter v Hodges (1988) 14 NSWLR 698 Re Kerrigan; Ex parte Jones (1946) 47 SR (NSW) 76 Re Smith (deceased) [1978] VR 596 Re the Estate of the late Marras [2014] NSWSC 915 Redglove Projects Pty Ltd v Ngunnawal Local Aboriginal Land Council (2004) 12 BPR 22,319; [2004] NSWSC 880 Reserve Hotels Pty Limited [2021] NSWSC 376 Riz v Perpetual Trustee Australia Limited [2007] NSWSC 1153 Rodda v Ian Rodda Pty Ltd [2015] SASC 95 Rosebanner Pty Ltd v Energy Australia [2009] NSWSC 43 Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45; [2002] HCA 5 Ryan v Dries (2002) 10 BPR 19,497; [2002] NSWCA 3 Ryan v Ryan [2012] NSWSC 636 Sasson & Partners Pty Ltd v Fahevu [1999] NSWCA 400 Scallan v Scallan [2001] NSWSC 1129 Scott Fell v Lloyd (1911) 13 CLR 230 Seamez v McLaughlin [1999] NSWSC 9 Serwin v Dolso [2020] NSWSC 370 Sgro v Thompson [2017] NSWCA 326 Shepherd v Doolan [2005] NSWSC 42 Simon v Byford [2014] EWCA Civ 280 Singh v Singh [2015] NSWSC 1457 Smith v Johnson (2015) 14 ASTLR 175; [2015] NSWCA 297 Southern Foundries (1926) Ltd v Shirlaw [1940] AC 701 Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640 Stojanovski v Stojanovski [2019] NSWSC 1713 Stone v Stone [2019] NSWSC 233 Strong v Bird (1874) LR 18 Eq 315 Super Vision Resources Ltd v AC Holdings Co Pty Ltd [2020] NSWSC 65 Sze Tu v Lowe [2014] NSWCA 462 Telfer v Telfer (No 2) [2013] NSWSC 823 The Application of the NSW Trustee and Guardian; The Estate of Critchley [2020] NSWSC 1635 Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49 Tillett v Varnell Holdings Pty Ltd [2009] NSWSC 1040 Timbury v Coffee (1941) 66 CLR 277 Tobin v Ezekiel (2012) 83 NSWLR 757; [2012] NSWCA 285 Toscano v Toscano [2017] NSWSC 419 Towson v Francis [2017] NSWSC 1034 Trident v McNiece (1988) 165 CLR 107 Tripodi v R (1961) 104 CLR 1 Underwood v Gaudron [2014] NSWSC 1055 Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 Vagg v McPhee (2013) 85 NSWLR 154 Valverde v Inch (2019) 19 BPR 39421; [2018] NSWSC 366 Varma v Varma [2010] NSWSC 786 Vigolo v Bostin (2005) 221 CLR 191 Voges v Monaghan (1954) 94 CLR 231 Wallington v Kokotovich Constructions Pty Ltd (1993) 11 ACSR 759 Warner v Hung, in the matter of Bellpac Pty Ltd (receivers and managers appointed) (in liquidation) (No 2) (2011) 297 ALR 56; [2011] FCA 1123 Watkins v Combes (1922) 30 CLR 180 Watson v Foxman (1995) 49 NSWLR 315 Watson v Kerridge (1888) 9 LR (NSW) Eq 35 Webster v Strang; Steiner v Strang [2018] NSWSC 495 Wechsler v Du Maurier [2002] NSWCA 13 Weige v Cupton Pty Ltd (2012) 8 ASTLR 229; [2012] NSWCA 414 Weiss v Weiss [2020] NSWSC 1064 West v AGC (Advances) Limited (1986) 5 NSWLR 610 Williams v Legg (1993) 29 NSWLR 687 Willis v Barron [1902] AC 271 Wilson v Darling Island Stevedoring Lighterage Co Ltd (1965) 95 CLR 43 Wily as Liquidator of Anglican Insurance Ltd [2009] NSWSC 696 Wirth v Wirth (1956) 98 CLR 228 Wollongong Coal Ltd v Gujarat NRE India Pty Ltd (2019) NSWLR 432; [2019] NSWCA 135 Worth v Clasohm (1952) 86 CLR 439 Yardley v Arnold (1842) C & M 434 Yerkey v Jones (1939) 63 CLR 649 Zagame v Zagame [2014] NSWSC 1302 Zorbas v Sidiropoulous (No 2) [2009] NSWCA 197 Texts Cited: Ashburner, W, Principles of Equity (1902, Butterworths) Barlow, RFD, et al, Williams on Wills (8th ed, LexisNexis Butterworths, 2002) Edgeworth, Brendan, Butt's Land Law (7th ed, 2017, Lawbook Company) Ford & Lee, Principles of the Law of Trusts (looseleaf, Thomson Reuters) GE Dal Pont and KF Mackie, The Law of Succession (3rd ed, 2021, LexisNexis Butterworths) GE Dal Pont, Equity and Trusts in Australia (7th ed, 2018, Thomson Reuters) Glister, J, "Is There a Presumption of Advancement?" (2011) 33 Sydney Law Review 39 Heydon, Cross on Evidence (7th Australian ed, 2004, LexisNexis Butterworths) Heydon, JD and MJ Leeming, Jacobs' Law of Trusts (7th ed, 2006, LexisNexis Butterworths) Ibbetson, D and E Schrage, "Ius quaesitum tertio: A Comparative and Historical Introduction to the Concept of Third Party Contracts" in E Schrage (ed), Ius quaesitum tertio (2008, Duncker & Humbolt) Janes, Liebhold and Studdert, Wills, Probate and Administration Law in New South Wales (2nd ed, 2019, Thomson Reuters) Liu, Q, 'The Use and Misuse of Equitable Election' (2014) 36(3) University of New South Wales Law Journal 1053 Nicholas Seddon, Seddon on Deeds (2015, The Federation Press) Norton, RF, A treatise on deeds (2nd ed, 1928, Sweet & Maxwell) Sir Anthony Mason, "Contract, Good Faith and Equitable Standards in Fair Dealing" (2000) 116 Law Quarterly Review 66 Swadling, W, "Explaining Resulting Trusts" (2008) 124 Law Quarterly Review 72 Thomas, G, Thomas on Powers (2nd ed, 2012, Oxford University Press) Williams, Mortimer & Sunnucks, Executors, Administrators and Probate (21st ed, 2018, Sweet & Maxwell) Category: Principal judgment Parties: Edmund Bede Hao San Cong (First Plaintiff) Teresa Mae Yin Cong (Second Plaintiff) The estate of the late Laurence Xavier Xiao Ming Cong by its representatives Edmund Cong and Teresa Cong (Third Plaintiff) Yanjiao Shen (First Defendant) Yaqin Wu (Second Defendant) The estate of the late Zi Li Cong by its representative Tamara Goodwin (Third Defendant) Representation: Counsel: M Condon SC with P Sharp (Plaintiffs) D Smallbone (Defendants)

[3]

INDEX JUDGMENT - WARD CJ in EQ [1] Parties [3] Chronology of Events [11] Mr Cong's first marriage [17] Companies in which Mr Cong and Ms Joyce carried on business [20] Acquisition of Haberfield and Woolwich properties [23] Matrimonial difficulties [24] Incorporation of Eastern Australian Sheep Products Pty Ltd [26] Office at 2-4 Barnes Avenue, Earlwood [27] Binding Financial Agreement - 11 May 2006 [29] Relationship between Mr Cong and Ms Shen [30] Birth of Mr Cong and Ms Shen's first son - June 2011 [31] Jolly Trading incorporated June 2011 [33] 2011 Will [34] November to December 2011 - reports by Ms Joyce to the authorities [35] Acquisition of the Wu Property - January 2012 [37] Renovation of the Wu Property [50] Birth of Mr Cong and Ms Shen's second son [62] Further complaint to immigration authorities - January 2013 [63] Acquisition of 9 Ethel Street Burwood - 2013 [64] Cancer diagnosis - November 2013 [65] 2013 Will [66] Sale of Woolwich property in December 2013 [70] Acquisition of 16 Nicholson Street, Burwood - January 2014 [71] Divorce - April 2014 [78] Birth of Mr Cong and Ms Shen's third son [79] Deregistration of various companies [80] Marriage of Mr Cong and Ms Shen [81] 2014 Will [82] Further complaint to immigration authorities - September 2014 [92] Acquisition of 43 Amy Street, Campsie - October 2014 [94] Further mortgage over the Wu Property - April 2015 [102] Acquisition of 56 Duke Street, Campsie - May 2015 [106] Acquisition of 58 Duke Street, Campsie - May 2015 [113] Evidence as to conversations in relation to the Duke Street properties [120] Mr Cong's testamentary intentions [122] Request for information regarding life insurance - June 2015 [125] First meeting with Mr Glynn regarding Will - 30 June 2015 [128] Communications in July 2015 [133] Second meeting with Mr Glynn regarding 2016 Will - 3 August 2015 [137] Entry into contract to purchase the Family Property - September 2015 [144] Contracts for sale of the Barnes Avenue and Ethel Street properties - September/October 2015 [146] October 2015 - Department of Planning and Environment rezoning proposal [149] Acquisition of 2 Duff Street, Burwood - December 2015 [150] December 2015 - arrangements to finalise Mr Cong's Will [154] Exchange of contracts for sale by Mr Cong and Ms Shen of 443 Amy Street - 14 December 2015 [156] Instructions sought regarding Mr Cong's Will - December 2015 [158] January 2016 - proposed move to Woodside Avenue [160] January/February 2016 - Ms Shen's knowledge of Mr Cong's intention to make Will [161] Advice sought as to withdrawal from sale of 43 Amy Street, Campsie [162] Deregistration of Eastern Australian Sheep Products [168] 9 February 2016 email forwarding draft testamentary documents [169] Ms Stefadouros' evidence as to conversations with Mr Cong [175] Third meeting with Mr Glynn regarding 2016 Will - 17 February 2016 [181] Ms Stefadouros' recollection of the meeting [189] Ms Shen's recollection of the meeting [201] March 2016 communications regarding Will/agreement [206] Mr Cong's instructions regarding draft agreement - 15 March 2016 [209] Acquisition of the Family Property - April 2016 [218] Extension of time for completion of sale of 43 Amy Street, Campsie to November 2016 [223] Fourth meeting regarding 2016 Will - 23 April 2016 at café in Randwick [224] 26 April 2016 email [238] 27 April 2016 telephone conversation with Mr Cong [239] Draft documents emailed to Mr Cong [242] Telephone conversation on 28 April 2016 [252] Further emails attaching the documents [255] Ms Stefadouros' evidence [265] Conversations to which Edmund has deposed as to Mr Cong's testamentary intentions [267] Conversations to which Teresa has deposed as to Mr Cong's testamentary intentions [272] Ms Shen's account of conversations with Mr Cong regarding his testamentary intentions [285] Query regarding fees - May 2016 [298] Hospitalisation in May 2016 [303] Baoming Shen immigration application - 25 May 2016 [304] Ms Lan's assistance in May 2016 [310] 30 May 2016 [327] 31 May 2016 [332] 1 June 2016 - revised draft agreement [333] 3 June 2016 - execution of documents [337] 2016 Will [365] Deed [371] 10 June 2016 - admission to hospital [374] Mr Cong's transfer to palliative care - 28 June 2016 [376] 4 July 2016 social worker's notes [379] Mr Cong's visit to the Family Property - 22 July 2016 [382] Text message from Ms Joyce to Teresa [383] Mr Cong's death - 28 July 2016 [384] Edmund's conversations with Ms Shen as to the 2016 Will [394] Alleged loans from Mr Baoming Shen [396] Incorporation of Cong Australia International and Ugg Australia International [411] Attempted rescission of contract for sale of 43 Amy Street [428] Commencement of new relationship and instructions for pre-nuptial agreement [429] Withdrawal of moneys from Mr Cong's bank account [431] Life insurance policy - September 2016 [435] Commencement of proceeding in this Court by purchaser of 43 Amy Street [438] Letter dated 26 April 2017 from plaintiffs' solicitors [440] Mediation of dispute regarding 43 Amy Street - June 2017 [442] Evidence of Edmund and Teresa as to conversations with Ms Shen [454] Lillian Street, Campsie acquisition - July 2017 [459] Sale of 43 Amy Street, Campsie - July 2017 [464] Visit to burial site - July 2017 [469] Deregistration of Jolly Trading 2017 [472] Commencement of present proceeding [473] Application for Probate of 2016 Will - 2017 [474] Transfer of the Wu Property to Ms Wu - 2017 [479] Further steps in proceeding [491] Death of Laurence - 15 July 2018 [493] Letter dated 24 July 2018 from plaintiffs' solicitors [494] Defence to cross-claim [496] June 2019 - freezing orders by Henry J [497] Sale of Duke Street properties - July 2019 [501] Further pleadings [503] Hearing [504] Pleaded Claims [505] Amended Statement of Claim [505] Defence to amended statement of claim [511] Reply [542] Amended cross-claim [552] Defence to amended cross-claim [553] Issues [554] Witnesses [555] Family members [556] Form of the plaintiffs' affidavits [556] Edmund [561] Teresa [574] Ruling on Voir Dire [590] Ms Joyce [594] Laurence [600] Mr John (Chris) Joyce [601] Shen family members [609] Ms Shen [610] Ms Wu [670] Mr Baoming Shen [677] Other witnesses [686] Ms Stefadouros [687] Ms Xiaoping (Vicky) Lan [728] Pastor Yip [740] Ms Dan Wang [742] Ms Alison Coombs [743] Mr Adrian Knox [744] Ms Ghuibin Zhu [746] Solicitors and accountants [748] Mr Glynn [748] Mr Allen [760] Mr Pirintji [762] Ms Bull [763] Experts [776] Professor Gorrell [776] Mr La Chang [779] The tendency evidence [783] Objection as to admission of audio tape recording [787] Factual findings sought by plaintiffs [789] Preliminary issue as to standing to sue on behalf of the estate [853] Merger or release by appointment of promisor as executor [865] Plaintiffs' submissions [872] Determination as to merger/release [880] Issues for determination [901] Issues regarding 2016 Will [901] (i) Validity of 2016 Will [902] Plaintiffs' submissions [902] First and second defendants' submissions [914] Plaintiffs' reply submissions [982] Determination as to issue (i) [988] (ii) Whether the terms of the 2016 Will incorporate the terms of the Deed [992] Plaintiffs' submissions [992] First and second defendants' submissions [999] Determination as to issue (ii) [1001] (xxi) Whether Mr Cong lacked testamentary capacity [1009] (xxiii) Whether Mr Cong suffered from a delusional optimism as to Jolly Trading Plaintiffs' submissions [1010] First and second defendants' submissions [1025] Plaintiffs' reply submissions [1049] Determination as to issues regarding testamentary capacity and delusional optimism [1054] Issues regarding the Deed [1069] (iii) Whether the Deed is binding and contains the implied terms pleaded [1070] Plaintiffs' submissions [1070] First and second defendants' submissions [1091] The plaintiffs' standing to seek declaratory relief [1091] Construction advanced by the plaintiffs [1094] Sale as a trigger - a penalty [1104] Contract of Wager [1105] Uncertainty [1106] Alternative approaches to construction of the Deed [1115] Sub-clause 2(a) [1116] Sub-clause 2(b) - sale as the trigger [1135] Sub-clauses 2(c) and (d) as limiting provisions, rather than distinct alternatives [1146] Plaintiffs' reply submissions regarding alleged uncertainty of Deed [1151] Submissions as to implied terms [1153] Implied term at 16 [1155] Implied terms alleged at 16 and 16 [1178] Plaintiffs' reply submissions [1186] Determination [1187] (iv) Whether Ms Shen breached the Deed [1221] Submissions [1226] First and second defendants' submissions [1228] Plaintiffs' submissions [1234] Determination as to standing of Laurence's personal representative [1239] Determination as to the alleged breaches [1241] (v) Whether the plaintiffs are entitled to sue on the Deed as a multi-party deed poll; or Edmund is entitled to sue as named executor or on the basis that the benefit of the promises were held on trust for the plaintiffs [1247] Multi-party deed poll? [1249] Plaintiffs' submissions [1249] First and second defendants' submissions [1259] Plaintiffs' reply submissions [1274] Further submissions by first and second defendants [1281] Determination [1291] Ability of Edmund to sue as named executor [1295] Ability to sue as beneficiary of trust of the benefit of the promises under the Deed? [1296] Plaintiffs' submissions [1296] First and second defendants' submissions [1307] Plaintiffs' reply submissions [1326] Determination [1328] The annuities [1333] Ms Shen's defences to claims under Deed [1334] (xviii) Contracts Review Act claim regarding Deed (xix) Whether unconscionable conduct of Mr Cong [1335] (xx) Whether undue influence of Mr Cong or presumed undue influence (xxii) Whether Ms Shen knew what she was doing when she signed Deed Plaintiff's submissions [1350] Determination [1361] (vi) The equitable relief sought by the plaintiffs [1383] First and second defendants' submissions re equitable relief [1402] Plaintiffs' reply submissions regarding equitable relief [1403] Determination [1413] Equitable fraud claims [1414] (vii) Whether Ms Shen represented to Mr Cong that she knew and agreed to implement the provisions of the 2016 Will and Deed [1415] (xi) Half-secret trust First and second defendants' submissions [1421] Determination [1456] Issues regarding Jolly Trading (viii) Jolly Trading - financial position and depletion of assets [1473] (xv) Whether Ms Shen acted as trustee de son tort regarding Jolly Trading Plaintiffs' submissions [1477] First and second defendants' submissions [1478] Breach of implied covenant concerning Jolly Trading [1479] Breach of fiduciary duty owed to the estate of Mr Cong [1492] Plaintiffs' reply submissions [1509] Determination [1515] (ix) Equitable election [1526] First and second defendants' submissions [1531] Determination [1536] (x) Proceeds of sale of 43 Amy Street [1547] (xii) Whether Deed conferred a power on Ms Shen and exercise of those powers [1549] (xiii) Whether the transfer of the Wu Property is voidable Plaintiffs' submissions [1556] Fraud on a power [1556] Section 37A Claim [1560] First and second defendants' submissions [1567] Fraud on a power [1568] Transfer to Ms Wu as agent and trustee; and the s 37A case [1571] Plaintiffs' submissions in reply [1581] Determination [1585] (xiv) Resulting Trust claim regarding Campsie and Burwood properties [1591] Plaintiffs' submissions [1591] First and second defendants' submissions regarding resulting trusts [1626] The Wu Property [1635] 16 Nicholson Street, Burwood [1642] 43 Amy Street, Campsie [1661] 56 Duke Street, Campsie [1668] 58 Duke Street, Campsie [1677] The Family Property [1680] 2 Duff Street, Burwood [1694] Determination of resulting trust claims [1699] (xvi) Succession Act claims - whether order for provision out of notional estate [1750] First and second defendants' submissions [1777] Disclosure [1777] Notional estate [1792] 16 Nicholson Street, Burwood [1793] 43 Amy Street, Campsie [1797] Life insurance [1802] Joint bank accounts cash of $114,745.78 [1804] Plaintiffs' reply submissions [1805] Determination - Succession Act claims and notional estate [1819] Section 60(2) factors [1825] Section 60(2)(a) - any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship [1826] Section 60(2)(b) - nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person's estate [1831] Section 60(2)(c) - nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered [1832] Section 60(2)(d) - financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate [1836] Section 60(2)(e) - financial circumstances of any person with whom the applicant is cohabiting [1846] Section 60(2)(f) - any physical, intellectual or mental disability of the applicant, any other person in respect of whom an application has been made for a family provision order or any beneficiary of the deceased person's estate that is in existence when the application is being considered or that may reasonably be anticipated [1847] Section 60(2)(g) - age of the applicant when the application is being considered [1848] Section 60(2)(h) - any contribution (whether financial or otherwise) by the applicant to the acquisition, conservation and improvement of the estate of the deceased person or to the welfare of the deceased person or the deceased person's family, whether made before or after the deceased person's death, for which adequate consideration (not including any pension or other benefit) was not received, by the applicant [1849] Section 60(2)(i) - any provision made for the applicant by the deceased person, either during the deceased person's lifetime or made from the deceased person's estate [1850] Section 60(2)(j) - any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person [1851] Section 60(2)(k) - whether the applicant was being maintained, either wholly or partly, by the deceased person before the deceased person's death and, if the Court considers it relevant, the extent to which and the basis on which the deceased person did so [1853] Section 60(2)(l) - whether any other person is liable to support the applicant [1854] Section 60(2)(m) - character and conduct of the applicant before and after the date of the death of the deceased person [1855] Section 60(2)(n) - conduct of any other person before and after the date of the death of the deceased person [1856] Section 60(2)(o) - any relevant Aboriginal or Torres Strait Islander customary law [1857] Section 60(2)(p) - any other matter the Court considers relevant, including matters in existence at the time of the deceased person's death or at the time the application is being considered [1858] Conclusion as to adequacy of provision under the 2016 Will [1859] Notional estate [1864] Proper provision in all the circumstances [1871] Probate issues [1878] (xvii) Whether probate should be granted to Edmund or Ms Shen, to the exclusion of the other, or to both persons Plaintiffs' submissions [1878] First and second defendants' submissions [1882] Determination [1890] Costs [1894] Conclusion [1895] Orders [1896]

[4]

Judgment

HER HONOUR: Before me for hearing late last year was a dispute between, on the one hand, the children of the late Mr Zi Li Cong's first marriage to Ms Anastasia Joyce, and, on the other hand, Mr Cong's second wife (the first defendant, Ms Shen) and her mother (the second defendant, Ms Wu). In simple terms, this is yet another unfortunate extended family dispute between the first and second families of the deceased (Mr Cong); unfortunate not least because it is clear that the deceased wished to provide for all of the claimants on his testamentary bounty and yet it seems apparent that (whatever might otherwise have been the case) the manner in which he intended to achieve this will not now be able to be fulfilled (for a combination of reasons, which I will explore in due course); and because, as is often the case with these kinds of disputes, it may have (perhaps inevitably) precipitated a breakdown in the relationship between the extended family members which will potentially have a lasting impact.
Although initially the claims brought by the plaintiffs were simply for further provision out of the late Mr Cong's estate pursuant to s 59 of the Succession Act 2006 (NSW) (Succession Act), over the course of the proceeding the claims broadened to include claims invoking the principles in relation to resulting and constructive trusts (which necessarily must be considered before the family provision claims), as well as claims of breach of trust on the part of Ms Shen and to enforce an agreement entered into between Ms Shen and Mr Cong at the time of execution by him of his last Will in June 2016 (the 2016 Will). The plaintiffs have made clear, however, that the family provision claim is not simply an ancillary fallback or "backstop" claim; in that, although failure on the so-called Deed claims will bring the family provision claim to the fore, success on the Deed claims will not necessarily remove the family provision claim (having regard to the timing of payment under the Deed, as I will explain in due course). For their part, the first and second defendants have foreshadowed costs issues arising out of the expansion of the claims by the plaintiffs (those being matters to be dealt with after the determination of the substantive claims in the proceeding).

[5]

Parties

As adverted to above, the plaintiffs at the time of commencement of the proceeding were the three children of Mr Cong's first marriage - Edmund Bede Hao San Cong (the first plaintiff), Teresa Mae Yin Cong (the second plaintiff) and Laurence Xavier Xiao Ming Cong (who is now deceased and whose estate is represented by his siblings) (the third plaintiff). I will refer to the various children of the deceased by their first names, with no intended disrespect. After the commencement of the proceeding, Laurence died of a drug overdose on 29 November 2018. Laurence's mother, Ms Joyce, is the administrator of his estate (and inherits his estate on intestacy). On 21 May 2020, Slattery J made orders appointing Edmund and Teresa as representatives of Laurence's estate in the present proceeding pursuant to r 7.10 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR).
As to the defendants, as noted above, the first defendant is Mr Cong's second wife, Ms Shen, who is now re-married; and the second defendant is Ms Shen's mother, Ms Wu. The third defendant, Ms Tamara Goodwin, is the appointed representative of Mr Cong's estate (in circumstances where no order for probate or letters of administration has yet been made). The third defendant has not taken an active role in the proceeding and has filed a submitting appearance.
Mr Cong commenced a relationship with Ms Shen, who had immigrated to Australia from China on a student visa, in about 2009. They had three children together (Bruce Lin Cong, born in 2011; Leon Sen Cong, born in 2012; and David Shu Cong, born in March 2014), before marrying in June 2014.
By the time of Mr Cong's death, and over the period in which Mr Cong was first in a relationship with and then married to Ms Shen, a number of properties were acquired, variously in one or both of their names: the four "Campsie properties" - namely, 43 Amy Street, Campsie (for the sum of $985,000); another property in Campsie to which I will refer (for privacy reasons) as the Wu Property (since Ms Wu is now the sole registered proprietor of that property and it is her home) (for $902,000) (the Wu Property); 56 Duke Street, Campsie (for $996,000); and 58 Duke Street, Campsie (for $1.1 million); as well as three Burwood properties - namely, 16 Nicholson Street, Burwood (for $1.72 million); 2 Duff Street, Burwood (for $2,430,000); and a third property in Burwood to which I will refer, again for privacy reasons, as the Family Property (which is Ms Shen's family home). Of those properties, 43 Amy Street, Campsie and 16 Nicholson Street, Burwood were registered in the couple's joint names; the rest were registered in Ms Shen's sole name. Further, at the time of his death, 43 Amy Street was the subject of an exchanged (but not yet completed) contract for sale by Mr Cong and Ms Shen to a third party purchaser. Mr Cong had earlier held in his own name a property at 9 Ethel Street, Burwood and a property at 2-4 Barnes Avenue, Earlwood, both of which had been acquired before his relationship with Ms Shen and both of which were sold in order to finance the acquisition of the Family Property.
Mr Cong was diagnosed with cancer in about November 2013 (although it seems that he had some health issues earlier, in 2011 - see the notes taken by his solicitor, Mr Glynn, extracted in due course below). Mr Cong died in July 2016, leaving a Will dated 2 May 2016 (the 2016 Will). It is common ground that it was executed on 3 June 2016 (but it is not common ground that it incorporated a deed referred to in that Will that was also executed on 3 June 2016 (the Deed)). Under the 2016 Will, Mr Cong appointed Ms Shen and Edmund as his executors. I set out later in these reasons the relevant terms of the Will and of the Deed (under which provision was to be made for the three children of Mr Cong's first marriage in varying amounts, at Ms Shen's discretion although within specified ranges, depending on the outcome of anticipated zoning changes for properties in the Campsie area).
Suffice it at this stage to say that Ms Shen does not accept that the Deed is a duly attested testamentary instrument and denies that it is enforceable for a variety of reasons. Ms Shen also denies that the 2016 Will is Mr Cong's true Will and asserts that he lacked testamentary capacity to execute that Will. By her amended cross-claim in the proceeding, Ms Shen seeks a grant of probate in respect of an earlier 2014 Will.
The nub of the dispute between the family members, as emerged very clearly during the course of the oral evidence, is that Ms Shen maintains that she was given absolute discretion by Mr Cong to make the decision as to how much (if, indeed, anything at all) should be given to the elder children; whereas the plaintiffs contend that Ms Shen bound herself to a particular arrangement to give effect to their late father's testamentary wishes, which included that substantial provision be made for them (albeit the bulk of that to be paid to them no sooner than ten years after his death) and it is clear that Ms Shen does not consider herself bound (and does not intend) to honour those wishes (in circumstances where Ms Shen says that the estate is insolvent and all the assets from which Mr Cong contemplated that provision for the elder children would be made are hers).
With the above brief introduction, I set out below in more detail the chronology of events.

[6]

Chronology of events

Mr Cong was a Chinese businessman, who carried on various businesses over his lifetime (both with Ms Joyce and separately; and, much later, although the extent of this is disputed, with Ms Shen). Relevantly, at the time of Mr Cong's death he was carrying on a business involving the exportation of sheep skins and leather products through an entity named Jolly Trading Pty Ltd (Jolly Trading) of which he was the sole director and shareholder.
It does not appear to be disputed that Mr Cong was not fluent in English.
As to his spoken English, various accounts were given by Edmund and Teresa, on the one hand, as to Mr Cong's facility in the English language (see for example, Edmund's first affidavit sworn 19 July 2017 at [8]; [28]; and his second affidavit sworn 9 October 2020 at [21]-[22]; and Teresa's first affidavit sworn 2 July 2017 at [7]; [40]; and see also Teresa's evidence in cross-examination on this issue) but it cannot be gainsaid that Mr Cong was able to speak English to the extent that he could converse not only with the members of his first family (who do not speak Chinese) but also with suppliers in Australia, various lawyers, his secretary or office assistant (Ms Vivian Stefadorous) and other persons (such as, it would seem, the social worker at the hospital responsible for recording a note as to Mr Cong's perception of his financial circumstances when he was in palliative care - see below).
As to Mr Cong's ability to read and understand written English, to my mind the most reliable indication of Mr Cong's ability comes from the evidence of the solicitor who drafted Mr Cong's earlier Wills (in 2011, 2013 and 2014), Mr Steven Pirintji, who was not only able to converse and communicate with Mr Cong without an interpreter present but whose evidence, in the context of the drafting of Mr Cong's 2014 Will (see below), was that he observed Mr Cong reading the 2013 Will and that Mr Cong then gave him specific instructions as to the changes he wished to make to that Will.
Therefore, while I accept that Mr Cong's ability to understand legal or medical jargon may have been more limited (and, indeed, even lay persons for whom English is their first language may struggle with some such jargon), and while there was at least one instance where the hospital records indicate that hospital staff found it difficult to communicate with Mr Cong (see Ex 1 at 203 - that being only a week after the execution of the 2006 Will and Deed), I am satisfied that Mr Cong was able to understand day-to-day English (including legal concepts explained in ordinary everyday terms) and was able to read and speak English at a sufficient level to communicate with business and professional people, and family, alike.
It was not disputed that Mr Cong's computer literacy skills were not strong. Email communications to and from Mr Cong and Jolly Trading (through the "sheepproducts@gmail" address) were mainly conducted via his secretary or office assistant, Ms Stefadouros (and when Mr Cong was in hospital there was at least one communication sent on his behalf to a business contact, Ismail, via a text message from Teresa).

[7]

Mr Cong's first marriage

Mr Cong and his first wife, Ms Joyce, married in 1990 and had three children (Teresa, born in 1991; Laurence, born in 1993; and Edmund, born in 1996) before separating in about late 2005 or 2006. There was conflicting evidence on the part of Edmund and Teresa as to the date of their parents' separation. Both Edmund, in his first affidavit sworn 19 July 2017 at [1], and Teresa initially placed the date of separation as being in 2010, though they subsequently corrected that evidence (albeit that Edmund continued at one point in cross-examination to adhere to 2010 as the date of separation). However, to some extent, that conflicting evidence may be explicable by reference to the fact that even after Mr Cong left the matrimonial home there is evidence that he stayed overnight with the family from time to time and that he maintained social (and, Ms Joyce says, for some time intimate) contact with Ms Joyce. The evidence of Ms Joyce, consistent with the time at which the couple entered into a Binding Financial Agreement pursuant to s 90 of the Family Law Act 1975 (Cth) (Family Law Act), is that the separation was in 2006 and I accept that evidence as consistent with the overall chronology of events.
There was evidence in the proceeding of domestic violence on Mr Cong's part both towards Ms Joyce and towards one or more of the children (the relevance of which was the subject of argument in the course of the hearing). I accept that evidence of this kind is of relevance at the very least when one comes to consider the family provision claims (having regard to the broad range of factors that the Court is required and/or permitted to take into account in such claims), although I accept that caution must be exercised in approaching the evidence of both Edmund and Teresa as to events that occurred in their childhood (and that, in some cases, they accept they did not directly observe). For present purposes, I simply note that it was not disputed that Mr Cong pleaded guilty to a charge of assault against Ms Joyce in around 2005 (for which a sentencing report was prepared by a psychiatrist, Professor Gorrell, who gave evidence in the present proceeding) and it is consistent with the timing of the couple's separation that this incident precipitated their ultimate separation.
That said, as adverted to above, Ms Joyce's evidence is that she and Mr Cong remained in contact until Mr Cong's death; and there was certainly not only contemporaneous photographic evidence that Ms Joyce visited Concord Hospital when Mr Cong was in palliative care there towards the end of his life but also of a family holiday that occurred in Turkey in late 2012 and early 2013 - which corroborates Ms Joyce's evidence that the couple remained in contact even after their separation. Ms Joyce's evidence is that they continued to maintain a sexual relationship until about January 2013 - well after Mr Cong commenced cohabitation with Ms Shen (see Ms Joyce's affidavit sworn 23 July 2018 at [10]); and that Mr Cong continued to refer to her as his "first wife" (to which Ms Joyce says that Mr Cong accorded a particular status under Chinese culture). It is impossible for me to make any concluded finding as to those assertions.

[18]

November to December 2011 - reports by Ms Joyce to the authorities

In late 2011, Ms Joyce made a number of reports (see Ex 23 at 9-62) to the Department of Immigration and Border Protection (Department of Immigration) as to Ms Shen's visa status and that of a Chinese maid in her employ (in the course of which the first and second defendants say that Ms Joyce acknowledged Ms Shen's ownership of the Wu Property). The first and second defendants say that the complaints to the immigration authorities was conduct that was intended to defeat Ms Shen's application for permanent residency; to destroy the basis for her residence in this country; and thereby to break up Mr Cong's relationship with Ms Shen (at a time when the couple had a young child). This, as I apprehend it, is relied on as a matter going to Ms Joyce's credit.
As adverted to above, Ms Joyce also contacted the "Project Wickenby" investigators in around 2011 to make disclosure of alleged tax evasion practices in relation to Mr Cong. Ms Joyce says that there was a practice of double invoicing (the creation of one invoice for customers and another for tax purposes) that started with the introduction of the goods and services tax (GST) and ended in mid-2005 (T 370). Ms Joyce also gave evidence of false certification of origin certificates on goods shipped to China (the feasibility of which was disputed by a freight forwarding expert, Mr La Chang, called for the first and second defendants). As noted above, this evidence as to unlawful or unethical business practices was said to be relevant to the assertion by Ms Shen that, at the time of Mr Cong's death, Jolly Trading was unprofitable or in financial difficulties (such that Mr Cong said that she should close it down). The plaintiffs maintain, to the contrary, that a large amount of money passed through the company's accounts and funded the extensive property portfolio acquired during the time of Ms Shen's relationship with Mr Cong. I address those allegations in more detail in due course.

[19]

Acquisition of the Wu Property - January 2012

Of the four Campsie properties referred to in Mr Cong's 2016 Will and Deed (and which feature in this proceeding), the first to be acquired was the Wu Property. The property was purchased pursuant to a contract for sale of land dated 10 December 2011. Settlement took place on 27 January 2012. The purchase price was $902,500. The property was purchased in Ms Shen's sole name. At this stage, it will be recalled, Mr Cong and Ms Shen were in a de facto relationship; and they had one child (Bruce).
The $90,250 deposit was by cheque drawn on a Commonwealth Bank of Australia (CBA) account in Ms Shen's name (account ending #55242) on 13 December 2011. (There was evidence from Edmund/Teresa of conversations with Mr Cong in which he indicated an intention that this property was to be for Ms Shen's benefit.)
The balance of the purchase price was funded by a $500,000 loan from Westpac (in Ms Shen's name, with an offset account set up in her name) and the balance of $222,840.79 withdrawn from the Wu Property Westpac offset account.
I note that the loan application which was made in connection with the settlement of the sale due on 20 January 2012 (Ex G) (which Ms Shen initially accepted she made without Mr Cong's assistance - see T 659.25 - and in respect of which she accepted that she told Westpac the truth when completing) contains a declaration as to Ms Shen's current occupation that she was employed full time as "Finance Director/Manager" for a Chinese company, Mengzhou City Aotai Leather Co Ltd (which turns out to have been a client of Jolly Trading). Ms Shen accepted in cross-examination that she had never been employed at that company and said that she had never heard of it (see T 659). I note that the application also records, incorrectly, Ms Shen's current home address as an address in Tianjin (but her mailing address as 2 Barnes Avenue, Earlwood) and (again incorrectly) her residential status as "Live with parents".
Ms Shen disavowed any knowledge of the contents of that loan application on the basis that it was written by her agent (a client from her hair salon named "Betty") (T 659). Ms Shen then said (contrary to her earlier evidence that the application had been made without Mr Cong's assistance) that she had asked Mr Cong and that he had given her a company name which she provided to the agent (and that she did not know if the agent had used it). Ms Shen's evidence was that the agent (Betty) had filled in the net income details (base monthly net income of $4,605), which Ms Shen accepted were also incorrect.
Pausing here, the plaintiffs say that Ms Shen must have known that the name of the Chinese company had nothing to do with any legitimate enquiry Westpac might make in relation to the loan application. It is submitted that Ms Shen lied when she said in cross-examination that she did not know why the agent wanted the name of that company and that "if she told me she was going to use the false information I wouldn't agree"; and that Ms Shen also lied about how that loan application came to include the statement that her base monthly income (net) was $4,065. Suffice it at this stage to note that this was by no means the only document containing (on Ms Shen's own evidence) false information but which Ms Shen says was signed or submitted by her without knowledge of its contents. If Ms Shen's evidence is to be believed (and I find it hard to accept that someone so clearly concerned to protect her financial position would engage in this conduct), Ms Shen showed a remarkable tendency to sign business, company and financial documents with no concern whatsoever as to their contents (and without seeking or being given any explanation of those documents). I find that evidence inherently implausible when seen in the context of other matters (such as Ms Shen's ability to argue persuasively against Mr Cong's proposal that one of the properties be left unencumbered for the three elder children - as to which I say more in due course).
Ms Shen has deposed that the money for the deposit was either from her mother in China or from Mr Cong and that a further $400,000 was gifted to her by Mr Cong by way of transfer to the Westpac offset account set up in relation to the Wu Property and referred to above (see her affidavit affirmed 13 October 2017 at [47]; and her affidavit affirmed 22 June 2018 at [47], [51]).
Bank records show that the same day as the sum of $400,000 was deposited into the Westpac offset account, the same amount was withdrawn from Ms Shen's Westpac #9147 account and that amount had been deposited into the #9147 account on 13 January 2012.
The plaintiffs say that it is not in dispute (and Ms Shen's evidence supports this conclusion) that Mr Cong contributed at least $400,000 to the purchase of the Wu Property, and the plaintiffs submit that it can reasonably be inferred that Mr Cong contributed a further $90,250 (being the payment of the deposit). I deal with this in due course in relation to the resulting trust claims.
The plaintiffs track the source of the $400,000 from amounts deposited into two CBA accounts - an account ending #55242 and an account ending #3670; and say that the source of the deposits to those two accounts was: a direct deposit from KVB F/X Pty Ltd in China or Rongqiao Investments; and cash deposits or transfer from account #3670 and, for account #3570, primarily by transfer from account #5242.
The plaintiffs contend that Mr Cong further contributed $500,000 to discharge the mortgage. The mortgage was discharged on 31 December 2013 (the discharge of mortgage being registered on 15 January 2014). Ms Shen has deposed that Mr Cong gave her $500,000 on 9 December 2013 as a birthday gift. That amount was transferred from Mr Cong's ANZ account #23909 deposited to #3765 and transferred to the Westpac loan account to discharge the mortgage. (I interpose to note that there was a second mortgage taken out over this property in 2015, as to which, see below.)
As at July 2016, the first and second defendants say that the sum of $980,000 was owing on this property, with a credit of $31,606.15 in the Westpac offset account.
The Wu Property was used as Mr Cong's office from some point in time (a granny flat at the back of the property) and was the scene of various of the conversations that were deposed to in the evidence. It is now Ms Wu's home (see below).

[20]

Renovation of the Wu Property

In around August 2012, application was made by Ms Shen for approval for renovations to the Wu Property (see Ex L). The renovations included the building of what was referred to in the evidence as a "granny flat". In cross-examination, Ms Shen confirmed that a granny flat was built and that the main building was almost demolished (T 774.24-5). The relevant application was in Ms Stefadouros' handwriting. The complying development certificate was dated 8 March 2012, with final approval dated 12 September 2013. The work was carried out over 2012 and 2013.
Ms Shen could not recall the estimated cost of the renovations (see T 775). The estimated cost of works on the certifying authority application form for a complying development certificate (Ex L) was stated to be $24,000 to "erect extension and covered verandah to rear of existing dwelling". The council complying development application (also part of Ex L) specified the cost of the proposed development at $40,000 (describing this as an "[a]pproximately 59m self-contained 2 bedrooms, 2 bathrooms, with open kitchen cooking facility single storey flat". Ms Shen's evidence in cross-examination was that Mr Cong would have asked Ms Stefadouros to fill out the form (T 775) and Ms Shen said that her husband asked her to sign the application forms. Ms Shen said that all documents in English were done by Mr Cong (T 777).
Ms Shen's evidence was that the renovations were done step by step (T 776) and that the costs were bigger than she had thought. Ms Shen said that her budget for the renovations (a figure which rather seems to have been plucked out of the air, since there is no suggestion that it was based on any considered costings) was $300,000 and the final cost about $450,000 to $500,000 (T 734.35-7). However, Ms Shen said in cross-examination that she thought that the cost was roughly $300,000 (T 776.38).
In her affidavit affirmed 4 September 2020 (at [106]-[108]), Ms Shen deposed that family money on behalf of Ms Wu paid for the renovations; that Ms Wu provided her with the money; that the money was deposited into her mother's account by her brother (Mr Baoming Shen); and that she had no idea how the money came into that account.
Ms Shen deposed to a conversation with her brother, Mr Shen, in relation to the Wu Property (in about 2012) in which she says he agreed to lend the money (around $485,000) and that the money came out in individual payments which her brother arranged through a foreign currency exchange (T 737). Ms Shen said that sometimes if her mother needed money she took her to the bank to transfer cash (T 738). Ms Shen confirmed that the amount spent was $455,000 on renovations and furniture.
Ms Shen had included some receipts in relation to the renovation works. Asked about those receipts, Ms Shen said that when she moved house (a reference, I would assume, to the move to the Family Property), she did not know where they were put but then she had found a bundle of receipts and that she had put in her affidavit whatever was found. Then (displaying a knowledge of capital gains tax consistent with her being a commercially savvy property investor) Ms Shen added that, because it was not an investment property and they were "self living" there, even if they sold the property they would not have to pay tax - so she said that it was not a "big deal" to keep the receipts (T 735). Ms Shen then went on to say, in effect, that if she had lost them, it was inadvertent.
Ms Shen deposed in her affidavit evidence that, from April to May 2014, she received $300,000 from her mother for the building works. The building works themselves, however, seem to have been carried out in 2012/2013, which does not accord with the timing put forward by Ms Shen. At T 778, having been taken to the relevant documentation (Ex L) that demonstrates this inconsistency, Ms Shen pointed out that she did not in her affidavit say that all the money was used for renovation; and said that she had also purchased furniture and used money for that. At T 778.2-14, Ms Shen also said (seemingly, to explain her use of this money) that she needed to pay her debts and that she looked after her three young children (perhaps a slip, since as at August 2012 she had only one child and during the course of the building works she had her second child but the third was not born until 2014; or perhaps an error of translation - although there were only one or two errors in translation brought to my attention by Ms Shen's Mandarin speaking solicitor during the hearing and this was not one of them).
In any event, Ms Shen ultimately accepted (T 777) that the payments in 2014 did not relate "entirely" to renovation. It was suggested to Ms Shen, but she did not appear to accept, that deducting $300,000 (the amount Ms Shen deposed she had received in 2013/2014) from the sum of around $455,000 that Ms Shen says was expended on the renovation (and furniture) might mean that the amount used to renovate the property was $155,000 (not the larger figure that Ms Shen claimed) (T 778-T 779).
As to how the money was paid, Ms Shen said (T 780) that an agent gave a Chinese bank account number to Mr Shen and that cash deposits were made in China and received here locally via a currency exchange agency. Relevantly, Ms Shen did not recall borrowing from Ms Wu before July 2016 (the date of Mr Cong's death).
Ms Shen's brother (Mr Baoming Shen) recalled that Ms Shen had asked him for money for the Wu Property in early February 2012 (T 752). His evidence was that Ms Shen asked to borrow roughly $500,000 for renovations and that altogether he lent her until 2014 the sum of $450,000 in instalments; the money being deposited to the account of their mother (Ms Wu) (T 752). It was not clear why the money was said to have been deposited to Ms Wu's account rather than directly to Ms Shen. Moreover, Mr Shen said he had no idea how it was sent - he said that every time Ms Shen told him who to transfer it to and he just did what his sister told him (T 752). There were limits on the transfer of money out of China (US$50,000 per year) (T 753). Taken to an application for funds transfer, Mr Shen's evidence was that he had no idea about applications for the transfer of moneys overseas (T 758). Mr Shen's evidence was that it was Ms Shen who arranged how to get the money out of China - he said that she just gave him an account and told him how much to transfer and he did that.
Mr Shen had attached a number of bank statements to his affidavit (see Annexures A to C to his affidavit affirmed 4 September 2020). He said (extraordinarily in my opinion given that, on his evidence, the moneys were deposited in a number of instalments) that "I remember the figure [of around $400,000] in my heart" (T 754.10-12).
The conclusion to be drawn from the above is that moneys from Ms Wu were not used to pay for the building works at the Wu Property (as Ms Shen had deposed). Moreover, I cannot accept that the amounts received from Mr Shen, transferred via Ms Wu's account and listed at [108] of her affidavit affirmed 4 September 2020, accurately reflect the amounts expended for the building improvements. (Further, I would add that when one comes to consider the cost of improvements as, say, part of the resulting trust claims, on no view could the cost of acquiring household furniture form part of any such contribution - yet those amounts seem to have been included in what Ms Shen calculated as the renovation costs.)

[25]

2013 Will

On 6 December 2013, Mr Cong made a new Will (the 2013 Will). It was drafted by the same solicitor who had prepared the 2011 Will (Mr Steven Pirintji). Mr Pirintji's file note of his instructions from Mr Cong records Mr Cong's instructions to the effect that "I want to leave a piece of land $2 million to my 3 kids [which must have been a reference to the three older children, since at that stage Mr Cong and Ms Shen only had two children], possibly some cash too, a hundred thousand to one hundred and fifty thousand" (see T 931).
Mr Pirintji is a solicitor who, by the time of the hearing before me, had some 35 years in practice, including some experience in probate matters. His evidence was that his usual practice when it came to the execution by a client of his or her Will was to go through the Will and read it over clause by clause, and then to give the final draft to the client and leave the conference room to allow the client to review the document (see T 923). However, his recollection as to the 2013 Will was that he did not leave the room; that he went through the Will at some length sitting in the boardroom with Mr Cong, discussing and explaining the Will to him and that, to his observation, Mr Cong then read the Will himself. Mr Pirintji's evidence was that he spent at least half an hour on this occasion. Relevantly, Mr Pirintji said that Mr Cong's "new wife" or "young wife" was with him and possibly some children. (Pausing here, Mr Cong and Ms Shen were not married at the time of the December 2013 Will but they were in a de facto relationship and by then had two children, which is consistent with Mr Pirintji's recollection.)
In Mr Pirintji's affidavit he deposed that Mr Cong had approached a few times to discuss employment and supplier contracts prior to 2013 and that on 6 December 2013 Mr Cong gave detailed instructions about his Will. Mr Pirintji's evidence was that Mr Cong referred in English to concepts such as changing his will, past gifts (in one case "free of mortgage") and to appointing Ms Shen as an executor. Mr Pirintji deposed that Mr Cong gave him clear instructions about the new will and he seemed to know what he wanted. Mr Pirintji deposed that he and Mr Cong discussed Mr Cong's affairs generally at some length. His evidence was that Mr Cong had a Chinese accent but that his command of English was good. Mr Pirintji was not aware of Mr Cong having any difficulty reading or understanding the 2013 Will, and was never told by Mr Cong that he could not read or understand the 2013 Will.
Under the December 2013 Will, the three elder children were to be left 9 Ethel Street, Burwood, and a sum of $100,000 each (see T 929), and Ms Shen was to receive the residue, including the property at 2-4 Barnes Avenue, Earlwood.

[27]

Acquisition of 16 Nicholson Street, Burwood - January 2014

The property at 16 Nicholson Street, Burwood, was purchased pursuant to a contract for sale of land dated 7 December 2013 (i.e., a contract entered into the day after the December 2013 Will was executed). Settlement of the contract took place on 29 January 2014. The property was acquired in the names of Mr Cong and Ms Shen, as joint tenants. The purchase price was $1,722,500.
The deposit of $172,250 was paid by a cheque drawn on 10 December 2013 from Mr Cong's ANZ bank account ending #23909. The balance of the purchase price was funded by a loan of $1,160,000 in Mr Cong and Ms Shen's joint names from NAB/Homeside (via a joint NAB loan account ending #3349).
Ms Shen has deposed (in her affidavit affirmed 13 October 2017 at [48] and in her affidavit affirmed 22 June 2018 at [18]-[20]) that the property was acquired using "joint funds" including Mr Cong's portion of the funds he received from the sale of the Woolwich property and the joint loan from NAB.
The bank records in evidence show that on 6 December 2013, Mr Cong received a sum of $1,144,747.44 into his ANZ #23909 account; and on 9 December 2013, another $251,122.87 into that account. On 28 January 2014, the sum of $492,115.15 was withdrawn from Mr Cong's ANZ #23909 account; and a further sum of $25,000 was withdrawn from that account on 29 January 2014. On 30 January 2014, the sum of $271.90 was deposited into the ANZ #23909 account with the narrative "Interest 16 Nicholson".
The loan was refinanced with a loan from NAB on 9 May 2016 of $1.3 million - another joint NAB loan account. The mortgage was discharged on 12 January 2017 on the sale of the property. The property was sold for the sum of $2,470,000 to an unrelated third party, Jianying Investments, and the sale settled on 12 January 2017.
As at July 2016, the sum of $1,300,000 was owing on this property, with a credit of $37,235.02 in an offset account.
Pausing here, it is relevant to note that for some time before his death Mr Cong had expressed the testamentary intention that the property at 16 Nicholson Street would be left to his three elder children although, as noted above, his interest in the property as recorded on the title was a half share as joint tenant with Ms Shen.

[32]

2014 Will

Not long after his marriage to Ms Shen, Mr Cong executed another Will, this being the Will dated 19 August 2014 that Ms Shen now contends is the last true Will of the deceased and in respect of which she now seeks probate (the 2014 Will). The 2014 Will was executed in the presence of two solicitors (Ms Alicia Therese Chung and Mr Pirintji).
By cl 5 of the 2014 Will, Mr Cong gave, devised and bequeathed the whole of his estate to Ms Shen, Ms Stefadouros and Ms Lisa Wu on trust for sale and conversion into money, for the payment of his just debts, funeral and testamentary expenses, provided that the direction for sale and conversion was subject to the gifts provided by cll 5(c)-(d) of the 2014 Will.
By cl 5(c), Mr Cong left his three elder children "all and any interest that I have at the date of my death in the property at 16 Nicholson Street, Burwood, free of any mortgage", in equal shares as tenants in common, such property to be transferred when Teresa attained the age of 45 years and in the meantime that such interest and income should he held in trust for each of Teresa, Laurence and Edmund; and left "all and any interest that I have at the date of my death" in 2-4 Barnes Avenue Earlwood "free of any mortgage" to Ms Shen, with small legacies to Ms Stefadouros and Ms Lisa Wu and giving the residue to Ms Shen.
This Will omitted a gift of $100,000 (to vest at age 30 at the earliest - see cl 8) to each of the three elder children that had been made in the 2013 Will and substituted 16 Nicholson Street for 9 Ethel Street Burwood which had been provided to them in the 2013 Will. It also increased the age for transfer from age 40 to 45 years. 9 Ethel Street, Burwood was held in the sole name of Mr Cong.
I interpose to note that, as referred to above, the 16 Nicholson Street property was registered in the names of Mr Cong and Ms Shen as joint tenants. The initial version of the first and second defendants' cross-claim, ironically in circumstances where Ms Shen now propounds this as the last true Will of Mr Cong, alleged that, by reason of the deceased's failure to appreciate the nature and extent of his estate (including that the 16 Nicholson Street property was held in joint tenancy and not available to pass through his estate), the deceased did not have testamentary capacity at the time of making the 2014 Will and did not know and approve its contents and effect such that it was not his true Will.
Pausing here, the right of survivorship is an inherent and necessary incident of a joint tenancy, which cannot be defeated by a joint tenant attempting to leave his or her interest by Will - a provision to that effect in the Will is simply ineffective (Vagg v McPhee (2013) 85 NSWLR 154 at [27] per Tobias AJA (with whom I agreed); and see Brendan Edgeworth, Butt's Land Law (7th ed, 2017, Lawbook Company) at [6.90]). However, the right of survivorship can be defeated by a disposition by a joint tenant during his or her lifetime. Thus the gift under the 2014 Will of Mr Cong's interest in the property at 16 Nicholson Street could not have taken effect unless the joint tenancy was severed in Mr Cong's lifetime.
Mr Pirintji's evidence in relation to the 2014 Will was to the effect that Mr Cong came to him and gave him verbal instructions as to the amendments he wanted and that there was a brief conference in which he (Mr Pirintji) made handwritten amendments on a copy of the 2013 Will that he had printed out. Mr Pirintji said that he followed a similar practice to that which he had adopted for the 2013 Will but that the conference did not go for as long as it had with that Will.
Mr Pirintji's recollection was that Mr Cong was sitting across the table; that he asked Mr Cong specifically what changes he wanted to make and that, to his observation, Mr Cong read the 2013 Will and either pointed to clauses or told him what changes he wanted to make. Mr Pirintji's evidence was that Mr Cong explained the nature of the changes (clearly) and did not require "much input" from Mr Pirintji but did not specifically say why the changes were being made. Mr Pirintji said that the conference was for "maybe less than half an hour"; and there were just the two of them in the conference.
I note that the first and second defendants say that under the successive iterations of the Will, the elder children were to receive less of the estate, when considered on an arithmetical basis, having regard to the prices paid for the acquisition of the respective properties (i.e., from the 9 Ethel Street property, which was registered in Mr Cong's sole name, which was to be left to them in the 2013 Will; to Mr Cong's interest in the 16 Nicholson Street property, which was registered in both Mr Cong and Ms Shen's names, in the 2014 Will).
The first and second defendants have submitted that Mr Pirintji's dealings with Mr Cong involved comparatively simple transactions; and they suggest that Mr Cong could merely have read the names and numbers found in the straightforward wills that Mr Pirintji prepared. The plaintiffs say that none of this evidence suggests that Mr Cong concerned himself, merely, with comparatively simple matters or that he might have concerned himself, merely, with the names and numbers in the draft Wills; and that it is consistent with Mr Pirintji's evidence that Mr Cong provided detailed instructions and read the Wills in front of him.

[34]

Acquisition of 43 Amy Street, Campsie - October 2014

The property at 43 Amy Street, Campsie was purchased pursuant to a contract for sale of land dated 30 August 2014 (i.e., about two weeks after the 2014 Will was executed). Settlement took place on 13 October 2014. The property was purchased in the names of Mr Cong and Ms Shen, as joint tenants, with a purchase price of $985,000.
The deposit of $98,500 was paid by cheque drawn on the couple's joint NAB account ending #3146. The couple obtained a joint loan from Westpac for $700,000, setting up a Westpac offset account. The balance of $228,235.24 was drawn from a joint account (Westpac #3500).
Ms Shen deposed that on 9 October 2014 she transferred $300,000 from the joint account #3146 to the Westpac offset account #693500 and that on 13 October 2014 the sum of $228,235.46 was withdrawn from Westpac account #3500.
As at July 2016, the first and second defendants say that the sum of $699,112 was owing on this property, with a credit of $73,635.67 in an offset account.
I note that the plaintiffs point to Ms Shen's affidavit evidence in relation to the acquisition of this property as showing her "single-minded determination" (and as being inconsistent with Ms Shen "blindly following" Mr Cong's wishes - c.f., particular (k) to the allegation at [145] of the pleaded defence that Ms Shen was accustomed to act in accordance with Mr Cong's wishes). That is because Ms Shen's affidavit evidence is that when she first wished to buy the property at 43 Amy Street, Campsie, Mr Cong said "no" but that she subsequently went and bid on the property (and then asked him to help her obtain a loan for the purchase price).
In cross-examination, Ms Shen said (for the first time) that she had spoken with Mr Cong about the acquisition of 43 Amy Street, Campsie before the auction - at a time when she says her husband was in hospital and that Mr Cong consented to the purchase. Ms Shen said that she needed Mr Cong's assistance to obtain a loan from the bank (T 612) (though this of itself does not point to whether he agreed to the purchase prior to or after the auction).
The property at 43 Amy Street, Campsie was sold in 2017, after Mr Cong's death, pursuant to the terms of a contract for sale of land entered into by Mr Cong and Ms Shen (prior to his death) for the sum of $1,375,000. As I refer to below, Ms Shen unsuccessfully attempted to rescind the contract for sale of this property after Mr Cong's death.
For completeness, I note that the mortgage over this property was discharged on 17 July 2017 with payment of the sum of $707,717.28. On 18 July 2017, the sum of $578,812.21 was received into Ms Shen's #1738 account and on 19 July 2017, a further $121,000 was received into that account from the sale of 43 Amy Street.

[36]

Acquisition of 56 Duke Street, Campsie - May 2015

The property at 56 Duke Street, Campsie was purchased pursuant to a contract for sale of land dated 28 March 2015, under which the purchaser was named as Mr Cong and Ms Shen. However, the property was registered in Ms Shen's name alone. Ms Shen has deposed to a conversation with Mr Cong in which she says that he said he was afraid that his ex-wife (Ms Joyce) would try to "get a piece" of the property.
Cross-examined as to this, there was the following exchange with Ms Shen (at T 626): Q. You, yourself, did not want Anastasia Joyce to have any piece of the properties that were being bought, correct? A. INTERPRETER: I don't understand your question. My husband told me she had already got whatever she was entitled to. How come she would like to share the properties with me? I quite don't understand what you mean. Q. Your husband said to you that he was afraid that Ms Joyce would try and get a piece of the properties, didn't he? A. INTERPRETER: Yes, because he had a concern that after he passed away it would occur because, at that time, doctor said his condition was not well, so that's why he said that, and also he did what he said. Q. And you went along with his concern, didn't you? A. INTERPRETER: Mm. I don't understand till today that why she's entitled to get something. She, she didn't get anything because she had already got what she was entitled to, so I don't understand that why she wanted to get something from my husband and I property.
Mr Cong signed a statutory declaration on 16 April 2015 directing that the sole purchaser was to be Ms Shen.
Settlement took place on 11 May 2015. The purchase price was $996,000. The deposit of $99,600 was drawn from the joint NAB account (ending #3146) of Mr Cong and Ms Shen. The balance of the purchase price came from: an ANZ loan in the name of Ms Shen in the sum of $700,000 and $238,236.84 from Ms Shen's ANZ account ending #13004.
Ms Shen has deposed that on 4 May 2015 the sum of $260,000 was withdrawn from the joint NAB account #3146; that same day $260,000 was deposited into Ms Shen's ANZ #13004 account and the sum of $232,236.84 was withdrawn from that account.
The plaintiffs submit that it can reasonably be inferred that the sum of $238,236.84 in joint funds was used in the purchase.
As at July 2016, the first and second defendants say that the sum of $700,000 was owing on this property, with a credit of $56,232.22 in an offset account. The mortgage was discharged on the sale of the property in 2019 with the sum of $673.862.64 received.

[37]

Acquisition of 58 Duke Street, Campsie - May 2015

The property at 58 Duke Street, Campsie was purchased pursuant to a contract for sale of land dated 28 April 2015 in Ms Shen's sole name. Settlement took place on 25 May 2015. The purchase price was $1,100,000. The deposit of $110,000 was drawn from the joint NAB account of Mr Cong and Ms Shen (ending #3146). (Ms Shen says in her affidavit that it is the 16 Nicholson offset account, but that account is not mentioned in her affidavit affirmed 22 June 2018 at [15]ff setting out the details of the acquisition of 16 Nicholson St, nor does it appear in the associated documents.) The property was registered in Ms Shen's name alone.
The balance of the purchase price was paid by a loan of $700,000 from ANZ in the name of Ms Shen (account #5853) and the sum of $337,448.47 drawn from funds obtained through the refinance of the Wu Property (the ANZ loan).
Ms Shen has deposed that she drew a personal cheque in the sum of $110,000 to pay the deposit (from the 16 Nicholson Street offset account).
The plaintiffs submit that it can reasonably be inferred that the $337,448.47 in funds drawn from the re-mortgage of the Wu Property (in which it is said that Mr Cong had a beneficial interest) was used in the purchase.
As at July 2016, the first and second defendants say that the sum of $700,000 was owing on this property, with a credit of $66,068.74 in an offset account.
The mortgage over this property was discharged on 2 July 2019 on the sale of the property (the purchase price under the contract for sale dated 21 May 2019 was $980,000). The sum of 672,441.64 was received into Ms Shen's ANZ account ending #5853 on 2 July 2019.
It was put to Ms Shen in cross-examination (see T 823) that, from the time of the acquisition of the Duke Street properties, she and Mr Cong agreed to put them in her name so as to avoid any claim on the properties by Ms Joyce. Ms Shen's response (T 823.39-42) was that, at that time, Mr Cong was sick and that is why he told her that he did not want to keep the title in his name "because after he passed away it may bring more trouble to me, probably from his ex-wife" and that that was why after the auction (here clearly referring to 56 Duke Street) "he removed his name out". However, when it was put to Ms Shen that at least from that point he put the properties into her name to avoid trouble from his ex-wife, Ms Shen said that he did not say that and that "he [Mr Cong] just told me, 'Have the property in your, in your name and in the future just bring up the, the, the children and have a good life" (T 823.46-8).

[39]

Mr Cong's testamentary intentions

There is no doubt that, in the period from November 2013 to his death in July 2016, Mr Cong gave considerable thought to his testamentary dispositions. He made three Wills in that period (the 2013 Will, the 2014 Will and the 2016 Will), the first two in a simpler format and drafted by Mr Pirintji; the third drafted by Mr Glynn and executed in the manner to which I will turn shortly. Moreover, there is ample evidence that Mr Cong wished to make provision for all of his children (and, of course, his wife, Ms Shen); not least being the provisions of each of those Wills and his conversations with Mr Pirintji and Mr Glynn, as well as the evidence of Pastor Yip and Ms Dan Wang, to which I refer in due course, as to Mr Cong's fondness for all of his children (albeit that there is also evidence that he had expressed some disappointment at issues such as Laurence's drug and alcohol abuse and that his elder children did not wish to continue on from him to carry on his business).
Mr Glynn (the solicitor who had acted for Ms Joyce in connection with the Binding Financial Agreement in 2006 and for Mr Cong over many years including as far back as the 1990's or early 2000's) has deposed (in his affidavit sworn 18 May 2020 at [21]) that between late 2015 and 3 June 2016, he had two or three conferences with Mr Cong for the purpose of obtaining his instructions about the contents of the documents subsequently executed on 3 June 2016 (the 2016 Will and Deed) and that Ms Shen was present at each of these meetings except one meeting (the 23 April 2016 meeting that he had with Mr Cong at a café at Randwick and which he had asked Mr Cong to attend alone). (I refer in due course to those meetings, the chronology of which was clarified in his cross-examination. Of great assistance in determining the course of events and the instructions that were given was Mr Glynn's original file, which was produced in the course of the hearing.)
Ms Stefadouros has deposed that, in mid-2015, Mr Cong had a conversation with her at the Earlwood office of Jolly Trading in which he said that "I feel like I am going to die soon. So I would like to have a will. You know, Vian, to make sure Amy and kids are looked after" (see Ms Stefadouros' affidavit sworn 22 June 2018 at [54]-[55]). That is consistent with Ms Shen's evidence that she knew Mr Cong was going to make a new Will (T 567), although Ms Shen puts this awareness as being in January or February 2016 (not mid-June 2015).

[41]

First meeting with Mr Glynn regarding Will - 30 June 2015

The first of the meetings with Mr Glynn at which Mr Cong's testamentary intentions were discussed was, as foreshadowed in Mr Glynn's 26 June 2015 file note, held on 30 June 2015. It took place in Mr Glynn's office in King Street, Sydney; and Mr Glynn's evidence was that Ms Shen was present at that meeting as well as Mr Cong. Ms Shen, however, says that she first met Mr Glynn at the Wu Property in the office (T 639), which must be a reference to the second, 17 February 2016, meeting (at which meeting she says that she was not there the whole time).
Mr Glynn's file note of the conference is in evidence (see Ex 6) and I extract it below. It records that Ms Shen was in attendance at the meeting and I would place weight on this over Ms Shen's recollection of events (not least because of the inaccuracies in her evidence to which I refer when assessing her credit in due course).
In his affidavit sworn 12 May 2020 (at [22]), Mr Glynn deposes that, at the meeting, Ms Shen nodded her agreement or said "yes" from time to time (which he took to signify her assent) and that Ms Shen did not raise any objection to what Mr Cong said. In his affidavit (at [22]-[23]), Mr Glynn also deposes that at the first conference he and Mr Cong had a conversation to the following effect (though this is not recorded in his file note): Zi Li: I want to provide for my young children. Glynn: You have an obligation to provide for all your children.
Mr Glynn's file note records: 306/6/15 meeting Zilli Amy Bruce leon Payout - Term life - $1,215,506 David Feb 11 - St George Hospital maybe a few month before bladder removed. bladder stone - check - no problems Cancer - 2013 - Nov 11/11/13 Randwick Prince of Wales - Bowl [sic] cancer Operation RPA - removed front of bowl [sic] - now moved to liver removed [?] - Aug 14: + now moved to bladder lymph nodes - taking chemo treatment
Pausing here, while I accept that it is always possible that a solicitor may mis-record or misunderstand instructions given in a conference with a client, I regard contemporaneous file notes of this kind as the most objective record of what was discussed in the relevant meetings and as likely to be more reliable than the recollection, years after the event, of those who were present at the meeting and who have a personal interest in the outcome of the proceeding.

[43]

Second meeting with Mr Glynn regarding 2016 Will - 3 August 2015

The second meeting with Mr Glynn in relation to Mr Cong's Will occurred on 3 August 2015. Although Mr Glynn's recollection (as noted above) is that Ms Shen was in attendance at all the meetings except the Randwick café meeting, Ms Shen is not recorded as being in attendance at the meeting which took place on 3 August 2015. Mr Glynn's handwritten note of that meeting is, relevantly, as follows: Meeting/ Zili Cong 3/8/15 Medibank. Feb commenced 2011 2011 … Will: w. - 100% children - 16 Nicholson St Burwood - loan $nil C.T with joint names - Value $2m Sole name property - Earlwood - $1.5m 9 Ethel St Burwood unit - $3m 224 Earlwood 3 child adult plus $100k each Earlwood: NSW [In handwriting to the bottom left of the first page of the note, that Mr Glynn says is not his handwriting, there appear the words "2-4 BARNE AVE"] [On the second page of the note there appear the following words] Campsie - 43 Amy St, Campsie
Mr Glynn in cross-examination accepted that there was no reference to the rezoning of properties in this note but his recollection was that very early in the discussions (and he thought it could have been 3 August 2015) there was a general discussion of rezoning (see T 456). Further, Mr Glynn did not agree that the rezoning discussion was at all times limited to the Campsie properties - he said that he thought there was a general discussion and then a particular discussion about Campsie at a later date (see T 464). Mr Glynn also did not accept that the conversation as to rezoning in the 3 August meeting related only to the property at 43 Amy Street, Campsie; his recollection was that there was another property in Amy Street (see T 464) (as indeed there was). Again, it is relevant to note that there is no reference in the file note to the issue of rezoning - which suggests to me that any discussion on this occasion was perceived by Mr Glynn to be a general discussion and not immediately relevant to the drafting of the Will (which would be consistent with the fact that at this stage Mr Cong's intention seems to have been for the 16 Nicholson Street property to be the subject of the elder children's inheritance).
Mr Glynn's recollection was that the sheepskin business (run through Jolly Trading) was raised only at the 30 June meeting and not the 3 August meeting (T 464). That is consistent with the above file notes.
There is also in evidence a separate (undated) file note of Mr Glynn (referred to as pages 8-9 of Mr Glynn's file - see T 466). In cross-examination, Mr Glynn indicated that he could not recall the occurrence giving rise to these particular notes, which read: report - Dr - 16 Nicholson St Burwood Will - Amy ) TPG [i.e., Mr Glynn] ) Trustees Beneficiaries: children Edmond [sic] Theresa [sic] - 24 Laurence - 22 16 Nicholson St Burwood 6 children $100k each child - 35 years or married Prop: sale of Hunters Hill sold 3 years ago $2-3m - this is the estate for 3 children P/A - Amy Yanjiao Shen [with an arrow pointing from 16 Nicholson St, Burwood to P/A] Guardianship - Amy - David Shu Cong 3 Living Will - Yes Amy; Vivian Stefadours [sic] Home: xxxxx [the Wu Property] Campsie NSW [with an arrow to the reference to 16 Nicholson St below] 2/4 Barnes St Earlwood 2206 - will be sold 16 Nicholson St Burwood new home
The plaintiffs say (and I accept) that the above file notes (and see also [22] of Mr Glynn's affidavit sworn 12 May 2020) suggest that Mr Cong's intention at this stage was that the three elder children were to receive the 16 Nicholson Street property (or, I would interpose to note, strictly speaking Mr Cong's half share of that property - had the joint tenancy been severed during his lifetime) and $100,000 each. The reference in the note to the Hunters Hill property seems most likely to be a reference to the property at Woolwich.
As to the timing of this file note, Mr Glynn was unable to determine the timing by reference to his file (since his file had been pulled apart and photocopied on a number of occasions - see T 467). However, the reference to a report from the doctor seems to place the note as being after 20 July 2015 and the text of the note (which contains more detailed information as to Mr Cong's children, the trustees to be appointed and the properties) suggests to me that it was a note made after the 30 August 2015 meeting (and perhaps by Mr Glynn in the course of preparation of draft documents). In any event, it appears that it was certainly before the later meetings in 2016 because it refers to the "Barnes Street Earlwood" property with the words "will be sold", and the sale of that property occurred in September 2015 (see below).
Mr Glynn's recollection in the witness box was that he had discussed with Mr Cong the value of the properties and that the insurance payout would service the debts (see T 488) but he cannot recall at which meeting this was. Nevertheless, he was firm in his recollection that he did discuss with Mr Cong his debts and his ability to repay the debts through the insurance or superannuation (see T 489-T 490). Mr Glynn says that that conversation took place "around the binding nomination", i.e., during discussion as to Mr Cong's superannuation or his life insurance that would service the debt. (Pausing here, the 27 April 2016 note - see below - refers to a binding nomination and superannuation of around $60,000 but not to life insurance; whereas the file note of 30 June 2015 records the life insurance "payout" of $1,215,596.)

[44]

Entry into contract to purchase the Family Property - September 2015

On 5 September 2015, Ms Shen entered into a contract in her name for the acquisition of a property at the Family Property (see the details of the acquisition below). The evidence, to which I will refer in due course, is that Mr Cong was excited by the prospect of moving to the "big mansion" and told Edmund that he did not want to die in Campsie (an audio recording of that conversation being played in the course of the hearing). There is no doubt that Mr Cong saw this property as being the family home for Ms Shen and their three children. It was Ms Shen's evidence that the Barnes Avenue and Ethel Street properties were being sold in effect to fund that acquisition (and that an extended completion date was sought because of delay in the sale of those two properties).
As to the extended completion date, Ms Shen accepted that she attended a conference with Mr Cong and the real estate agent (Mr Iskander) in relation to the proposed acquisition of the Family Property. However, Ms Shen's evidence was that she was not interested in the conversation (even though it related to the property that she was keen to purchase). Ms Shen said that she was only interested in the price but that they did not mention that in the conversation (which suggests to me that she must have been paying attention to the conversation at least to the extent that she was able to say that there was no reference to the price). At this meeting, Mr Cong sought a six month completion period for the the Family Property contract. Ms Shen (implausibly) was dismissive of the proposition that to her this was an important conversation - saying that "whether it's agreed or not [the six month completion period], it depends on the vendor" and that "[i]f I can get it, I can get it. If I can't get this one, I can wait for the next one" (T 641.22-3; T 642.5-6). Pausing here, this is one of a number of conversations to which Ms Shen says she did not pay attention or in which she says she was not interested. I have difficulty accepting that Ms Shen was so disinterested as she professed to be in matters that would affect her personal financial situation (for reasons I discuss in due course).

[53]

Advice sought as to withdrawal from sale of 43 Amy Street, Campsie

By email on 19 January 2016, sent in Mr Cong's name, Mr Glynn was asked to "investigate the matter of withdrawal of Contract" for the 43 Amy Street Campsie property (Ex 6 at 13). Mr Glynn's recollection in the witness box was that the first enquiry as to withdrawal from the contract for the sale of 43 Amy Street came on a telephone call when he was driving somewhere, and Mr Cong told him that he had just been told about the rezoning.
The email referred to the conveyancer (Nian Ci Cao at Nian Ci & Associates), and requested information as to who was the director of the purchaser company, and stated that "[i]f this issue is legally impossible let me know so I can not take it further".
It is clear from this that, by 19 January 2016, Mr Cong was looking to withdraw from the sale of 43 Amy Street Campsie. That is consistent with him having become aware of the possibility that the Campsie properties might be rezoned. Both Edmund and Teresa gave evidence as to the reaction of Mr Cong and Ms Shen to the proposed rezoning (namely, that this was terrible news and that they would lose a lot of money) (T 191.10-26; T 196.25-8). Mr Allen's understanding (though he could not recall whether it came from Ms Shen directly or from Ms Stefadouros or Mr Glynn) was that Ms Shen felt that she had almost been tricked or cheated into entering into the contract for sale of the 43 Amy Street property (i.e., that she had done so without knowing its potential increased value) (T 509).
Mr Glynn responded on 21 January 2016 with details of the purchaser and brief (albeit incorrect) advice as to the right to terminate the contract if certain events occurred before the 6 month completion date, namely that "… if before the 6 month completion date … you pass away … you are entitled to terminate the Contract" (Ex 6 at 14).
The advice was clearly incorrect insofar as it suggested that there would be a right on the part of the vendor to terminate if Mr Cong were to die before completion whereas the right of termination in those circumstances was only exercisable by the purchaser. Clause 31.1 of the contract for sale of land (in the Law Society Standard form contract) (see Ex 39) was to the effect, as noted above, that if either party dies then the other party may by notice rescind the agreement.
Teresa's evidence was that when Ms Shen learnt of the potential rezoning of 43 Amy Street Ms Shen told Teresa that "we've missed out on millions. We have to fight the sale" (T 196.25-8). That evidence is quite plausible in my opinion.

[55]

9 February 2016 email forwarding draft testamentary documents

On 9 February 2016, Mr Glynn sent an email to Mr Cong attaching a number of documents (including two alternative Will templates, in which the first and second defendants say he had done little but fill in the names, and template Power of Attorney/Guardianship documents), and stating: Dear Zi Li, as discussed, attached are drafts of the documents we do need to talk about next week. Things for you to consider for you: ● Appointment of Amy and someone else as trustee, guardian and power of attorney; ● Establishing a trust so that all of your children have a right to assets and cash as they need it and to a time when those children on reaching a certain age are entitlement to have the asset and/or cash for themselves. ● Consideration that you need to leave Amy with enough money/ assets so she can maintain herself and her and your young children. When you have the time please call me to discuss and to make a time for me to either come to see you or you come into the city next week.
It is to be noted that there is no reference in this email to any deed or agreement between Mr Cong and Ms Shen.
The first and second defendants note that one of the alternative Will templates emailed to Mr Cong on 9 February 2016 by Mr Glynn included a form of cl 7, with the identification of the asset or entity left blank; that Mr Glynn did not give any evidence that he ever explained this clause to Mr Cong, or read it to him; and that it was never translated into Chinese. It is noted that Mr Glynn's oral evidence as to cl 7 (see T 482) was that it appeared to be a standard form clause on his set of precedents at the time; that he did not recall a discussion with Mr Cong at the time as to how to complete it but that subsequently there was although he could not recall when.
Ms Stefadouros' evidence is that she printed and handed the email to Mr Cong; and that she "skimmed" through the attachments and told Mr Cong that "the properties have not been mentioned" and that "[i]t's all legal terms and I don't understand a lot of it". Ms Stefadouros was adamant that she did not tell Ms Shen about the draft Will or its contents (see below), as was Ms Shen, whose evidence was that she never saw the emails and that Ms Stefadouros never told her (see T 575).
Ms Shen's evidence was that she never had a copy of the Will and that the first time that she saw the document was after the present proceeding commenced and her solicitor showed it to her (T 567-T 568). Ms Shen's evidence is that Mr Cong told her (though she did not say when, just that it was "before") what was in the Will (T 570); that she did not want to know what was in it because Mr Cong had told her and that she could not read or understand it. Ms Shen said that a Chinese lawyer "maybe" in September 2017 explained it (T 570) and that it was "totally different" to what her husband had told her (T 571). (Ms Shen's evidence as to her disinterest in the 2016 Will is inherently implausible for reasons that I discuss in due course; and the implicit suggestion that Mr Cong in some way tricked her into signing the Deed is also not credible.)
On 15 February 2016, Mr Glynn sent an email to the sheepproducts@hotmail address with an estimate of his fees and suggesting a meeting with Mr Cong and Ms Shen.

[56]

Ms Stefadouros' evidence as to conversations with Mr Cong

Ms Stefadouros accepted that Mr Cong could understand the discussions with Mr Glynn and says she was never asked for clarification but that Mr Cong needed her assistance to read correspondence being sent by email but not conversations of this kind (T 970).
Ms Stefadouros said that she was not aware until after Mr Cong's death (and that Mr Cong did not tell her) about the 2014, 2013 and 2011 Wills (T 970). Ms Stefadouros said that she arranged the meeting in mid-June 2015 between Mr Cong and Mr Glynn but said it was 'none of her business' to attend. However, in 2016, Ms Stefadouros said that she wanted to help because Mr Cong could not read any English (c.f., Mr Pirintji's evidence) (T 971).
Ms Stefadouros accepted that she read the documents sent by Mr Glynn but did not accept that she read them carefully and said (in a constant refrain) that she could not explain "something that I didn't understand myself" (T 972).
In her affidavit sworn 22 June 2018 at [65], Ms Stefadouros said that she looked through and saw that the properties had not been mentioned. It was put to her that she must have had a discussion before 9 February 2016. Ms Stefadouros said that before 9 February, Mr Cong spoke to her about 43 Amy Street, 56 and 58 Duke Street, the Family Property, 16 Nicholson Street and 2 Duff Street (T 973-T 974); and that there were a few conversations before 9 February 2016 in which Mr Cong told her about the properties and the Will (she cannot remember exactly how often) (T 974). Ms Stefadouros said that Mr Cong discussed his wish for the three older children to get 16 Nicholson Street (T 975). Ms Stefadouros was "absolutely certain" that Ms Shen was not present during any of these conversations.
Ms Stefadouros said there were many conversations with Mr Cong - almost every day; and that (T 976) Mr Cong spoke about this topic once a week perhaps after February 2016. She said that the conversations started late 2015 and prior to 9 February 2016, there were probably not that many conversations (T 977). Ms Stefadouros said that Mr Cong was only specific about 16 Nicholson Street because he wanted that property to go to the three older children "after 10 years" (T 976.30-1). As to Ms Shen, she said "[w]ell all the other properties were going to her regardless". Ms Stefadouros said that she assisted Mr Cong to understand the Will that Mr Glynn sent to her (T 989).
It is to be noted that there was no reference in Ms Stefadouros' affidavit to conversations with Mr Cong in the period between 9 February 2016 and 17 February 2016 as to his testamentary intentions.

[57]

Third meeting with Mr Glynn regarding 2016 Will - 17 February 2016

The third meeting at which Mr Cong's testamentary intentions were discussed with Mr Glynn was a meeting on 17 February 2016 at Mr Cong and Ms Shen's then home at the Wu Property (in the office at the back of the house). This was a significant meeting for reasons that I will explain shortly.
There was on Mr Glynn's file a copy of a cabcharge tax invoice for the taxi fare to the Wu Property on 17 February 2016 and Mr Glynn gave an account of his journey to the house (which stood out in his memory because he was unfamiliar with the suburb and had gone to the wrong train station - Burwood - and had caught a taxi from a hotel near the station on what he recalled was a very hot day. Mr Glynn subsequently sent a fee invoice in which the narration read: WILL, POWER OF ATTORNEY, GUARDIANSHIP AND TESTAMENTARY WISHES To receiving your instructions, discussions with you and meeting on 17 February 2016, perusing correspondence concerning the sale of 43 Amy Street, Campsie, preparing draft Will, Power of Attorney and Guardianship and Testamentary Wishes
As to the meeting on 17 February 2016, Mr Glynn has deposed in his 13 October 2020 affidavit (at [6]-[9]) that he attended the meeting at the Wu Property with Mr Cong to obtain instructions from him about the 2016 Will; that it was the first and only time he attended upon Mr Cong at Campsie; that he arrived late to that meeting; and that there were other people present (Ms Shen, Ms Wu, Ms Stefadouros, one of Mr Cong's elder sons and another lady of Asian appearance whose name he did not know but who he believed might have been employed as a nanny). Mr Glynn has deposed that Mr Cong conducted the meeting; that Ms Stefadouros participated in the conversation that arose about the council in relation to the Campsie properties; and that, at that meeting Ms Shen, Mr Cong and Ms Wu spoke to one another in Chinese. Mr Glynn's recollection was that Ms Shen was present for the whole of the meeting, which lasted about an hour. Ms Shen's evidence, supported by that of Ms Stefadouros, is that she was not present for the whole of the meeting.
Mr Glynn's handwritten note of the meeting (Ex P at 88-89) recorded as follows: Campsie: Guardianship - Amy Power of Attorney: Amy/Vivian Will - Amy - Trustee and Vivian Beneficiarys [sic] - Amy: 70% 3 children 30% 3 adult children have some money 5-10 years / * Any money paid in their life they are to account for it Amy life estate: Property some in Amy's name ppty xxx [the Wu Property]: Amy 43 Amy: Zi & Amy 56-58 Duke Campsie: Amy Xxx [the Family Property] Amy Purchase $3m - 16 Nicholson st Zi/Amy 2 Duff Burwood Amy Super - $60k: Binding Amy - children Insurance $1.2m - Beneficiary " " Sheepskin $1m Agreement Amy/Zi Li 3 adult children: 10 years - 16 Nicholson - or similar ppty [property] Value at this time Value: $1m each plus: Trust - 3 adult children - Amy - 3 minor children
Edmund's evidence is that he was not at this meeting; so it would appear that, if one of Mr Cong's elder sons was there, it must have been Laurence.
Relevantly, Mr Glynn's recollection was that there was no consensus at that meeting on an agreement between Mr Cong and Ms Shen (see T 475) and that the meeting was for discussion purposes (he did not recall leaving the meeting with an agreement "as set in terms") (T 481). Mr Glynn's recollection was that Ms Shen spoke at the meeting but not to him (T 481) (and the fact that he has a genuine recollection of the meeting rings true given his comment that he considered it rude that he was not introduced to the other women at the meeting).
As to the reference in the note to a trust, Mr Glynn's recollection was that it was to be a trust for all the children and for Ms Shen. By this stage, there was understandably no reference to the Barnes Avenue and Ethel Street properties (which had been sold in order to provide funds for the proposed acquisition of the the Family Property); and it is also relevant to note that this file note (unlike the Deed as executed) accurately records the names in which the respective properties were registered. The file note makes reference to a binding nomination in favour of Ms Shen and (presumably, their) children in relation to superannuation and insurance (not ultimately put into effect); and it contemplates that the property at 16 Nicholson Street (to be the subject of provision for the three elder children) might be substituted by a similar property and that the three children would obtain $1 million each (albeit in 10 years).
This file note is the first reference in Mr Glynn's file notes to an "agreement" as such ("Agreement Amy/Zi Li 3 adult children"), as opposed to a Will, power of attorney or guardianship document; and, as the first and second defendants point out, it is not clear from the file note whose idea it was that there be an agreement. However, the subsequent 15 March 2016 email from Ms Stefadouros on behalf of Mr Cong seems to respond to the suggestion of an agreement by setting out a "rough draft" of "Zi Li/Amy's agreement" (see below).

[58]

Ms Stefadouros' recollection of the meeting

Ms Stefadouros deposed to the meeting that Mr Glynn attended with Mr Cong, Ms Shen, Ms Wu and herself; and that, at that conference, she remembered that Mr Cong and Ms Shen had a disagreement speaking in Mandarin. Ms Stefadouros deposed (see at [75]-[80] of her affidavit sworn 22 June 2018) that she did not understand the words but that there were heated exchanges. This was obviously a reference to the meeting at Campsie on 17 February 2016. Ms Stefadouros' recollection was that Mr Cong and Ms Shen had a number of heated exchanges at the meeting (though she could not recall how many; and then said she could not remember if there was more than one). Ms Stefadouros could not remember the time that the meeting started, although she recalled that she left the meeting at about 4pm to pick up her children (see her affidavit sworn 22 June 2018 at [80]). In the witness box, Ms Stefadouros could not recall exactly how long she was present at the meeting (T 953).
Ms Stefadouros said that she could not recall the discussions; just that they were about the Will and Mr Cong's wishes for the Will and "about the properties and that sort of thing" (T 954). In her affidavit, Ms Stefadouros had deposed at [78] to Mr Glynn saying that he did not know why Ms Shen was so upset since everything was under her name and she did not have to give the three older children anything. (I interpose to note that this seems a surprising comment by a solicitor to make about a client to someone not his or her client - and it is inconsistent with what Mr Glynn noted as to his instructions at that meeting. It is also seemingly inconsistent with Ms Shen's evidence that her discussion with Mr Cong about 16 Nicholson Street was before or after, but not at, the meeting itself. However, Ms Stefadouros was adamant in the witness box that the words she had attributed to Mr Glynn were said by him, saying that the words stood out to her.)
Ms Stefadouros did not recall anything being said at the meeting about Ms Shen being a guardian or any discussion about a power of attorney or Ms Shen being a trustee; and she did not recall discussion at the meeting about guardianship. Nor did she recall discussion about an agreement (seemingly inconsistent with her later email in May 2016 querying Mr Glynn's fee note).
Ms Stefadouros agreed that there was discussion about the children having to account for some money they might receive under the Will (T 955) and that the children would receive something from the estate in the Will.
Ms Stefadouros said that they talked about the different properties; that 43 Amy Street was mentioned, and that Mr Cong wanted 16 Nicholson Street to go to the three older children and be held for 10 years because the property would have gone up in value (T 955). Ms Stefadouros said that there was discussion about the children getting a million each (i.e., 3 million). At T 956, Ms Stefadouros suggested that Nicholson Street was Mr Cong's "comparison" of the 3 million. Ms Stefadouros also said that she had a distinct recollection that the children were each to receive $10,000 a year (T 957).
At T 957 (c.f., later at T 965), Ms Stefadouros said that she was clear in her mind that 16 Nicholson Street was discussed, as was the $10,000 a year for the children; and that there was talk about 43 Amy Street and that they (or perhaps Mr Cong) did not want to sell. Ms Stefadouros also recalled a discussion about who owned the properties.
Ms Stefadouros could not recall exactly how much had been paid for 16 Nicholson Street (commenting that there were so many properties) but said she knew at the time the approximate purchase price of the properties (by seeing emails from the solicitor addressed to Mr Cong). Ms Stefadouros said that she read everything that came through (adding in what I considered to be a tone of surprise that she was the office assistant) (T 958).
Ms Stefadouros accepted that there was some discussion at the meeting about superannuation and a figure of $60,000 or so was mentioned and her evidence was that Mr Cong said that that was to go to Ms Shen.
Ms Stefadouros said (T 960) that Ms Shen was "in and out" of the meting and that Ms Shen did not sit down to have a conversation. At T 960, she accepted that the reference in her affidavit to "I was present during the conference" meant "throughout the conference" (my emphasis) and that she had there deposed "as were Lisa Wu and Amy Shen". However, in the witness box, Ms Stefadouros was insistent that Ms Shen was only there for part of the meeting not the whole time; and that she went in and out between one and five times ("many times") (T 961).
Ms Stefadouros said that she could not be specific as to whether there was conversation in relation to superannuation when Ms Shen was present. She nevertheless reiterated that she had a distinct recollection of $60,000 being discussed - just not whether Ms Shen was there then although she might have been (T 962). Ms Stefadouros could not recall if there was discussion of the insurance of $1.2 million and said that there was no discussion about the sheepskin business.
Ms Stefadouros agreed that there was some discussion about an agreement but says that it was that Ms Shen "was to look after the properties [note the plural here] to maintain them". Ms Stefadouros did not recall the specifics and does not recall the word "agreement" used. Her evidence was that Ms Shen would give each of the children $10,000 cash to help them along the way for 10 years (T 963). Ms Stefadouros did not remember discussion about a trust (T 964).
Ms Stefadouros said that Ms Shen communicated with Mr Cong in Mandarin and that there was nothing said to Mr Glynn "or to us" (T 964). Interestingly, Ms Stefadouros then said that "I rarely spoke to Ms Shen at the time".

[59]

Ms Shen's recollection of the meeting

Ms Shen's evidence was that she was only present at the meeting from time to time (for about 15 minutes on one or two occasions - see T 687-T 688) and her evidence variously was that, at the meeting, she only heard "some name", "probably properties" and nothing else (T 687); and ultimately that the only word she understood in English at the meeting was her name (Amy) (T 694). Ms Shen said that she was there for 15 minutes then left the room and later returned. Ms Shen observed that Ms Lisa Wu was there working; and she said that Mr Cong and Mr Glynn were talking (T 689). Ms Shen accepted that she knew the words "agreement" and "Will" in English and said that she did not hear those words said at the meeting (T 689).
Ms Shen says that after the meeting Mr Cong said to her in Mandarin that it was "just family agreement" (T 689). Ms Shen agreed that Mr Cong said that he was going to do his last Will but says that she only knew that he proposed to leave 16 Nicholson Street to the three elder children (T 694). Ms Shen was adamant that later, "after everyone is gone, everyone has left and during his night time", Mr Cong told her that it was always his proposal that he wanted to leave 16 Nicholson St to the three elder children. Ms Shen reiterated that Mr Cong had told her that even before the meeting with the lawyer (T 694).
Later in cross-examination, Ms Shen accepted that she did not ask Mr Cong anything about what was said in the meeting, adding that "I thought my husband knew everything so I didn't think that it's necessary to ask him one more time" (T 695.14-5)).
The dispute between Ms Shen and Mr Cong as to what was proposed at this stage, according to Ms Shen, was as to the basis on which 16 Nicholson Street would be transferred to the three elder children - her complaint being at the suggestion that it should be transferred to them unencumbered by a loan (which would have required her, in effect, to discharge the mortgage) - in which context she said she had given Mr Cong a calculation as to what was owing on the properties (see below).
Taken to [248] of her affidavit affirmed 4 September 2020 and asked whether it was incorrect for Mr Cong to say that all the properties were under Ms Shen's name (see T 695-T 696), Ms Shen's response was that "that's what lawyer said to him and that's why he said that to me" (it was in this context that Ms Shen added that her husband never allowed her to interrupt his conversations with someone else) (T 695.15-6).

[61]

Mr Cong's instructions regarding draft agreement - 15 March 2016

On 15 March 2016, an email was sent from Mr Cong (typed by Ms Stefadouros) to Mr Glynn, setting out a "rough draft for Xi Li and Amy's [Ms Shen's] agreement". Ms Stefadouros says it took 30 minutes to prepare the note (or the "rough draft"); that she spoke to Mr Cong about it and that she read it back to him (T 980).
The rough draft of the agreement included reference to "this investment [16 Nicholson Street] is to be managed by Amy" (to which the first and second defendants point as introducing the concept of Ms Shen as the manager of the investments for the benefit of the elder children - although of course the benefit of those investments would also enure to Ms Shen insofar as the Deed provided minimum and maximum amounts to be paid to the elder children). The plaintiffs say that the email to Mr Glynn was in effect communicating that the properties were matrimonial assets and that Mr Cong did not want Ms Joyce to know about them.
There is on the file a printed out version of the document sent to Mr Glynn on 15 March 2016 with some highlighting and post-it notes which suggests that this is Mr Glynn recording amendments or instructions received after the documents were sent.
The first and second defendants say that the instructions in this 15 March 2016 email, through Ms Stefadouros, returned to the proposition concerning Nicholson Street that Ms Shen had rejected, but added that Mr Cong put a current value on it of $3 million; and suggested a power of sale of Nicholson Street and investment by her as manager, to take advantage of rezoning opportunities at Campsie.
Ms Stefadouros said that she recalled one time where she had emailed Mr Glynn "saying something about Amy" [Ms Shen] because Mr Cong told her to email Mr Glynn saying that he (Mr Cong) had spoken with Ms Shen (T 979-T 980); and then she said that Mr Cong never told her anything about what Ms Shen's input was.
Ms Stefadouros said that Mr Cong had "possibly" discussed with her before 15 March 2016 regarding her giving some assistance with capital gains tax matters (T 980).
In cross-examination, Ms Stefadouros was taken, in the note sent to Mr Glynn, to the recital as to the 16 Nicholson Street property and the mention of the investment being managed by Ms Shen (T 981). Ms Stefadouros says that she did not ask Mr Cong whether Ms Shen agreed; nor did she ask Ms Shen whether she agreed.
The note contemplates that the three elder children may get help from "Lisa or Vivian" regarding capital gains tax issues. Ms Stefadouros said that had been discussed "very briefly" with her beforehand (T 982). Ms Stefadouros said that she thought she might be able to assist because she was Mr Cong's secretary and she thought Ms Lisa Wu might be able to assist because she could deal with the accountants (T 983). Ms Stefadouros says that Mr Cong told her to put Edmund as executor and Ms Shen (T 983).
Ms Stefadouros said that she had no concern that Mr Cong was not able to communicate his wishes over the phone to Mr Glynn and agreed that that remained the position right up until 3 June 2016 (T 984).

[64]

Fourth meeting regarding 2016 Will - 23 April 2016 at café in Randwick

The fourth meeting to discuss Mr Cong's 2016 Will occurred at a café in Randwick on 23 April 2016. Mr Glynn has deposed that Ms Shen arrived at that meeting with her young children and that, shortly after Mr Cong and Ms Shen arrived, Ms Shen left with her children. He did not recall telling Mr Cong that Ms Shen could not attend the meeting (see his affidavit affirmed 13 October 2020 at [12]).
Ms Shen has deposed that Mr Cong asked her to take him to a meeting with Mr Glynn at Randwick and that Mr Cong said to her that "Tom says you cannot be here when I speak with him" (see her affidavit affirmed 4 September 2020 at [270]-[271]). In cross-examination (see T 696), Ms Shen recalled that she drove Mr Cong to the café; that he had said something about meeting the lawyer and then she said that Mr Cong "said something about 10,000 for one year for one child and it lasts 10 years" and: And in future you need to help those 3 children - you need to give them $10,000 per year per child and in future if you become very rich you can decide what you give.
In cross-examination, Ms Shen said that the lawyer (Mr Glynn) said that she could not sit there and would have to leave, so she went and sat somewhere else. Ms Shen said that she did not give him her licence (c.f., file note) but probably her husband got it from her handbag and did so (T 696).
Ms Shen's position was that she knew that Mr Cong had proposed to give the three elder children the property at 16 Nicholson Street but says she then thought he had agreed it would all be at her discretion. (If so, then Edmund's account that she said she was waiting for the rezoning of the Campsie properties would arguably be consistent with her waiting to see if she would be "very rich" or on different accounts by Ms Shen, "very, very rich".)
Mr Glynn has deposed that the café meeting lasted for an hour. His handwritten file note of the meeting records that: Meeting 23/4/16 Randwick Yanjiao Shen xxx [the Wu Property] either Campsie 2184 Power of Attorney Lic # [xxx] Amy Shen/Vivian DOB [xxx] Xxx [the Family Property] Burwood Accountant Mr Lee - Hurstville Will Executors Amy/Edmond [sic] Superannuation Directive Amy agreement Binding Notice: Amy: *Send notice to sign Life Insurance Amy Vivian to arrange * Beneficiaries Sheepskin shares Properties 25% to Vivian Directors: xx [the Wu Property] 50% to Amy Amy 43 Amy Vivan 56 Duke Agreement Vivian to xxx [the Family Property] Directors pay 25% 16 Nicholson Amy - may be on death 2 Duff Burwood Check shareholding $200k * Annuity per year $10k paid to each child per year X 3 Edmund etc 10 years 30x10 = $300,000
Mr Glynn subsequently sent an invoice dated 6 March 2018 in which the narration read: To receiving your instructions to complete you Will, Power of Attorney, Appointment of Guardianship, meeting with you on 23 April 2016 (1 hour) and emails and telephone discussions and attending on you to sign these documents.
This file note is the first that contains a reference to Edmund as executor (this is relevant to note having regard to Edmund's evidence as to a conversation in which Mr Cong told him that he was going to appoint him as executor).
In cross-examination, Mr Glynn confirmed his belief that the reference to "Sheepskin shares" was a reference to the shares in Jolly Trading (see T 436). I interpose to note that the earlier file note appears to have placed a value on the "sheepskin" business of $1 million (see above) (c.f., the value attributed to Jolly Trading in the 2006 Binding Financial Agreement).
Mr Glynn agreed that the note recorded his instructions to include in the Will a gift of 16 Nicholson Street and a direction to hold it for 10 years. He said that the conversation was not specifically as to the holding of the property for a period of time; it was centred on servicing any of the debts that Amy would have to carry (T 491).
Mr Glynn has deposed (at [27]) that during his final conference with Mr Cong to obtain his instructions about the Will and the Deed, he had a conversation with Mr Cong and Ms Shen to the following effect: Glynn: Does everyone agree that the four properties should go to Zi Li's adult children? Amy: Yes I agree. We should wait for the rezoning and that would be good for the adult children. Cong: Yes I agree. Amy will get the whole estate now and pay Laurence, Teresa and Edmund the money.
It seems that this must be a reference to the final 3 June 2016 meeting at which the Will and Deed were signed (because both Mr Glynn and Ms Shen are consistent in their evidence that Ms Shen did not attend the café meeting for any length of time).
The plaintiffs point out that Mr Glynn's notes of the 23 April 2016 café meeting record many of the integers of the arrangement that came to be recorded in the Deed and the associated documents (namely that: Ms Shen and Ms Stefadouros are identified as the attorneys; Ms Shen is nominated as a guardian; Ms Shen and Edmund are nominated as his executors; Ms Shen is to receive the benefit of Mr Cong's superannuation and life insurance; and the three elder children are to receive an annuity of $10,000 over each of the next ten years). It is said that, by this time, Mr Cong had had many months to consider his testamentary options; and that the salient aspects thereof were settled some months before he came to execute the Deed and his 2016 Will.
The plaintiffs also point out that the notes refer to the transfer of a 25% share of the Jolly Trading business to Ms Stefadouros for $200,000. Thus, it is submitted that Mr Cong considered that, even on his death, the business would be worth in the order of $800,000 going forward.
The first and second defendants nevertheless emphasise that there is nothing in this file note (or other file notes) as to the debts secured against the respective properties. Complaint is made that Mr Glynn failed to consider the liabilities in respect of the properties. Mr Glynn denies this. Mr Glynn was adamant that there was a conversation about Mr Cong's debts and liabilities (though he could not recall when that was - see T 481; and there does not appear to be a file note of it). Complaint is also made by the first and second defendants that Mr Glynn recorded instructions as to a binding beneficiary nomination in favour of Ms Shen and the children in relation to the superannuation moneys but that Mr Glynn failed to document such a nomination (which had the effect that Mr Cong and Ms Shen's third son, David, did not share in the superannuation payout). (That said, there is an email which appears to record a binding nomination being sent but seemingly it was not progressed. In any event, whether Mr Glynn adequately discharged his duties as a solicitor in preparing the 2016 Will is not here to the point - other than that criticism as to what he did or did not do is raised in the context of the Contracts Review Act 1980 (NSW) (Contracts Review Act) defence - see below.)

[67]

Draft documents emailed to Mr Cong

By email on 27 April 2016, Mr Glynn sent to Mr Cong drafts of the Will, Power of Attorney, Guardianship documents and health directive "for you to carefully check [sic] to ensure you understand the contents and to be ready for you to sign next Tuesday with John Ellis in my office" (from which communication Counsel for the first and second defendants submitted it could be inferred that Mr Glynn did not then anticipate being present at the meeting at which the documents were to be signed - an inference I am not persuaded should be drawn since it would be equally consistent with Mr Ellis being a joint signatory).
The email also attached a draft deed, cl 2 of which provided that: Cong and Shen agree between each other and with Teresa, Laurence and Edmund as follows: (a) In the event of Cong's death Shen will retain ownership of the Campsie properties for no longer than to ten (10) years for the purposes of the rezoning of these properties; and (b) upon rezoning of the Campsie properties or sale of any or all of the Campsie properties Shen agrees to pay to Teresa, Laurence and Edmund an amount in her absolute discretion to be divided equally between them an amount of no less than 6 million and not more than $9 million such amount to be determined by her as to the then market value of the Campsie properties; (c) in the event the Campsie properties are not rezoned for high density living within 10 years of the death of Cong, Shen agrees to pay $3 million to Teresa, Laurence and Edmund to be divided equally between them.
This would appear to represent Mr Glynn's understanding of the instructions recorded in his February file note but with a substitution of "the Campsie properties" for 16 Nicholson Street. Mr Glynn accepted (at T 483) that the proposal at the meeting in February 2016 was to give the three elder children some interest in the whole of 16 Nicholson Street after 10 years or money in lieu. He could not recall any suggestion at that meeting in relation to the Campsie properties to be sold (T 483).
As to cl 7 of the Will (see below), Mr Glynn confirmed that this was a standard form clause that he used (see T 482). He says that he subsequently had a discussion with Mr Cong as to how to complete the draft cl 7 but he could not remember when. The first and second defendants point out that Mr Glynn had no file note bearing on this (pointing out that the file note of 23 April 2016 (Ex 6 at 20) indicates that, as late as the Randwick café meeting, Mr Glynn did not know the name of Jolly Trading, which he referred to in his note as "sheepskin shares"). It is noted that there is no record of any explanation of cl 7 in that file note; and it is said that the completed cl 7 "just turns up" in the draft Will sent on 27 April 2016, with the name of the company being filled into the former blanks, under an email attaching drafts for Mr Cong carefully to check and to be ready to sign the following week.
In cross-examination Mr Glynn did not recall asking for an email as to the agreement with Mr Cong (T 482).
The first and second defendants point out that the differences in terms of substantial provision made between this draft and the 2014 Will were: to introduce Edmund as a co-executor with Ms Shen, in place of the employee executors; to reinstate the $100,000 gifts to each of the three elder children in the form of $10,000 per year annuities for 10 years or terminating sooner upon the earlier transfer to them of his interest in 16 Nicholson Street, Burwood; and to direct "my trustee" to hold that property for "a period of no more than ten (10) years after the date of my death so as to maximise its value as a result of any rezoning of the that" [sic] property and "at the expiration of this period" to give "all my right title and interest in this property to" the three elder children. It is noted that this gift was not expressed to be "free of any mortgage".
It is submitted by the first and second defendants that those departures from Mr Cong's previous Will on the whole reduced the degree of his generosity to the elder children. It is said that, although the annuity was introduced, it was offset by the omission of an exoneration of Nicholson Street from "any mortgage" (there being a very substantial mortgage burden at that time). Further, the first and second defendants point to the fact that, although Mr Cong was approaching death, he took no decision to sever the joint tenancy over Nicholson Street, whilst continuing to confine the gift to his "interest in" that property. (That, of course, presupposes that Mr Cong was aware of or had been advised as to the law in relation to survivorship of interests held as joint tenants.)
The first and second defendants say that the long postponement of benefit for the plaintiffs was relaxed somewhat in that the $100,000 concept was changed to an annuity. Further, although the first and second defendants say that this is not completely clear, they say that cll 9(c) and (d) of the draft appear to mean that the trustee could transfer Mr Cong's interest in Nicholson Street to the elder children sooner than 10 years after his death - thereby conferring a discretion.
The first and second defendants also point out that the 27 April 2016 draft did not take up the proposals in the 15 March 2016 email; but merely gave Mr Cong's interest in 16 Nicholson Street to his elder children after a delay of 10 years (with no provision exonerating it from debt). The first and second defendants say that no explanation for this departure from the 15 March 2016 instructions was provided by Mr Glynn; and that there is no basis for concluding that Ms Shen was prepared to accept the 15 March proposals or that she even knew of them.
It is noted by the first and second defendants that there is no file note recording instructions for the Will that was drawn on 27 April. It is said that that draft is the only record of what was in Mr Glynn's mind at that time, so far as instructions for it are concerned. The first and second defendants say that the file note of the meeting of 23 April 2016 provides little help, noting that it records, contrary to Edmund's evidence, that Edmund was first proposed as an executor on that day; and it records the annuity; but it does not mention the gift of an interest in 16 Nicholson Street. There is no reference to the written instructions of 15 March 2016; and there is a proposal to give 50% of the "sheepskin" shares.

[69]

Further emails attaching the documents

As to the subsequent communications, including the email from Ms Stefadouros at 2.55pm, the plaintiffs submit that the sequence of events is that: Mr Cong had read the amended documents forwarded by Mr Glynn; the email at 2.55pm records his considered view of his proposed amendments; and, although the Campsie properties are not identified by reference to their addresses, Mr Glynn understood what they were because they had been described at the meeting in February 2016. The plaintiffs emphasise that the structure of Mr Cong's proposition was articulated both in that conversation and the email of 2.55 pm. Those subsequent communications were as follows.
At 1.57pm on 28 April 2016, Mr Glynn again sent the Deed, the Will and the enduring guardian appointments to the "sheepproducts@hotmail" address. It appears that, by error, he sent the same version of the documents as had been sent on 27 April 2016.
At 2.12pm on 28 April 2016, Ms Stefadouros (for Mr Cong) sent an email to Mr Cong stating "I can't see any changes to the Will? Unless you have added a clause I can't see" (see Ms Stefadouros' affidavit at [86]). Ms Stefadouros in cross-examination was at pains to emphasise that she had only "skimmed" the documents and that she did not understand them. However, her evidence was contradictory and, in my opinion, unreliable - see below. It is clear from this email that she had at least read the Will sufficiently to discern that there was no change from the earlier version that had been sent. Ms Stefadouros explained this by saying that there was no reference to the properties but I do not accept as plausible the suggestion that her review of the document was limited to checking this, in light of the message that she sent through to Mr Glynn. In cross-examination, Ms Stefadouros was asked "[y]ou wouldn't be able to work out if parts were missing or not missing unless you read them with some degree of diligence, is that right?"; which seems to me to be self-evident.
Mr Glynn responded by email at 2.26pm, sending an amended version of the Will (the "correct version") with changes marked in red. The changes mirror the Deed as far as it relates to the Campsie properties (43 Amy Street, the Wu Property, and 56 and 58 Duke Street).
The first and second defendants say that this introduced very substantial changes (within a day of the 27 April 2016 draft) and they emphasise that this was the first time any form of draft agreement with Ms Shen was drawn up; but they complain that Mr Glynn evidently still thought that he need not give any further explanation.
At 2.55pm, Ms Stefadouros (for Mr Cong) sent an email to Mr Glynn. Ms Stefadouros deposed that Mr Cong had asked her to email "one additional instruction to Glynn for his will" (see at [89] of her affidavit sworn 22 June 2018). The email states that: It's very complicated, however Zi Li has specified he wants this added: If rezoning goes ahead at any Campsie properties, he wants the 3 older children to receive 6 to 9 million within 10 years of his death. If rezoning doesn't go ahead then he wants the 3 older children to receive 3 million within 10 years of his death. The clause relating to $10,000 is extremely complicated I'm a little confused, he still wants them to receive these payments. Also add if the kids don't draw the $10,000 from Yanjiao Shen they can receive this payment in a lump sum at the end of 10 years totalling $100,000 each. If they draw any amounts over the course of this time it can be deducted at the end of the 10 year period.
The first and second defendants say that it is notable regarding the email of 28 April that it is expressed in the passive voice (i.e., what Mr Cong wants the older children to receive); and that it does not express an intention to expose Ms Shen to personal liability for those results. It is submitted that, between the concept of a manager and a promisor, there was a need for Mr Glynn to make sure that Mr Cong understood the effects of what was proposed and to ascertain what Mr Cong wanted.
Pausing here, I consider that it is implausible in the extreme that Ms Stefadouros sent the above email without discussing this with Mr Cong. The email specifically sets out a clause that Ms Stefadouros says Mr Cong wanted to be added. Furthermore, the comment as to the clause relating to $10,000 being "extremely complicated" makes clear that Ms Stefadouros was herself reviewing the material to some extent and not simply passing it on to Mr Cong, since she says that "I'm a little confused" but immediately goes on to say that "he still wants them to receive these payments" (clearly distinguishing between her confusion and Mr Cong's wishes in the one sentence). (I refer in due course to Ms Stefadouros' evidence as to her confusion in relation to these "complicated" documents.)
At 5.19pm that day, Mr Glynn sent an email attaching "what should now be the final of your Will and the Deed of Agreement" for Mr Cong and Ms Shen to sign; and attached his tax invoice. Ms Stefadouros deposes that she printed the email with the attachments and spoke to Mr Cong about the email to summarise what it contained but she cannot remember if it was over the telephone or in person (see at [90] of her affidavit sworn 22 June 2018).
The first and second defendants say that Mr Glynn's email shows that his "attitude" had not altered, notwithstanding the very substantial changes made on that day, including the first introduction of the draft Deed and notwithstanding Ms Stefadouros' concern that it was "very complicated". It is submitted that the wording of this email indicates that Mr Glynn intended that the documents would be signed without need for further attendance by him in person. It is noted that Mr Glynn's fee note rendered under the same email included "attending on you to sign these documents", which had not then happened. The first and second defendants point to this as the second time that Mr Glynn had, in effect. stated that it was up to Mr Cong "to work it out for himself". (They argue that that is clearly why Mr Cong had to resort to Ms Stefadouros to help him understand this complex document, a matter to which it is said his solicitor should have been attending. Again, this seems to me to be a complaint as to the performance of Mr Glynn's professional services, which is not what is here at issue.)

[71]

Conversations to which Edmund has deposed as to Mr Cong's testamentary intentions

At this stage, it is convenient to note the evidence of Edmund as to his father's testamentary intentions.
Edmund has deposed in his affidavit sworn 19 July 2017 at [32] that about six months before his father's death, his father told Edmund that he had made a Will (which must be incorrect at least insofar as this was a reference to the 2016 Will, which was only made about 6 weeks before Mr Cong's death).
At [33], Edmund deposed that on one occasion shortly before Mr Cong's death, he had a conversation in which Mr Cong referred to a sum of $10,000 a year or $100,000 after 10 years (see also [17] of his affidavit sworn 9 July 2018) (T 114.1). (Paragraphs [33] and [17] seem to be consistent with each other in respect of the $10,000 each year for 10 years.) Edmund says that he had already seen the Will (which logically would put this conversation at some time after 3 June 2016 if it was the executed 2016 Will to which he was referring). Edmund says that there were one or two occasions in April to June 2016 at Campsie where his father said that he was not too worried about dying; and said that he already had a Will. (It should be noted that, for much of May 2016, Mr Cong was in hospital at the Prince of Wales Hospital; that the move by Ms Shen and the children to the Family Property occurred in April 2016; and that, after Mr Cong was readmitted to hospital on 10 June 2016, he only left hospital on one occasion - that being 22 July 2016, the day that he visited the Family Property - see below.)
In his 9 July 2018 affidavit (at [45]; [21]), Edmund referred to his father "walking [him] through the Will" and referring to a sum of $1 million and that the children would be getting the properties (see T 104, T 117, T 124). He gave evidence in cross-examination that his father told him that the Campsie properties would be split evenly between the three elder siblings (see below).
Edmund's evidence is to the effect that in the conversation with Mr Cong and Ms Shen in the granny flat at the Wu Property, Mr Cong said that "you are both here because you are both executors of my estate. You [Edmund], Laurence and Teresa will get all the Campsie properties after 10, and until then you will each get $10,000 per year"; elsewhere it was to the effect that Mr Cong said "you will get at least one million each which you will receive after ten years because I don't want you touching it until then. In the meantime you will get $10,000 each year for ten years".

[72]

Conversations to which Teresa has deposed as to Mr Cong's testamentary intentions

Teresa deposes (see her 9 October 2020 affidavit at [110]) to a conversation at the Wu Property with Mr Cong in January 2016 (at which she says Laurence was present) in which she says that Mr Cong told her that he had been talking to Ms Shen "about how to make sure there is a fair share" and that he said: … She [Ms Shen] is worried that what I have left her will not be enough. She says she needs more because she has to look after the boys, and that you two and Edmund don't need as much because you're older and you have your mum. I've been trying to work out how to make sure everyone gets enough. Amy doesn't want me to give you too much.
Teresa says that Mr Cong in that conversation suggested that they would receive 30%. (The first and second defendants say that this is consistent with Mr Glynn's file note - see above - in which there is a reference to a 70%/30% split of the estate. I would add that it is also consistent with the evidence as to the argument between Mr Cong and Ms Shen over 16 Nicholson Street being left unencumbered to the elder children.)
Pausing here, Teresa's account of what her father said was Ms Shen's concern is in my opinion consistent with Ms Shen's stance in the present litigation - in other words, there has been much emphasis in the first and second defendants' case on the position of Ms Shen as a young widow with three young children and her concern to have enough money to meet school fees, living expenses and the like (indeed, the lack of money is Ms Shen's explanation for her breach of Court orders in relation to the giving of an encumbrance over property the subject of the Court orders - see below). The proposition that Ms Shen did not want Mr Cong to give his elder children "too much" at the expense of Ms Shen and her children seems to me to ring true.
Teresa also deposes in this affidavit (at [122]) that in a conversation during a visit to Amy Street, Campsie, she urged Mr Cong to make a Will and he said that "Yes, don't worry, Amy understands everything. We have talked about it a lot. She understands and agrees with what I want to do". The first and second defendants point out that this account does not make clear what it is that Mr Cong says he wanted to do (and that is undoubtedly so).
Teresa further gives evidence (at [123]-[124]) that she had a conversation with Mr Cong at the Wu Property in which Mr Cong told her that everything was "sorted" and that he had done his Will. (Chronologically, if by this he was referring to the signed Will, the conversation must have been after 3 June 2016.) Teresa says that she asked whether Ms Shen had agreed to it and that Mr Cong said "Amy knows and understands it. Don't worry, she understands everything". Again, the first and second defendants place emphasis on the fact that what Mr Cong does not there say is that Ms Shen has agreed to it.
Nevertheless, this evidence is telling insofar as Mr Cong was there communicating to Teresa an understanding on his part that Ms Shen was in agreement with his testamentary intentions. I say this because it seems to me that on Ms Shen's own evidence she did have communications with Mr Cong about what he was intending to do (indeed Ms Shen accepts that she argued with Mr Cong as to the proposal that 16 Nicholson Street be left mortgage free for the elder children). I consider it likely on all the evidence that Mr Cong believed (rightly or wrongly) that he had Ms Shen's agreement to the arrangements ultimately provided for under the 2016 Will and the Deed.
I also consider it likely that Ms Shen led Mr Cong to believe that she agreed with, and would implement, those arrangements because she understood that the effect of it was that she could give whatever she liked (be that $1 or nothing) to the elder children (see her evidence at T 707) and, even then, that this would only be when she was "very rich" (or "very, very rich"), which on her own account was to be a wholly subjective assessment for her to make - and even in cross-examination, she said that she did not know what would amount to be "very rich" or "very, very rich". It was a constant refrain in Ms Shen's evidence that she understood that Mr Cong was giving her an absolute discretion as to how much, if anything at all, should be given to the elder children - and that this was to happen if she became "very rich" or "very, very rich" in the future.
Again, at [111], Teresa refers to a visit to her father at the Prince of Wales Hospital in May or June 2016 at which she says that Mr Cong said that: Amy knows and understands what the will involves. You don't need to worry - she is a good simple Chinese girl and will do the right thing. She doesn't care about money and won't fight you because it's not the Chinese way. She knows what she is getting and is so happy about that.
Leaving aside the pejorative flavour of the description attributed to Mr Cong of Ms Shen as a "good simple Chinese girl", if this is indeed what Mr Cong said to Teresa then it proved to be misguided on a number of fronts (not least the suggestion that Ms Shen did not care about money and would not fight the elder children in respect of the estate). What seemed to me to be apparent from Ms Shen's evidence in the witness box was that Ms Shen has a good appreciation of the value of money (including as to the incidence of tax liabilities such as CGT and GST); a self-avowed interest in real estate and the Sydney property market; and a very firm intention to protect her (and, through her, her children's) interest in the properties acquired during the course of her relationship and marriage with Mr Cong (I refer to her evidence in due course). (I interpose to note that Ms Joyce's suggestion to Teresa that they might appeal to Ms Shen's "non-avaricious human heart" (in an email or text message sent in mid July 2016 - see T 436) seems similarly to betray a misunderstanding of Ms Shen's focus on Ms Shen's own (and her children's) interest in Mr Cong's estate; or perhaps this was simply a forlorn hope on Ms Joyce's part that her children would not effectively be left without an inheritance from their father.)
Ms Shen's attitude in this regard was revealed by the conversation (see below) with Teresa around the anniversary of Mr Cong's death, in which Teresa attributes to Ms Shen the statement to the effect that if the children took her to Court they would get nothing and they would not be family anymore. That promise (or on one view threat) appears amply to have been made good - since Edmund and Teresa have received less than $10,000 each from the estate, which on Ms Shen's case is insolvent; and there seems no suggestion on Ms Shen's part that they will receive any more.
Returning to the conversations which Teresa says she had with her father as to his testamentary intentions, at [112] of her affidavit, Teresa refers to a conversation "in or around June" (which in cross-examination she suggested could possibly have been in May or April - T 203ff), in which she deposes that Mr Cong said that the Campsie properties were for her and her brothers and suggested figures of "up to $9 million" and "3 million" with reference to rezoning.
Pausing here, again as with Edmund, I accept that there is uncertainty as to precisely when and where conversations to the effect to which Teresa has deposed took place and as to what was said. What is, however, beyond doubt is that Mr Cong was prepared to discuss his testamentary intentions with family members and others (see in particular the February 2016 meeting) and it is in my view wholly plausible that Mr Cong said things to Teresa that caused her to believe that his intention was for her and her two brothers to receive an inheritance out of the Campsie properties. I also consider it plausible that Teresa enquired of her father whether Ms Shen agreed with what he told her that he was planning by way of testamentary disposition (not least because it is plausible that Ms Shen's opposition to testamentary dispositions in favour of the elder children might well have been expected).
Teresa's evidence (and I accept that this is a broad brush account of those conversations) is that Mr Cong said to her on about six occasions from April/May 2016: The Campsie properties are for you and your brothers. They should be rezoned soon. I've set out in the deed, and if they get rezoned then you'll get a larger amount of money, up to $9 million to split between the three of you. If they don't get rezoned, you'll get a different amount, $3 million to split between the three of you. Amy knows and understands this.

[73]

Ms Shen's account of conversations with Mr Cong regarding his testamentary intentions

Ms Shen accepted (see T 596) that she had argued with Mr Cong about his intention to leave 16 Nicholson Street to the elder children. Tellingly, perhaps (in light of the resulting trust claim), she did not say that this was because she held a one-half interest as joint tenant in that property; rather, it was because on that scenario she was to pay off the mortgage (as Mr Cong was suggesting that it be left to the children unencumbered). That is consistent with Ms Stefadouros' recollection that there was a heated argument about this - although, unlike Ms Stefadouros, Ms Shen does not place the argument as occurring at the February 2016 meeting. Rather, Ms Shen says that the argument with Mr Cong as to 16 Nicholson Street occurred one or two months before the February 2016 meeting (T 689).
That there was an argument over Mr Cong's intention to leave 16 Nicholson Street to the elder children is wholly plausible (particularly since I have no doubt that Ms Shen would not have agreed to an arrangement whereby she thought she would be required to pay off the mortgage for the benefit of her step-children). To my mind, the very fact of the argument as to 16 Nicholson Street makes it implausible that Ms Shen would not have wanted to confirm what was in the final Will (and to do so at a time when she might still be able to have her say against any proposal with which she was not happy).
It is evident that Ms Shen kept a close eye on her own financial interests; not least because Ms Shen said that she made a calculation in front of her husband to let him know how much debt "we have right now", which indicates her familiarity with the state of the finances in relation to the various properties (T 597).
Ms Shen is adamant that Mr Cong told her that he would let her decide whether and how much to give to the three elder children (a proposition inconsistent with his instructions to Mr Glynn as recorded in Mr Glynn's file note and in the provisions of the draft Will and Deed that Mr Cong approved).
Ms Shen said that the discussion was to the effect that "you need to give each child $10,000 per year" and that that was the "whole conversation" (T 701). Ms Shen said that she said to Mr Cong that she could not "provide mortgage" (I think by this she meant pay off the mortgage). Ms Shen said that Mr Cong told her "[i]n future if you become very very rich you can decide how much you give and I believe you could make the right decision" (T 701).
Ms Shen referred to two conversations with Mr Cong - the first, before the (February) meeting with Mr Glynn; the second, being after the café meeting. Ms Shen said that in those conversations Mr Cong never said anything about the business but that he suggested to Ms Stefadouros "if you want to have a try you can try". Ms Shen says that Mr Cong never mentioned her being given shares.
As to the conversation between Ms Lan and Mr Cong, which Ms Shen said she overheard only from Mr Cong's side of the conversation, her evidence in cross-examination was that Mr Cong had said it was "too complicated" (T 707). Ms Shen said that Mr Cong "mentioned about 3 million, 6 million, 8 million" and that he said that "I just want to know if Amy could make decision about how much she wants to give". (Pausing here, it is clear from this that Ms Shen well knew that Mr Cong was contemplating a substantial inheritance for his elder children.)
However, Ms Shen said that "[m]y husband always said to me it was my decision to decide how much to give - so we didn't have further discussion about this". Ms Shen says she did not ask him to explain because "my husband said even himself didn't understand document so how can I get answer" (see T 708.7-8). Significantly, at T 708, Ms Shen said: My husband told me clearly it was my decision to give whether $1 or whether how much and I didn't think about it that much and it didn't happen. If I become very very rich but how much to you mean by very rich I don't know
I see this as significant because it is the first suggestion that Ms Shen understood that it would have been open to her to give the elder children $1 (effectively nothing at all) out of the estate. This is wholly inconsistent with Mr Cong's very evident testamentary intentions as revealed in Mr Glynn's file notes and in the email communications sent by Ms Stefadouros and Ms Lan but it would explain (if Ms Shen genuinely believed this) her indignation at the position in which she found herself when the present dispute arose.
Ms Shen gave evidence that she first became aware about the Campsie properties in the Will after she engaged her current lawyer (saying that the first lawyer did not "do the job") (T 726). Ms Shen said that her husband did not tell her what the 2016 Will said and that, in November 2017 when her then lawyers read over the affidavit for probate, she did not understand it. Confronted with her contrary evidence at T 588.22 (where she said there was nothing in the affidavit read out to her that she did not understand), Ms Shen said "I forget". I find this evidence implausible.
Ms Shen's position was that she "always thought that we are family. So, if in future, if one day, I become very rich, I definitely, I would look after them, and I trust my husband and my husband trusts me as well" (T 728). As to 16 Nicholson Street, and the proposition that she and Mr Cong had agreed at some stage before April 2016 that the three elder children should get that property, Ms Shen said that: Correct, he [Mr Cong] said that property is under our joint name, and you know, they, they could look after their brothers, half, half-brothers, anyway, they're very close, the family. So, if you agree, after I die, you can give this property to them. And I, at that time, I didn't disagree.
Ms Shen also agreed that she and Mr Cong discussed that the three elder children would need more - an annuity of $10,000 a year for ten years - saying at T 729: Yes, correct. Correct, my husband told me they are not easy, as well, just in case children need money or need help. You should help, and for example, give them $10,000 per year, and I agreed, and also, I did, at each time, when they came, they came, and I gave them money.
As to anything in addition to the annuity, Ms Shen said that there was not a discussion, that Mr Cong just said, "[i]n the future, if you are rich, you can make your own decisions" (T 729). Ms Shen was adamant that the discretion remained with her.

[74]

Query regarding fees - May 2016

Returning to the chronology of events, on 2 May 2016 at 10.03 am, Ms Stefadouros sent the following email to Mr Glynn: I notice there are 2 outstanding invoices, but from the email below a few weeks ago you and Zi Li discussed the cost for this Will to be completed was estimated at 2,500 plus GST. Once you came to Campsie and we didn't have a final agreement with Amy. Then a couple of weeks ago Xi Li came and met you at Randwick discussions about the same issue, finalising the Will and Agreement, We are a little confused why there are two invoices for the one job? [my emphasis]
Apart from the fact that Ms Stefadouros refers, in the plural, to "we" being a little confused, it is relevant to note that this email (presumably reflecting Mr Cong's instructions) is consistent with there having been discussions with Mr Glynn at the 17 February 2016 meeting as to a proposed agreement with Ms Shen (since the email says that, on that occasion, "we didn't have a final agreement with Amy") and indicates that, at least in Mr Cong's mind, that issue had been resolved after the discussions at Randwick "about the same issue".
Mr Glynn's response, at 11.27am that day, was that initially the February 2016 meeting at Campsie was to complete "the Will, etc"; however, that there were more discussions and another Saturday morning lengthy meeting (no doubt the Randwick café meeting) - hence the additional account. On 3 May 2016, Mr Glynn nevertheless sent a revised email for fees.
On 5 May 2016, Ms Stefadouros sent an email to Mr Glynn (on Mr Cong's "sheepproducts@hotmail" address) thanking him for the amended invoice and stating that "we will need to arrange a time to come in to sign, please advise next availability?".
The plaintiffs say that Ms Stefadouros would not have forwarded the 5 May 2016 email to Mr Glynn, noting that they would need to arrange a time to execute the documents, had Mr Cong not reviewed the documents and signified his assent thereto.

[76]

Baoming Shen immigration application - 25 May 2016

In May 2016 an immigration application was lodged on behalf of Ms Shen's brother, Mr Baoming Shen, to the Department of Immigration and Ethnic Affairs, applying for a visa. Ms Shen's evidence as to the immigration application (Ex J) (see T 715) was that there had been three such applications; that they were filled out by Ms Stefadouros twice and by an agent (Mr Zhong) once; that she did not fill out the form; and that she knew the importance of telling the truth but that she did not pay attention.
Taken to the document her first question was "[d]id I need to sign?". Ms Shen recognised her brother's name, her own signature and the Wu Property address; and knew that by signing the form she was saying that the contents were true and correct. However, inconsistent with any such appreciation, Ms Shen's evidence was that she did not look at the form; she just asked Ms Stefadouros to do it; that it was all done by Ms Stefadouros; that she could not understand it; and that if Ms Stefadouros asked her to sign, "I just sign it".
The form (date stamped 25 May 2016 and signed by Ms Shen on behalf of Ms Shen) stated that Ms Shen had been employed by Jolly Trading for two years. Ms Shen denies that this was the case but was unable to explain the discrepancy other than by refuge to her inability to read English. Ms Shen pointed out that it was Ms Stefadouros' mobile number on the form and Ms Stefadouros suggested that this information referred to her (since it was her mobile number on the form) but, if so, this does not explain the two year employment history (since Ms Stefadouros had been employed for far longer than that).
In cross-examination, Ms Shen said that the information on the form ("employer" Jolly Trading 2 years; employed in administration role) was incorrect. Ms Shen said that she did not read it (T 715); that she was very busy and did not have time; and that she just signed it (pointing out that the phone number was that of Ms Stefadouros). At T 719, Ms Shen was adamant that she never worked for Jolly Trading.
Ms Stefadouros, who prepared the form, was similarly unable to give a satisfactory explanation for the (said by Ms Shen to be incorrect) information. Ms Stefadouros' evidence was confused to say the least. At T 1040, Ms Stefadouros said that she did not give information to Ms Shen. Taken to the date stamp (25 May 2016) and the fact that the form was in Ms Stefadouros' handwriting, Ms Stefadouros then accepted that she filled the form out and that she did give information to Ms Shen. Ms Stefadouros noted that Ms Shen's number was on the form in answer to question 11 (T 1041).
Ms Stefadouros said that Ms Shen never worked at Jolly Trading. Ms Stefadouros said that she filled this out about herself but then accepted that she had been employed by Jolly Trading from 2011 to 2016 (i.e., some five years by the time that the form was filled out whereas the form says two years). Ms Stefadouros said, variously, that this was a mistake; that it was an error; and then said "unless Zi Li told me to write it". Her evidence then became that it was either a mistake or Mr Cong told her (T 1043); before again saying that it "could be" a mistake. Ms Stefadouros added (as if this explained the error) that it was getting an application for a family member. Ultimately, her explanation at T 1046 was that it was a mistake, on the basis that the employee phone number was her mobile and otherwise she would have put Ms Shen's mobile number. Ms Stefadouros said that she did not show the document to Ms Shen (T 1042). At T 1046, Ms Stefadouros said that she filled out the form; asked Ms Shen "her specifics" and gave it back to her.

[77]

Ms Lan's assistance in May 2016

On 26 May 2016, Mr Cong sent a WeChat message to Ms Vicky Lan, an accountant whose husband was a friend or business acquaintance of Mr Cong, asking her to explain the Will and Deed (see her affidavit at [10]-[13]). Emailed from the "sheepproducts@hotmail" address, presumably by Ms Stefadouros, to Ms Lan were the three attachments (the Will, Deed and tax invoice).
The first and second defendants say that Mr Cong needed Ms Lan's help because he did not have someone to explain the instruments in his own language; and that Ms Lan was not able to discharge the responsibilities (and did not have the skills) that would be required of a competent and experienced solicitor to do so. One obvious example of this is said to be that she did not keep a file note (said to be a normal expectation for such consultations). (Pausing here, the lack of a file note seems to me to go nowhere since this was clearly not a professional consultation.) The first and second defendants say that an even more obvious example is the existence of a clear conflict of interest between Mr Cong and Ms Shen in the transaction that was being proposed. The first and second defendants say that Ms Lan was a "well-intentioned amateur being asked to do a lawyer's job".
Ms Lan has deposed that she had a conversation in Mandarin with Mr Cong for 30 minutes (see at [13]). Ms Shen has deposed that during the conversation (which she accepts she overheard at least at Mr Cong's end), Mr Cong said that he did not understand what it said and (significantly having regard to her evidence as to her understanding of what her husband was proposing and her current stance) Ms Shen said that Mr Cong asked Ms Lan "[d]oes it talk about Amy can decide whether to give money to the children". Ms Lan did not give an account of such a question having been put to her by Mr Cong.
The plaintiffs submit that Ms Lan explained the Deed to Mr Cong and Ms Shen; and that, as a friend of Mr Cong, she tried to explain the Deed and the Will doing the very best she could. It is noted that, even though he was sick from cancer, Ms Lan perceived that he could "still talk like a normal person and [understand] things like a normal person". The plaintiffs point to Ms Lan's evidence that she gave her explanation over a period of 30 minutes; and that, in doing so, she concentrated on the more important provisions. They note that Ms Lan's evidence was that she translated the provisions before explaining them; and that Ms Lan perceived no problem on Mr Cong's part in understanding both her translations and explanations.
Ms Shen has deposed that after the phone conversation, Mr Cong said to her (see [279] of her affidavit affirmed 4 September 2020): 279. Vicky said the documents are too complicated. She said you can decide whether to give money to the kids and how much. But she does not understand the documents fully either. She said I should get a translator to help me if I want to understand it fully.
Ms Lan then sent an email to Mr Glynn on 27 May 2016 at 8.35am: This is Vicky acting on behalf of Zi Li and Yanjiao. Based on the conversation with them, they want to make the below changes/adding: 1. If the property 43 Amy Street Campsie was sold before my death, the amount to be paid to the children I have with my ex-wife upon rezoning will be $5 million to $8 million (We have signed the selling contract with the buyer and it's supposed to settle on 14 June 2016). 2. No matter if the rezoning happens or not on Campsie's properties, the agreed amount for Teresa, Laurence and Edmund will be paid after 10 years after my death. 3. Both of the beneficiaries of my Life Insurance and Superannuation are my said wife Yanjiao Shen, 4. There is $10,000 bond in the Department of Immigration for Yanjiao's mum immigration which will be returned after around 10 years. It goes to Yanjiao's account if I died before then. 5. Beneficiary of all the other situations which was not mentioned in the will, is Yanjiao Shen. [my emphasis]
There was much contention as to whether Ms Shen had in fact been consulted in relation to the instructions conveyed by this email. Ms Shen was adamant that she had not been consulted. I consider this in due course. The plaintiffs note that Ms Lan asked Mr Glynn to ignore her "bad wording" but sought the amendments to be sent as soon as possible; and that her email concluded with the words, "Vicky on behalf of Zi Li and Yan Jiao".
Reliance is placed by the plaintiffs on the communications of 27 May 2016 involving Ms Stefadouros and Ms Lan, as indicating Ms Shen's knowledge of what was then proposed (see the email sent by Ms Stefadouros at 10.03am on 27 May 2016 to Mr Glynn stating that "Amy has looked at the agreements and these need to be adjusted a little bit. I will forward the changes shortly so we can arrange to come and sign the final documents" (my emphasis) and Ms Lan's email at 10.33am, conveying that she had explained the documents to Ms Shen and Mr Cong).
The plaintiffs say that the first numbered paragraph of the 8.35am email only makes sense if Ms Shen and Mr Cong understood the other terms of the arrangement. It is submitted that they can hardly be said to have supplemented the arrangement if they did not first appreciate what required adjustment. (That, with respect, seems to me to beg the question. The statement by Ms Lan can be no more than her perception of the position - it does not establish that Ms Shen in fact understood the arrangement.)
As to the balance of the email, the plaintiffs say that much of this reflects provisions which benefit Ms Shen, noting that: payment is to occur only 10 years after Mr Cong's death; Ms Shen is to receive the benefits of Mr Cong's two policies; Ms Shen is to receive the $10,000 bond; and Ms Shen is to be the residuary beneficiary. It is said that most, if not all, of these matters had been settled already; and that they reflected Ms Shen's desire to protect her position having regard to her own understanding of the Deed. It is submitted that it should be inferred that not only did Ms Shen read the drafts that Mr Glynn had forwarded, but also that she made a rational assessment of the risks and benefits arising therefrom and took steps to stake out her interests.
The plaintiffs argue that this is consistent with Ms Lan's oral evidence. They say that the "apparent variations" in Ms Lan's evidence are explained by her attempt to refresh her memory from the documents. The plaintiffs emphasise that the documents are consistent with Ms Lan's oral evidence that she spoke to both Ms Shen and Mr Cong; and they contend that her evidence to that effect in cross-examination is the most reliable. The plaintiffs also place weight on the spontaneous recollection in the course of her cross-examination by Ms Lan that Mr Cong and Ms Shen inserted the changes in her email and that she wrote the email after speaking with both Mr Cong and Ms Shen (T 885.13ff) (The plaintiffs say that it is likely that Ms Lan told the defendants' solicitor when her affidavit was prepared in 2018, that she had advised both Ms Shen and Mr Cong, noting that an application by the defendants by reference to s 38 of the Evidence Act 1995 (NSW) (Evidence Act) for leave to cross-examine Ms Lan on this issue was not pursued after the plaintiffs' counsel foreshadowed a call on those notes.)
As to the 10.03am email, Ms Stefadouros said in cross-examination that Mr Cong told her to add the words "Amy has looked at the agreements" (T 1004). Ms Stefadouros said that she did not discuss this with Ms Shen and that she was not involved in any discussions with Ms Lan. In my opinion it is implausible that Ms Stefadouros (albeit, as she was anxious to emphasise, that she is not a qualified professional) would have stated that "Amy has looked at the agreements" unless she was aware in some way that the documents had been shown to Ms Shen and that Ms Shen had been made aware of what they contained.
The plaintiffs say that, insofar as Ms Shen denied ever thinking about the return of the $10,000 immigration bond (referred to in item [4] of Ms Lan's email of 10.33am), it is difficult to see why, for his part, Mr Cong should have seen fit to emphasise that point (the money relating to a sum paid on behalf of Ms Shen's mother). (I agree.)
Insofar as Ms Shen also denied seeing the 10.33am email, until it was shown to her in the witness box, the plaintiffs point to the fact that it was attached to an exhibit of one of her affidavits (referring to [280] of her affidavit dated 4 September 2020 in which Ms Shen expressly referred to that email before saying that it was sent without her authority). It is said that Ms Shen thus had to accept that Ms Stefadouros (her friend) had never discussed or even adverted to the document; and that in support of that Ms Shen gave evidence to the effect that Ms Stefadouros knew that Ms Shen could not read and could not understand (a proposition that, as noted already, the plaintiffs say does not reflect Ms Shen's real skills and expertise).
The plaintiffs submit that Ms Shen's disavowal of knowledge cannot stand with the terms of the emails themselves, noting that in the space of half an hour, two persons (Ms Stefadouros and Ms Lan) expressly stated that Ms Shen had undertaken certain activities referrable to the draft agreement that Mr Glynn had forwarded (and that Ms Stefadouros' email of three days later assumes that Ms Shen is going to read the document). The plaintiffs say that there is no reason to discount those clear statements in those three emails.
Ms Lan's oral evidence on this issue is to my mind significant as is the fact that it is implausible that someone with professional accounting qualifications in Ms Lan's position (even though not providing expert accounting advice) would have written the words "acting on behalf of Zi Li and Yanjiao" and "[b]ased on the conversation with them, they want to make the below changes/adding" unless Ms Lan had in fact had a discussion with both Mr Cong and Ms Shen as to the documents.
It is also telling to note that item 4 of the list of changes was an item that related to matters specific to Ms Shen and about which it is hard to see that Mr Cong would have had any special interest. In that regard, I do not accept Ms Shen's evidence that she had no interest in the amount of the immigration bond refund that would become due after around 10 years.

[78]

30 May 2016

On 30 May 2016, there were email communications as between Ms Stefadouros and Mr Glynn, to arrange another conference between Mr Cong and Mr Glynn. Those email communications contemplated that Mr Glynn might attend at Burwood or at the hospital (where Mr Cong then still was) and tentatively "booked in" the Friday. On 30 May 2016, Ms Stefadouros also sent an email to Mr Glynn asking him "to send through the updated changes so both Li [i.e., Mr Cong] and Amy can read through". Mr Glynn responded by advising that he would send through "the further drafts" before he saw Ms Shen and Mr Cong on Friday.
As to the email of 30 May 2016 in which Ms Stefadouros asked Mr Glynn to "send through the updated changes so that both Li and Amy can read through", the plaintiffs submit that it should be assumed that, when Ms Stefadouros contemplated that Ms Shen would be reading the documents, she had a basis to foreshadow that Ms Shen would do so.
At T 1005, Ms Stefadouros agreed that she read the updated changes to Mr Cong but was adamant that she did not read them to Ms Shen. Taken to the wording of the email ("so Li and Amy can read through"), Ms Stefadouros said that "[n]o one was going to read the document to Ms Shen" (T 1005.30).
Ms Stefadouros said that she did not anticipate speaking to Ms Shen about the documents; that she assumed Mr Cong had explained to Ms Shen not that Ms Stefadouros would explain it to her (but that makes no sense when she said that Mr Cong could not read them) (T 1005). Ms Stefadouros said, "I wasn't going to explain anything to Amy - [b]ecause she couldn't understand English" (T 1006.13).
Ms Stefadouros agreed that Mr Cong (her boss) wanted her to help Ms Shen but says that this was not in relation to Jolly Trading or his testamentary intentions; rather she said this was in relation to 43 Amy Street. Ms Stefadouros also said that Mr Cong asked her to help with forms and with the children and "with translation, she wouldn't understand, to read documents for her" (T 1007.6-7).

[81]

3 June 2016 - execution of documents

On 3 June 2016, Mr Cong and Ms Shen attended Mr Glynn's office to execute the documents: an Enduring Power of Attorney appointing Ms Shen as Mr Cong's attorney (with Ms Stefadouros as a named substitute attorney), certified by Mr Glynn and witnessed by a Mr John Ellis; an Appointment of Enduring Guardian in favour of Ms Shen, witnessed by Mr Glynn (both documents wrongly dated 2 May 2016 but Mr Glynn's evidence is that they were signed at the meeting on 3 June 2016 - and the signed documents were retained by him at his office); Mr Cong's Will (witnessed by Mr Glynn and Ms Bull); and the Deed.
Mr Glynn's evidence as to Ms Shen's ability to communicate is that he spoke to Ms Shen on two occasions without the need for an interpreter and recalled that the communications were "very simple, not at great length, but sufficient to tell [him] what she wanted and for [him] to provide some advice and then subsequently some documents" (T 442.42-4).
Mr Glynn's evidence of that meeting is that it was quite an emotional meeting; and that his recollection was that Mr Cong was not frail (Mr Glynn said that Mr Cong was a big man and when the meeting concluded, Mr Glynn gave him a big hug and was surprised by how strong he was). Initially Mr Glynn could not recall if Ms Stefadouros was there but then he accepted that she was because she had signed the Power of Attorney document.
Mr Glynn gave evidence of his general practice when a client executed documents such as these - including that he would explain what a power of attorney is (which, he said, would take five minutes or less) and any document that was signed; would explain to the person accepting the power of attorney (certainly for less than five minutes); explain the enduring guardianship document (five minutes maybe less); and that he would explain probably in combination to both people the effect of this (T 492).
Mr Glynn said that Mr Cong looked at the Will for some minutes and also at the Deed. Mr Glynn denied that Mr Cong had signed immediately after the document was presented to him.
Mr Glynn's evidence was that his experience with Mr Cong over many years was that he understood Mr Cong to understand written and oral English (T 495). Mr Glynn accepted that he did not tell Mr Cong that, if Ms Shen signed the Deed she would personally be liable to pay at least $3 million to the elder children regardless of how the investment fared (T 496) but, tellingly, he added (at T 497) that: He told me that - he told me that was going to happen - they went through the calculations and that was the decision and Amy …
Mr Glynn, when asked if he had explained to Mr Cong that if things did not turn out well Ms Shen might have to sell the house to make the payment, was adamant that Mr Cong explained to him that this was his (Mr Cong's) intention (T 499.36-41). Mr Glynn accepted that he did not explain that to Ms Shen; and he agreed that he never warned Mr Cong that the Deed could "ruin" Ms Shen or directly told Mr Cong that Ms Shen could lose the house (T 499-T 500).
Pausing here, at the time of death, the properties held by one or both of the couple (leaving aside the now vexed dispute as to the resulting trust claim) were 16 Nicholson Street, 56 Duke Street, 58 Duke Street, the Wu Property, 43 Amy Street (already being subject to a contract for sale of land), 2 Duff Street and the Family Property. Therefore, the proposition that Ms Shen could lose the Family Property if she had to pay out a liability of, say, $3 million under the Deed, would at the very least require a calculation of the amount of debt secured on the other properties. However, the first and second defendants' point here seems to be that Mr Glynn did not undertake that exercise (or explain the possibility of financial difficulty occasioned to Ms Shen in due course, to Mr Cong).
Mr Glynn said that the wording "for no longer than 10 years" was based on Mr Cong's instructions and represented a maximum period (T 500). Mr Glynn accepted that he did not explain to Mr Cong that Ms Shen could dispose of the properties immediately (T 501). His recollection was that, at some point, Mr Cong had told him that they required the longer period (i.e., 10 years). Mr Glynn said that he did take Mr Cong through the document; and he said that Mr Cong was very strongly of the view that it would take the 10 year period for rezoning and that the maximum property value would only be on rezoning (T 502). Mr Glynn emphasised that Mr Cong was "very strong on that point".
Ms Bull's recollection was that Mr Glynn read through the Will (consistently, the plaintiffs say, with Mr Glynn's concerns founded on Mr Cong's poor health and his wish to have "someone in there to show that he'd gone through [it]") (see [13] of her affidavit in which Ms Bull deposed that Mr Glynn said to her on the day of the meeting that "Margot - can you come and sit with me with this client Mr Cong? He isn't very well. I want to have someone else sit in and listen whilst I explain the will to him and make sure he understands it and what is happening". (The plaintiffs say that the conversation explicitly ties Mr Cong to the meeting which Ms Bull attended. Further, it is submitted that if Mr Glynn foreshadowed explaining the 2016 Will to Mr Cong, then it can likely be inferred that he did what he planned to do.)
Ms Bull recalled sitting in the room while Mr Glynn was talking to Mr Cong. Ms Bull accepted the possibility that a third person was present but her recollection of this was vague.
It is said that, having given the evidence referred to at T 521.5, Ms Bull gave the further evidence when pressed as to what she meant by the proposition that Mr Glynn went through the Will. It is noted that the evidence at T 524.23 is explicit in saying that Mr Glynn read through the Will (contra the defendants' written submissions at [563] that Mr Glynn's practice was to read the documents to his client).
In cross-examination, Ms Bull was pressed as to whether she had confused the execution of this Will with another Will by another person. Ms Bull's evidence was that she was able to recall this by reference to the fact that Mr Glynn took extra care to read out the Will, given the testator's poor health; and also on the fact that she had never witnessed the execution of a Will by a person of Asian appearance.
Ms Bull's evidence as to the meeting is that Mr Glynn "went through" the Will "and then we all signed it", saying in her evidence in chief (see T 521.5; T 524.23): A. Mean, well, normally I used to witness wills for Mr Glynn on a regular basis, and I just go in at the end and do the witnessing, but he actually wanted me in there longer and to sit through while he, sort of, went, read through the will with Mr Cong, cause he-- HER HONOUR Q. When you say "When he went through the will," he read it out aloud? A. Will, went through, yes, cause he said Mr Cong was very ill and he wanted someone in there to show that he'd gone through, and that's what he asked me to do, so, so yes, I was there a lot longer than normal, mm.
In cross-examination, Ms Bull did not accept that Mr Glynn simply asked Mr Cong to read it for himself without reading parts of the Will out to him, saying: A. My memory I thought was Tom going through the will reading it out.
Ms Shen's evidence (at [291]-[293], [302], [304]), is that the meeting lasted about 20 minutes. Ms Shen says that, after a brief greeting, Mr Glynn took out the documents, flipped the pages to some places, pointed to certain places and said to Mr Cong "sign here". Ms Shen was adamant that Mr Glynn did not say what was in the Will (T 572). Ms Shen says that Mr Glynn did not ask any questions and did not give any explanations; that Mr Glynn did not take any notes; that it was quick; and that Mr Glynn did not turn every page. Ms Shen says that after Mr Cong finished signing Mr Glynn said, "Amy sign" and presented her with a pen. Ms Shen says that after she finished signing Mr Glynn sat down and signed the documents and after that he walked out and returned with a lady who signed something without speaking and then left the room. Ms Shen's evidence that Ms Bull came in after the Will was signed is inconsistent with her initial verified defence in mid 2018 in which there was a non-admission rather than a denial, a matter about which Ms Shen was cross-examined (T 583).
Consistent with her professed disinterest in relation to such topics, Ms Shen expressed sublime disinterest in what had been said at the 3 June 2016 meeting, saying (at T 652) "my husband told me already so why I pay attention?".
In cross-examination, Ms Shen said that Mr Cong told her to sign the Will (in fact she signed the Deed not the Will) (T 583). Elsewhere her evidence (see T 709) suggests that what Mr Cong told her he was signing was a guardianship document not a Will. Ms Shen says that Mr Cong told her only the day before that they were going to see a lawyer. Ms Shen was insistent that no one told her what documents were (T 710); that Mr Glynn did not speak to her and did not explain it to her (T 711). At one stage in her cross-examination, Ms Shen said that she "had no other choice" and that Mr Cong was standing next to Mr Glynn and she just signed (T 711.50-T 712.2).
Ms Shen said (T 711) that if she had known the contents, she would not have signed it. Ms Shen said that she trusted her husband very much so she believed that he would not ask here to sign something at that time that was not good to her (T 712). Ms Shen became quite voluble when she said (at T 712): If I knew that after I signed this document I will become - I don't have anything left, and now I have these proceedings and today then I wouldn't sign at all.
In her affidavit (at [303]), Ms Shen was insistent that Mr Glynn did not explain the document(s) and that she had no choice but to sign. (Somewhat inconsistently at [294] Ms Shen deposes that she thought he [Mr Cong] must be signing a Will.) Ms Shen maintained that it was when this proceeding commenced that she became aware what the documents were about (T 721). Again, Ms Shen said that she trusted her husband and believed her husband would make the right decision. Ms Shen said (at T 724): If I knew by that time [what] his will was I definitely would not sign will because this will make me lose everything and I and my children need to sleep outside on the street so I definitely wouldn't sign will.
Ms Shen was adamant that Mr Glynn never spoke to her and never explained the documents.
Ms Stefadouros' evidence (at [96]-[115] of her affidavit) is that the meeting lasted about half an hour (T 1024); that Mr Cong could not sit for too long; that Ms Shen drove them from Burwood to Mr Glynn's office; that Mr Glynn spoke to Mr Cong for a few minutes about the Will; that Mr Glynn did not read each page and that there was no interpreter present and the document was not read out aloud in Mandarin nor was any written translation of it in Chinese provided. Ms Stefadouros did not remember specifically what Mr Glynn told Mr Cong regarding the 2016 Will (T 1025). Ms Stefadouros remembered that there was a Will and Deed.
Ms Stefadouros said that Mr Cong did not attempt to read the Will and she did not remember that he asked any questions. Ms Stefadouros said that there was no discussion between Mr Glynn and Ms Shen and that Ms Shen was quiet (T 1029). Ms Stefadouros said that Mr Glynn indicated where to sign and Mr Cong signed the Will; that Mr Glynn said he had to get a witness to sign the Will; that she could not remember whether he said that before or after Mr Cong signed; and that Mr Glynn left the room and brought in a woman who also signed the Will. At T 1025, Ms Stefadouros thought that Mr Cong signed first and then she had to sign and the witness came later but did not recall the complete details, and then said she could not remember; that it "might have been [before] or might have been after" (T 1026.30) (c.f., Ms Stefadouros' affidavit evidence at [109] in which she could not recall whether the witness came after or before Mr Cong signed).
Ms Stefadouros accepted that the effect of her evidence was that she knew that Mr Cong was going to the meeting on 3 June 2016 thinking that Ms Shen was going to sign the Deed and Ms Stefadouros' evidence was that Ms Shen had no idea about it (T 1008.49-T 1009.1). Ms Stefadouros denied that Ms Shen looked at it; and said that she had not seen Mr Cong read the documents and that he did not read them to Ms Shen. At T 1009, Ms Stefadouros said that she assumed that Mr Cong had explained it to Ms Shen (seemingly inconsistent with her evidence that Mr Cong could not read and with her evidence that Mr Cong could not understand English - since if so it is difficult to see how he could have understood what to explain to Ms Shen in the first place.) Ms Stefadouros said that it was not her place to question what they were doing; that she did not even consider it; and it did not occur to her to do so (again, emphasising that she is not a solicitor).
Ms Stefadouros accepted that from May 2016 she was "somewhat closer" to Ms Shen (in sense of Ms Shen being her boss' wife) but at T 1009, Ms Stefadouros said that at the time she did not think too much about whether Ms Shen was being treated fairly.
Ms Stefadouros recalled that there was talk about 43 Amy Street; and that if anything were to happen to Mr Cong, he could keep 43 Amy Street (although I query the reliability of the timing of this given that this was advice that was provided in January 2016). Ms Stefadouros also said that there was some small talk.
As noted, Ms Stefadouros did not recall Mr Glynn reading the Will (T 1028). Ms Stefadouros said that Mr Glynn did not read the terms of the Deed. Ms Stefadouros could not remember whether there was discussion about the Deed - she said that there could have been brief discussion; and did not recall discussion about guardianship.
The plaintiffs submit (and I agree) that Mr Glynn is likely to have well-remembered the meeting on 3 June 2016 because of its significance and because of his evidence as to Mr Cong's continued resilience in the face of his illness. It is noted that Mr Glynn said that it was quite an emotional meeting because he was saying good-bye to a client he had known for many years and that he gave Mr Cong a hug (only to be surprised how strong Mr Cong remained). That said, Mr Glynn's evidence as to what was said at the meeting was not particularly specific. The plaintiffs also submit that one matter which supports the evidence of Mr Glynn and Ms Bull of what happened on 3 June 2016 (as I understand it this relates to Mr Cong's ability to understand the document - not what occurred at the meeting itself) is what Mr Cong had done in the past when it came to executing wills (referring to Mr Pirintji's evidence in this regard - see above).

[82]

2016 Will

As adverted to above, the 2016 Will (dated 3 May 2016 but executed on 3 June 2016) appointed, as Mr Cong's executors, Ms Shen and Edmund (and, as an alternate Ms Stefadouros). The plaintiffs rely on the appointment of both Ms Shen and Edmund as executors as representing both "sides" of the family and as showing Mr Cong's continuing trust in Edmund.
The 2016 Will (see annexure to Edmund's affidavit) included the following clauses: 7. My will has been drafted to enable my family to benefit from the structure of my financial affairs. All long term holdings are held by Jolly Trading Pty Ltd with a view to providing a continuing income stream for the beneficiaries. The assets held by Jolly Trading Pty Ltd have been identified as the ones best sold for the purpose of discharge of all debts although these debts are readily serviced by income. I therefore encourage my executors and beneficiaries to take the appropriate legal financial and taxation advice relating to the administration of my estate. … 9. My executors and trustees hold my estate: (a) To sell, call in or convert into money any part of my estate and pay all or any debts, legacies, funeral and testamentary expenses and any death, estate or succession duties associated with my death or the administration of my estate; (b) I give all my right title and interest in the shares and business conducted by Jolly Trading Pty Ltd to my said wife Yanjiao Shen. I GIVE to Teresa Mae Yin Cong and Laurence Xavier Ming Cong and Edmund Bede Hao San Cong an annuity each, payable by request monthly instalments from my death for a period of 10 years, which bears the same relation to $10,000.00 as the Consumer Price Index All Groups Weighted Average of Eight Capital Cities or the index which is substituted for it current at the date of my death bears to that index at the date of this Will and my Trustees must vary the annuity on each anniversary of my death so that the annuity amounts to a sum which bears the same relation to $10,000.00 as the index current at the date of each anniversary bears to the index at the date of this Will. (c) I direct my trustee to retain the ownership of the properties at 43 and xxx [the Wu Property], Campsie NSW 2194 and 56 and 58 Duke Street Campsie NSW 2194 for a period of no more than ten (10) years after the date of my death so as to maximise its value as a result of any rezoning of those properties and at the expiration of this period [Note that the clause does not appear to have any concluding words here] (d) I acknowledge that my spouse will pay to Teresa Mae Yin Cong and Laurence Xavier Ming Cong and Edmund Bede Hao San Cong the agreed amount as contained in the Deed dated 2 May 2016 which is attached to this my Will. (e) The residuary beneficiaries of this my will are: (i) My said spouse Yanjiao Shen; and (ii) In the event that my said spouse does not survive me equally between those of my children namely Bruce Cong, David Cong and Leon Cong who survive me and attain the age of twenty one (21) years provided always that should any of my children not survive me to take under this my will leaving children who survive me and attain twenty one (21) years then such children shall take by substitution and if more than one equally the share in my estate which their parent would otherwise have taken.
Pausing here, there seems some juxtaposition of clauses in the copy that appears to be the executed 2016 Will (see the clause above that headed (c)) but no issue was taken as to this.
Clause 10(o) of the 2016 Will provided that: 10. My trustees may at their discretion: … (o) Hold all or any part of any superannuation death benefits paid to my estate in a separate superannuation proceeds trust upon and subject to the rights and powers herein created for any of the beneficiaries under this my will who qualify as death benefit dependants pursuant to the Income Tax Assessment Act 1997 in such proportions as my executors may determine provided that my estate is divided between all the beneficiriaries of my estate in the proportions that accord with my wishes expressed herein.
Clause 10(p) of the Will provided: 10(p) My Trustees may appropriate whatever part of the residue of my estate they consider sufficient as a fund to meet from its yearly income the annuity given by clause 9 C and the cost of administering the fund and, if this power is exercised, the following provisions apply: (i) in relation to the appropriated fund, my Trustees may exercise the power of investment given by law and the other clauses of this Will; (ii) the rest of my estate is exonerated from claims by the annuitant; (iii) if the income from the appropriated fund is insufficient to meet the annuity, my Trustees must resort to the capital of the find; (iv) my Trustees must apply any excess income in any one year from the appropriated fund as income of the residue of my estate, except to the extent necessary to replenish the capital of the fund where it has been depleted; (v) When the annuitant dies the appropriated fund falls into the residue of my estate;
The previous (unexecuted) draft sent on 27 April 2016 (see Annexure A to Mr Glynn's 18 May 2020 affidavit) had contained a different version of cll 9(c) and (d), which read: (c) I give $10,000 each year to each to my children Teresa Mae Yin Cong and Laurence Xavier Ming Cong and Edmund Bede Hao San Cong for a period ten (10) years from the date of my death or upon the sale or transfer to them all my right title and interest in the property known as 16 Nicholson Street, Burwood whichever is the sooner. (d) I direct my trustee to hold the said property at 16 Nicholson Street, Burwood for a period of no more than ten (10) years after the date of my death so as to maximise its value as a result of any rezoning of those properties and at the expiration of this period I GIVE all my right title and interest in this property to the said Teresa Mae Yin Cong and Laurence Xavier Ming Cong and Edmund Bede Hao San Cong in equal shares as tenants in common.

[83]

Deed

The Deed dated 3 June 2016 between Mr Cong and Ms Shen recited, inter alia, that: (at A), they were the registered proprietors in joint names of the seven properties there named - the four Campsie properties and the three Burwood properties (the Family Property, 2 Duff Street and 16 Nicholson Street); at (B) that they are married and have three children all under the age of 18 years; at (C) that Mr Cong was previously married and has three children to this earlier marriage all above the age of 18 years; and: D. On current information and to the best of Cong's and Shen's knowledge and belief the properties at 43 and xxx [the Wu Property], Campsie and 56 and 58 Duke Street, Campsie ("Campsie properties") ar proposed by the local authority for rezoning for high density living and as a consequence will increase in value. E. It is Cong and Shen's intention to retain ownership of the Campsie properties until rezoning or until such time that the local authority determines the zoning of these properties. F. Cong has paid a bond of $10,000.00 to the Department of Immigration and Ethnic Affairs as required for the Application for Residency in Australia for the mother of Shen ("Bond"). G. Cong has made a Will dated 2 May 2016 which is attached and marked A to this Deed. H. The purpose of this Deed is to make provision for Teresa, Laurence and Edmund upon the death of Cong.
Clause 2, headed "Operative provisions", provided that: 2. Cong and Shen agree between each other and with Teresa, Laurence and Edmund as follows: (a) In the event of Cong's death Shen will retain ownership of the Campsie properties for no longer than to [sic] ten (10) years for the purposes of the rezoning of the these [sic] properties; and (b) Upon rezoning of the Campsie properties or sale of any or all of the Campsie properties Shen agrees to pay to Teresa, Laurence and Edmund no sooner than 10 years after my death an amount in her absolute discretion to be divided equally between them an amount of no less than $6 million and not more than $9 million such amount to be determined by her as to the then market value of the Campsie properties; (c) In the event the Campsie properties are not rezoned for high density living within 10 years of the death of Cong, Shen agrees to pay $3 million to Teresa, Laurence7 and Edmund to be divided equally between them. (d) In the event of the sale of the said property at 43 Amy Street, Campsie before my death I direct and agree that upon rezoning of the remaining Campsie property to pay Teresa, Laurence and Edmund an amount between $5 million and $8 Million such amount to be determined by Shen in her absolute discretion. (e) In the event of my death before the refund of the Bond that amount is to be paid to Shen.
The Deed included a confidentiality clause (cl 3), an entire agreement clause (cl 4) and various other boilerplate clauses (including a dispute resolution clause - cl 7).

[89]

Mr Cong's death - 28 July 2016

On 28 July 2016, Mr Cong died. There was an issue raised by the first and second defendants as to the attendance by the plaintiffs at the hospital in the hours before Mr Cong died (in particular, that they are recorded as having attended the hospital at or around 9pm but left when Mr Cong was in a critical condition at around 10pm - Mr Cong dying at or around 1am on 28 July 2016 (when Ms Shen was present).
The first and second defendants point to the evidence of Edmund that when Mr Cong was in palliative care he said to Edmund that he did not want there to be any fighting for the properties after he died (and that Edmund nodded his head in agreement) (see at [25] of his affidavit sworn 28 February 2020); and they say that Edmund commenced this litigation in disregard of that wish. (One might, however, also note that Mr Cong expressed wishes about the provision to be made for his elder children and that Ms Shen has seemingly acted in blatant disregard of those wishes; hence, it is difficult to see that Edmund's disregard of his father's wish that there be no litigation over the properties goes anywhere.)
Mr Glynn was obviously notified of Mr Cong's death that same day because at 2.54pm on 28 July 2016 he sent an email to the "sheepproducts@hotmail" address, to Ms Shen, expressing his condolences and attaching a copy of the 2016 Will. Mr Glynn's recollection is that Ms Stefadouros telephoned him telling him that Mr Cong had passed away and asking for a copy of the Will. Ms Stefadouros was reluctant to accept that it was for Ms Shen's benefit that she had obtained the Will and she said that she did not give the Will to Ms Shen nor did she discuss it with her.
Ms Stefadouros did not remember an email to Mr Glynn asking for the Will the day that Mr Cong died (T 990). At T 992, Ms Stefadouros said that she did not think that she asked Mr Glynn to send the Will to her, and she agreed that she could not think of anyone apart from Ms Shen who would have asked that.
Ms Stefadouros agreed that she had obtained the 2016 Will from Mr Glynn but could not remember "specifics" (T 1018). Ms Stefadouros said that she did not tell Ms Shen the contents of the 2016 Will; that she might have printed it out later (but not on the day that Mr Cong died); and then said that as far as she knew Ms Shen would have had copy of the 2016 Will anyway (which raises the question why she thought it necessary to ask Mr Glynn for the 2016 Will in the first place). Ms Stefadouros denied that she gave the 2016 Will to Ms Shen; but then said "I might have handed it to her" (though she could not remember) and said she knew Ms Shen "needed it for something" (T 1019.4-5).
Ms Stefadouros gave inconsistent evidence at T 1019-T 1020. Ms Stefadouros at T 1020 said she thought that Ms Shen needed the Will for life insurance or to close down the bank account (but then said that she was thinking of the death certificate). At T 1021, Ms Stefadouros could not remember specifically giving Ms Shen the 2016 Will and did not know how Ms Shen was going to understand it.
Ms Stefadouros gave evidence that, out of curiosity, she looked at the 2014 Will (T 992); and opened a sealed envelope to do so; but she cannot remember when she did and she said that Ms Shen did not ask her. She could not see the need to pass on the contents of the 2014 Will to Ms Shen.
I can well understand that Ms Stefadouros would not have necessarily given the 2016 Will to Ms Shen that day but it is implausible that at some stage in the period after Mr Cong's death she did not do so - and indeed it is clear that she must have done because Ms Shen took it to the bank after her first attempt to withdraw money from Mr Cong's bank account was unsuccessful (unless Ms Shen already had a copy given to her by Mr Cong).
In the email, Mr Glynn 'reminded' Ms Shen that if she wished to rescind the contract for the sale of 43 Amy Street Campsie then he suggested she contact the conveyancing solicitor or instruct him to notify the purchaser of this without too much delay.
At T 1017, Ms Stefadouros said there would have been some discussion with Ms Shen as to what passed between Ms Stefadouros and Mr Glynn regarding the 2016 Will and Deed but she could not remember details and said that it was when there was an email (about taking Ms Shen to court). At T 1017, Ms Stefadouros said that they would have talked more about it, but not shortly after Mr Cong died (and not in any detail regarding the 2016 Will).

[90]

Edmund's conversations with Ms Shen as to the 2016 Will

Edmund deposes (at [25]) that after Mr Cong's death he had a conversation with Ms Shen in which he suggested that she should get a lawyer and perhaps she should get the 2016 Will translated. This was at a time prior to the present dispute having arisen and is consistent with Edmund having regard to the fact that Ms Shen was a co-executor under the 2016 Will. Edmund says that Ms Shen's answer to this was that she was just waiting for the Campsie properties to be rezoned (which, if Edmund's recollection is correct, clearly indicates some familiarity with Mr Cong's testamentary intentions if not indeed the terms of the 2016 Will and is consistent with Mr Glynn's account that there was general discussion of rezoning of properties at the meetings in which instructions were given as to the 2016 Will (see Edmund's evidence at T 92). The first and second defendants say that this also indicates Edmund's awareness of Ms Shen's language difficulties (at least in relation to reading English).
Edmund agreed in cross-examination that shortly after Mr Cong's death he asked Ms Shen for a copy of the Will (T 124) and that she gave him a packet with original documents. That supports the conclusion that, by then, Ms Shen had been given the Will or at least some kind of certified copy of it (as does the fact that she produced it to the bank when withdrawing money from Mr Cong's account) (and not some printout that Ms Stefadouros had given to her from Mr Glynn's email). That said, the original Deed was produced to the Court during the course of the hearing from Ms Shen's solicitors which suggests that it was not among the documents given to Edmund or had been returned to Ms Shen if it was. Edmund said that he did not read the Will when he received it (T 126). This seems somewhat surprising; one might have thought he would have looked at the documents to confirm what they were or if anything had to be done with them, if not out of curiosity as to their contents. However, the explanation for this seems to be that Edmund's evidence was that he had no knowledge or understanding at the time of his duties as executor (T 125; see [37] of his affidavit) or had only a "loose idea" (T 126) and, if so, it is perhaps not implausible that he did not take any steps in relation to the documents at that stage (even though he had asked for them). Edmund's evidence is that he thought that there would be a point when he and Ms Shen would (as I understand it, together) deal with the properties (T 125).

[91]

Alleged loans from Mr Baoming Shen

The evidence as to moneys paid (allegedly by way of loan) by Mr Shen was confused and inconsistent. Apart from the moneys earlier said to have been paid for the renovations to the Wu Property (which seem to have gone beyond renovations in any event), there are two categories of payments for which Mr Shen is said to have lent or provided family moneys to assist Ms Shen: payments to creditors of Jolly Trading; and mortgage liabilities in relation to the properties.
Ms Shen gave evidence (at T 740; T 742) that when her brother attended Mr Cong's funeral she asked if he could pay the company's creditors and that her brother did so, using "some family moneys". (Ms Shen said that she did not think it necessary to put this in her affidavits.) Earlier, at T 739, when asked how the creditors had been paid, Ms Shen said that Mr Cong had called Mr Shen and told him how much the debt was and that after Mr Cong's death she called her brother to pay off the debt from creditors in China. Ms Shen agreed that in August 2016 she had no idea how much was owed for truck storage or loading charges or the like (but she says that Mr Cong had told her brother and that this was arranged between her brother and husband). Ms Shen identified Mr Zhongkai Wei, whose name appeared in certain of the documents, as Mr Cong's friend.
At T 741, Ms Shen maintained that she had no idea about the business. Her evidence, at T 742, was that, as at July or August 2016, Mr Cong told her the names of Chinese creditors and said he had already told everything to Mr Shen and told her to ask her brother (and that for debtors in Australia he had already told Ms Stefadouros). Ms Shen said that the conversation with Mr Shen in relation to the debts was when he attended Mr Cong's funeral.
Taken to documents in relation to payments from China purportedly to Jolly Trading (T 676), Ms Shen's position was that these were prepared by the "China side" and that "the company could write down anything he [sic] want to". Ms Shen said that she was never involved in the company payments (T 681).
Mr Shen confirmed that after the funeral, Ms Shen asked him to pay some debts (T 759); he said that there were five people in China and that Ms Shen gave him the names and the amounts to pay and he transferred the money from his bank account (T 760) and he says that Ms Shen only repaid him that amount. This is inconsistent with Ms Shen's evidence that it was Mr Cong who told Mr Shen the names of the Chinese creditors (and Ms Stefadouros who told him the names of the local creditors).
Taken to documents that were attached to Mr Shen's own affidavit, he said that he had not seen them before (adding that he did not understand English - although it should be noted that at least some of those pages were in Chinese). Mr Shen said he agreed that the documents were sent to him but said that he had not seen them and did not receive documents, just goods and did not ask about them (T 762-T 763). Mr Shen was adamant that he did not receive any documents and did not see a single document relating to the Jolly Trading business in China (T 763-T 764). Mr Shen's evidence, having worked for 8 years for the company, was that he did communicate with customers but did not need to mention the name of the company; and that he did not need to communicate with others because all was arranged by Mr Cong and he just followed his instructions (T 764).
As to the moneys owing to the bank, Ms Shen accepted that the mortgage liability in August 2016 was about $8 million. At T 795, Ms Shen gave evidence that she asked her brother for money because she discovered she owed the bank $8 million and she told him she had no income. (However, it is apparent from her evidence as to her earlier calculations with Mr Cong that this cannot be something she had only discovered after Mr Cong's death and Ms Shen agreed that she had rental income.) Nevertheless, Ms Shen said that she told Mr Shen that she had mortgage debts over $8 million and that she could not service the payments. Ms Shen said that, according to Chinese tradition, when she said she had no income that meant no job (though even that is problematic because Ms Shen at that stage had or was about to start the new company business as company director, taking over the existing Jolly Trading business).
Mr Shen's account of the conversation after the funeral was that Ms Shen said that she had a lot of debts and needed some money to repay the bank; that he said "OK" in relation to the family money but that, if anything happened to his mother, then he needed 50/50 in the Wu Property (T 760). (Pausing here, Mr Shen's account of the conversation at first seems to be that it was his suggestion that, as part of the arrangement, he would receive 50% of the Wu Property - and it is worth noting that, at this stage, the Wu Property was not in Ms Wu's name so the logic of something happening to give him an interest in the property when she died is not immediately apparent.)
As to the money for the Wu Property, Mr Shen said that this was remitted through an agent in China, using a company whose boss was Yu Zhen (T 765). Mr Shen said that he wanted to transfer the money and that the agent gave him an account and he (Mr Shen) transferred the money. Mr Shen was not sure who gave instructions in relation to the account in Australia but thought it was probably Ms Shen who told him on the Australian side (T 765). Then Mr Shen said that he actually told Yu Zhen to contact Ms Shen and they made the arrangement.
Asked how many payments there were, Mr Shen thought there were seven (but he did not sound sure about this) and the amount was 4.75 million RMB. Mr Shen could not recall whether there were bank statements - he said that he gave the records to the solicitor in August/September (by email to his sister's lawyer) (T 766). A call for those documents was answered by the response that they were not produced.
As to the 3 million RMB paid by Ms Shen in November 2019, Mr Shen said that his sister owed him at that point over 6 million - and then that it was 7 million adding all the transactions. Mr Shen then said (T 768) it was roughly over 9 million but less than 10 million.
Mr Shen agreed that from July, August, and September 2006 he caused to be remitted to Australia money owing by Tianjin but disagreed with the suggestion that in those months Tianjin made payments for debts owed to his employer (T 768). (Pausing here, the documentation that is in evidence records moneys transferred for purported company debts. Whether that was an attempt to transfer moneys for personal purposes out of China in breach of that country's exchange requirements is perhaps a moot point since the only objective evidence is that the money was recorded as being for business transactions. Moreover the notion that a substantial sum of money was transferred in tranches - at Ms Shen's direction - and not recorded in any document produced to the Court but somehow engraved on Mr Shen's heart is not plausible and gives me no confidence that there was any such loan arrangement as Mr Shen contends. Rather, the impression his evidence gives is that moneys were simply transferred as and when Ms Shen asked for them and that there was some kind of unwritten understanding that this was all family money which he would be entitled to claim back whenever he chose. I do not accept that this establishes any enforceable loan arrangement or agreement and I did not find his evidence credible on this issue.)
Mr Shen denied that the moneys sent to Australia in August, September and October 2016 were owed to Jolly Trading by Tianjin but then he also said that he did not know what was happening in Australia (T 768). At T 769, consistently with Ms Shen's evidence but not with his earlier evidence in cross-examination, Mr Shen said that Mr Cong told him in mid-July who the creditors were in China (but he said that he had no idea who the creditors were in Australia) and that when he was at the funeral Ms Shen asked to borrow money. In evidence there was a receipt from Zhongkai Wei, which Mr Shen said he had asked for, but that there were no other receipts. Mr Shen confirmed that he is not now in the business of importing skins (T 770).
The plaintiffs say that the genesis of the relevant loans was, on Mr Shen's account, a detailed description by Ms Shen of the debts that needed to be repaid: $800,000 RMB for trucks, $280,000 RMB for storage and loading, and $350,000 RMB to repay Zhongkai Wei for example; but that, on Ms Shen's evidence, she knew nothing of these debts and never told him what to pay.
The plaintiffs say (and I agree) that the evidence of Mr Shen and Ms Shen was not consistent on the issue of how the alleged loans came to be remitted to Australia.

[92]

Incorporation of Cong Australia International and Ugg Australia International

Within a fortnight of Mr Cong's death, a new company was incorporated, Cong Australia International Pty Ltd (Cong Australia International) of which Ms Shen and Ms Stefadouros were the directors. The following day, Ugg Australia International Pty Ltd (Ugg Australia International) was incorporated.
Ms Shen's evidence (see T 574) was that Mr Cong told her when he was in hospital in the days or weeks before his death that Jolly Trading had a lot of debts and that she should pay off its debts and shut down the business. Ms Shen maintained that this was the case at T 800 (when she accepted that she effectively took control of Jolly Trading).
The suggestion that Mr Cong told Ms Shen to shut down Jolly Trading and pay off its debts (which Ms Stefadouros in her evidence echoed) is squarely inconsistent with the note of what Mr Myhill, the social worker, records he was told. It is also inconsistent with the email that Teresa sent to Mr Cong's business associate in mid July 2016 (she says at Mr Cong's request.
Moreover, insofar as the logic of shutting down the existing business and immediately commencing trading in a new company seems to have been premised on a wish that Mr Cong's reputation should not be sullied if the business did not succeed, that is inconsistent with the intention being that Ms Shen would attend to payment of the debts (since then the reputation of the existing Jolly Trading company would surely not be tarnished) and, even more tellingly, inconsistent with naming the new business after Mr Cong (which would hardly serve to protect his reputation after death if that new business failed).
It seems apparent from documents in evidence from at least one of the company's customers (Freight Solutions Victoria) that there was a relatively seamless transition between the Jolly Trading business (which operated at least up until 4 August 2016) and Cong Australia (with whom it dealt from 20 September 2016); and, as noted above, Ms Shen accepted that she had effectively taken control of the Jolly Trading business (T 600).
The relevance of Ms Shen's assumption of the business of Jolly Trading lies in whether she was thereby taking a benefit under the Will (such that the equitable doctrine of election would operate - see below). The plaintiffs say that it is immaterial whether Ms Shen used her own funds in this regard - in that she had access to Jolly Trading's business and assets.
Pausing here, there was inconsistent evidence as to Ms Shen's familiarity with the business of Jolly Trading (and even as to its name) in the period prior to Mr Cong's death. In cross-examination, Ms Shen maintained that she did not work in the business of the company but this is inconsistent with her affidavit (see [61] of her affidavit affirmed 13 October 2017) where Ms Shen refers to her "only work experience other than working in the business of the deceased…" (my emphasis). Moreover, in an immigration application signed by Ms Shen and submitted on behalf of Ms Shen's brother, Ms Shen is described as having been employed at Jolly Trading for two years as "Finance Director/Manager", which Ms Shen said in the witness box was incorrect.
Ms Shen was adamant that she had not heard the name "Jolly Trading" until she came to prepare her affidavit for the proceeding (see T 697; T 698) (even though she had signed documents such as financial statements or tax returns in relation to the company and there were bank statements that recorded transfers from or to Jolly Trading and even though it was her evidence that she had lent considerable sums of money to the company before Mr Cong's death); and that she had no idea about its financial position - that it was all being managed by Mr Cong (see, for example, at T 681). Ms Shen's evidence was that Ms Stefadouros asked her to sign documents (T 616) and that the company was just referred to as "Zi Li's company" (T 699). Ms Shen also said that the money in the joint bank account was all arranged by Mr Cong (T 628). Later (at T 685), Ms Shen said (in relation to the document which was Ex H) "whenever I needed to sign it, she [Ms Stefadouros] just showed me the document and I sign it. Actually, I signed many documents but I can't recall that which were". Her position was that she did not pay attention in relation to Jolly Trading (T 700) and, taken to evidence of the deposit of $50,000 from Jolly Trading on 17 March 2015, her response was that she did not ask who had paid it - that she spent all her time with her husband and children (T 701) and again that she looked after her children (T 701).
In cross-examination, Ms Shen said that she did not communicate with customers in China (though she accepted that Mr Cong had said she could). Ms Shen said that she only knew that her elder brother could find buyers (T 580). Ms Shen said that she invested ($300,000) in the new company "to have a try" and said "it's like a gamble". (Again, it is difficult to see why one would invest in a new company when there was an existing company already there and she was going to pay off the debts anyway.)
As to the business of Cong Australia International, Ms Stefadouros said that Ms Shen would deal with China and organise payments and Ms Stefadouros assisted her. Ms Stefadouros said that she dealt with documents, payments, suppliers, but there were no contracts; and Ms Shen dealt with customers in China (T 950). Although her affidavit described her as an office assistant, Ms Stefadouros accepted that she was a company director of Cong Australia International.
Ms Stefadouros confirmed that Cong Australia International was registered as a business in early August. She resisted the proposition that it was the same business as Jolly Trading, insisting that it was a "similar" business (on the basis, apparently, simply that it was not the same stock). Ms Stefadouros accepted that it used the same email but she said it did not necessarily have the same suppliers (she later said there were a couple of new suppliers) and she was not sure about the customers (see T 950-T 951). However, ultimately Ms Stefadouros accepted that both companies exported raw sheepskins to China and to that extent it was the same business. Ms Stefadouros said that Ms Lisa Wu was employed by Cong Australia International for a short time but she does not have her contact details (T 952).
Ms Stefadouros' evidence was that the business of Jolly Trading was to be closed down but she saw this not as Mr Cong's testamentary intentions but "moving forward". At T 1021, Ms Stefadouros said that the discussions about Jolly Trading trading down and discussions about paying off suppliers of Jolly Trading would have been in early July 2016 before Mr Cong died. Ms Stefadouros said she had not spoken about Jolly Trading with Ms Shen before July 2016. At T 1022, Ms Stefadouros said that from July 2016 onwards she began mentioning Jolly Trading to Ms Shen in order to pay the bills.
Ms Stefadouros accepted that, after Mr Cong fell sick, she arranged for payments to be made to certain of the creditors of the company, with at least some of the moneys owed by, and coming in from, debtors used to make those payments to creditors (T 1029).
At T 1022, Ms Stefadouros' said that, in respect of two deposits of 4 August 2016 of $30,000 and $40,100 respectively, she would have been there to assist for one of them; and, when asked whether, to her knowledge, Ms Shen at that stage was quite able to operate the account of Jolly Trading without her assistance, she said, "at that point, possibly, yes". Ms Stefadouros said that Jolly Trading had an Australian Dollar and a US Dollar account, and that, to her observation, Ms Shen could make deposits into the Australian Dollar account by filling a deposit slip in respect of that account number, but that Ms Shen wouldn't make any payments from the account.
At T 1029, reference was made to her affidavit sworn 22 June 2018 at [120], and specifically to a conversation with Ms Shen where Ms Stefadouros said that Ms Shen said, "I am borrowing money from my mother to pay any suppliers". Ms Stefadouros said that Ms Shen did not say how much. (And Ms Shen accepted in her cross-examination that she did not recall borrowing any money from her mother before July 2016 - see T 782.) At T 1030, Ms Stefadouros said that the debt was between Ms Shen and her mother; it was not a debt between Ms Stefadouros and her mother, or Jolly Trading and her mother.
Ms Stefadouros said that a lot of money came through from Ms Shen's mother. She said that Ms Lisa Wu, the bookkeeper, gave material to the company's accountant to assist him prepare the company's financial statements. At T 1031, she said that she became a director and shareholder of Cong Australia International, which started in early August 2016. Ms Stefadouros said that, by this stage, she had worked for businesses associated with Mr Cong for 16 years; but that the only experience that she had with suppliers was paying them.
Ms Stefadouros said that she had a fair understanding of how the business worked from Australian side, but not the Chinese side. Ms Stefadouros said that Ms Shen could speak Mandarin; that Ms Shen had not dealt with suppliers before but that she began to do that. The Cong Australia International business was conducted up until 2019.

[99]

Mediation of dispute regarding 43 Amy Street - June 2017

A mediation of the dispute with the purchaser of 43 Amy Street took place in June 2017 by way of court annexed mediation. A retired solicitor, Mr Tony Allen, acted for Ms Shen at the mediation (at Mr Glynn's request) and in relation to the dispute.
Mr Allen, who made a final note immediately after this meeting, had first met Ms Shen on 13 October 2016 (prior to the mediation). Mr Allen's evidence was to the effect that Ms Shen and Ms Stefadouros attended a conference with him and with Mr Hand of Counsel on 13 October 2016. The conference lasted for one hour and fifty minutes. Mr Allen confirmed that English was spoken throughout the meeting; and he observed Ms Shen speaking English with Ms Stefadouros.
Significantly, and I accept this evidence without reservation, Mr Allen says that he asked Ms Shen if she needed an interpreter and her response was "no". Mr Allen said that Ms Shen indicated her understanding during the meeting by the fact that she would nod and say "I understand" (T 509). (Pausing here, while I accept that it is possible that someone not understanding what was being said might simply nod vacantly or in some fashion indicate an understanding without actually having any such understanding of what was being said or conveyed, I think it unlikely that an experienced solicitor would not have discerned that there was a problem if faced with no more than such an indication; and would in some way have sought to satisfy himself or herself that the advice was being understood.) Mr Allen's evidence was that at the meeting on 13 October 2016, Counsel was told on occasions by Ms Shen that she did not require an explanation.
Mr Allen said that Ms Shen made clear that she wanted the sale process delayed as long as possible to give herself the greatest opportunity to avoid a settlement of the sale of the property (which is inconsistent with Ms Shen not being able to communicate with him).
Mr Allen's understanding (he was not sure whether gleaned from Ms Shen or Ms Stefadouros or Mr Glynn) was that Ms Shen believed she had almost been "tricked" into signing the contract; and that she was not aware that the property was rezoned or was being rezoned until shortly after the contract was signed (T 509). He said that Ms Shen was unhappy and felt cheated. (I accept that this is Mr Allen's perception or understanding of what was being conveyed to him but it is consistent with the objective events and it corroborates Teresa's evidence as to Mr Cong and Ms Shen's reaction to news of the rezoning.)
Mr Allen's evidence was that he observed that there were visual communications between Mr Hand and Ms Shen. He said that on a number of occasions, Mr Hand asked Ms Shen if she needed him to explain further (and she did not say that she did) (T 510). He also recalled that Ms Shen and Ms Stefadouros had some reasonably short conversations in English.
Mr Allen's evidence was that Ms Shen did not require Mr Allen's explanation of the very short affidavit which supported the commencement of the litigation in respect of 43 Amy Street and that she looked at the affidavit before she signed it (T 510). It was two or three paragraphs in length. He said that in the presence of Ms Stefadouros he spoke to her. He said that Mr Glynn had explained it to Ms Shen. Mr Allen said that Ms Shen put it down, looked at it and signed it.
The mediation itself took place on 2 June 2017. There was a conference that morning before the mediation attended by Mr Hand, Mr Allen, Ms Shen and Ms Stefadouros. Mr Allen said that this pre-mediation meeting took 15 minutes to half an hour; and that Mr Hand was speaking in English.
The mediation took place under the auspices of the court annexed mediation process with a registrar of the Court acting as mediator. (Pausing there, one would expect the mediator in the ordinary course to have satisfied himself as to the ability of Ms Shen to understand what was occurring but there was no evidence as to this.) Mr Allen said that there was some small talk at the mediation including as to how the business was going and that Ms Shen and Ms Stefadouros were "reasonably happy" with the way the business was going (T 514) (Ms Shen, on the other hand, says that she did not pay attention at the mediation (T 645); that there was no small talk with Mr Allen and that it was impossible that she told Mr Allen that the business was going well (T 646), though she readily accepted that neither Mr Allen nor Mr Hand spoke Chinese (T 643). Ms Shen's evidence seems to have been that Ms Stefadouros was responsible for giving the instructions and talking during the mediation.)
Mr Allen gave evidence that: There were three or four offers that were - by each party that obviously got thoroughly discussed and instructions given and those are recorded in my handwritten notes that are attached. The instructions came from Ms Shen. At the end of the mediation, counsel read to Ms Shen the proposed agreement. Ms Shen said nothing to indicate that she did not know the document's terms.
Mr Allen's recollection is that Mr Hand went through the Heads of Agreement document recording the agreement reached at the mediation clause by clause, without Ms Shen indicating that she did not understand what was being said.
Ms Stefadouros agreed that Mr Allen and Mr Hand spoke English to both her and Ms Shen and had contact with Ms Shen. Ms Stefadouros says Ms Shen relied on her to help translate English into simpler English (Ms Stefadouros does not speak Chinese so clearly could not have translated the English into Mandarin) (T 1003). Ms Stefadouros said that "I gave main instructions via Amy. She didn't understand everything but she understood a lot of it - after I explained a lot of it to her". Ms Stefadouros agreed they spoke to both of them in English and Ms Shen answered in English (T 1003).

[100]

Evidence of Edmund and Teresa as to conversations with Ms Shen

Teresa's evidence (see [41] of her affidavit sworn 21 July 2017) is that, some months before commencing the litigation, Ms Shen said to Teresa and Edmund that she would: …provide you all with the $10,000 each year as set out in the will if you ask and give me a few days warning. I will keep you both informed about the court case regarding 43 Amy Street Campsie. I am hoping for a re-zoning in Campsie so that these properties are worth more.
Edmund's evidence is that he informed Ms Shen on multiple occasions that she ought to obtain a lawyer about the Will, to which she responded that she was "just waiting for the properties to be re zoned before anything is done".
The plaintiffs also refer to Laurence's affidavit sworn 4 August 2017 at [32], in which he deposes that Ms Shen said to him words to the effect that Mr Cong had said to her "what he wanted regarding your inheritance which would be property and access to cash. Your father has left properties for each of you three children". (Obviously, Laurence's evidence was not able to be tested by way of cross-examination as he died before the hearing and before a second affidavit could be attested by him. Part of his affidavit was read as to his understanding and the balance for the fact of what he there deposed had been communicated to him.)
Pausing here, the plaintiffs say that a striking aspect of the evidence is that Ms Shen did not (despite what they maintain was her knowledge of the 2016 Will and Deed) tell them that she would not honour their terms and did not, for example, tell them that the estate was insolvent or that she did not recognise their claims to moneys at the end of the ten years; rather, that it was only after the commencement of the present proceeding that the relationship broke down. (That submission is of course predicated on it being found that Ms Shen was indeed aware of the terms of the 2016 Will and Deed at the time of the above conversations. Those conversations would equally be explicable by reference to Ms Shen's account of the conversations that she had with Mr Cong in relation to her giving the children $10,000 a year and a sum of money at her discretion if the properties were rezoned and she became (in her subjective opinion) "very, very rich".)
Edmund says that he had a conversation with Ms Shen in which she said that she wanted to put one property in Teresa's name (T 126). Relevantly, Edmund gives evidence (which Ms Shen broadly does not deny) that at some stage, Ms Shen suggested that he or his sister take out loans to help alleviate the capital gains tax (CGT) and that she said she would help to assist with the mortgage payments (T 92). This is consistent with Ms Shen's evidence in cross-examination as to her concern as to the tax liabilities after her husband died and her evidence that she sought assistance from her brother, Mr Baoming Shen, at the time of Mr Cong's funeral to meet liabilities (see above).

[101]

Lillian Street, Campsie acquisition - July 2017

To my mind, one of the most extraordinary aspects of the matter was the acquisition in Ms Wu's name (but arranged by Ms Shen) of another property in Campsie - 64 Lillian Street, Campsie.
Questioned about this (at T 812), Ms Shen's immediate response was "that's not my property". Ms Shen said that it was a property that a friend of her current husband wanted to purchase but could not do so in his name (perhaps because the friend was in China and there were some applicable foreign investment issues either here or in China, although that was not made clear); so an arrangement was reached that he could "use" Ms Wu's name to buy the property. Ms Shen said that she lent the money for the initial deposit (between $450,000 and $500,000) but was not worried because the property was under Ms Wu's name. At T 812, Ms Shen said that she transferred $479,770 to Ms Wu's account on 26 July 2017.
Ms Shen then amended that evidence to say that the "friend" purchased the property together with another person (Yang Ping Huang from Shenzhen City) and that those two both had a 50% interest but that the other person's share was under Ms Wu's name. At T 814, Ms Shen said that the friend eventually made a loss so he was "not quite happy about it".
At T 814, Ms Shen gave the further explanation that she did not make a loan to Ms Wu; rather, she lent the money to this friend of her current husband; and she said that he gradually paid it back. Ms Shen said that the arrangement was not in writing because the property (or, as I understand it, the "friend"'s 50% share of it) was under Ms Wu's name and there was no interest. Ms Shen then said, confusingly, that it was fully paid out, so it was not a borrowing (T 815).
Ms Shen's philosophy in the witness box seemed to be that if a friend borrows money, the friend will not pay interest and that one relies on trust. Ms Shen said the friend gradually paid the money back but Ms Shen seemed uncertain when that was (see T 816) and Ms Shen then said that she could not even say when the property was bought. At T 816, Ms Shen said that "friends, any friend" will not write an IOU and emphasised that it was for a "short short period of time" and that it was his (the friend's) investment property - not hers (which seems to me beside the point). Pausing here, in hindsight one can well see that the plaintiffs' concern at the potential for dissipation of the estate (which founded the application for freezing orders) was justified when transactions of this kind were occurring, though I do not suggest that the plaintiffs were aware of this acquisition at that time.

[102]

Sale of 43 Amy Street, Campsie - July 2017

Completion of the sale of the 43 Amy Street property occurred on 17 July 2017. The purchasers paid the sum of $1,430,000 (see Ms Shen's affidavit affirmed on 4 September 2020 at [44]; [46]). Of that amount, $702,717.28 was paid into the Westpac account (ending #9688) to discharge the mortgage over the property and $699,812.21 was paid into another Westpac account (ending #1738) on 18 or 19 July 2017 (see Ex Q).
Ms Shen has deposed that the net moneys received from the sale were used to pay Jolly Trading's accounting fees, legal fees (including those of Mr Glynn) and to make a loan to her mother, Ms Wu (this being the amount that was applied to the Lillian Street acquisition and in respect of which Ms Shen said in cross-examination that it was not a loan to her mother - see above); as well as a loan to Cong Australia International (see Ms Shen's 4 September 2020 affidavit at [49]). (Pausing here, the extraordinary evidence about the alleged loan to Ms Wu - when the money in fact was lent to a friend of Ms Shen's current husband - indicates how unreliable Ms Shen's explanations for her financial transactions have been; and the apparent disregard for the need to be careful as to what she deposed on affirmation.)
The plaintiffs point to the bank records for the Westpac #1738 account, as disclosing that, in the week after the settlement, the following amounts were withdrawn:

$3,762 on 20 July 2017, marked "Jolly Accountant";
$479,770 on 26 July 2017, deposited into Ms Wu's account;
$100,000 on 1 August 2017;
$300,000 on 2 August 2017, marked "Cong Austr";
$100,000 on 3 August 2017, marked "Xin Ni".

The plaintiffs note that by at least 29 May 2020 the balance of the #1738 account was $5,388.07 (see Ex Q).
The first and second defendants say that, as to the withdrawal on 1 August 2017, on that day the sum of $100,000 was deposited into Cong Australia International's business account numbered #59508 and used to pay suppliers (Ex P); and that, as to the withdrawal on 2 August 2017, on that day $300,000 was deposited to that same Cong Australia International business account and also used to pay suppliers (Ex P).

[106]

Application for Probate of 2016 Will - 2017

Meanwhile, after the commencement of the present proceeding, Ms Shen filed an application for probate in respect of the 2016 Will (which she now impugns). In the probate proceeding (2017/236460), Ms Shen affirmed an affidavit of executor on 29 November 2017 in which Ms Shen deposed that she believed the 2016 Will to be the last Will of Mr Cong and that she was not aware of the existence of any other document purporting to embody the testamentary intentions of the deceased; and Ms Shen estimated the gross value of the estate at $11,521.34 and its net value as nil.
In that affidavit (at [16]), Ms Shen deposed to the following reasons for the delay in making the application: (a) At the time of death of the deceased, no one advised me of the necessity of applying for a grant of probate and I was overwhelmed with the responsibilities of taking care of our three young children, arranging for the funeral and other affairs of the deceased, and legal action regarding the sale of property known as 43 Amy Street, Campsie NSW 2194 (b) I was also informed by Thomas Patrick Glynn, solicitor, that the assets in the estate of the deceased were small enough so as to not warrant an application for grant of Probate.
Pausing here, a cynic might add that, in the time when Ms Shen deposed that she was overwhelmed with the responsibilities of taking care of her three young children and the other matters set out in (a) above, she was also in the throes of a new romantic relationship and re-marriage. More relevantly, her evidence as to the affidavit in application for probate of the 2016 Will was inconsistent and unsatisfactory.
Taken in cross-examination to the application for probate (T 585ff), Ms Shen said first that "actually" she could not recall that event. Ms Shen said (in respect of 16) that this information was said to Ms Stefadouros by Mr Glynn and Ms Stefadouros later told her; then Ms Shen said that the lawyer had read the document from English to Chinese and Ms Shen accepted that there was nothing in that which she did not understand (T 588). Then (consistent with a pattern of blaming others), Ms Shen said that she did not understand and (in a somewhat ill-tempered response) that it should be Mr Glynn who needed to understand; that she (Ms Shen) did not need to understand it (T 590) (and inconsistent with Ms Shen's complaint throughout the proceeding that others should have explained things to her).
Later in cross-examination, as to the application for probate (T 725), Ms Shen said that the lawyer told her (because she was not sure) that she needed to apply for it and so she had said "Ok go ahead". When reminded that she had previously said that there was nothing in the affidavit as read out to her that she did not understand (T 588.22), Ms Shen's evidence at this point in the cross-examination was that she did not understand and then said that "I forget" (in a way that appeared to me to be attempting unco-operatively to shut down further questioning on the topic).

[107]

Transfer of the Wu Property to Ms Wu - 2017

The Wu Property was transferred to Ms Wu for a stated consideration of $1,675,000 in 2017.
It should be noted that Edmund corrected his earlier affidavit evidence (in which he had deposed that he was not aware that Ms Shen was intending to transfer or had transferred the Wu Property), Edmund confirming in cross-examination that he was notified of Ms Shen's intention to do so (see T 93). The plaintiffs, however, emphasise that what Edmund was not told was that the transfer would be for no cash consideration.
At T 802, Ms Shen agreed that she had not received any money from the transfer of the Wu Property to Ms Wu (just the money received from Mr Shen of over $450,000). Ms Shen also agreed that the reason set out in her affidavit at 18 as to why she transferred the property to Ms Wu was incorrect and she confirmed that Ms Wu had not made loans to the estate to repay business creditors (T 791).
Asked to explain why her October 2017 affidavit was incorrect in this regard, Ms Shen resorted to the (by now familiar) excuse (T 791), that the lawyer just went through the document quickly and did not explain it carefully; and also said that there was no translation and that the lawyer did not do a good job. Later, when it was pointed out (T 808) that the October 2017 affidavit had been translated, Ms Shen said it was "just verbally translated to me and then they told me to sign it" and (at T 809) that it was not translated to her; that the person just verbally interpreted it, and "just read it out continuously, and from here to there, and then, 'What was this? What was that?' And that's it, and then I just sign it". (This evidence just reinforced to me the difficulty in accepting Ms Shen's assertions that things were not translated or explained to her - since the distinction in Ms Shen's mind between something being translated and something being verbally translated was not clear and the practical import of such a difference is equally unclear. Rather, it seemed to me that Ms Shen relied upon her professed inability to understand English as a convenient excuse whenever she was faced with evidence of documents that she had signed and by which she did not now wish to be bound.)
In what I considered to be a genuinely heartfelt piece of evidence, Ms Shen said (at T 809) that if she knew about this proceeding she would not have transferred the property to Ms Wu and would not have borrowed from her brother. (There was, however, no suggestion by Ms Shen and Ms Wu that the Wu Property might be transferred back to the estate.)
Ms Shen accepted that a borrowing of more than $8 million was a large debt but, in relation to her acquisition of luxury items with such a level of debt, her philosophy seemed to be that with that level of debt, the luxury items did not make much difference (see T 810) and that she was under pressure. (I note that Ms Shen, in the witness box, was visibly upset at this point and a short adjournment was taken.)
It was put to Ms Shen (see T 817) that, at the time that a black Range Rover had been acquired in 2017 for $198,000 with funds out of the Family Property offset account, the debit on the Wu Property loan was $2.275 million and the offset account $2.478 million. Therefore, when the offset account was used to acquire the Range Rover, this brought the offset account to less than the amount owing on the mortgage. Ms Shen's response to this (at T 817) was to the effect that if she had used this to pay off the mortgage, she would have no money to pay mortgage repayments for other properties and that she could not just use up money for one property. (That begs the question as to why in those circumstances Ms Shen was unconcerned about using that amount to purchase the car - when one would assume that a cheaper vehicle could have been acquired to achieve the same purpose.) Ms Shen explained that each property had an offset account but only this offset account had the money and then said (at T 818) that she did not know if the offset account came from Mr Cong's company but that Mr Cong "organised all these transactions" and "[t]hat's money my husband gave me".
At T 820, Ms Shen accepted that in late 2017 and early 2018 (i.e., after the commencement of the proceeding), she had spent large sums of money. Her response was that to solve the problem with her financial situation "is to sell property".
At T 793, Ms Shen accepted that she had told Edmund she was transferring the Wu Property to Ms Wu for tax reasons and she maintained in the witness box that that was one of the reasons (referring at T 794 to a concern as to potential CGT liability because one could not have two places of residence - again displaying a knowledge of tax consistent with someone who is commercially savvy). Ms Shen said that she would not have said that she had to repay her mother; that she borrowed money from her family to repay the debt. Ms Shen did not know why it was denied in her affidavit at [18] that she had stated to Edmund that the Wu Property was transferred to her mother for tax reasons (T 793).
As to the other purpose for the transfer, Ms Shen said that if her brother helped her to discharge the loan she could save some $50,000 interest each year (and Ms Shen said that she received advice from a financier named Nancy - it is not clear who this person is).
I have referred above to Ms Shen's evidence of the conversation with Mr Shen at Mr Cong's funeral about the payment of mortgage debts and/or creditors of the company. Ms Shen also gave evidence to the effect that in that conversation her brother said that "if when my mum, our mum passed away can we have half/half the property" and her response was (see T 796) "Yeah - if I transfer to mum's name and you have security". Ms Shen said that Mr Shen said that he could lend some family money but that in future she would have to pay it back straight away; and that Ms Shen said "if you pay property off for me we can transfer to mum and you have some security". Ms Shen added "[b]ecause I was going to transfer title to my mum anyhow to save money on land tax and CGT in future".
At T 797, Ms Shen denied that she did this in order to avoid her "obligations" under the 2016 Will. Ms Shen was insistent that the family lent her the money; that she never thought it was personal property (by which I understand her to be adopting some concept of communal family money); that she did not read Mr Cong's 2016 Will "or any agreement"; and (interestingly) that it was "not a big deal". Ms Shen said that the properties "are mine but then my brother helped and I borrow money from him - moneys from brother he has authority to decide who can have money". At T 798, Ms Shen confirmed that all the family money was controlled by her brother; and said that she did not know who had put in the money. Ms Shen said that she wanted to give Mr Shen security.

[112]

June 2019 - freezing orders by Henry J

On 7 June 2019, after a contested interlocutory hearing, Henry J made freezing orders in relation to the Wu Property (that by then had been transferred to Ms Wu). Ms Shen accepted that she received a translation of those orders in Mandarin (T 636) (as I might add also, as I understand it, did Ms Wu). Ms Shen accepts that there was a breach of Order 8 of those orders by reason of a loan of $1 million from OUF Commercial Pty Ltd (OUF) being secured over the Wu Property after the making of those orders and in the witness box she apologised to the Court for that breach.
Significantly, Ms Shen accepted that she knew that there was a breach of the order and she says that she made a deliberate decision not to tell the plaintiffs (T 637). Ms Shen gave evidence that she did not have enough money for food and said that if she had money she would not have done that. Apart from the fact that the appropriate course if there was that degree of hardship was to approach the Court for a variation or discharge of the freezing order - not simply to breach the order - Ms Shen's evidence in this regard is problematic (to say the least) because not only is it inconsistent with the expenditure on luxury personal items, holidays and the like - and her apparent philosophy that if one owes $8 million, what difference does some personal expenditure of this kind make (see T 810) - but also when regard is had to what was done with the $1 million.
Shortly after the borrowing of the $1 million, Ms Shen lent the sum of $45,000 to Ms Stefadouros. Ms Shen said this was "just for a couple of days" but it is difficult to see how a loan of that amount (interest free) to Ms Stefadouros is consistent with Ms Shen being unable to provide food for her children (and it takes no account of the fact that Ms Shen was by then remarried and presumably able to look to her second husband at least for sustenance). There does not appear to have been any documentation of this loan (although there are notes of other loans between Ms Shen and Ms Stefadouros - e.g., $47,900 (see T 814)). Furthermore, out of the borrowing, Ms Shen expended $50,000 to buy face masks (which she says was to try and make money in the current pandemic). Again, that is scarcely an expenditure for food or living expenses.
When taken with the evidence in relation to the acquisition by Ms Wu of the interest in the Lillian Street property (see above), the conduct of Ms Shen in relation to the $1 million borrowing seems to me to demonstrate an extraordinarily casual or indifferent attitude towards her own financial affairs (inconsistent with Ms Shen's evident concern prior to Mr Cong's death that her position be secure - insofar as Ms Shen argued against his proposal for the 16 Nicholson Street property to be left unencumbered for the three elder children).

[116]

Amended statement of claim

By the amended statement of claim filed on 28 February 2020, the plaintiffs seek a variety of relief. They contend that, from the time of execution of the Deed, Ms Shen held on trust for the benefit of Mr Cong (and then from Mr Cong's death for the benefit of his estate) each of the Campsie properties and they seek a declaration to that effect (see prayer 2). Alternatively, they seek an order that the proceeds of sale of each of the Campsie properties are held on trust for the benefit of Mr Cong's estate to discharge the obligations of Ms Shen under the Deed (prayer 3). The plaintiffs seek an order that an account be taken of Ms Shen's dealings with trust property (prayer 4); a declaration that (by not retaining ownership of the Wu Property) Ms Shen breached the Deed (prayer 5) and an order that Ms Shen perform her obligations under cl 2 of the Deed (prayer 6) or, further or in the alternative, an order that Ms Shen pay damages to the plaintiffs and to Laurence's estate in addition or in substitution of the order for specific performance (prayer 7).
Further orders and declaratory relief are sought as to alleged breaches of the Deed and in relation to the annuities due under the Will (see prayers 8-15) and as to amounts said to be held on trust for the plaintiffs (prayer 16).
The claims against Ms Wu relate to the transfer to her of the Wu Property (see prayers 17-20) including an order that the property be reconveyed to the plaintiffs and to Laurence's estate or to the estate of Mr Cong (prayer 20).
A declaration is sought that Ms Shen holds some or all of her interest in various properties (the Campsie properties, other than the Wu Property; and each of 2 Duff Street, Burwood, the Family Property and 16 Nicholson Street, Burwood) on resulting trust for Mr Cong's estate in such proportion as reflects his contribution to the costs of acquisition of those properties (prayer 21); a declaration is sought that Ms Shen is liable to account to Mr Cong's estate for the benefits she or others have received by reason of her intermeddling (referable to the transfer of funds from Jolly Trading's bank account into her own bank account in September 2016 and the transfer to her own companies - Cong Australia International and Ugg Australia International - of the business and assets of Jolly Trading) (prayer 22); and for equitable compensation for breach of fiduciary duties or an account of profits (prayer 23).
Further or in the alternative, orders are sought in favour of the plaintiffs (although now this would apply only to Teresa and Edmund) for provision out of Mr Cong's estate or notional estate in their favour pursuant to ss 65 and 66 of the Succession Act (prayers 24-25). In particular, the plaintiffs seek to have some or all of the following designated as notional estate: the net proceeds of sale of 16 Nicholson Street (sold by Ms Shen in about January 2017 for $2,470,000); the net proceeds from the sale of 43 Amy Street, Campsie; the remaining three Campsie properties (the Wu Property and the two Duke Street properties); 2 Duff Street and the Family Property; as well as moneys received on account of Mr Cong's life insurance policy (in the sum of $1,200,000); joint bank accounts held in the couple's names ($41,110.11 with NAB and $73,635.67 with Westpac Banking Corporation); and the assets of Jolly Trading (including cash in the sum of not less than $689,000) (prayer 25).
Edmund also seeks a grant of administration in respect of Mr Cong's estate be made to him alone (on the basis that Ms Shen is not a fit and proper person to carry out the duties of executor and has misconducted herself as alleged in the pleading).

[117]

Defence to amended statement of claim

By their defence, the first and second defendants, among other things, adopt the following position.
As to the claims for a grant or representation of the estate of Mr Cong, they deny that the alleged 2016 Will is the true Will of the deceased and say that the 2014 Will ought to be admitted to probate but in any event that Ms Shen is the person most nearly interested in the administration of the deceased estate and, if the 2016 Will be admitted to probate, she is entitled to be joined in the grant of probate of that Will; deny that the executors have any cause of action to sue Ms Shen upon the Deed (by reason of the merger and release or discharge that operated upon the death of Mr Cong by reason of the appointment of Ms Shen as executor); and deny that the beneficiaries of the estate have any interest in enforcing the terms of the Deed if it be otherwise enforceable (see [1]-[3]).
As to the claims sought to be asserted on behalf of Mr Cong's estate, they deny the standing of the plaintiffs to claim the relief sought in prayers 2-11 and 18-23 of the amended statement of claim; and say that the plaintiffs in seeking to enforce the alleged Deed have sought and continue to seek to pursue their private interest in opposition to the interests of the estate and its beneficiaries, to their great prejudice, and in conflict with their duty to act impartially and only in the interest of the estate and its beneficiaries and to refrain from pursuing any collateral private benefit of their own (see [4]).
As to the claims for administration relief in respect of the annuities, the first and second defendants, among other things, object that the pleading does not allege any trust of the shares in, or the alleged benefits or profits derived from or through use of the assets of, Jolly Trading; deny that the alleged 2016 Will was the true Will of Mr Cong; in the alternative, say that upon the true construction and effect of the alleged 2016 Will, the estate other than residue was exonerated from the annuities; say that Ms Shen is a substantial creditor of the estate by reason of her payment of various of the estate's liabilities; say that the estate was without funds to pay the annuities which therefore abated; and that in any event the annuities were payable to the plaintiffs and Laurence Cong only during their lives (limited to a term of 10 years) and the annuity to Laurence abated upon his death on 15 July 2018 (see [5]).
As to the proprietary claims by the plaintiffs and the estate of Laurence in respect of the Campsie properties and proceeds, the first and second defendants: deny that there is standing to maintain those claims; in the alternative, say that by reason of the appointment of Ms Shen (or in the alternative, Edmund) as executor of the 2016 Will, the alleged causes of action merged and were released and discharged with effect from Mr Cong's death; and in the alternative, say that the plaintiffs were volunteers and not entitled to specific performance or any other equitable relief (see [6]-[9]).
As to the claims asserted in respect of Jolly Trading, the first and second defendants deny the plaintiffs are the proper plaintiffs to claim that relief and deny their standing or interest in respect of the shares in Jolly Trading or the assets or affairs of Jolly Trading (see [10]).
The first and second defendants contend, among other things, that upon its true construction and effect the alleged Deed was a deed poll inter partes between Mr Cong and Ms Shen ([11]); deny the plaintiffs standing to enforce the Deed and say that the plaintiffs and Laurence were not privy to the Deed nor to the alleged trusts in favour of Mr Cong and that they are volunteers ([13]-[15]). They deny that the Deed was duly attested as a testamentary instrument and deny that it was intended by Mr Cong to have testamentary effect ([15]).
As to the plaintiffs' allegations in respect of the Deed (see Part C of the amended statement of claim), the first and second defendants say, inter alia, that, by reason that the plaintiffs were not parties to the Deed, cll 2(a)-(d) were inoperative and void for incompleteness; the alleged provisions of cll 2(a)-(d) were void for uncertainty or incompleteness; and they deny that they had the effect alleged or had any effect that supports the claims for relief made by the plaintiffs ([24]). The first and second defendants also say that the expressed purpose of the Deed was to make provision for the plaintiffs and Laurence personally upon the death of Mr Cong, to the effect that any such provision was intended to be personal and not to survive to the estate of (relevantly) Laurence in the event of his death ([23]).
Reference is made to the entire agreement clause (cl 5) of the Deed. The Deed itself is said to be void for uncertainty; alternatively, that the terms alleged by [16] of the amended statement of claim are not capable of arising by reason that if they were terms of the Deed, they would be void as restraints on alienation of land and that cll 2(a)-(d) are void by reason or to the extent that they impose a restraint on alienation by virtue of the imposition of a financial obligation amounting to a fine contingent on sale of the properties or any of them (see [26]-[30]).
In the alternative, the first and second defendants say that there is no action for damages in that the alleged promises in cll 2(a)-(d) were unenforceable by the deceased save as to nominal damages by reason that the contingent promises therein were promises to pay money to third parties (see [31]).
Further or in the alternative, it is alleged that the true construction of cl 2(b) is that any covenant therein was contingent upon the rezoning within 10 years of all the four Campsie properties for high density living; and that payment of the amount might be deferred after rezoning of all the properties until a later sale of them. It is contended that cl 2(b) has no operation or effect in case any of the Campsie properties is sold before rezoning to high density living (see [32]-[35]).
As to the effect of cl 2(d), it is contented that cl 2(d) operates to qualify the effect of cl 2(b) in the event of a sale of 43 Amy Street Campsie before the death of the deceased. It is contended that cl 2(d) does not contain any covenant to make any payment but comprises a qualification and modification of the operation of cl 2(b) continuing it (with reduction in the amount) in the case of a sale of 43 Amy Street entered into before the death of the deceased. It is said that cll 2(b) and (d) have no operation in the events which have happened; namely that on the true construction of the deed any covenant in cl 2(b) as modified or provided by cl 2(d) was contingent upon the happening of the event of rezoning of all the properties (other than 43 Amy Street) for high density living; and that that condition has not been fulfilled (see [36]-[44]).
As to the promise under cl 2(c), it is said that this was contingent on all the Campsie properties other than 43 Amy Street still being owned by Ms Shen upon the happening of the event of the rezoning within 10 years after the death of the deceased or the expiry of 10 years and, by reason of the sale of the Campsie properties, cl 2(c) has no operation or effect (see [45]-[46]).
The first and second defendants further raise the Contracts Review Act in defence of the whole of the claim, contending that the Deed at the time it was entered into was unjust in all the circumstances relating to it, concerning its terms, and the circumstances under which it came into effect (see [47]), seeking by way of relief a refusal to enforce cll 2(a)-(d) or an order declaring the Deed or cl 2 thereof void. Further or in the alternative, a defence of unconscionable conduct is raised based on the alleged special disability of Ms Shen, and the allegation that her execution of the Deed was procured by the unconscionable conduct of the deceased (see [49]-[50]).
At [52]-[59]ff, a claim based on the presumption of undue influence (invoking Yerkey v Jones (1939) 63 CLR 649) (Yerkey v Jones) on the part of the deceased is raised. In the alternative, it is alleged that Ms Shen's execution of the Deed was procured by the undue influence of the deceased ([60]). The particulars to that allegation include (at 60) that Ms Shen had limited education, training and experience in business; and (at 60) that Ms Shen "was accustomed to act on [Mr Cong's] advice and in accordance with his wishes". It is alleged that the Deed was manifestly disadvantageous to Ms Shen ([61]) and that by reason of the undue influence Ms Shen is entitled to avoid the transaction comprised in the Deed ([62]).
The defence as to the 2016 Will is at [63]ff, including denials that the Deed was duly attested as a testamentary instrument and was intended by Mr Cong to have testamentary effect ([65]); that Mr Cong knew and approved the contents and effect of the alleged 2016 Will and that it was his true Will ([66]); in the alternative, a denial that Mr Cong knew and approved the terms and effect of cll 7, 9(c), 9(d), 10(o) and 10(p) and the gift of the annuities in cl 9(b) and a denial that those provisions should be admitted to probate ([67]) and a denial that Mr Cong had testamentary capacity ([68]; and see in particular at [110]ff).
As to the allegations in relation to Jolly Trading, the first and second defendants deny that Ms Shen depleted the assets of the company after Mr Cong's death; and say that Ms Shen paid funds to the company to pay its creditors in respect of trade debts and that the moneys referred to at 31 were Shen family money remitted to Australia from China using Jolly Trading's US dollar account (see [117]ff).
The defence goes on to contain denials of the allegations made in the balance of the pleaded claim (including denials that Ms Shen's capacity or right to alienate or dispose of any interest or estate in any of the Campsie properties was subject to the matters alleged in the pleadings or depended on the matters alleged in the pleadings and they say, further or in the alternative, that the restraint alleged at [47] was void as a restraint on the alienation of land (see [127]-[130])); denials of the alleged breaches of the Deed, breach of trust, equitable fraud, fraud on a power and alienation to defraud creditors (see from [131]ff). It is admitted that a motive for the transfer of the Wu Property was for the first and second defendants properly to arrange their affairs to avoid the incidence of land tax (see [154]).
From [158]ff the defendants respond to the allegations in relation to the purchase of the respective properties, denying the allegations of resulting trust. I will deal with those in due course.
As to the family provision claim (dealt with from [208] of the defence), it is alleged, among other things, that the deceased had an obligation to provide for Ms Shen and her children (of comparable standard and, in essence, a way of life akin to that of his elder children) ([211]); that Ms Joyce had established a trust fund for the plaintiffs and otherwise provides considerable support to them ([212]); that the plaintiffs "have chosen to apply the support of their mother to the prosecution of this litigation at enormous expense, rather than to their maintenance and advancement in life" ([213]); and that, during his lifetime, Mr Cong provided in a substantial way for the plaintiffs' needs ([214]).
It is alleged that the plaintiffs "disregarded and ignored" Mr Cong's wishes and needs "and those of his survivors" and "thereby failed to be filial to him" ([215]). In the particulars to [215], amongst other allegations, it is asserted that the plaintiffs "did not have a close relationship with [Mr Cong]" (it being accepted that there is a typographical error at (m)).
As to the claimed notional estate, the first and second defendants' response to each of the categories of property sought to be designated as notional estate is as pleaded from [216]ff. In summary, the first and second defendants say as follows.
In respect of the proceeds of 16 Nicholson Street: it has not been pleaded that full valuable consideration was not given to Ms Shen for the sale of the property and they deny that it was a relevant property transaction; that it has not been pleaded that there are special circumstances that warrant the making of an order under s 81 of the Succession Act nor have circumstances been pleaded qualifying that transaction under s 83 of the Succession Act; and that the proceeds of sale were applied to pay the expenses of sale, repay the secured mortgage of $1.3 million, Mr Cong's tax liability of $242,548, purchase a car, make a loan to Cong Australia International, and make repairs or improvements to the Family Property, leaving "only a modest residue" (see [216]).
In respect of the proceeds of 43 Amy Street: it has not been pleaded that full valuable consideration was not given to Ms Shen for the sale of the property and they deny that it was a relevant property transaction; that it has not been pleaded that there are special circumstances that warrant the making of an order under s 81 of the Succession Act nor have circumstances been pleaded qualifying that transaction under s 83 of the Succession Act; and that the proceeds of sale were applied as alleged at 135 (see [217]).
In respect of the transfer of the Wu Property: it has not been pleaded that full valuable consideration was not given to Ms Shen for the sale of the property and they deny that it was a relevant property transaction; that it has not been pleaded that there are special circumstances that warrant the making of an order under s 81 of the Succession Act (and that the circumstances alleged by 54-(b) do not constitute special circumstances); that no circumstances have been pleaded qualifying that transaction under s 83 of the Succession Act; that Ms Shen discharged the mortgage on the Wu Property and serviced the mortgage liabilities and outgoings up to transfer and thereafter the outgoings were serviced by Ms Wu; and that the property is Ms Wu's home (see [218]).
In respect of the purchase of both 56 and 58 Duke Street: that neither property is held by any defendant and neither property is capable of being designated as notional estate; they deny that it was a relevant property transaction; they say that it has not been alleged that Mr Cong entered into the purchase of the property or any transaction consisting of a contribution to that purchase with any intention required for the application of s 80 of the Succession Act nor have circumstances been pleaded qualifying that transaction under s 83 of the Succession Act (see [219]-[220]).
In respect of the purchase of 2 Duff Street: deny that it was a relevant property transaction; say that it has not been alleged that Mr Cong entered into the purchase of 2 Duff Street nor that he had the moral obligation required by s 80(2)(b) of the Succession Act; say that no circumstances have been pleaded qualifying that transaction under s 83 of the Succession Act; and say that it is heavily burdened with mortgage liabilities which have been borne by Ms Shen (see [221]).
In respect of the purchase of the Family Property: deny that it was a relevant property transaction; say that it has not been alleged that Mr Cong entered into the purchase of the Family Property nor that he had the moral obligation required by s 80(2)(b) of the Succession Act; say that no circumstances have been pleaded qualifying that transaction under s 83 of the Succession Act; say that it is heavily burdened with mortgage liabilities which have been borne by Ms Shen; and say that it is the home of Ms Shen and the infant children of Mr Cong (see [222]).
As to the life insurance, say that: the beneficiaries were Ms Shen and her sons, Bruce and Leon (and that neither Bruce nor Leon is a party to the proceeding); that the funds have been depleted by mortgage payments, legal fees, school fees, living expenses and other general expenses; and say that it has not been pleaded that there are special circumstances that warrant the making of an order under s 81 of the Succession Act because of that transaction and that no circumstances have been pleaded qualifying that transaction under s 83 of the Succession Act (see [223]).
As to the joint bank account: deny that it is a relevant property transaction; say that money was used to pay for Mr Cong's funeral and has otherwise been used up; and say that it has not been pleaded that there are special circumstances that warrant the making of an order under s 81 of the Succession Act nor have circumstances been pleaded qualifying that transaction under s 83 of the Succession Act (see [224]).
Finally, as to the assets of Jolly Trading, say that it has not been pleaded that there are special circumstances that warrant the making of an order under s 81 of the Succession Act nor have circumstances been pleaded qualifying that transaction under s 83 of the Succession Act (see [225]).

[118]

The plaintiffs have filed a reply to the defence in which they contend as follows.
As to [1] of the defence, the plaintiffs say that Ms Shen cannot be an administrator or legal representative of Mr Cong's estate given that she has a conflict of interest, has not to date sought probate of the estate and denies the efficacy of the 2016 Will ([1]).
As to the construction of cll 2(b) and (d) of the Deed, the plaintiffs say that the construction of these clauses cannot be affected by Ms Shen's own actions after the death of Mr Cong in breach of her obligations under the Deed ([2]).
As to the allegation that the Deed was unjust (see [47] of the defence), the plaintiffs deny that it was unjust in the circumstances in which it came into effect and say, among other things, that: the Deed was incorporated by reference into the 2016 Will; the transaction comprised in the Deed was part of a broader testamentary scheme which included the gifts devised under the Will; it was Mr Cong's intention to divide his assets and wealth among all his children and Ms Shen; Mr Cong's intention was that Ms Shen and the younger children would receive the Family Property, 2 Duff Street "and the assets of Cong Australia" (presumably intended to be a reference to Jolly Trading - perhaps a Freudian slip) and be amply provided thereby; Mr Cong's intention was that the plaintiffs would, in addition to an annuity, receive a substantial monetary sum in the future from the sale of the four Campsie properties (which would be held by Ms Shen for a period of no longer than 10 years for the purposes of a council rezoning) and that the mortgage liabilities of the Wu Property and 26-28 Duke Street were to be financed by dividends earned from Jolly Trading (see [3]). The plaintiffs say that Mr Cong's scheme for the division of his assets and wealth was not improvident to Ms Shen; that it amply provided for Ms Shen; that Ms Shen was aware of Mr Cong's intention and agreed to implement it by signing the Deed; and that Ms Shen assured Mr Cong that she would implement his intention so to provide for the plaintiffs ([3]). It is further alleged that Ms Shen understood that she was obliged not to sell the three Campsie properties (other than 43 Amy Street) for a period of no longer than 10 years to enable those properties to increase in value as a result of a potential future council rezoning; that Ms Shen was familiar with the local real estate market; and that Ms Shen affirmed the arrangement to the plaintiffs ([3]).
The plaintiffs deny that Ms Shen is entitled to avoid the transaction comprised in the Deed (c.f., [51] and [57] of the defence) and say that the principle for which Yerkey v Jones is cited does not apply to transactions other than guarantees and, in any event, Ms Shen received benefits referable to the Deed in that the Deed and the Will were executed concurrently as part of the same arrangement (see [4]-[5]).
As to [59] of the defence, the plaintiffs say that the relationship of husband and wife (pleaded at [52] of the defence) is not one that gives rise to an automatic presumption of undue influence and the pleading is contrary to law ([6]).
The plaintiffs say in response to [72]-[74] of the defence that Mr Cong provided instructions to Mr Glynn about the contents of the 2016 Will and understood the effect of the 2016 Will ([7]).
The plaintiffs deny the allegation at [91] of the defence and say that it was Mr Cong's intention to use the fruits of Jolly Trading to service the mortgage liabilities of the Campsie properties for a limited period of not more than 10 years and that thereafter the fruits of Jolly Trading would belong solely to Ms Shen ([8]).
The plaintiffs deny [95] of the defence and say that Mr Cong's assets at the time of signing his Will also included: an expectancy under a life insurance policy; the joint bank accounts held with NAB and Westpac; and the assets of Jolly Trading including the cash transferred from its bank account by Ms Shen in the sum of not less than $689,000 ([9]).
As to 171 of the defence, the plaintiffs say that it is contrary to law that a presumption of advancement arises between persons who are engaged to be married ([10]). In response to [207] of the defence, the plaintiffs say that even if the presumption of advancement applies for the benefit of Ms Shen in relation to the said properties, then Ms Shen's rights in relation to the Campsie properties are subject to the equitable obligation pleaded at [48] of the amended statement of claim by reason of the doctrine of election ([11]).

[121]

Issues

At the outset of the hearing, the plaintiffs identified the following issues as those raised in the proceeding: 1. whether the 2016 Will is valid; 2. whether the terms of the 2016 Will incorporate the terms of the Deed; 3. whether the Deed is binding and whether it contains the implied terms pleaded at [16] of the amended statement of claim - namely, (a) that Ms Shen would hold the proceeds of any sale of the Campsie properties on trust to make the payments due to the three elder children under the Deed; (b) that Ms Shen would not, by any act within her power or control, do anything to destroy or diminish her ability to pay the moneys due under the Deed; and (c) Ms Shen would act in good faith towards Mr Cong and the plaintiffs; 4. whether Ms Shen breached the Deed (as pleaded at Section G of the pleading - for example, when she transferred the Wu Property to Ms Wu in February 2017); 5. whether the plaintiffs are entitled to sue on the Deed (whether as a multi-party deed poll; or by Edmund in his capacity as the named executor of the 2016 Will; or on the basis that the benefit of the promises in the Deed were held on trust for the plaintiffs) (see [57]-[58]; [69]; [71] and Section H of the amended statement of claim); 6. whether the plaintiffs are entitled to damages; and/or equitable relief including an injunction and an order that Ms Shen specifically perform her obligations (see [58]-[59] of the amended statement of claim); 7. whether Ms Shen represented to Mr Cong that she knew of and would implement the provisions of the 2016 Will and the Deed (see [25] of the amended statement of claim); 8. the financial position of Jolly Trading and whether Ms Shen depleted its assets after Mr Cong's death (see Section E and [31] of the amended statement of claim); 9. whether Ms Shen elected to take the entire benefit of the Deed and the 2016 Will (by receiving benefits referable to Mr Cong's estate) (see [42] of the amended statement of claim) and is thus bound in equity to give effect to the Deed with the consequence that her rights to dispose of the Campsie properties were suspended and she held the properties and proceeds of sale thereof on trust for the plaintiffs (citing Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 417 (Countess of Bective) at 418-9; Estate Reid; Roberts v Moses and Palmer [2018] NSWSC 1145 (Roberts v Moses and Palmer) at [33] per Lindsay J); 10. whether the proceeds of sale of 43 Amy Street, Campsie are held on trust for the plaintiffs (see section I of the amended statement of claim); 11. whether Ms Shen was bound by a half-secret trust on the terms recorded in cl 2 of the Deed; and whether the trust property was constituted by the benefit of cl 2 or the Campsie properties (see [79]ff; 82; [86] of the amended statement of claim); 12. where the Deed conferred a power on Ms Shen to deal with the Campsie properties for the purposes of benefitting the plaintiffs, whether Ms Shen has exercised those powers for an extraneous purpose and in a manner beyond the scope of, or not justified by, the Deed and the 2016 Will; and whether in those circumstances the transfer of the Wu Property is void or voidable (see [99]; [102] of the amended statement of claim); 13. whether the transfer of the Wu Property to Ms Wu is void by reason of it constituting a fraud on the power conferred on Ms Shen (see section K of the amended statement of claim); or s 37A of the Conveyancing Act 1919 (NSW) (see section M of the amended statement of claim); 14. whether the Campsie and Burwood properties are held on resulting trust by Ms Shen for Mr Cong's estate 15. whether Ms Shen acted as a trustee de son tort in her dealings with Jolly Trading; 16. whether a family provision order should be made in favour of the plaintiffs (see [148] of the amended statement of claim); and what assets constitute the notional estate; 17. whether a grant of administration of the 2016 Will should be granted to Edmund, pursuant to r 78.19 of the Supreme Court Rules, to the exclusion of Ms Shen (see [150] and section O of the amended statement of claim); 18. whether cll 2(a)-(d) of the Deed are (or the Deed generally is) unjust within the meaning of the Contracts Review Act; 19. whether Ms Shen's execution of the Deed was procured by unconscionable conduct of Mr Cong; 20. whether Ms Shen's execution of the Deed was procured by undue influence of Mr Cong or, in the alternative, the Deed can be set aside on the basis of presumed undue influence; 21. whether Mr Cong lacked testamentary capacity when he signed the 2016 Will; 22. whether Ms Shen did not know what she was signing when she signed the Deed (see [205]-[300] of her affidavit of 4 September 2020); and 23. whether Mr Cong entertained a delusional optimism as to the financial position of Jolly Trading at the time of making his 2016 Will (see [114] of the defence to amended statement of claim).

[123]

Form of the plaintiffs' affidavits

At the outset, before considering Edmund's evidence and that of Teresa in due course, it is relevant to note that criticism was made by the first and second defendants as to the close similarity of content and expression in the first affidavits made by each of Edmund and Teresa in the proceeding, such as the date at which Mr Cong and Ms Joyce separated (both Edmund and Teresa initially placing this in their 2017 affidavits as occurring in 2010 and then later in their 2018 affidavits placing this in 2006 - though Edmund was still somewhat unclear about this in cross-examination); as to the date of their father's death (incorrectly specified in their 2017 affidavits as 15 February 2016 - see Edmund's affidavit of 19 July 2017 and Teresa's affidavit of 21 July 2017 at [9(a)] in each); and the identical references in their affidavits to their "often" attendances on doctors' appointments. The first and second defendants say that the explanation given as to the process of preparation of the affidavits (see T 101.30), insofar as it is said to be entirely separate, cannot be true and it is suggested that it bespeaks collusion.
Further, the first and second defendants say that Teresa's concession in cross-examination (see in due course) of "conversations with everyone involved about the issue" as the basis for evidence she gave in relation to Ms Shen's acknowledgement of the 2016 Will and Deed contrasts with Teresa's evidence, and that of Edmund, that they did not collaborate on their affidavits (despite the obvious resemblances and symmetries, down to identical changes from 2017 to the 2018 editions and identical punctuation and identical typographic errors). The first and second defendants note that, during cross-examination, when Edmund was asked about the identical features of his and Teresa's affidavits, he said "I can't explain outside of just, those were the, the recollections that occurred to me" (T 297.39). It is said that Edmund and Teresa's evidence as to the method of preparing these affidavits is not capable of explaining such common errors and symmetries of form and cannot be truthful.
In Rosebanner Pty Ltd v Energy Australia [2009] NSWSC 43, I had cause to consider the authorities that have addressed the question as to whether an inference of collusion between witnesses should be drawn where there are substantially identical affidavits, which inference in turn may diminish the weight or credit accorded to the evidence of those witnesses. So, for example, in Macquarie Developments Pty Ltd v Forrester [2005] NSWSC 674, Palmer J considered the weight to be attributed to two affidavits dealing with critical discussions in virtually identical terms, in circumstances where the evidence was that the solicitor who prepared the affidavits had "copied and pasted" portions from each, and said that it "is totally destructive of the utility of evidence by affidavit if a solicitor or anyone else attempts to express a witness' evidence in words that are not truly and literally his or her own", though there the identity of evidence was found to be entirely due to a mistake on the part of the legal adviser. (See also Seamez v McLaughlin [1999] NSWSC 9 per Sperling J; Dialog Pty Ltd v Addease Pty Ltd [2003] FCA 1359 per Cooper J; Lucent Technologies Inc v Krone Aktiengesellschaft (No 3) [2000] FCA 100 per Lindgren J, where his Honour considered it doubtful where a witness had read a draft of another affidavit, there another expert, that the views expressed by that witness in his affidavit testimony represented his independent views uninfluenced by the views of others.) Similarly, in Day v Perisher Blue Pty Ltd [2005] NSWCA 110, Sheller JA, with whom McColl JA and Windeyer J agreed, spoke at [30] of the undermining of the evidence-taking process where witnesses participated in a teleconference relating to the evidence that they would give, in respect of which his Honour considered that it was hard to see that it was for any reason other than to ensure that witnesses "would all speak with one voice" about the events that had occurred.
Here, it seems to me that the likelihood is that the initial affidavits prepared in support of the family provision claims were prepared by reference to some kind of standard template into which formal details (such as the date of death) were inserted by others (presumably, the solicitors) and the error was not appreciated by the deponents (perhaps through insufficient attention in the course of preparation of the affidavits). It seems inherently unlikely that both Edmund and Teresa would have made such an obvious mistake as to the month of their father's death (one might understand an error as to the particular date but not that both would recall his death as having occurred in February rather than July, especially when the initial affidavits were not drawn many years after the event). That suggests to me that the mistake was not one made by Edmund and Teresa; and was not the product of collusion between them. As to the subsequent affidavits, which address different conversations in different contexts, no suspicion of collusion arises.
While I do not endorse a template style process of preparation of affidavits, I accept the evidence of Edmund and Teresa to the effect that they did not collude with each other in the preparation of their affidavit evidence. Edmund's evidence was that he may have talked about "events" with his sister but not the actual affidavit (see T 89). In a family context, it seems to me inevitable that there would have been discussion as to the happening of events both as they unfolded and later, after Mr Cong's death; and in those circumstances, and particularly where the later affidavits appear to be reflective of Edmund and Teresa's individual recollection of events, I draw no adverse inference from the manner in which their initial affidavits appear to have been prepared.

[124]

Edmund

As to Edmund's evidence, I have referred above to the conversations which he deposed he had with his father in relation to his father's testamentary intentions. There is no doubt that he had difficulty in recalling precisely when, from a chronological perspective, and in what context those conversations took place. I accept that, as a matter of the fallibility of human memory (see Watson v Foxman (1995) 49 NSWLR 315 (Watson v Foxman) at 318-319 per McLelland CJ in Eq), it is possible (and indeed likely) that to some extent, he has run together in his mind conversations or snippets of conversations and is giving his recollection of what he perceived to be the intentions or wishes of his father gleaned over a number of discussions, the precise date of which he cannot recall.
However, the broad themes of Edmund's recollection of discussions with his father as to his testamentary intentions rang true and were consistent with the objective documents (such as the file notes made by Mr Glynn, in which Mr Cong's wishes, as they varied from time to time, were recorded); including as to his father telling him that he wished to appoint him as executor. Moreover, it is consistent with Mr Cong's openness in discussing his testamentary intentions in the presence of others (such as Ms Stefadouros and Ms Lisa Wu at the February 2016 meeting) that he would have made known to Edmund (and, for that matter, Teresa) his intention that Edmund, Teresa and Laurence would be provided for under his Will (both by reference to what Mr Cong referred to as "his" property holdings and by provision of a not insubstantial sum of money).
Significantly, Edmund's evidence is that his father told him that he had already "organised" the Family Property for Ms Shen "and the boys". That is consistent with Mr Cong having regarded the funds he contributed to the Family Property purchase as a gift to Ms Shen in order to provide for her and for their three children. That is also consistent with the apparent logic underlying Mr Cong's ultimate testamentary provisions in the 2016 Will, namely, that his second wife and their sons would be secure in their own home and that his elder children would be provided for out of another property or properties, or effectively out of a share of the anticipated increase in value of such other property or properties, plus a monetary sum. Each of the 2013, 2014 and 2016 Wills reflects that intention - albeit that the particular properties varied (from 9 Ethel Street in the 2013 Will to 16 Nicholson Street in the 2014 Will to the Campsie properties in the 2016 Will).
I accept that there are timing difficulties with Edmund's account of the conversations with his father about the Will. For example, the conversation in which he says that Mr Cong told him that he had "organised" for the family because of the Will and offered to show him the Will (T 91), which Edmund placed as occurring between April and June 2016 at the Wu Property in the granny flat (where he says Mr Cong spent quite a bit of time) (see T 106).
If, by the reference to his Will, Mr Cong was referring to the signed 2016 Will (and he can hardly have been referring to any of the earlier Wills, so the only real question is whether it was the signed Will that Mr Cong could have offered to show Edmund at the time), then this must mean that any such conversation could only have occurred after 3 June 2016 (and there was a limited period of time between then and Mr Cong's admission to hospital on 10 June 2016). If Mr Cong was there referring to the Will that had been drafted (at a time when it was not yet signed), then the conversation could have occurred any time from late April 2016.
Placing the above conversation(s) about the 2016 Will some time from April 2016 is consistent with the timing of the acquisition of the Family Property (by which it is clear that Mr Cong was intending to provide a secure home for his second wife and family). However, for much of May 2016, Mr Cong was in Prince of Wales Hospital (which Edmund accepts - see T 105). Moreover, Edmund places the conversation or conversations in relation to the 2016 Will as occurring at the Wu Property; yet the purchase of the Family Property was completed in April 2016.
The account of conversations at the Wu Property is not necessarily inconsistent with Ms Shen and the younger children having moved to the Family Property after completion of the acquisition in April 2016 but Mr Cong still spending time at the Wu Property. There is some doubt as to whether Mr Cong ever actually moved into the Family Property (and, even if he did, he may still have spent time at the Wu Property, which is where the company office had been after the move from Barnes Avenue) (see Edmund's evidence at T 105; T 139). There was evidence in particular that towards the end of his life Mr Cong did not want his younger children to see him in his then condition (evidence that rang true to me - see T 199). Moreover, there is a reference in the audio recordings made by Edmund of conversations with his father as to the possibility of Edmund staying overnight with his father again (which can only be a reference to Edmund staying overnight at the Wu Property , since there is no suggestion that he ever did so at the Family Property - and in re-examination, Edmund confirmed that when he had stayed overnight with his father, it was at the Wu Property - see T 141).
Therefore, it is by no means implausible that there was a conversation (or perhaps more than one conversation) either sometime at the end of April or early May 2016 or sometime in early June (before Mr Cong's hospitalisation on 10 June 2016) at which discussion of the kind to which Edmund has deposed as to his father's Will took place; and that Mr Cong offered to show Edmund either an unsigned copy or the signed copy of the Will.
As another example, Edmund places the conversation at which he found out that he was going to be executor as occurring two to four months before Mr Cong died (T 110), which is consistent with the fact that it was not until the 2016 Will - and the instructions for this given in April 2016 - that Edmund was to be named as executor. Somewhat inconsistently with the way this is expressed in his affidavit evidence, Edmund says that Ms Shen was present during that conversation with his father (see T 112).
I note that Ms Shen gives an account of a conversation with Mr Cong in which she says that he said he wanted her to "manage" the property investments so that if there were future increases in value due to rezoning, she would be in a position to "assist" Edmund, Teresa and Laurence at her discretion. Edmund did not accept that Mr Cong said anything to him about Ms Shen "managing" the properties (T 120), although he accepted that something along the lines of that was said. He did not recall his father saying that the amount was to be at Ms Shen's discretion; rather, he says that his father said that he and his two siblings would split evenly the sale proceeds of the Campsie properties (see T 121) and that they would have money over 10 years that would help them until the rezoning of the properties took place (see at [33]).
Cross-examined about his evidence of violence by his father towards Ms Joyce and Laurence (see T 92ff), there was some vagueness as to the date at which Edmund placed this as having occurred (he says it was during the time he was aged between 4 and 14 years, although on the evidence it is most likely that his father left the Woolwich home when Edmund was about 10). Moreover, some of the evidence makes clear that he did not necessarily observe what was happening (as opposed to hiding in his room and overhearing raised voices and the like). In any event, I think nothing turns on this, other than that (when considering all the circumstances in the context of the family provision claim) it is a matter of record that there was at least one incidence of domestic violence within the family (which led to the conviction for assault on Mr Cong's plea of guilty) which corroborates Edmund's recollection of violence in the family.
As to Mr Cong's condition prior to his death, the audio recording of 28 January 2016 reveals Mr Cong's frustration as to his inability to "get around" as he used to do. However, Edmund did not accept that it was a great overstatement to say (as he did in his affidavit sworn 9 July 2018 at [9]) that his father was "active and mobile and engaged in life" at the time he was drafting his Will, which Edmund placed as being sometime earlier in 2016 (see T 100). Pausing here, there can be no doubt that by the end of his life Mr Cong's physical abilities were constrained but the contemporaneous medical notes support the conclusion that up until close to his death Mr Cong remained mentally alert; and I do not see Edmund's affidavit as consciously overstating the position.
I accept that Edmund was an honest witness attempting to give his best recollection of events. I accept that he had no full understanding of his obligations as an executor (nor, I might add matter, did Ms Shen display any such understanding) and I consider it plausible that he, in effect, left it initially to Ms Shen to make decisions as to his father's affairs after Mr Cong's death. I considered Edmund to be genuinely fond of his father and that his recollection of conversations with his father about his father's testamentary intentions (although not necessarily wholly accurate) reflected the tenor of Mr Cong's intentions - in particular, although Edmund recalled that his father said that the proceeds of sale of the Campsie properties would be split evenly between the siblings, the 2016 Will makes clear that what Mr Cong ultimately intended was to set some minimum (and, for that matter, also a maximum) amount that his three elder children would receive out of the Campsie properties and to leave it to Ms Shen's discretion as to how much, if anything, more than that minimum would be given to the three elder children (plus an annuity over the 10 years that Mr Cong - and I think likely also Ms Shen - considered it might take for the value of the properties to increase by reference to the proposed rezoning).

[125]

Teresa

Teresa lives in Melbourne and, at the time of giving her evidence, she was in the midst of the Melbourne lockdown due to the COVID 19 pandemic and gave her evidence by audio-visual link from her apartment. Teresa, who has a history of anxiety and depression, gave evidence of her family relationships, including her father's violent conduct towards her mother and Laurence, and on one occasion against Teresa herself. Teresa also gave evidence of her sense of loss at her father's death. I considered her evidence to be compelling and plausible.
Criticism is made by the first and second defendants as to inconsistencies in Teresa's accounts to others (for example, statements recorded in an application by Teresa for special consideration in connection with her university studies which suggest that Teresa had represented that she was Mr Cong's primary carer) and chronological inconsistencies (for example, the statement attributed to Mr Cong, in 2016 when he was in hospital for cancer treatment, that he should be "at my building sites", when there were no "building sites" in 2016, or at all, and the renovation of the Wu Property - assuming that to be the relevant reference - had taken place some years before). Criticism is also made of Teresa's evidence as to when she learnt of the concept of "black zoning". The first and second defendants say that Teresa's evidence as to when there was reference by Mr Cong to the rezoning proposal (in the context of his testamentary intentions) is fiction, as is her account of Mr Cong "waving around" the 2016 Will and offering to show it to her on two occasions at the Campsie address.
Criticism was also made of Teresa's evidence of observation of cash in the Jolly Trading business (in which context it was noted that Teresa had also given evidence of her father's complaint that she needed to come into the business more often and that she was not interested in taking over the business). As to this complaint, it can be disposed of fairly readily. There was photographic evidence on which Teresa relied to corroborate that she had indeed taken cash from time to time to Melbourne for her father to deliver to business associates (namely, a photograph of her then flatmate holding a wad of cash). While I accept that it is possible that this related to something entirely different, it seems to me that Teresa's account of her excitement to be holding such an amount of cash is not implausible and her response to the question whether it was her cash (to the effect that if you had ever seen her bank account you would know that was not the case) both rang true and displayed a wry sense of humour. In any event, ultimately, I do not need to make any finding as to whether there was a cash component to the business carried on by Jolly Trading.
As to the evidence that Teresa gave of a conversation in relation to a proposal to amalgamate the 56 and 58 Duke Street properties, again, while I accept that there is objective contemporaneous evidence of such a proposal, to my mind nothing turns on this.
The first and second defendants point out that Teresa included many more (hearsay) statements attributed to Mr Cong in her 2018 affidavit than in her 2017 affidavit; and that Teresa's answer as to why she had not included more of these in her affidavit of 21 July 2017 at T 206.16 was that: "I spent more time thinking about the weight and gravity of conversations and some things which I hadn't thought to include in the first one"; and then at T 208.7, that she had started taking medication in 2019 for her mental health which enabled her to "focus on things and kind of see things objectively and clearly a lot of better and in 2020". The first and second defendants note that no specific description of the medication or its effects, or medical explanation of an impaired ability to focus on the task of preparing her earlier affidavits was supplied. It is said that, if Teresa's cognitive abilities were impaired in 2017 and 2018, that must throw further doubt on the accuracy of her affidavits in those years and on her ability to retain information accurately. (There is not sufficient evidence to make any determination as to the extent to which her psychological difficulties had an impact on her memory or cognitive abilitiy - suffice it to say that Teresa presented as a witness capable of understanding and recalling events.)
As to the chronological inconsistencies in Teresa's evidence (including those referred to above) I consider that this demonstrates no more than the fallibility of human memory. I do not accept that it was dishonest evidence but, far more likely, I consider that Teresa has assimilated in her mind and in broad brush terms a number of conversations on the general topics relating to the properties the subject of the proceeding, as well as the discussions in relation to Mr Cong's testamentary intentions. What is more significant, to my mind, is that broadly the thrust of what Teresa recalls was discussed with her father as to Mr Cong's testamentary intentions is reflected in the contemporaneous file notes of Mr Glynn and ultimately in the 2016 Will (and Deed).
Insofar as complaint is made by the first and second defendants as to the disparaging terms in which reference is made by Teresa (and, for that matter, Ms Joyce) to Ms Shen (namely, as a simple Chinese girl or as a peasant or coming from a rural or peasant background) or from which inferences might be drawn as to other matters (such as the evidence from Ms Joyce that Mr Cong had told her, when on a visit to Tianjin in China, that barbershops were often a front for brothels) - evidence that it was suggested was insulting and intended to be hurtful to Ms Shen; and as to matters relating to the birth of the three younger children (as to whether they were wanted by Mr Cong or the like), the response by Teresa (and Ms Joyce), in effect, was that they were simply repeating what Mr Cong had said. There is, of course, a dilemma posed for a litigant in the plaintiffs' position where, on the litigant's case, statements were made by a deceased that might well be perceived to be insulting to those about whom the statements were made. Suffice it here to note that, even if Mr Cong said words to the effect attributed to him as to Ms Shen's background or as to aspects of his relationship with Ms Shen, it would be mere speculation as to his motivation for so doing or what he meant to convey. It could well be, for example, that he said such things to Teresa or Ms Joyce simply seeking to diminish or downplay Ms Shen's role in his life so as to avoid inter-family disputes - the "men have special needs" conversation, for example, might well have been no more than a stereotypical self-justification for behaviour of which Mr Cong might have thought his daughter would disapprove. In any event, I consider that nothing turns on this for the purposes of determining the substantive issues I presently have to determine because I accept that the evidence amply establishes that Mr Cong loved and wished to provide for all of his children, as well as Ms Shen. (It was foreshadowed that the manner in which the case was conducted might be taken into consideration when the question of costs arises, but that is for another day.)
Going back to the particular criticisms made of Teresa's evidence, the first and second defendants say that she overstated the number of occasions on which she accompanied Mr Cong to doctors' appointments (those being the "many" occasions on which she said they had conversations about the Will) (at one point her evidence being that this was almost on a daily basis). I accept that it may well be the case that Teresa has overstated the number of visits to doctors where she accompanied Mr Cong (and in another context - namely her application for special consideration at university - that may have conveyed the impression that she was his daily carer - see the Egan report dated 22 June 2016), particularly in light of the medical reports that indicate Ms Shen having accompanied Mr Cong to various appointments.
However, there is evidence of Teresa visiting her father regularly in hospital (and she is noted in at least one of the hospital records as his contact); and I accept the evidence of there being a roster among members of the family for overnight stays from time to time when Ms Shen was unable to be there (noting also, however, the evidence of Ms Ghuibin Zhu to the effect that Ms Shen was at the hospital on many occasions overnight - because Ms Zhu minded the children for her on those occasions (see T 921-T 922)).
I accept that there was confusion in Teresa's evidence and inconsistency as to the timing of some of the conversations and as to the "recent" discovery of the Campsie rezoning (see T 200) (which at one stage she seemed to put as being in September 2015, which is inconsistent with the fact that 43 Amy Street was not sold until December 2015). However, I consider this to be more likely the product of poor recollection (and perhaps a tendency retrospectively to put a gloss on events) than any deliberate reconstruction to suit the plaintiffs' case.
I accept as plausible that there were some conversations in which Mr Cong expressed his testamentary intentions to Teresa in terms which contemplated that she and her two brothers would receive substantial provision out of the estate (not least because that is consistent with the contemporaneous documents and with Mr Cong's apparent openness about his testamentary intentions); and, as adverted to above, I accept that Teresa was an honest witness attempting to give her best recollection of events. I also accept that Teresa had a good relationship with her father (as attested to by Pastor Yip, who thought Teresa was the favoured child); and that she has been emotionally affected by his death.
The first and second defendants have referred to inconsistency in Teresa's evidence in cross-examination (see T 273-T 274), in that Teresa first said that Mr Cong told her that he was putting properties in Ms Shen's name because "it's better for tax" and then Teresa said that Mr Cong said it was better for "his" tax (a difference that the first and second defendants say undermines her credibility). The first and second defendants say that Teresa could not explain how it was better for Mr Cong, given that he was dying, except by the proposition that he was not facing up to the reality of his coming death (T 274).
It is said that during her oral evidence, Teresa was clearly conscious of what she perceived to be her interest in her approach to this evidence; yet she had earlier conceded (T 273.35): I don't understand that type of thing and, again, I didn't want to have those specifics conversations with my dad about the technicalities because it was upsetting.
The first and second defendants say that if Teresa did not understand this "type of thing" then it is remarkable that she could be so definitive in her recollection of Mr Cong's statement of a position on technical matters of that kind (the first and second defendants here again invoking Watson v Foxman).
As to the evidence given on the voir dire (see T 187) concerning the properties being put into Ms Shen's name for tax reasons (see T 273-T 274), which the first and second defendants say is unlikely at a time when Mr Cong knew he was soon going to die, and as to the evidence that Mr Cong referred to the properties as his properties, I accept that some of the evidence indicates that Mr Cong acted as if he could deal with the properties as if they were his own - and that he could make a direction as to in whose name they be held (and that may well have been his belief).
However, it seems to me that the weight to be put on that is limited, insofar as it could simply be a propensity for self-aggrandisement on Mr Cong's part (as, for example, I regard the evidence of the discussion with Mr Chris Joyce as being). Furthermore, to my mind, if Mr Cong chose to put the properties into Ms Shen's name for tax reasons, that points strongly against him and Ms Shen having an intention that the beneficial interest was to be held on trust for him (relevant to the resulting trust claims which I consider in due course).

[126]

Ruling on Voir Dire

The first and second defendants say that Teresa's recollection of the conversations in which she says that Mr Cong said that the business would look after any debts ([35]; [36] of her affidavit) is inconsistent with Mr Glynn's evidence in cross-examination that Mr Cong intended the life insurance payment to service the liabilities. The first and second defendants say that Mr Cong was worried about the business and was concerned that no one knew it like him (see T 248-T 250). As to this, I consider in due course the evidence of Ms Shen and Ms Stefadouros as to the position of Jolly Trading but I do not see there being an intractable inconsistency between an expectation that the business would service the debts (as it had done for some years - and particularly where there is evidence, contrary to that put forward by the first and second defendants, that Mr Cong contemplated that the business would indeed continue and hence would be able to continue to service the debts) and the reference to the life insurance payout also being available to service the liabilities secured over the properties (particularly when the life insurance was much less than the overall debt of around $8.3 million at the time of Mr Cong's death). It is not insignificant that the social worker's note of his conversations with Mr Cong and Ms Shen records an understanding that they were of the opinion that the family was financially secure.
Teresa was visibly emotionally affected by the matters the subject of cross-examination (and I say this with no criticism of Counsel for the first and second defendants who approached the cross-examination in a manner properly sensitive to Teresa's position). It seems to me that this is the explanation for the fact that, on the second day of cross-examination, Teresa's recollection was generally more vague and she tended to resort to responses such as "yes it must be correct if that's what I wrote" (see T 270).
As to her candour, Teresa agreed that Mr Cong had said to her that the Family Property would be Ms Shen's residence and she agreed that she knew he had bought the property in Ms Shen's name (see T 275). In her affidavit at [36], Teresa deposed that Mr Cong told her that because "Amy is now getting [the Family Property] to live in with the boys she will not get [the Wu Property]". As noted above, Edmund similarly said that the Family Property was for Ms Shen and the boys (see T 91; T 106).
I considered Teresa to be a genuine and honest witness. She became visibly distressed on a number of occasions (both when giving evidence as to her father and as to matters going to her own psychological condition and anxiety - see T 242; T 274; T 255). Some of the evidence in relation to Teresa was subject to confidentiality orders and for that reason I do not here propose to summarise that evidence. Overall, however, Teresa seemed to me to display a sense of humour and an openness and candour in giving her evidence (see, for example, when she good-humouredly asked the cross-examiner "Is this a trick question?" (T 240.16); her wry comment about the state of her bank account (T 243.41-5); and her description of reading the copy of the Will she had been given over a glass of wine that night (T 279.10-12). I did not form the impression that Teresa was exaggerating or embellishing her evidence. If anything, I suspect that Teresa was minimising her psychological difficulties. While I take into account (as with Edmund) that Teresa has a personal interest in the outcome of the litigation, on balance I considered her evidence to be credible.

[127]

Ms Joyce

Ms Joyce's role in the proceeding was the subject of no little comment and criticism by the first and second defendants, who say that she has controlled the litigation and who seem to regard this as part of a continuing vendetta of some kind by Ms Joyce against Ms Shen. Certainly, Ms Joyce's family trust fund has to date funded the conduct of the litigation by the plaintiffs (and may or may not ultimately call in the loans in that regard; and Ms Joyce herself accepts that she has been "very involved" in the litigation (T 365) (though she characterises that assistance as being in relation to the provision of information in answers to questions that the children did not have). Ms Joyce denies (and I have no reason to disbelieve this) that she was involved in the actual preparation of their affidavits or had seen those affidavits in preparing her own evidence. In circumstances where her children, though adult, are relatively young, it seems to me not surprising that Ms Joyce (who was present in the court room throughout the hearing) has been supportive of them in the present litigation; and I draw no adverse inference from this.
That said, as noted in the chronology of events set out above, Ms Joyce has in the past made various reports to the immigration authorities, consistent with her bearing some animosity towards Ms Shen; and it seems to me that there is little room for doubt that there is a level of distrust between the two (no doubt not helped by the allegations made in the present proceeding or by the fact that, as it is at present, the plaintiffs stand to inherit little from their father's estate).
As to the disclosures made to the Project Wickenby investigators, logically those can have had nothing to do with the dispute over Mr Cong's estate (since they were made years before he died) and, to the extent that the correspondence from the plaintiffs' solicitors was perceived as a threat to induce a particular outcome in the present proceeding, it is relevant to note that the allegations were not new allegations (they had been made years before). Moreover, Ms Joyce did not simply implicate others in those disclosures, she implicated herself. One might think it unlikely that Ms Joyce would have gone to such lengths absent a genuine concern or belief on her part.
I found Ms Joyce to be a credible witness who gave her evidence in a calm and direct fashion. Ms Joyce readily accepted, for example, the proposition that Mr Cong's absence from the company would "absolutely" have an effect on its worth (T 389); and her evidence as to other matters (such as her relationship with Mr Cong) is consistent with objective evidence (the fact that he pleaded guilty to the assault charge; and the evidence of their trip together to Turkey and her visit to him when he was in hospital in the last weeks of his life).
I do not accept that the lengths to which Ms Joyce seems to have gone in the past in order to raise issues as to Ms Shen's immigration status (or her disclosure of matters going to the tax practices of Mr Cong and his business) renders Ms Joyce's evidence overall any more unreliable than that of any other witness whose self-interest is likely to be affected by the outcome of the proceeding (such as, most obviously, Ms Shen herself). For Ms Joyce, her personal interest arises not simply out of any concern to protect her children's position in relation to any inheritance from their father's estate but also because she will inherit Laurence's estate on intestacy.
I therefore approach Ms Joyce's evidence with the same degree of caution as I do that of the principal protagonists (Edmund, Teresa and Ms Shen). I do not include Ms Wu in that list of protagonists whose evidence I approach with caution because, although a party, it became very apparent in the course of cross-examination that she simply acted on Ms Shen's instructions or direction; and that she has no reliable recollection of events independent of that of Ms Shen.

[129]

Mr John (Chris) Joyce

I deal at this stage with the evidence of Mr Joyce (who is known as Chris), not because he is a principal protagonist but because he is an extended family member, being Ms Joyce's brother. Mr Joyce described himself as a taxation solicitor (though not practising as such, as I understand it) and tutor in criminology; and said that he runs his own import business.
Mr Joyce gave evidence as to a conversation that he had with Mr Cong (he says in Ms Shen's presence) in the hospital before Mr Cong died, in which he says Mr Cong referred to his properties (and said they were worth about $20 million). Relevantly, Mr Joyce's evidence is that, during the visit to the hospital, Mr Cong told Mr Joyce that Laurence should be getting $2 million in 10 years' time. Mr Joyce deposed that Ms Shen "certainly smiled and nodded her head and … assented to it. She could have said yes or something like that" but he could not remember. Mr Joyce said in cross-examination that Ms Shen smiled and nodded when he said that Laurence should be wiser by then (i.e., 10 years hence). Mr Joyce said that on that visit Ms Shen was talking about things in English; referring to a conversation about her making him some green tea and saying that Ms Shen had commented on the Campsie properties (Campsie being an area in which Mr Joyce used to live). Mr Joyce said that it gave him a lot of relief to know that Laurence would be looked after out of the estate, explaining that this was because he, Mr Joyce, was not in a position to help him.
The plaintiffs attach significance to Mr Joyce's evidence because they say it demonstrates that Ms Shen was adept in conversing in English about both important matters (by which I assume they are referring to the discussion as to the properties in Campsie) and anodyne matters (such as the attributes of a certain block of units in Campsie and how well Edmund was tutoring Bruce). The plaintiffs say that Mr Joyce was also clear that Ms Shen understood what Mr Cong was saying about his testamentary intentions. (Pausing there, I can draw little if anything from Mr Joyce's perception that Ms Shen understood what Mr Cong was saying simply from the fact that she smiled and nodded - and I have no benchmark against which to test the reliability in general of Mr Joyce's perceptions.) The plaintiffs nevertheless say, and I would accept, that Mr Joyce had good reason to recall the exchange because of his concern for Laurence; and the plaintiffs note that he could recall issues of detail (such as the sort of tea he wished to take).
Mr Joyce was a loquacious witness (more than happy to engage in a dissertation on the stereotypical traits of various nationalities and illustrating his account of the events by referring to his observation of a lizard on a tree outside the window in Mr Cong's hospital room - see T 547; and equally happy to divulge details of his own family history). (Indeed, I suspect, with no disrespect to him, that one might well find it easier to smile and nod than to attempt to get a word into the conversation.)
I consider that Mr Joyce was an honest witness and I accept his evidence as to the conversation with Mr Cong. In particular, I consider it plausible (and broadly consistent with contemporaneous evidence of Mr Cong's testamentary intentions) that Mr Cong told Mr Joyce that Laurence should be getting $2 million in 10 years' time. Mr Cong's intention was clearly that the minimum the elder children would receive out of the estate was $1 million each (plus the annuity); that this figure might in certain circumstances be a minimum of one-third of $5 million or $6 million each; that they might receive as much as $3 million each, depending on whether there was a rezoning and Ms Shen's exercise of discretion; and that they might not receive their inheritance until 10 years after his death. That makes plausible to my mind a reference to $2 million in 10 years' time (that being, on the testamentary scheme Mr Cong had in mind, one of the potential outcomes).
Other than that, however, Mr Joyce's evidence appears to me to be largely peripheral to the real issues in dispute. There is sufficient other evidence from which I infer that Ms Shen was able to understand basic conversational spoken English, albeit that I accept that Ms Shen's ability to read English was probably more limited.
As to the submission by the first and second defendants to the effect that this conversation (which I note Ms Shen says did not occur with this particular witness in any event - see below) supports the conclusion that Mr Cong did not know and appreciate the true value of the assets in his estate (because of the reference to a $20 million property portfolio when in fact the properties were subject to a considerable level of debt), I consider that issue in due course.
The most intriguing aspect of Mr Joyce's evidence was that Ms Shen did not recognise Mr Joyce (on the audio-visual screen) as being the person who had visited Mr Cong in hospital (T 643). However, there is no basis on which to doubt Mr Joyce's evidence that it was in fact he who had visited the hospital on this particular occasion; and it is not suggested that there were two such visitors. I can only conclude that Ms Shen was mistaken when she denied that Mr Joyce was the same person who had visited Mr Cong in hospital that day.

[131]

Ms Shen

Broadly speaking, Ms Shen's position may be summarised as being: that she can understand only some basic English (small talk, "like daily lives"); that she could speak conversational English (T 642); that she could read only some single words in English (T 575); that she did not see (and no one told her about) the emails in relation to the draft 2016 Will and Deed; that Ms Stefadouros did not tell her about the 2016 Will; that Ms Lan did not explain it to her; that Mr Glynn did not explain the 2016 Will or the Deed; that she had no choice but to sign the Deed and did not know what it was or what its terms were; that she was not interested in knowing what was in the Will because Mr Cong had already told her what he intended and she trusted him; that various solicitors who acted for her either did not translate documents to her (or if they did she did not understand) or did not take proper instructions from her and did not do a "good job" of advising her; that she signed a whole raft of documents put in front of her by Ms Stefadouros (see, e.g., T 605) or others, not knowing the contents of those documents (and seemingly not being interested in whether they were correct or not - such as her brother's immigration form and the Westpac loan application); that she understood (and was adamant about this) that what Mr Cong had told her was that she was to have the absolute discretion as to whether and how much the elder children should receive out of his estate after a period of 10 years if by then she was very, very rich; and that, had she known what was in the Deed, she would never have signed it (as it would leave her and her children homeless - "on the street" - and destitute).
The picture thus painted is of someone naïve and both trusting of, and dependent on, others (including her husband); and in effect requires acceptance of the proposition that a whole raft of disinterested professionals failed to act in accordance with their duties and that Ms Shen's own friends or acquaintances (such as Ms Stefadourus and Ms Lan) failed to assist her and misrepresented to others her position. It is inconsistent with Ms Shen being either commercially astute or careful to protect her own interests; and in my opinion inconsistent with an objective view of Ms Shen's conduct and that of others over the relevant period. I cannot accept that it represents an accurate picture of what happened. That said, as I explain in due course, that does not mean that all aspects of Ms Shen's account of events must be discounted. I can, for example, readily accept Ms Shen's evidence that she never read loan agreements and that documents such as the contracts for sale of properties that she acquired were explained to her (by her conveyancer) (see T 607). However, that is far removed from her assertion that she had no idea about the relevant transactions in the present case.
There were various aspects of Ms Shen's evidence that emerged only in cross-examination. For example, the evidence to which I have adverted above as to Mr Cong having consented to the purchase of the 43 Amy Street property before she bid for it at auction (T 612) and the evidence that Mr Cong had "gifted" her the Family Property.
As to the first of those matters, when confronted with the seeming illogicality of telling Mr Cong, in a discussion to which she had deposed as having occurred after the auction, that she had made a bid for the property at the auction (and the price) if Mr Cong already knew before the auction that she was bidding for the property (and had consented thereto), Ms Shen's answer (at T 615) was a dismissive "Correct or not I can't recall". I note that by this point in the cross-examination, I had formed the view that Ms Shen was becoming tired or perhaps frustrated by the process and was tending to shut down debate by saying that she did not recall; rather than (as the plaintiffs suggest) being unable to explain the perceived illogicality. However, the fact remains that her evidence was inconsistent in relation to this aspect of the couple's property dealings and this is not immaterial in circumstances where a tenet of Ms Shen's case is that she was accustomed to act in accordance with her husband's wishes.
At T 610, Ms Shen said, in relation to the investment properties (which would include all the subject properties other than the Wu Property and the Family Property), that normally Mr Cong would listen to her suggestions; and she said that Mr Cong was focussed on business and was not interested in real estate whereas she "was the person who was interested in investment properties and spent time in investment". However, she was also adamant that the property decisions were Mr Cong's decisions and that "[i]f he disagreed just, just don't buy it, there is no need to fight" (T 611) (though tellingly, Ms Shen's approach seemed to be (see at T 611, extracted below) that the alternative was divorce, which suggests perhaps that this might have been an implicit threat of last resort - though that is mere speculation). At T 611 there was the following exchange: Q. I want to suggest to you that at least in relation to those properties you weren't accustomed to act on his direction, he was accustomed to act upon your direction or suggestion? A INTERPRETER: Yeah, but, you know, we can't just argue about this. For example, if I said, "I want to buy this property" he, he didn't agree, what shall we do, divorce? So, every time he said, "Okay, I support you." And I really don't understand what you mean by this question.
Ms Shen's own evidence is that in relation to the proposal for her to pay off the mortgage for 16 Nicholson Street (and the property to be left to the three elder children) (see her affidavit affirmed 4 September 2020 at [220]) was that "if you force me to do this, I will divorce you". (That evidence suggests that Ms Shen accepted that Mr Cong might be able to dictate how the 16 Nicholson Street property was to be dealt with, although on her case Mr Cong's interest was only a half share as joint tenant with her.)
As to the second of those matters, the alleged "gift" of the sum of $4.5 million to purchase the Family Property, Ms Shen's evidence was in effect that she made a forensic decision not to include this in her affidavit until her final affidavit (apparently to foreclose any response by the plaintiffs to that evidence) - see T 821, which, if correct, is a concerning example of a deliberate decision not to put before the Court at an earlier stage a complete picture of events. At T 821, Ms Shen said that she did not put the details in relation to the Family Property "gift" in her earlier affidavit because the other side "would just copy it" so she left that for the final one at end.
At T 822, Ms Shen could not remember what she told the lawyer in October 2017 about the gift of $4.5 million (again, her mantra was that the lawyer did not do a good job and that the affidavit was "not translated") and Ms Shen says that after the affidavit was produced she did not have a chance to look at it again. In response to the proposition put to Ms Shen that Mr Cong never told her he was "gifting" money, Ms Shen's response was "So if it's not for me - for whom?" (which seems to me rather to beg the question, although reliance is placed by the first and second defendants on this answer).
An even more concerning example of non-disclosure is the deliberate decision not to inform the plaintiffs of conduct in breach of court orders (see T 637).
Ms Shen gave her evidence through an interpreter and to my observation had the assistance of the interpreter throughout the course of the proceeding (the interpreter sitting next to her and translating throughout). On the rare occasion when the interpreter was not in the courtroom, I observed that Ms Shen's Mandarin speaking solicitor also assisted her in that regard. I have no doubt that Ms Shen's English skills are limited. That said, Ms Shen can clearly communicate to some extent orally in English. At T 642, Ms Shen agreed that Mr Cong's elder children could not speak Chinese; yet there is no dispute that she was able to communicate with them (as she was with a number of other non-Chinese speaking witnesses - for example, her own witness, Ms Stefadouros).
Ms Shen was generally fairly inexpressive both in the witness box and in the court room. However, there were points at which Ms Shen became quite animated in cross-examination. So, for example, Ms Shen responded with evident feeling when she said that if she did not make the document (i.e., the Deed) she would not be in court that day; that "right now I'm going to sue Mr Glynn"; and that she was very unsatisfied with him (T 572); that if she knew about this proceeding she would not have transferred the Wu Property to her mother and would not have borrowed from her brother; and, later, when she said of a particular document (see T 590.25-6) that it should be Mr Glynn that should understand it - not her.
Ms Shen became quite animated when she said in the witness box that Mr Cong told her that Ms Joyce had already got what she was entitled to and that she could not understand why Ms Joyce would be entitled to get anything (T 626); and particularly strident when she decried the prospect that she and her children would be living on the streets (see T 724.11). However, there was only one occasion I recall where Ms Shen appeared upset and that was when she was being questioned about her expenditure in late 2017 and 2018 (and a short adjournment was taken).
There were obvious inaccuracies in the way in which Ms Shen described herself in affidavits in the proceeding (consistent with an attempt to downplay her financial resources). For example, in Ms Shen's affidavit affirmed on 13 October 2017 (before the mediation at the end of October 2017), Ms Shen describes her occupation as "homemaker". In fact, at the time, Ms Shen was a director of both Cong Australia International and Ugg Australia International and at least the former was carrying on business. Ms Shen's response was that "I forget content of affidavit. I didn't read it", but Ms Shen then went on to justify the description by saying that she was a homemaker but, in the meantime, "I had a company with someone else". Similarly in her affidavit affirmed 22 June 2018 (which echoes the sentiments in the first affidavit), Ms Shen deposed that she had no income and was dependent on her (second) husband, her mother and friends for financial support and would need to refresh her skills before re-joining the workforce, at a time when Ms Shen was a director of Cong Australia International. Ms Shen sought to explain this affidavit evidence by saying that she was there referring to refreshing her skills as a hairdresser. However, at the very least this affidavit evidence was apt to present a very misleading picture of Ms Shen's then financial resources.
Ms Shen accepted that Mr Cong loved her very much and trusted her; and accepted that Mr Cong wanted to provide for "my children and also his children" (T 701); yet she seems blithely unconcerned at the prospect that Mr Cong's wish to provide for his elder children (on her own case) will come to nought.
It is of course difficult to assess the credibility of any witness whose evidence is given through an interpreter (as there is always the risk of inadvertent mistakes in translation and the nuances of the questions and answers may be lost in translation). However, in the present proceeding, both sides were agreed that the interpreter had performed a sterling service in the translation of the evidence; and what became apparent in the course of cross-examination was that Ms Shen was quick to blame others for the situation which she now faces.
As noted above, Ms Shen's evidence was that she never saw the emails in relation to the draft agreement and Will, never discussed them with Ms Stefadouros; never talked about these things with Ms Stefadouros (T 703) and that it was Mr Cong who talked to Ms Stefadouros. Ms Shen was adamant that "[t]hese are quite confusing - so I was not able to understand"; that Ms Stefadouros was not able to communicate with her, that it was all "too complicated" for Ms Shen and that Ms Stefadouros "knew I couldn't read I couldn't understand". Ms Shen said that when Ms Stefadouros asked her to sign a document "she never explained the document because she knew I am I was not able to read - I was not able to understand" (T 703). Ms Shen was adamant that no one translated anything, and no one told her anything.
It is no overstatement in my opinion to say that Ms Shen's position was broadly that she did not understand anything, did not read anything, was not told anything and simply signed anything put in front of her; and that her explanation for discrepancies or inconsistencies (or errors) in her affidavits (other than her most recent affidavits prepared by her current lawyers) was that nothing was translated to her (or, if it was verbally "read out to her" in Chinese, that did not amount to a translation, or it was not done so that she could understand it or she forgot).
My assessment, however, is that, contrary to the picture Ms Shen painted, Ms Shen is commercially "savvy". Ms Shen has a self-confessed interest in property investment and exhibited an evident understanding of tax concepts relating to CGT; a very clear focus on what was in her (and her children's) interests; and an ability to stand up for herself (as evident by her own account of her dealings with Mr Cong and by Edmund and Teresa's accounts of their conversations with her).
Ms Shen showed that she had a common sense (and realistic) attitude to property values when she said in cross-examination that everyone who buys property thinks that over 10 years it will increase but that no one could guarantee that; and that no one wants to lose money. And Ms Shen also seemed to have a firm grasp on the financial side of the respective property acquisitions. At T 730, in respect of the four Campsie properties, Ms Shen said that she knew "what price I paid - and I also know how much I owed". Ms Shen accepted that each was rented out in 2016 but she referred to the incidence of land tax each year and said that the lease payments were not enough to pay expenses. Ms Shen said that now she cannot pay the mortgages. As to 2 Duff Street and 16 Nicholson Street (at T 732), where Ms Shen said that the rent was only enough for land tax, in her affidavit evidence Ms Shen deposed that Mr Cong said to her "[a]fter I die, sell 16 Nicholson Street first. It is at a busy road". Ms Shen was adamant that Mr Cong told her to pay off all company debt and close the company. At T 733, Ms Shen maintained that at the time she did not have concern as to her financial position because if she could not pay the debt she would just sell the property. Ms Shen said that she had debt for over $8 million so that she had no other choice but to sell properties.
At T 820, Ms Shen did not accept that she promised Mr Cong that she would honour his wishes in the 2016 Will and Deed. She may well not have understood what those wishes were but it seems to me unarguable that Mr Cong understood that Ms Shen would honour his wishes and I would be troubled if this evidence were to suggest that Ms Shen had led Mr Cong to believe something that she did not intend to honour (see further below). However, I accept it more likely that, when saying this, Ms Shen was simply denying that she promised to honour the particular wishes that she says she only discovered were contained in the 2016 Will and Deed when her current lawyers explained them to her.
Addressing the plaintiffs' submissions as to Ms Shen's credit, I note that the plaintiffs maintain (and I accept) that Ms Shen is not commercially naïve (pointing to her evidence that she had managed three hair salons in China, with 23 employees; and to her role in the acquisition of the properties in Australia); and they say (which to some extent I accept) that she was well able to converse in English including in relation to matters of some complexity. The qualification I would make to that last proposition is that I am not persuaded that Ms Shen is able to communicate in English beyond what might be described as conversational or basic English (though I accept that concepts such as rezoning - which the plaintiffs used as an example - could easily be expressed in basic conversational terms and I have no doubt that Ms Shen had a particular interest in the potential for rezoning of the properties the subject of the present proceeding). It is also said by the plaintiffs (and I consider that the evidence amply supports this) that Ms Shen was able to form a view as to what was in her best financial interests.
The plaintiffs further say that it should be accepted that Ms Shen was familiar with the affairs of Jolly Trading (pointing to the immigration application submitted on behalf of her brother, Mr Shen, to the Department of Immigration and Ethnic Affairs in which there is a reference to Ms Shen having been employed by the company for two years) and the fact that Ms Shen felt confident enough to "rebrand" Jolly Trading's business under the name Cong Australia International. As to those matters, the difficulty I have is that it seems clear from Ms Shen's evidence that she was prepared to sign a raft of documents without necessarily having any idea of their contents and she also signed the Westpac loan application that described her as employed in an administrative role for a Chinese company (and contained a host of other objectively incorrect information). There is no evidence that Ms Shen was actually carrying out any work for the company in the years prior to Mr Cong's death (indeed the impression I formed from the evidence was that it was Mr Cong himself who dealt with the suppliers and customers). I would not infer from Ms Shen's continuation of the Jolly Trading business (through Cong Australia International) that Ms Shen was familiar with the business - rather, the evidence that she thought it was "like a gamble" seems consistent with the unbusinesslike way in which Ms Shen seems to have expended large sums of money on interest-free loans to friends and her seeming philosophy that, if one has a very large amount of debt, then it makes no difference to expend large amounts on luxury items rather than reducing that debt.
The plaintiffs submit that the following aspects of Ms Shen's evidence are inherently improbable and should be rejected: that Ms Shen had not seen the executed 2016 Will and the Deed until after the commencement of the proceeding and she knew nothing about the terms of the Will at the time of Mr Cong's death; that Ms Shen was ignorant about the Deed's terms; that Mr Cong lied or misled her about his testamentary intentions; that Ms Bull did not attest Mr Cong's execution of the Will; that Ms Shen did not work in Jolly Trading other than at the end of Mr Cong's life; and that Jolly Trading was unprofitable.
As to the first of those matters, the plaintiffs point to the following: that Ms Stefadouros asked for and received a copy of the Will on the day of Mr Cong's death; that Ms Shen took it to the bank to withdraw funds from Mr Cong's bank accounts at the end of 2016 or early 2017; and that, in her affidavit in support of her then application for a grant of probate of the 2016 Will, when explaining her delay in applying for probate, Ms Shen did not suggest that she had lacked possession of the Will. The plaintiffs further say that Ms Shen must have had possession of the original of the Deed, since it was produced to the Court by her solicitors on the first day of her cross-examination; and point to inconsistency between Ms Shen's evidence that she only found out about the emails concerning the 2016 Will and the Deed in September 2020 but then said that she had not seen the email of 27 May 2016 until her cross-examination.
As to this, I find it implausible that Ms Shen did not ask about the contents of Mr Cong's 2016 Will at or about the time it was executed, let alone shortly after he died; particularly in circumstances where her evidence was that she and Mr Cong had argued over whether (as he had then wished) 16 Nicholson Street should be left to the three older children. I consider it far more likely on the balance of probabilities that Ms Shen was aware (from the discussion at the 17 February 2016 meeting - at which she was present for at least part of the time; conversations both before and after that meeting with Mr Cong, Ms Stefadouros and Ms Lan; and, however brief, Mr Glynn's reading through of the Will at the 3 June 2016 meeting) of the broad concept of what was provided for under the Will (namely that the elder children were to receive a monetary amount for 10 years after Mr Cong's death and a substantial inheritance either in the form of property or an interest in property (such as had been the case under the 2013 and 2014 Wills) or representing a share of the value of the properties that she and Mr Cong considered would increase in value if they were rezoned over a period of 10 years).
The fact that Ms Shen has given evidence of hearing Mr Cong speaking to Ms Lan of amounts of $3 million and the like makes it clear that Ms Shen understood that Mr Cong was proposing that his elder children share in what he clearly regarded as a substantial estate. The conversation to which Edmund deposed (and which I accept on the balance of probabilities occurred) to the effect that Ms Shen was waiting for the rezoning of the Campsie properties belies her professed ignorance as to the substance of the testamentary arrangements that Mr Cong had put in place. That said, I accept that Ms Shen mistakenly thought that the Will provided her with a complete discretion as to whether to pay anything at all to the elder children (and then only if she subjectively formed the view that she was "very rich" or "very very rich" and after 10 years). I consider that this is the most likely explanation of the course that Ms Shen has taken and that this explains her reaction to the claims made in the present proceeding, which is akin to her apparent belief that she was "tricked" or cheated on the sale of 43 Amy Street (when, with no fault as I can see it on the part of the purchaser, Ms Shen discovered after entry into the contract for sale of the publication of the strategy paper that contemplated the rezoning of the area in which the property was located).
Again, as to Ms Shen's professed ignorance of the provisions of the Deed, I am unable to accept that she had no awareness of the proposed regime in relation to the payments to the three elder children being dependent on the rezoning of the Campsie properties (not least because she herself gave evidence that she overheard the conversation between Mr Cong and Ms Lan in which the former referred to the various ranges of amounts and because she was obviously astute to the reference to properties and prices in the various conversations even though her English speaking skills were limited). It is telling, for example, that although she professed a lack of any interest in the discussion with the real estate agent at the time that delayed completion for the Family Property purchase was sought, saying that she was only interested in the price, Ms Shen was able to say that there was no mention of the price in that conversation. Again, however, whether she understood the precise nature of the obligations being assumed under the Deed is another matter altogether.
As to Ms Shen's evidence that, when her current solicitor explained the documents to her, she found the documents quite different from what Mr Cong had told her before, the plaintiffs say that no explanation has been advanced as to why Mr Cong should traduce his wife (and mother of his three younger children). I see no benefit here to be gained in speculation as to why Mr Cong might, intentionally or otherwise, have misled Ms Shen as to his testamentary intentions. (One might equally speculate as to how Mr Cong evidently came to understand that Ms Shen had agreed to that testamentary regime, since that is clearly what he conveyed to Mr Glynn.) The relevant question to my mind is as to what Ms Shen knew or understood of those testamentary intentions - in the context of her execution of the Deed. I address this in due course.
I accept that Mr Cong made his testamentary intentions known to various people (including Ms Stefadouros) and Ms Shen herself accepts that he discussed at least some of his intentions with her (in relation to 16 Nicholson Street) and that she was aware of the monetary amounts he was contemplating. The real issue seems to me to be that Ms Shen believed (and I accept that she was genuine in this belief - hence her insistence and repetition of this in the witness box) that she was to have ultimate discretion as to what, if anything at all, the elder children were to receive.
As to the reliance placed by the plaintiffs on the fact that Ms Shen had not made any complaint about Mr Glynn's conduct (and had continued to retain his services), I would query how far that takes matters since Ms Shen has now foreshadowed proceedings against Mr Glynn (consistent, I might add, with her propensity to blame a variety of lawyers and other people for the position in which she is now placed).
As to Ms Shen's claim that Ms Bull did not attest Mr Cong's execution of the 2016 Will, I am comfortably satisfied that that should be rejected. I place weight on Ms Bull's evidence in that regard (which I accept) and the inherent unlikelihood of an experienced solicitor not having the witnesses present when a Will was executed.
I therefore do not need to place reliance on the fact that Ms Shen's affidavit of 29 November 2017 (which had been translated for her), in support of her application for probate, is inconsistent with her present denial that the 2016 Will was properly attested; nor is it necessary to place weight on the fact that Ms Shen's first defence (which she verified on 14 May 2018), contained a non-admission as to Ms Bull having witnessed Mr Cong's execution of the Will (particularly since it is unlikely that as a non-lawyer Ms Shen would appreciate the distinction between a non-admission and a denial in a pleading).
More significant, to my mind, is the fact that Ms Shen has shown a propensity to deny that she has seen documents or that documents have been translated to her even where, as it turned out, the documents in question were in her possession (such as the 2016 Will and, most likely, the original Deed) or in one case in an exhibit to her affidavit (the email to which I have referred above) or had been "verbally" translated to her; and that Ms Shen then took refuge in answers to the effect that she had forgotten or did not understand. As to the affidavit verifying the defence in mid April 2018, once it was pointed out that the affidavit verifying was translated to her, Ms Shen's response (at T 593) that no one asked her what happened that day (i.e., what happened on the day the Will was executed), is extraordinary given the allegations to which she was there responding.
I have every sympathy for the difficulty of someone who does not speak much more than basic English when confronted with documents in English and when dealing with persons who only speak English. However, it is to my mind implausible that someone with Ms Shen's obvious commercial savvy or "nous" (and who was clearly concerned with protecting her, and her children's, interest in Mr Cong's estate) would have been so sublimely unconcerned or disinterested in what Mr Cong was signing in relation to his testamentary dispositions and so unquestioning (as she suggests she was) as to what it was that she herself was signing on that occasion. Such professed disinterest or concern could only be plausible (if at all) to the extent that Ms Shen had understood (wrongly as it turned out) that the documents being signed on 3 June 2016 left her with the absolute discretion to do what she liked in relation to the elder children (which to my mind explains Ms Shen's obvious dissatisfaction at the prospect that the documents might be construed otherwise than giving her that discretion - hence the rather dramatic protestation that signing the Deed would leave her and her children homeless, rather than "very very rich" when and if the properties were rezoned - see T 701.32).
Ms Shen accepts that she had a conversation with Mr Cong in which he conveyed that he wanted her to repay the mortgage for 16 Nicholson St and for that property to go to the elder children, in addition to the $10,000 annuities; and yet her professed belief at the time of ultimately signing the Deed was that Mr Cong had changed his mind such that the payments to the elder children after rezoning of the Campsie properties were now to be entirely discretionary. On one view, it seems plausible that Mr Cong said that if you get "very, very rich", then you can decide how much more to give them, and that Ms Shen took that to mean that all payments (except for the annuities) were now discretionary; on another view, Ms Shen is clearly commercially savvy, and would have had conversations in her native tongue with Mr Cong about his testamentary intentions. That said, I have little doubt that Ms Shen would not have signed anything that she thought was against her financial interests; and therefore the most logical explanation is that she interpreted (or chose to interpret) Mr Cong's intentions (or heard what she wanted to hear in this respect) such that she understood that she was to have the ultimate and absolute discretion as to the eventual payments to be made to the three elder children.
In any event, as noted above, I accept as credible Ms Bull's evidence that she witnessed Mr Cong's execution of the 2016 Will. It is far more plausible (reinforced by the fact that this stood out in Ms Bull's mind because this was the first time she had witnessed the signature of an Asian testator, and because of how ill she had understood Mr Cong to be and that this was why Mr Glynn wanted her to be present for longer than usual when witnessing the execution of a document) that Ms Bull's account is correct. It is not plausible that an experienced solicitor would not have ensured that the witnesses were present physically at the same time to witness the testator's signature when that was what the attestation clause contemplated (and what was required for the proper execution of the Will).
As to Ms Shen's disavowal that she worked in Jolly Trading other than right at the end of Mr Cong's life, I accept that this is inconsistent with Ms Shen's evidence at [61] of her first affidavit to the effect that she had worked in the deceased's business and with the declaration made by Ms Shen in the immigration documents relating to Mr Shen. As to the latter, I have already indicated the difficulty placing much reliance on documents signed by someone who seems to have simply signed on demand, so to speak. As to the former, I am troubled by the fact that Ms Shen has given inconsistent evidence in a number of respects and this is one of them.
It is to my mind quite misleading, for example, for Ms Shen to have described herself in her October 2017 affidavit as a homemaker unable to refresh her skills with a view to re-joining the workforce for at least a further three years; and to have referred to being dependent on financial support (whether from her second husband, her mother or rental income, only), when she was by then a company director of a business that was trading in the same business as that which had formerly been carried on by Jolly Trading (and I consider that Ms Shen's explanation, given in a different context - namely to justify why she told her brother in 2016 that she a large mortgage debt and no income, when that was clearly wrong - that in China someone having no income means that that person is not employed - does not assist in removing that inconsistency).
Insofar as the plaintiffs note that Ms Shen accepts that Mr Cong had said that she could communicate in Chinese with buyers, that seems to me less significant (since the fact that Mr Cong considered that Ms Shen was capable of so doing does not necessarily mean that she had done so in the past or had done so for any relevant period of time).
As to the suggestion by the first and second defendants that Jolly Trading was unprofitable after Mr Cong's death because of the goodwill attached to Mr Cong and/or because of currency fluctuations, I would accept that there was likely to be a significant amount of personal goodwill attached to Mr Cong's involvement in the business (and that may well be why the new company was named Cong Australia International) but I do not accept that it has been established that Jolly Trading was unprofitable at the time of Mr Cong's death - there is simply too much left unexplained by the large sums of money in and out of the bank accounts and I cannot accept Ms Shen's evidence as reliable in this regard.
The plaintiffs point to a number of other inconsistencies in Ms Shen's affidavit and oral evidence. For example, they say that Ms Shen's verified defence asserted (particular (l) to [60] of the defence) that she was accustomed to act on Mr Cong's advice and in accordance with his wishes, which is inconsistent with the fact that Ms Shen acknowledged that, on occasion, she had bought properties without his proper approval. It is said that, in cross-examination, when confronted with that particular of the pleading, Ms Shen reacted defensively (by enquiring as to the author of that document). I did not form the impression at the time that Ms Shen was being defensive so much as I thought that she was being careful to ensure she understood the provenance of the document that was being put to her. That said, there was an element of inconsistency in Ms Shen's evidence that Mr Cong was focussed on the business and she was the one interested in property investment, on the one hand, and the conflicting evidence as to how the decision was made to acquire properties (not least Ms Shen's evidence for the first time in cross-examination that Mr Cong had approved the purchase of 43 Amy Street when he was in hospital and before she had attended the auction).
As noted earlier, Ms Shen's evidence was that in her home the husband made the decisions (see T 709: "in my home, in my home my husband is the person who made the decision") and that Mr Cong was not the kind of person to interrupt (see T 695: "[m]y husband actually never allow me to interrupt the conversation between him and someone else"). Nevertheless, it seems to me that Ms Shen was well able to stand her ground when she wished to do so (such as when she successfully resisted the proposition that 16 Nicholson Street be left unencumbered for the three elder children); and I considered it telling that her answer to an earlier question as to property decisions suggesting that what was she to do - "divorce?" (which suggested to me that Ms Shen may have seen this as the ultimate threat to hold over Mr Cong) (see T 611.31-4).
In any event, by the time in the cross-examination that Ms Shen was challenged about inconsistency in relation to her evidence as to the purchase of 43 Amy Street (namely, that she would not have said to her husband in early September that she had bid $985,000 for 43 Amy Street - see [132] of her affidavit - if she had already told him that), it seemed apparent that Ms Shen was effectively shutting down the debate by saying dismissively, "[c]orrect or not, I can't recall".
The plaintiffs also point to Ms Shen's evidence that, prior to April 2016, she had lent considerable sums of money to Jolly Trading, even though Ms Shen was unable to calculate how much had been lent (having never made such a calculation); and her assertion that some of the money for these loans had been provided by Mr Cong and that some came from the proceeds of sale of properties. The plaintiffs say that this evidence: was unsupported by any contemporaneous records; was never referred to in her affidavits; and is inconsistent with her own financial circumstances. The plaintiffs point to Ms Shen's acceptance that she had attempted to set out as fully as possible in her affidavit evidence the extent to which Mr Cong had lent or given moneys to her and, conversely, the money she had given or lent to him; but that her affidavits did not allude to any gifts of money from Mr Cong unrelated to the purchase of properties.
The plaintiffs say that the alleged financial transactions cannot be reconciled with Ms Shen's own description of her financial circumstances, as recorded in her affidavits of 13 October 2017 and 22 June 2018 (to which I have referred above), which they say was disingenuous and an attempt to create a false impression of her financial circumstances; and they note that, when faced with the inconsistency between her asserted impecuniosity and the financial transactions involving Jolly Trading, Ms Shen asserted for the first time that Mr Cong had given the money to her and said that it was "the company's kind of a cash flow or something".
The plaintiffs further say that Ms Shen's evidence concerning the loan application made to Westpac for funds in relation to the Wu Property acquisition (see above) demonstrates that she was prepared to say whatever she perceived advanced her case, even at the risk of inconsistency. The plaintiffs say that Ms Shen's evidence contradicted her testimony that she had told Westpac the truth. The plaintiffs say that although Ms Shen denied that the agent had asked for her income, Ms Shen must have understood that Westpac would be interested in her financial circumstances; and they argue that it is improbable that the agent would commit a fraud on both her and Westpac for no apparent reason.
As to Ms Shen's evidence concerning her lack of knowledge of the circumstances of Jolly Trading, the plaintiffs say that this manifested another attempt on her part to avoid her involvement in the matters informing the context of the Deed and the Will. It is noted that Ms Shen asserted she knew nothing about Jolly Trading (not even its name) and that she was informed (by her lawyer) of the company's name after this proceeding had commenced; notwithstanding that she concurrently asserted that she asked her brother to lend money to that entity and that Jolly Trading paid large sums into the joint account she held with Mr Cong.
Insofar as Ms Shen claimed that she had no idea about the company's performance before Mr Cong allegedly told her to shut it down and pay off its debts; and that she never thought about whether her family was financially secure as at early July 2016, the plaintiffs say that this evidence cannot stand in light of the contemporaneous records (referring to the social worker's note).
The plaintiffs contend that Mr Cong's assets were substantial and that their true worth is not reflected in the contemporaneous records, such as Jolly Trading's financial records. It is said that the bank statements record very large sums being transferred between accounts which cannot be explained by reference to the figures declared in those financial statements. The plaintiffs do not suggest that Ms Shen's credit is adversely affected by whatever arrangements Mr Cong put into place to bring about that outcome; but they say that it cannot be assumed that Ms Shen's financial resources have been, and remain, circumscribed in the manner she asserts.
Finally, as to Ms Shen's evidence that Mr Shen lent money to discharge the mortgage on the Wu Property, the plaintiffs say that this is unsupported by any records other than those which indicate that the transactions involved the payment of moneys due to Jolly Trading (referring to contemporaneous documents that it is said indicate that the remittal of funds for the alleged loan on 13 September 2016 was as payment for imported sheep skins; and that there are similar records that relate to the payment of 30 September 2016, referring to an invoice which had been issued by Thomas Foods to Jolly Trading). The plaintiffs point out that none of the many loans that Ms Shen said she advanced to Jolly Trading was ever recorded as a liability in the year end returns for that company. (It is also noted that in [61] of her first affidavit Ms Shen acknowledged that she had worked in the business.)
I accept that the above matters point to a concern that Ms Shen was prepared to sign documents (including affidavits) without satisfying herself as to their accuracy and that she proffered from time to time a variety of explanations to suit her case. I do not regard her as a reliable witness. I do not, however, find her to have been knowingly dishonest in her evidence (although, as noted, I am troubled by the deliberate breach of the Court orders and by her self-confessed decision in effect to ambush the plaintiffs by withholding information from her affidavits (namely the "gifting" of moneys in relation to the Family Property)).
The plaintiffs say that Ms Shen's evidence about her capacity to speak, and understand, English (which they say was internally inconsistent in any event) was also given with a view to advancing what she perceived to be her best interests; and they say it was contradicted by contemporaneous records. The plaintiffs say that, at the one extreme, Ms Shen asserted that at the 17 February 2016 meeting she could only recall one word being used (being her own name); and that apart from her own name, she understood not a single word said in the 30 minutes that she accepted she was present at the meeting. It is noted that Ms Shen asserted that Mr Cong could make all the decisions "so I, I didn't hear. I couldn't understand". It is said that Ms Shen maintained that extreme position notwithstanding that she accepted that she could speak what she called "very basic English". The plaintiffs say that this concession was not true; and that she was plainly able to speak to the elder children, none of whom spoke Chinese. As adverted to above, I accept that Ms Shen was able adequately to communicate in English with a variety of people.
Complaint is made that on other occasions Ms Shen attempted to avoid giving answers or obfuscated as to her understanding of words. By way of example, it is said that Ms Shen refused promptly to acknowledge that her affidavit in support of the grant of probate failed to acknowledge her claim that she did not see the Will until September 2017; and it is said that she obfuscated as to what she understood by the word "witness". The plaintiffs also say that Ms Shen's attempt to understate her financial circumstances is illustrated by the cross-examination in which, when asked what stopped her from saying this in her evidence, she said "I don't recall the other content of the affidavit and I can't read at this moment". I did not regard Ms Shen as being guilty of deliberate obfuscation in the witness box; rather, I thought that some of the answers towards the end of her cross-examination reflected her tiredness and the stress of a lengthy cross-examination.
It is submitted by the plaintiffs that Ms Shen deliberately downplayed her knowledge of the English language; and that she did so out of a perceived need to create the picture that she was vulnerable to exploitation and a victim of circumstance. For example, the plaintiffs refer to Ms Shen's evidence: that at the meeting that Mr Glynn attended, she was only able to recognise the names said, and nothing else, with the result that she could not pay attention to what was said; that she could not comprehend what was said by the estate agent, Mr Iskander, at a meeting prior to the purchase of the Family Property (and was not interested in the conversation even though the subject matter of the meeting was an extension of the time normally fixed for completion); and that she could not understand a word that passed between Mr Hand, Mr Allen and Ms Stefadouros at the meeting concerning the dispute in relation to 43 Amy Street in October 2016 (and again that she did not pay attention to the conversation because she could not understand it). The plaintiffs submit to the contrary that Ms Shen was able to communicate and comprehend English. I have made my finding as to this already above.
The plaintiffs argue that Ms Shen's defence turns on the proposition that she was deceived by Mr Cong and by Mr Glynn, and that no one had told her before September 2017, what she and Mr Cong had executed 15 months before. The plaintiffs say that that case cannot stand if Ms Shen was informed of Mr Cong's intentions either before or after Mr Cong's death, and that Ms Shen's conduct in continuing to retain Mr Glynn to conduct her litigation and prepare her Will and pre-nuptial agreement is irreconcilable with any sense of grievance. I have addressed part of those submissions already. Suffice it here to note that I do not accept that Ms Shen was deceived by Mr Cong or Mr Glynn but nor am I satisfied that it was ever clearly explained to Ms Shen what it is that she was being asked to assume by way of obligations under the Deed; and the more logical explanation for events in my mind is that whatever was said between Mr Cong and Ms Shen, she (rightly or wrongly) thought she was being given a discretion inconsistent with what was provided for under the Deed.
The plaintiffs say that one other matter that bears strongly upon the credit of Ms Shen is that she procured Ms Wu's breach of the injunction prohibiting the encumbering of the Wu Property. It is said that Ms Shen did so consciously and with regard to Order 8; that before her cross examination on 29 October 2020, she did not explain her defiance of the order; and that, even then, her explanation was "no more than a half-truth". It is noted that Ms Shen asserted that she did not have money for living and was suffering as a consequence; and that all of the $1 million that was drawn down from OUF was used to redress her financial needs, including living expenses, tuition fees, legal costs and the repayment of debts; but that, although Ms Shen denied in the witness box that that evidence was incorrect, in fact Ms Shen had lent the sum of $45,000 to Ms Stefadouros and Ms Shen had spent $50,000 to buy face masks. I have dealt with this above. I accept that the evidence surrounding the breach of the Court orders was unsatisfactory; but I do not consider that it leads to the conclusion that Ms Shen's evidence as a whole should be rejected.
In summary, the plaintiffs submit that there can be no confidence that Ms Shen's recollection has been unaffected by self-interest and the intervention of the litigation. It is said that Ms Shen embarked upon an aggressive defence (which she foreshadowed to Teresa in the conversation on the eve of the anniversary of Mr Cong's death); and that her self-interest has caused her to transfer the Wu Property in order to defeat the plaintiffs' claims and to encourage her mother to breach the Court's orders made on 7 June 2019 by charging the Wu Property with the liability undertaken to OUF (for which they say no proper explanation was given). It is submitted that if Ms Shen was prepared to breach Court orders then it can be inferred that the pressures of litigation have otherwise influenced her approach to the case.
Insofar as Ms Shen asserts that the Will was not properly executed, it is noted that she impugns not only the credibility but also the professional conduct of Mr Glynn. The plaintiffs say that the allegations made against Mr Glynn (to the extent that it is alleged that he prepared a deed without ever consulting her and that he procured her execution thereof without even attempting to explain its terms to her) are serious allegations which involve the application of s 140 of the Evidence Act 1995 (NSW). Reference is made in that regard to what was said by Emmett J, then sitting in the Federal Court in Warner v Hung, in the matter of Bellpac Pty Ltd (receivers and managers appointed) (in liquidation) (No 2) (2011) 297 ALR 56; [2011] FCA 1123, as to the requisite degree of satisfaction required in such a case.
In this case, the plaintiffs submit that it can be inferred that Ms Shen chose, deliberately, not to be candid; and that this conduct involves her recognition that the truth would harm her case. The plaintiffs accept that, as observed in Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640 at 694 by Gibbs J, as his Honour then was, "[t]he fact that a witness is disbelieved does not prove the opposite of what he asserted" (his Honour there citing Scott Fell v Lloyd (1911) 13 CLR 230 at 241; Hobbs v Tinling (CT) & Co Ltd [1929] 2 KB 1 at 21) and that, where the story of a witness is disbelieved, the result may simply be that there is no evidence on the subject (his Honour there citing Jack v Smail (1906) 2 CLR 684 at 698; Malzy v Eichholz [1916] 2 KB 308 at 321; Ex parte Bear; Re Jones (1945) 46 SR (NSW) 126 at 128). However, the plaintiffs point out that his Honour went on to say that there may be circumstances in which an inference can be drawn from the fact that the witness has told a false story, for example, that the truth would be harmful to the witness (citing Eade v R (1924) 34 CLR 153 at 158; Tripodi v R (1961) 104 CLR 1); and that "if the truth must lie between two alternative states of fact, disbelief in evidence that one of the state of facts exists may support the existence of the alternative state of facts" (his Honour there citing Lee v Russell [1961] WAR 103 at 109). The plaintiffs here submit that aspects of Ms Shen's evidence were so disingenuous and blatantly tainted by self-interest as to permit the conclusion that they were advanced out of concern to hide the true facts from the Court. The plaintiffs submit that Ms Shen lied to avoid admitting the truth and that this conduct constitutes affirmative evidence.
In conclusion, I have dealt with the issues in relation to Ms Shen's evidence at some length above because her evidence is central to the matters here in issue. I regard Ms Shen as an unreliable witness in many respects and I accept that her evidence is likely to have been tainted to a degree (and probably to a large degree) by her self-interest. However, I do not find that she has deliberately lied in the giving of her evidence - rather, I consider that Ms Shen has simply proffered a range of excuses that in her own mind might justify what she has done but without proper attention to the facts (such as the affidavit evidence of the loan to her mother of moneys that she now accepts were lent to a "friend" of her current husband; or the alleged loan of moneys by Ms Wu to the estate). That said, on the critical issue of her understanding of the obligations under the Deed, I accept (as being the most logical in the overall chronology of events) that Ms Shen believed (wrongly) that she was being given a discretion as to how much, if anything, the elder children were to receive out of Mr Cong's estate (insofar as the Campsie properties formed part of that estate). I cannot imagine Ms Shen signing anything that bound her to a particular payment to the elder children had she understood that that was the obligation she was there undertaking. Ironically, it is that very self-interest that makes me believe Ms Shen's professed belief that she was being given an absolute discretion.

[132]

Ms Wu

Ms Wu, the second defendant, gave evidence through an interpreter. Although (as she was entitled to be) Ms Wu was in Court for most if not all of the hearing, it was not apparent to me that she was receiving any regular translation of what was happening in Court. Therefore, other than observing the court process (and hearing the evidence insofar as it was given in Chinese), it is likely that she did not understand much of the evidence. Nevertheless, she was able to hear (and presumably understand) the evidence given by Ms Shen and Mr Shen before her cross-examination. Her evidence makes abundantly clear that she was not the active decision maker in the events that occurred. With no disrespect to Ms Wu, she simply acted in accordance with Ms Shen's instructions or at her direction. There is force in the submission that she was Ms Shen's "cipher".
Ms Wu's evidence was that she had not very often spoken with Ms Shen about the issues in the case (T 851) but she accepted that she did have discussions with her daughter and she said that she always followed her daughter's instruction. As to the process of preparation of her first affidavit affirmed 12 August 2020, her evidence seemed to be that she told the lawyers directly about the matters in her affidavit (T 856.4-6). As to the second affidavit affirmed 4 September 2020, she said that Ms Shen told the lawyers the information seen in the affidavit (T 855.36). As to how she placed the conversation in her 4 September 2020 affidavit, Ms Wu said that "Amy told me". At T 858, Ms Wu said it was "so messy I have a headache" but she did not wish to have a break - and it is possible that what she meant was to the effect that the whole process of reviewing the affidavit evidence was enough to give her a headache.
Ms Wu's evidence was that transactions on her bank account were all done by Ms Shen (T 898); that Ms Shen took her to the bank; and that Ms Shen told her things (for example, as to the renovations).
As to the acquisition of 64 Lillian Street Campsie, tellingly, Ms Wu said she was not sure it was done by her and that it was all done by her daughter (see T 864).
Ms Wu confirmed that she divorced her husband in 2013; that he has a separate bank account (T 864); and that she has nothing to do with him. Ms Wu said that all her money was managed by her son and that he managed everything. Ms Wu had no idea that she was a member of a company in Hong Kong (Forest International Ltd) (T 825).
The plaintiffs submit that Ms Wu has been under the control of Ms Shen and has acted as her willing cipher; and that the cross-examination of Ms Wu suggested that her evidence was influenced by Ms Shen, despite Ms Shen knowing that she should not be talking to other witnesses. (In the case of Ms Shen, the plaintiffs submit that her evidence cannot be characterised as merely erroneous or inadvertently incorrect; rather, it is submitted that it represents a calculated attempt to deceive. The plaintiffs contend for an inference that Ms Shen adopted this position out of fear that the truth would harm her case.)
I make no adverse credit findings in relation to Ms Wu. It is apparent that she has simply acted on the direction or at the behest of Ms Shen in the dealings the subject of this proceeding and otherwise. With no disrespect to her, I have real doubts as to whether Ms Wu has any understanding at all of the transactions in which she has been involved. (Indeed, it seems to me likely that this is precisely why she was involved in those transactions by Ms Shen.)

[133]

Mr Baoming Shen

Mr Shen gave evidence through an interpreter by audio visual link from China. His evidence was inconsistent with that of Ms Shen and Ms Stefadouros as to how he came to know what account to make payments into or who to pay. I found his evidence to be inherently implausible and I am not persuaded that his account of events is credible.
Mr Shen said that he had last spoken to his sister about this court case a long time ago (T 746) (see Ms Shen's evidence that they had spoken a couple of months ago but that may not have related to the court case).
Mr Shen's evidence is that he controls the family finances but then added that he and his father (from whom Ms Wu was divorced in 2013 at about the time she immigrated to Australia) "have discussion" and confirmed that there was a "family pool of resources" (T 746). When asked how much in those accounts represented money invested by Ms Shen, his response was that all the money was "our family money". However, he also said (perhaps somewhat inconsistently with the notion of a pool of family money) that Ms Shen does not still have money in China (T 750). Mr Shen's evidence was that Ms Shen just had some money from a land acquisition that had occurred in China, then said that Ms Shen did not have much and, again, that all the money belongs to "our family" (T 750).
Asked about a sum of money paid into his accounts in December 2019 (3 million RMB), Mr Shen's account was that his business was not going well and he had lost money and that Ms Shen had repaid the money so he had just used it (T 750). His evidence, as I understood it, was that Ms Shen did not lend that sum to him; rather, that represented repayment of money he had lent to her for renovations and debts (T 751).
Mr Shen's evidence is that he worked for Mr Cong until 2016 (T 752); and later that he worked full time for Jolly Trading for the period from 2011 to 2016. Mr Shen said that the company had warehouses in Tianjin (but no sheepskins now; they were gone) and that before, when Mr Cong was alive, he (Mr Shen) delivered all the goods (T 752). He said that Ms Shen did not discuss Jolly Trading (T 755); and then that "I don't really know the Jolly Trading". He said that he did not need to tell Ms Shen (by which I understood him to be referring to the question whether he had discussed Jolly Trading with Ms Shen) because she knew he worked for Mr Cong. He was adamant that he did not know Jolly Trading and that he worked for Mr Cong and did not know the name of the company which employed him (T 755). At T 756, he said that he sometimes received text messages but not emails; that his employer was Mr Cong; and that he had never heard the name Jolly Trading; and indeed that he had never heard the name until in cross-examination (T 755). (It may be plausible that, as Mandarin speakers, they might not have used its English name, and Mr Shen at T 756.39 seems to allude to that when he said "just recently I heard this, this company you, you said the English words".)
Mr Shen recalled that Ms Shen asked him for money for the Wu Property in early February 2012 (T 752). His evidence was that she asked to borrow roughly $500,000 for renovations and that altogether he lent her until 2014 the sum of $450,000 in instalments; the money being deposited to their mother's account (Ms Wu) (T 752). It was not clear why the money was said to have been deposited to Ms Wu's account rather than directly to Ms Shen. Moreover, Mr Shen said he had no idea how it was sent - he said that every time Ms Shen told him who to transfer it to and he just did what his sister told him (T 752). There were limits on the transfer of money out of China (US$50,000 per year) (T 753). Again, his evidence was that it was Ms Shen who arranged how to get the money out of China - he said that she just gave him an account and told him how much to transfer and he did that.
The plaintiffs say that all of the records relating to the alleged transactions suggest that the payments out of China represented the proceeds of sales of Jolly Trading sheepskins. It is said that no reason has been advanced as to why the remittances did not record the payments as loans, as opposed to what they state, namely the payment of imports. Mr Shen could not produce any record of a running tally of the loans he said he advanced to his sister, nor how he calculated the estimated indebtedness.
It is submitted that Mr Shen's credit was also undermined when he asserted, having worked for Mr Cong for 8 years, that he did not see a scrap of paper generated by the business nor had he ever heard the name Jolly Trading. I place little weight on this, however, in circumstances where Mr Shen seems to have been remarkably disinterested in anything relating to the business.
I found Mr Shen to be an unreliable witness. I find his account (inconsistent with that of Ms Shen) as to the manner in which the moneys came to be paid to be unpersuasive and his explanation of the use of family moneys is not compelling.

[135]

Ms Stefadouros

Ms Stefadouros was called to give evidence by the first and second defendants. Ms Shen was somewhat coy about her description of her relationship with Ms Stefadouros, accepting that she was a friend but "not very close". (Similarly, Ms Shen described Ms Lan as her husband's friend's wife and said that she was someone "you can say friend but not close" - T 704.) Similarly, Ms Stefadouros was seemingly reluctant to accept that she and Ms Shen were friends; and clearly placed a demarcation on the position before and after Mr Cong's death, saying that she had only limited communication with Ms Shen before then.
With all due respect to Ms Stefadouros, I did not find her to be a reliable or credible witness. Her adamant position was, in effect, that Ms Shen could not understand any English and hence that she did not tell her anything or show her anything. That evidence is inconsistent with the evidence of Mr Allen and Mr Pirintji; and it is extraordinary insofar as it suggests that Ms Stefadouros considered it perfectly acceptable to treat Ms Shen (her boss' wife and ultimately her friend) as no more than a rubber stamp.
At T 941, Ms Stefadouros gave evidence that she never observed Mr Cong read aloud from a document in English or look at a document and speak to her about what it was. That may be the case but it is inconsistent with Mr Pirintji's observations (which I consider to be far more reliable) and with Teresa's reference to her father reading The Daily Telegraph in hospital.
Ms Stefadouros was aware that Mr Cong became sick in 2013 and said that he had attended many doctors' appointments (T 942); she was aware of the email in relation to the redrafted Will that was sent on 28 April 2016. Asked whether she had a conversation with Mr Cong as to the clauses when she received that email, her response (T 945) was "not specifically no" and she then said "I didn't read it word by word so I skimmed over it" (evidence that she repeated insistently during the course of her cross-examination).
Taken to Exhibit 21 (a record of online banking transactions), Ms Stefadouros identified her handwriting on an amount received on 4 August 2016 at the Burwood office. Ms Stefadouros said that the asterisk next to items indicated that Ms Lisa Wu had entered the item in MYOB. At T 946, Ms Stefadouros accepted that she assisted Ms Shen in making some of the Jolly Trading deposits in July 2016.
Ms Stefadouros accepted that she was friends with Mr Cong but said that they did not socialise - she described them as being close work friends (T 958); in her affidavit at [22], she described them as "close friends". Ms Stefadouros said that prior to Mr Cong's death she would not consider Ms Shen a friend (T 959).
At T 964, Ms Stefadouros was emphatic that she never spoke to Ms Shen about the Deed and Will; she was adamant that there was no point talking to her about or discussing it with her because she would not understand and it was disrespectful.
When it was pointed out in cross-examination that there was no reference in her affidavit to the 16 Nicholson Street property in relation to the 17 February 2016 meeting, Ms Stefadouros said (at T 965) "well not quite certain was discussed but my memory says perhaps we did". In fact, in her affidavit there is nothing about the topics discussed at that meeting. In her affidavit, Ms Stefadouros deposed that, at that meeting, Mr Glynn rolled his eyes when he said that he did not know why Ms Shen was upset. Ms Stefadouros could not in cross-examination remember if Ms Shen was there at the time but said that she was not part of the conversation between Ms Stefadouros and Mr Glynn (T 967). Ms Stefadouros said that Mr Glynn was sitting opposite her at a small office table.
At T 968, Ms Stefadouros said that she did not recall exact names but again she said there was a discussion about individual owners of individual properties. Ms Stefadouros said that she knew, at the time, that 43 Amy Street was owned by Mr Cong and Ms Shen jointly and she agreed that that was confirmed at the meeting (T 967). Pausing here, this would make implausible the comment attributed to Mr Glynn that all the properties were under Ms Shen's name. However, Ms Stefadouros said then, "I believe the only house that was separate was Nicholson Street; the others were all jointly owned" (also incorrect as per the discussion recorded by Mr Glynn of the meeting). Pressed on this (as making it unlikely that Mr Glynn would have made the comments attributed to him), Ms Stefadouros retreated into not recalling things (T 969) and said that it was not her place to comment as she was Mr Cong's secretary (T 970).
In cross-examination (at T 978), Ms Stefadouros admits that she did not tell the lawyers about the conversations with Mr Cong in relation to his Will between 9 February 2016 and 15 March 2016 even though she says she could recall what was said. Ms Stefadouros said that during this time Mr Cong spoke about 16 Nicholson Street and actively considered what should happen to his estate; and that Mr Cong and Ms Shen spoke about it (T 979).
It was Ms Stefadouros' evidence that in late April, Mr Cong told her that he wanted the children to get $6-9 million if the rezoning was to go ahead in 10 years and also if 43 Amy Street sold eventually then that would be part of the estate (T 985). Her recollection is that if 43 Amy Street "wasn't cancelled", they would get between 6 and 9 million in 10 years. Ms Stefadouros say they talked about this before April 2016. At T 986, Ms Stefadouros said that Mr Cong also said the children were to get $100,000 each spread over 10 years.
Ms Stefadouros accepted that these were "fairly important" conversations and were not in her affidavit (T 986). Her explanation for this was that she thought the information was in her email of 15 March to Mr Glynn (although that email refers to 5-8 million not 6-9 million). At T 987, she confirmed this was her error, but she maintained that she had a "pretty good recollection" of the conversations.
Pausing here, on a number of occasions, Ms Stefadouros used the expression "my truth" (an odd expression in that it suggested that "her" truth might be different from someone else's truth or "the" truth - when I sought to clarify what she meant by that Ms Stefadouros said that she meant "my understanding of the facts" (T 987)).
As to the conversation with Mr Cong regarding the documents emailed on 28 April (and her comment in cross-examination that "I don't know why there's a deed and all these other things attached"), Ms Stefadouros said that Mr Cong did not understand either. Ms Stefadouros maintained that it was very hard to go into detail to explain because she did not understand a lot of it herself (T 993).
Taken to the wording of cl 2, Ms Stefadouros maintained that she did not remember reading it word for word; maybe she did, maybe she did not, and that she couldn't remember (T 994). Ms Stefadouros agreed that cl 2 was not particularly complex. She said that "possibly" she discussed it with Mr Cong but not in detail; she said she skimmed through most of it. Ms Stefadouros agreed that she looked at it to see if it changed (T 994). At T 995, she reiterated that she did not read it word for word - that she was skimming.
At T 995, Ms Stefadouros said that there was too much information to read each word to Mr Cong and that he would not understand anyway (which seems to be a refuge for Ms Stefadouros and inconsistent with her earlier evidence as to her confidence in his ability to understand things in discussion with Mr Glynn). Ms Stefadouros was adamant that she did not read it word for word and that she did not read with diligence, and that she could not remember exact details. Ms Stefadouros could not remember what changes she complained about to Mr Glynn that were not in the draft and suggested that it may have been in relation to the properties. She said that she did not have a conversation with Mr Cong as to the things that were missing. At T 996, Ms Stefadouros accepted that she would have looked at the document with some degree of care to see if the words were put in that were missing and she said that she believed the words added in were changes of the kind that she was expecting (T 997).
As to whether the email sent on 28 April 2015 to Mr Glynn, saying that "I can't see any changes to the Will?", was sent with Mr Cong's assent, Ms Stefadouros said that it was (T 997) but then said "not with Mr Cong's consent, I sent that". Ms Stefadouros said that Mr Cong would not have read the Will or Deed and that Mr Cong "would not know how to read it".
Ms Stefadouros agreed that she was not present when Mr Cong spoke to Mr Glynn about the 2016 Will; and agreed that she must have known there was some agreement or instruction to Mr Glynn to change the Will but said (at T 998) that she could not remember whether the additional words surprised her.
At T 998, Ms Stefadouros accepted that she would have told Mr Cong what Mr Glynn sent and what was put in the document but she was insistent that she was very confused and that this was "complicated" (and that this reflected both their views).
Ms Stefadouros agreed (T 999) that Mr Cong instructed her to send the email about execution of the documents. Ms Stefadouros said that Mr Cong did not tell her that he was content with the documents but agreed that Mr Cong would not have asked her to arrange a time for execution unless he was satisfied with them. At T 1000, her evidence was that they talked about the documents being confusing; but that Mr Cong did say something about wanting to sign documents. Ms Stefadouros said that it was not Mr Cong's personality to say "I'm satisfied with documents".
Ms Stefadouros accepted (T 1000) that Mr Cong trusted Mr Glynn and trusted her (Ms Stefadouros) but was insistent that she and Mr Cong discussed that the documents were confusing. Ms Stefadouros accepted that Mr Cong was, to her observation, a careful businessman who didn't rush into things.
At T 1001, Ms Stefadouros said that she assumed what had been said in the email as to her explanation to Mr Cong was correct and agreed that she had explained it to Mr Cong but was quick to add that there was a lot of it she did not understand and that "I'm not a solicitor and he knew that". At T 1002, Ms Stefadouros said that she did not think it was important to put the content of conversations where she explained the documents to Mr Cong into her affidavit because "it's in the emails, and that's part of the evidence".
Ms Stefadouros was insistent (T 1002) that she did not discuss any of it with Ms Shen, even after Mr Cong died, saying "[w]hat do I discuss with someone who wouldn't understand - I mean I, I wouldn't understand it myself, so". (Pausing here, this seems to me to be disrespectful in the extreme - an inability to read English does not translate into an inability to understand concepts if explained in simple English). At T 1002, Ms Stefadouros accepted that Ms Shen could understand basic English (and see her comment at T 1017), but at both times Ms Stefadouros was quick to say that she did not understand it herself and so how could she discuss it with Ms Shen.
Ms Stefadouros accepted that she was a director of Cong Australia International but said that she and Ms Shen were not friends "like before" and did not "necessarily socialise". Ms Stefadouros paid the sum of $200,000 to invest in the company and mortgaged her home to do so (she gave evidence of a discussion with her husband in relation to this). At T 1016, Ms Stefadouros agreed that she had lent Ms Shen money (out of friendship) in 2019 - the sum of $100,000 interest free.
At T 1017, Ms Stefadouros said she had talked to Ms Shen about details of properties and that sort of thing but not the detail in the Will and Deed "[b]ecause what am I to discuss with her as far as what's in the deed? I don't - still to this day don't understand it - what am I to say to her about it".
Ms Stefadouros had no explanation for the fact that the exhibit to her affidavit (which contained copies of emails passing between her and Mr Glynn) did not include the email dated 27 May 2016 to Mr Glynn stating that "Amy has looked at the agreements and these need to be adjusted a little bit" (Ex P at 93) (see T 1032); an omission which might be suggestive of partiality to Ms Shen's cause.
Ms Stefadouros accepted that in about July 2017 when Ms Shen met with her then lawyers, JC Legal, Ms Stefadouros sent a copy of Mr Cong's Will to that firm (and says that she told Ms Shen she was going to do so).
At T 1034, Ms Stefadouros said that she gave instructions to lawyers in relation to the 43 Amy Street litigation on Ms Shen's behalf ; that all the correspondence was done through her; and that Ms Shen never spoke to the lawyers "prior to the commencement", but she then accepted that there was a meeting prior to commencement with the lawyers and that it was Ms Shen who gave the instructions to commence proceedings. As to the settlement deed, Ms Stefadouros was at the mediation and said that it was Ms Shen's decision to settle. (Ms Shen, interestingly, gave evidence in cross-examination (T 644ff) - in the context of questions as to her desire to withdraw from the 43 Amy Street contract for sale because of the prospect of rezoning at that stage - that that was not the case and that if she had thought the property would increase in value then she would not have settled the litigation - which rather suggests she cannot have had a real understanding of the advice that I can only assume she was given at the time, i.e., to the effect that she was unlikely to succeed in that litigation; however, I accept that this involves a degree of speculation.) At T 648-9, Ms Shen said that the lawyers came to see her about important matters and that Ms Stefadouros told her to sign it.
At T 1035, Ms Stefadouros agreed that Ms Shen made a Will in 2017. Her evidence was that Mr Glynn acted for Ms Shen and "[a]s I did with ZI Li I typed up what she wanted" (i.e., with instructions from Ms Shen). A similar course was adopted for the pre-nuptial agreement (T 1035), in that Ms Stefadouros' evidence was that she typed up a document; emailed it to Mr Glynn; that on the draft, Ms Stefadouros hand wrote answers and instructions; and emailed the handwritten annotated document to Mr Glynn and told Ms Shen. Ms Stefadouros said that "[w]e sat down and went through each property, wrote down the debts associated with each property. I emailed that copy back".
As to instructions in relation to this document, at first Ms Stefadouros said that Ms Shen did not give instructions in relation to the content of the document (see T 1035). Ms Stefadouros then clarified this to say that Ms Shen gave them to her, and she gave them to Mr Glynn. Ms Stefadouros said (reminiscent of her evidence in relation to Mr Cong's testamentary documents) that the details were confusing and that she looked out for details of properties not terminology. At T 1036, Ms Stefadouros confirmed that Ms Shen told her what she wanted in the pre-nuptial agreement. Ms Stefadouros said she did not explain the contents to Ms Shen (again, her position was that the contents were confusing and that Ms Shen's English was "not good", so there was no point, though she did accept that, by this stage, Ms Shen's English was "better".
At T 1037, Ms Stefadouros agreed that at times she put documents before Ms Shen to sign without explaining them; then she qualified that by saying that she explained them but did not read them out. At T 1037, Ms Stefadouros accepted that Ms Shen would have needed to sign Jolly Trading financial statements and tax returns but Ms Stefadouros said that she gave Ms Shen no explanation (as she would not understand them). Similarly, Ms Stefadouros said that she did not explain Cong Australia International documents (T 1038), saying that she did not know or understand them herself and making the point that she was not a bookkeeper (though it must be noted that Ms Stefadouros was a company director and one would have thought she would be careful to ensure that the documents were explained to herself). Ms Stefadouros said that the accountant (Mr Li) prepared the financial documents and, as I understand her evidence, it is that because he spoke Mandarin, Ms Stefadouros assumed that he explained them to Ms Shen.
Ms Stefadouros also said that she did not tell Ms Shen about Jolly Trading in the early years and that discussion about the company started towards the end of Mr Cong's life. Ms Stefadouros said that in the "early days", communication with Ms Shen was very limited.
It is relevant to note the cross-examination of Ms Stefadouros as to the passage in her second affidavit where Ms Stefadouros deposed that she had never seen any evidence of violence by Mr Cong against Ms Joyce (see T 1046). In cross-examination, Ms Stefadouros could not recall "specifics" when asked if she knew Mr Cong had pleaded guilty to a charge of violence but she admitted that she knew of the allegation of violence; and, indeed, knew something of the involvement of Professor Gorrell (the psychologist who prepared the sentencing report(s)). At T 1047, Ms Stefadouros could not remember that Mr Cong had pleaded guilty but knew that he was charged. (Professor Gorrell's report records that she had spoken to Professor Gorrell.) At T 1049, Ms Stefadouros accepted that Ms Joyce complained about violence.
In those circumstances, the evidence that Ms Stefadouros had never seen any evidence of violence by Mr Cong against Ms Joyce (while it may, albeit perhaps unlikely, be the case that Ms Stefadouros did not observe physical signs of such violence) is apt to be misleading insofar as it suggests (contrary to the undisputed evidence that Mr Cong had pleaded guilty to a charge of violence) that Ms Joyce's evidence in that regard was incorrect. Ms Stefadouros' response in cross-examination was that she did not say anything about this because all she knew "before" was what Ms Joyce told her. That, to my mind, is an unsatisfactory explanation for the omission from Ms Stefadouros' affidavit of evidence that would have presented a more complete picture of what occurred. I consider that this casts serious doubt on the objectivity of Ms Stefadouros' affidavit evidence. If, as she did, Ms Stefadouros saw fit to comment on Ms Joyce's evidence of domestic violence, then it was surely incumbent on her not to present a misleading picture of her knowledge on that issue.
Ms Stefadouros denied (at T 1049) that large sums of cash were in the office kept by Jolly Trading in 2010 and 2016. Taken to the cash ledger and invoices, Ms Stefadouros said that Mr Cong had determined the profit margin (T 1053) and that he would tell her how to invoice. As to the amount owed to Jolly Trading at the time of Mr Cong's death (over $700,000), Ms Stefadouros thought that most of this was recovered, though she was not sure, and Ms Stefadouros said that, as far as she was aware, all creditors were paid off (T 1053).
It may be noted that it was only in Ms Stefadouros' second affidavit that there is reference to any instructions from Mr Cong for Jolly Trading to be shut down and its debts paid off. At T 1054, Ms Stefadouros explained this by saying in effect that Mr Cong did not want them to leave a bad name for him. (That seems to me to be moot in circumstances where the new company bore his very name.) At T 1055, Ms Stefadouros said that Mr Cong told her in a few meetings leading up to his death that if she wanted to start a new company, it was up to her and that she could close off the old one and start a new company; and that it was her choice because Ms Shen could not do it on her own. At T 1056, Ms Stefadouros said that she spoke to her husband about a mortgage (to obtain funds to invest in the new company); that there was "very minimal" discussion with Ms Shen up to Mr Cong's death about it - along the lines that she wanted to try to "give it a go" - and Ms Stefadouros said that she knew it was possible because Mr Cong had told her "leading up to it". At T 1057, Ms Stefadouros confirmed that she would have spoken to Ms Shen about it before Mr Cong died.
Ultimately, I have real doubts about the reliability of Ms Stefadouros' recollection of events. I have referred above to her clear lack of objectivity in the evidence she gave about not observing violence against Ms Joyce. She may not herself have observed any evidence of violence (and she may have considered that Ms Joyce exaggerated things - which was the tenor of her affidavit evidence) but the impression that this evidence conveys is that Ms Joyce's evidence of violence was untrue. It is extraordinary that Ms Stefadouros would seek to put that in issue (or even implicitly to contest that) when Ms Stefadouros knew at the very least that Ms Joyce had complained about such violence and that Mr Cong had been charged (and when, even if she had forgotten about this - which in any event would go to the reliability of her memory - it appears that she was interviewed for the purpose of the psychologist's sentencing report). I note that Ms Stefadouros at first said "yes" when asked if she knew that Mr Cong had pleaded guilty and then changed this to "I can't remember" (see at T 1047).
Even apart from that, there are too many inconsistencies in Ms Stefadouros' evidence (particularly, the emails which can only sensibly be read as indicating that Ms Stefadouros had, or was anticipating to have, conversations with Ms Shen in relation to the content of the draft Will and Deed and that she was conveying joint instructions to Mr Cong) for me to place reliance on that evidence; there are a number of examples where evidence was given for the first time in her subsequent affidavit or the witness box; and internal inconsistency between the proposition that Mr Cong himself could not read or understand the draft documents and the assumption that Mr Cong would have explained them to Ms Shen.
Ms Stefadouros' evidence that she told Ms Shen nothing because Ms Shen would not understand it yet expected that Mr Cong would have told her (when she also said that Mr Cong himself could not read the documents and would not understand them) is implausible. It is certainly plausible that Mr Cong might have given an explanation in Mandarin to Ms Shen but Ms Stefadouros' evidence suggests that he could not have had any understanding himself which he could have conveyed to Ms Shen (whether in Mandarin or English). (I accept that Mr Cong had oral conversations with Ms Lan and Mr Glynn from which Mr Cong may have been able to convey to Ms Shen whatever his understanding was as to the import of the documents but to the extent that Ms Stefadouros was not a party to those conversations then it could only have been surmise on her part that Mr Cong would have explained the documents to Ms Shen based on any of those conversations.)
Ms Stefadouros' evidence that she simply put a great number of documents in front of Ms Shen to sign without explaining anything about them (because there was no point as Ms Shen would be unable to understand them), while disrespectful to Ms Shen, is echoed by Ms Shen's evidence to the same effect. However, to my mind it is implausible that Ms Shen would have signed documents that she considered to be of importance in relation to her personal position without any understanding of what was in them based simply on Ms Stefadouros presenting them to her.
The upshot of this is that, unless corroborated by contemporaneous objective evidence, I have great difficulty accepting as reliable Ms Stefadouros' evidence about the various conversations and, in particular, about the extent of her communications with Ms Shen about the relevant documents.

[136]

Ms Xiaoping (Vicky) Lan

Ms Vicky Lan is an accountant (described by Ms Shen as Mr Cong's friend's wife). Her involvement in the matters the subject of the proceeding was certain assistance apparently given by her to Mr Cong (and, the plaintiffs say, Ms Shen) in relation to the draft Will and Deed. Ms Lan gave evidence in English and, although she was able to call upon the interpreter if required, Ms Lan seemed to have little difficulty in comprehending and answering the questions asked of her in English.
Ms Lan said that she met Mr Cong in around 2010 or 2011 as an accountant but that she never performed accounting services for his company (T 875). Ms Lan accepted that she had done the best she could, as a friend, to explain the documents (the draft Will and Deed) and she said that Mr Cong, despite his illness, was still able to talk like a normal person (T 876). Ms Lan confirmed that she had familiarity with contracts and like documents; that she went through the Deed and Will to familiarise herself with them; and Ms Lan agreed that she would not have left the conversation without thinking that Mr Cong had understood her explanation about the documents (T 879.44-6). (Ms Lan accepted that she had told Ms Shen's solicitor that Mr Cong appeared to understand what he was doing (see T 884).)
As to her conversation with Mr Cong about the documents, Ms Lan said that it went for about 30 minutes; she did not remember if it could have taken longer (T 878); and that it was via a "WeChat" voice call on speaker. Ms Lan accepted that she had endeavoured to find the more important clauses before communicating this to Mr Cong (T 879).
Taken through the document in cross-examination, Ms Lan: accepted that the Recitals to the Deed were an important part and that cl 2 was of particular importance (T 880); accepted that cl 5 was important (because Mr Cong there appointed Ms Shen as executrix), but could not recall whether, in the conversation, anything was said about Ms Shen being appointed as executrix; thought that cl 7 was important (but could not remember whether she translated and explained this clause to them (Mr Cong and Ms Shen) at the time(T 881); and considered that cl 10 was important as well. Ms Lan did not remember talking to Mr Glynn at all (T 882).
At T 885, Ms Lan said that after the conversation about the documents, she marked the points (and significantly Ms Lan said that "they" put in the points) and then she drafted this at the time and sent it to the lawyer. Ms Lan does not remember if she double checked her email with Mr Cong. (It was her normal practice as an accountant to do so but she could not recall if she had done so on this occasion - T 887.)
Significantly (as this is relied upon by the plaintiffs and was the subject of re-examination for the first and second defendants), Ms Lan said that, in the course of the 30 minute WeChat phone call (held on speaker), she had spoken to both of Ms Shen and Mr Cong (see T 885). What Ms Lan could not remember was if Ms Shen was on the second conversation (T 886) and Ms Lan could not recall how long that second conversation took (T 884).
Ms Lan was taken to the fact that the email in question started and was signed off by her "on behalf of Zi Li and Amy". Asked if there was a conversation with the two of them she said "I think so" (T 887). Going back to her explanation of the 2016 Will and Deed, Ms Lan said that she remembered that she explained the amended parts (T 890); she did not recall Ms Shen talking about the $10,000 bond; and she did not remember another occasion when she explained the Will. Insofar as the email referred to Ms Stefadouros as Ms Shen's personal assistant, Ms Lan could not recall how she had thought that.
In re-examination, Counsel for the first and second defendants sought, and I granted, leave under s 38(1)(a) of the Evidence Act to cross-examine Ms Lan about evidence given by Ms Lan that was unfavourable to the first and second defendants (confined to evidence regarding the identity of the persons who were a party to the 30 minute WeChat phone call). At T 899, Ms Lan agreed that, using the WeChat application (app) on her phone, she called Mr Cong by pressing his particular icon in the app. When it was suggested by Counsel for the first and second defendants that it was only Mr Cong to whom she was speaking on that call, Ms Lan replied "I think so, but I couldn't remember exactly". When pressed that she was not speaking to Ms Shen on that call, Ms Lan responded that she did not remember.
Then, at T 902.23-5, in further cross-examination by Senior Counsel for the plaintiffs, Ms Lan said "to be honest I do not remember exactly but from this email I sent to the lawyer because I included both of their names, I believe maybe I did speak to both of them". Ms Lan then said that she did not have a recollection of trying to assist Ms Shen at the time to understand the Deed or the Will (T 905.4).
At this point, it is relevant to set out [15] of Ms Lan's affidavit affirmed 20 June 2018: In relation to the words 'this is Vicky Lan acting on behalf of Zi Li and Yanjiao' which was mentioned in the May 2016 Email to Glynn, I used the words 'acting on behalf because I was told by Cong to write a reply on his behalf. I mentioned 'Zi Li and Yanjiao' because I presumed the instruction that I was given from Cong was based on an instruction which was mutually agreed with between Cong and Shen. She did not know I was writing the email in her name.
It seems to me on the balance of probabilities more likely that the conversation was with both Mr Cong and Ms Shen (having regard to the unprompted recollection of Ms Lan to the effect at the outset of the cross-examination; and reinforced by the fact that Ms Lan's email was expressed to be on behalf of both Mr Cong and Ms Shen). Insofar as it is possible that Ms Lan simply assumed that this was the case (i.e., that she did not hear Ms Shen's voice at all on the speaker telephone conversation), then the only sensible explanation for the way in which Ms Lan's email was signed would be if Mr Cong had communicated that to her in some way at the time of the call (and it seems unlikely that Mr Cong would have had any reason to mislead Ms Lan in that regard). Even so, I accept that it would not necessarily mean that Ms Shen was listening to the entire conversation between Ms Lan and Mr Cong (or even that it was on speaker from Mr Cong's side of the conversation).
As to the giving of the instruction for the amendments, while it is plausible that the amendments were conveyed by Mr Cong to Ms Lan (and she simply assumed that they were agreed to by Ms Shen) that does not take into account Ms Lan's initial recollection that "they" put in the points which clearly indicates a joint instruction; but I accept that there is doubt as to this and that it is unlikely that Ms Shen reviewed any email sent by Ms Lan.

[142]

Mr Glynn

As noted above, Mr Glynn had acted for Ms Joyce in relation to the Binding Financial Agreement. He had also acted for Mr Cong on a number of matters prior to the 2016 Will (including a dispute involving a payment from China to Mr Cong's business; the sale of 43 Amy Street, Campsie; and a dispute involving a Mercedes Benz motor vehicle owned by Mr Cong). After the 2016 Will was drafted, Mr Glynn acted on the dispute with the purchaser of 43 Amy Street (although the carriage of the matter rested with a retired solicitor who assisted Mr Glynn's office in the matter - Mr Tony Allen; and Mr Glynn did not attend the mediation - see T 441). Mr Glynn also acted for Ms Shen in relation to the preparation of her Will (a copy of which was not produced in the proceeding) and pre-nuptial agreement (Ex 15).
The plaintiffs place some weight on the fact that Ms Shen continued to use the services of Mr Glynn after Mr Cong's death (in relation to the dispute and ultimate conveyance of 43 Amy Street, although as she pointed out, it was her husband who had retained Mr Glynn; and the preparation of her Will and pre-nuptial agreement, although this was very soon after Mr Cong's death and no dispute had by then arisen). The plaintiffs point out that Ms Shen has no complaint as to the drafting of the 2016 Will and Deed (although in the witness box, Ms Shen was quick to say that she was going to sue Mr Glynn "right now" and certainly expressed dissatisfaction with his services).
The plaintiffs say that Mr Glynn has no interest in the outcome of the proceeding and that his recollection is consistent with his file notes and the objective probability of events. In this regard, while Mr Glynn's recollection was largely derived from his file notes, there were matters on which he had a distinct recollection of what had occurred quite independently of his file notes (for example, the circumstances in which he attended the meeting on 17 February 2016; and his recollection that there was a meeting in the conference room which Ms Shen attended with her children who were disruptive in the conference - see T 464). In the main, however (and not surprisingly), Mr Glynn's recollection was based on the file notes (see T 475) and on his usual practice as a solicitor. Mr Glynn confirmed that there was no time recording on this matter (T 468) and could not be sure as to the chronological order in which his file now appears (T 467).
Mr Glynn's evidence was that he spoke to Ms Shen with no translator and he considered that she was able to communicate with him (T 442). On her account of events, however, the bulk of the communication at the relevant meetings was by Mr Cong (and it is not disputed that on at least one of the conferences Ms Shen was not present during the discussion - that being the meeting at the café in Randwick). As to the 3 August 2015 meeting, Mr Glynn could not recall if Ms Shen was present but could only rely on his notes to say that she was there - see T 443).
I have referred above to Mr Glynn's evidence as to the 3 June 2016 meeting. In cross-examination, Mr Glynn denied that there was no oral communication between sending the draft Deed and the 3 June 2016 meeting. He said that he had communications where that was discussed but he could not recall when (T 502). Mr Glynn said that the reason that he believed Mr Cong could understand written English was that he had seen him in business with banking documents and the like.
Mr Glynn accepted in cross-examination (at T 505) that he thought the Deed involved "a difficult concept" but he said again that Mr Cong was "very strong" on the rezoning and ownership of the properties whilst that took place and that all the properties were to be rezoned.
I accept that Mr Glynn gave his evidence honestly. Mr Glynn was not overly defensive as to the drafting of the Deed and the 2016 Will; and his recollection of events was broadly consistent with the contemporaneous documents. I accept his evidence as to his general practice and that he believes that he followed it in this instance.
Of course, if Mr Glynn followed his normal practice then that involved perhaps some 15 minutes dealing with the power of attorney and enduring guardianship documents leaving some time to deal with the Will and the Deed. As I will explain when I consider Ms Bull's evidence, I am comfortably persuaded on the balance of probabilities that Mr Glynn did give some explanation at the meeting on 3 June 2016 as to the substantive provisions of the 2016 Will and the Deed. However, two things should be noted. First, it seems unlikely that Mr Glynn spent a lot of time going through the concepts about which he said it was Mr Cong's "very strong" position that this be the regime (i.e., the holding of the properties for no more than a maximum period of 10 years to permit the rezoning to occur). Second, Mr Glynn accepts that he did not explain to Mr Cong (it seems because he thought Mr Cong well understood), and by necessary extension, he did not explain to Ms Shen, the potential ramifications of the obligation that Ms Shen was personally undertaking under the Deed.
Even leaving aside for the moment the issue of Ms Shen's language difficulties, that seems to me to present a problem for the plaintiffs in relation to, at the very least, Ms Shen's Contracts Review Act claim. It seems to me that Mr Glynn's explanation of what he did at the 3 June 2016 meeting, when understood in the context of his usual practice, was to treat this as if he was dealing with a client executing a Will (not with two clients, one executing a Will and other documents; and the other, Ms Shen, accepting a power of attorney and appointment of enduring guardian but also, and very significantly, entering into a Deed under which she was agreeing to undertake personal obligations).
At the very least, I consider that Mr Glynn should have been careful to ensure that Ms Shen understood the nature of the personal obligations that she was there agreeing to undertake (beyond being told by Mr Cong that Ms Shen had agreed to them and beyond Ms Shen (assuming that she did) nodding or somehow signifying assent without a clear communication that she in fact understood and consented to the obligations under the Deed). The more prudent course would have been to advise or ensure that Ms Shen obtained independent legal advice as to the entry into the Deed. I have no reason to doubt that Mr Glynn was an experienced and careful and competent solicitor (and I certainly make no findings to the contrary). However, it does seem to me that his conduct in apparently not raising the issue of independent legal advice (and in not directly addressing Ms Shen in his explanation of the potential ramifications of the Deed for her personal position) is most likely explicable by Mr Glynn seeing the Deed as part of the 2016 Will and not as the subject of a separate contractual arrangement.
The other matter that is troubling is that there were obvious errors in the documents that were signed. The Will purported to deal with all the Campsie properties when Mr Cong had only a joint interest in one of those properties. (I consider in due course the submissions made by the plaintiffs as to what should be inferred in that regard, but I simply here note that it seems to me highly unlikely that, if a careful and competent solicitor had been told that real property was held in one client's name but was being treated by that client and another as jointly held property, there would not have been a clear recital of this acknowledged position in the documents. There is also the difficulty that cl 7 of the Will in relation to Jolly Trading's "holdings" does not make sense as a factual matter since it had assets in the sense of stock or trade creditors but no "holdings" as such. Further, there is on the face of the Will itself a clause which ends mid-sentence (although that might perhaps be a punctuation error). It is hard to accept that this clause could have been read out and explained to Mr Cong and Ms Shen without Mr Glynn realising that some amendment was here necessary.
I consider in due course the conclusions to be drawn from the above matters.

[145]

Ms Bull

Ms Bull is the chartered accountant who witnessed the execution by Mr Cong of the 2016 Will.
In her affidavit, Ms Bull deposed that, on the occasion of execution of the Will, Mr Glynn sat down and read through the Will and that he would pause occasionally and asked Mr Cong if he understood and each time Mr Cong responded, "I understand" (see Ms Bull's affidavit sworn 8 October 2020 at [17]-[18]). The first and second defendants say that Ms Bull could not know this because she had never read the 2016 Will; and they submit that in her oral evidence she did not adhere to it, Ms Bull saying that "he went through it and then we all signed it" (T 521.5). (Pausing here, I see this as broadly consistent with Ms Bull's affidavit evidence although I accept that it does not include any reference to questions and answers as to Mr Cong's understanding.)
The first and second defendants say that Ms Bull's evidence is contrary to Mr Glynn's evidence. It is noted that Ms Stefadouros also says that Mr Glynn did not describe the terms of the 2016 Will to the deceased; and neither did he read any of the pages of the 2016 Will (T 1028.15).
In cross-examination, Ms Bull could not remember the presence of Ms Stefadouros (T 522.46), recalling only the presence of persons of Asian appearance. Ms Bull said that Mr Glynn would usually turn the pages for people to sign, but she could not specifically remember for this one (T 523.34); and Ms Bull could not recall anyone looking at the papers on the table during the meeting (T 523.22). Ms Bull agreed that she was there for less than half an hour (T 523.11). Her evidence was that this was a lot longer than normal for her, but normal was "five minutes, really quick". Ms Bull said that she saw that there were a lot of papers but could not recall how many specific documents; that she was not told what they were; and that she was only there for the 2016 Will (T 522-T 523). It is submitted by the first and second defendants that this would seem to involve Mr Cong signing the 2016 Will at a distinct time from the other documents, in a meeting that took only half an hour or less; yet it is clear that the Deed at least (if not also the nomination of life and superannuation beneficiaries) was related to the 2016 Will.
Ms Bull's affidavit evidence is that the occasion was memorable because Mr Glynn had asked her to sit in with his client because "[h]e isn't very well. I want to have someone else sit in and listen whilst I explain the Will to him and make sure he understands it and what is happening" (see Ms Bull's affidavit sworn 8 October 2020 at [13]; T 524.41-6). It is noted by the first and second defendants that Mr Glynn did not recall this (and that Mr Glynn relied on his "usual practice" to explain Ms Bull's presence (see Mr Glynn's affidavit affirmed 13 October 2020 at [16]). The first and second defendants say that if this was the purpose of Ms Bull's attendance, it is strange that she made no file note. It is also noted by the first and second defendants that Ms Bull did not recall the explanation given (though it is said that this was the reason why according to her evidence she was asked to attend for longer than usual).
Pausing here, I see no obvious inconsistency between the fact that Ms Bull was a professional accountant and the fact that she did not take a file note, since her evidence was that she did not charge for her attendance when witnessing such documents. As to the perceived inconsistency between Ms Bull being asked to attend for longer than usual because Mr Cong was so ill and the fact that Ms Bull did not take a file note, I do not draw anything from this - this is not the occasion for an enquiry as to Ms Bull's professional practices and Mr Cong was not her client.
Nor does the fact that Mr Glynn asked Ms Bull to sit in on the conference because Mr Cong was so ill strike me as inconsistent with the fact that Mr Cong did not appear frail to Mr Glynn (see the latter's evidence at T 492.3) since (whether or not he appeared frail) Mr Glynn was well aware that Mr Cong's condition was terminal (and indeed his evidence was that it was quite an emotional meeting because he knew he was saying goodbye to a client he had known for many, many years).
The first and second respondents submit that Ms Bull's recollection appears to contradict the rest of the participants of the 3 June 2016 meeting; and that her evidence is so divergent from that of all other witnesses present that she may have confused another occasion with this one. It is noted that Ms Bull did not know the people, except Mr Glynn, and relied on racial identification (as to which it is said she was mistaken in the case of Ms Stefadouros). It is submitted by the first and second defendants that such methods would be apt to mislead her if she had forgotten a second occasion on which she witnessed a Will for a man of Asian appearance. The difficulty with that submission is that Ms Bull was quite clear in her recollection that this was the only occasion on which she had witnessed a Will for a man of Asian appearance; and her explanation rang true in circumstances where it seemed to my observation that she was embarrassed at proffering an explanation that might be seen to be ethnically insensitive.
I accept Ms Bull's evidence as truthful and, in particular, I regard as credible her evidence that she has an actual recollection of Mr Cong signing the Will because it was the first time that she had witnessed the execution of the Will by a person of Asian ethnicity and because Mr Glynn had wanted her to be there because Mr Cong was so ill.
There was some cross-examination as to Ms Bull's time records. The first and second defendants note that, in cross-examination, it transpired that (in answer to a request for production of such records) Ms Bull had looked for records of her attendances on 3 May 2016 (whereas the meeting had occurred on 3 June 2016 (T 522.25). That is no doubt because the Will is misdated 3 May 2016. The first and second defendants say that this failure is the plaintiffs' responsibility in failing to instruct Ms Bull to search for records on the correct date. It is submitted that, for this reason, Ms Bull's evidence should be discounted. I do not accept that this is warranted.
Ms Bull made clear that as a matter of usual practice she did not charge her time for witnessing such documents and so would not have had a time entry for this. Moreover, she said that she entered time on matters at the end of the day in a total number of units (so it would presumably be difficult to tell from the total tally whether she had spent, say, half an hour in Mr Glynn's office or more or less than that). It seems to me pure speculation to think that Ms Bull's time records of 3 June 2016 would have shed light on whether her recollection of what occurred at the meeting was accurate.
Ms Bull's evidence was that Mr Glynn "went through" the Will and then everyone signed the documents. Ms Bull said that she sat there while he went through it - when asked by me to clarify her evidence, she said that he had read the Will "reading it out". Her recollection was that the execution and witnessing of this Will took a lot longer than normal (she said if she was just there to witness it, it would usually take five minutes) (T 523).
I have no hesitation in accepting Ms Bull's evidence. Ms Bull has no personal interest in the outcome of the proceeding and I accept that she had a distinct recollection of the occasion. While I accept that she may not be able to say whether Mr Glynn in fact read out every clause (and while it is not clear from her evidence that he did anything more than read out part or all of the Will, as opposed to advising on parts or all of it), I reject as inherently implausible (and wholly inconsistent with what Ms Bull was attesting when witnessing the Will, which Ms Bull must have understood was a testamentary document) the evidence of Ms Shen that Ms Bull was not present while the 2016 Will was being signed and only came in later.

[147]

Mr La Chang

Expert evidence was called from an experienced freight forwarder, Mr La Chang, in effect as to the issue whether the illegal business practices in which Ms Joyce says Mr Cong's company was engaged in relation to the certification of origin of sheepskin products exported to China could feasibly have occurred. Mr La Chang had experience in shipping goods direct from South America to China without going through Australia. He was not aware of any procedure of obtaining an Australian Certificate of Authentication of Origin for those products.
Mr La Chang explained that "transhipments" go through a bonded facility. His evidence was that all shipments from South America to China were transhipments via Asia and usually through Singapore. He was not aware that there was a direct service from South America to Australia.
I do not propose to summarise Mr La Chang's evidence in any detail because I am not persuaded that this issue is of any assistance in resolving the matters here to be determined. The plaintiffs sought to rely on Ms Joyce's evidence as to illegal business practices in order to counter the evidence of Ms Shen that Jolly Trading was in financial difficulties and, essentially, insolvent at the time of Mr Cong's death; and that Mr Cong told her to close the company down and pay off its debts. The plaintiffs say, in response to that, that there were large amounts of money going in and out of the company's accounts, much of which was unexplained, and that there was evidence of the company engaging in cash transactions (and double invoicing as a means of tax evasion).
I accept that there seem to have been large amounts of money going into Jolly Trading's bank accounts and it is undeniable that Mr Cong was able to obtain financial accommodation in order to acquire a portfolio of properties (most held in Ms Shen's name), the expenses for which must have been met (other than from rental income) out of Jolly Trading's revenue. It does not assist me to explore whether it would feasibly be possible for Mr Cong to have affixed false certificates of origin stamps on sheepskin products exported to China (nor would I be able on the evidence to form a view one way or another as to whether that occurred during his lifetime).

[148]

The tendency evidence

The first and second defendants maintain that the evidence of a history of conduct on the part of Mr Cong on other occasions, with other people and involving different transactions, does not cast any light on the intention of Ms Shen, at the times of the relevant purchases here in issue. They say that this evidence does not meet the test of "significant probative value" (see s 97(1)(b) of the Evidence Act 1995) and complain as to the lack of compliance with the notice requirement in this regard (see Evidence Regulation 2020, Reg 5). They further say that evidence of Mr Cong's general character from a variety of dealings does not establish (even were it to be relevant) a unilateral intention on Mr Cong's part to retain a share of beneficial ownership at the time of purchase of a particular asset.
The first and second defendants argue that, insofar as it is suggested that Mr Cong wished to arrange his affairs to avoid the incidence of taxation (or evade taxation), then such an intention is not consistent with an intention to retain ownership (and says nothing about Ms Shen's intention). I agree.
The first and second defendants say that Mr Cong's interest in property investment was limited to residences before 2013 and that much of the funding for acquisitions was supplied by bank loans borrowed by Ms Shen, or by mortgaging the Wu Property, or by applying the proceeds of sales of previous properties. They emphasise that uncommunicated purposes or intentions of Mr Cong are not relevant (see Calverley v Green (1984) 155 CLR 242 (Calverley v Green)); and that what is being presumed (if a presumption is to arise) is a declaration of trust by the alleged trustee (Ms Shen).
In this regard, it is submitted that the evidence of earlier tax evasion put forward by Ms Joyce, even apart from the criticism as to its plausibility and the expert evidence adduced by Mr La Chang as to the objective difficulties of such a course, takes the matter no further. The first and second defendants nevertheless raise this as a matter against Ms Joyce's credit generally, referring to what they describe as "the uncreditworthy manner" in which Ms Joyce advanced her allegations.

[150]

Factual findings sought by plaintiffs

At the outset, before turning to the issues in the proceeding, I briefly address the factual findings for which the plaintiffs have contended.
First, that from an early point in his relationship with Ms Shen, Mr Cong used his resources to purchase properties in his and Ms Shen's joint names or in Ms Shen's name alone; that he did so out of an apprehension that Ms Joyce might make a claim against his estate and also to gain a tax advantage; and that he used the resources of Jolly Trading to pay the mortgages.
I address the source of the funds for the purchase of the particular properties later in the context of the resulting trust claims. Suffice it here to note that I accept that Mr Cong made a decision that 56 Duke Street, Campsie should be acquired in Ms Shen's sole name. That decision is clearly evidenced by the statutory declaration he made for the purpose of the transfer directing that Ms Shen was to be the sole purchaser, in circumstances where the contract for sale named both as the purchaser.
I also accept Ms Shen's evidence that at least part of the reason that Mr Cong did so was a perceived concern that Ms Joyce might cause Ms Shen trouble if the property was in (or jointly in) Mr Cong's name (and that trouble could only logically be that she might make a claim or encourage her children to make a claim for the property or a share of the property). It is plausible that part of the reason Mr Cong did so was also a view that there might be a tax advantage in putting the property in Ms Shen's name (as Teresa says Mr Cong suggested). Although the first and second defendants argued that there would be no such tax advantage perceived to be likely for a man who was about to die, there is no reason to think that this was Mr Cong's logic. In any event, if Mr Cong intended to have the property put in Ms Shen's name for tax purposes, that would point in the first and second defendants' favour on the resulting trust claims (see below).
As to the remaining purchases after 56 Duke Street, I would infer that the same logic underlay the acquisitions being in Ms Shen's sole name other than the Family Property. I am comfortably satisfied that the latter was acquired in Ms Shen's name because Mr Cong intended it to be the property in which she and their children would continue to live after his death; i.e., that it would be their family home.
As to the mortgage payments while Mr Cong was alive (and noting that Ms Shen's evidence was that Mr Cong arranged all those payments), I would accept that the payments were funded (other than to the extent that there was rental income for the investment properties which would have been available to meet at least some of the mortgage payments) out of the income received by Jolly Trading, since there is no evidence of any other income source over the period prior to Mr Cong's death.
Second, that for about a year before his death, Mr Cong thought closely about his testamentary dispositions, including how he should balance the interests of his elder children against those of his younger children (and wife); and that he was assisted by Mr Glynn, who was a solicitor experienced in estate planning. I have no hesitation in making that finding. There is no doubt that Mr Cong spent some time from around mid-2015 considering his testamentary dispositions; nor is there any doubt that he involved Mr Glynn in that process. I consider his testamentary intentions in more detail in the context of the family provision claims.
Third, that from June 2015, Mr Cong involved Ms Shen in his testamentary considerations, including by her attendance at the meeting with Mr Glynn on 17 February 2016 and her reviewing the draft agreement and Will in late May 2016 (in which the plaintiffs say Ms Shen was assisted by Ms Stefadouros and by Ms Lan). The plaintiffs say that Ms Shen's participation in that process explains why she applied for probate of the Will and did not complain about not knowing its contents or the contents of the Deed until the present proceeding commenced.
As to this, I have referred in the chronology of events above to the attendances by Ms Shen at various of the meetings with Mr Glynn. I accept that Mr Cong involved Ms Shen in discussions as to his testamentary intentions (indeed, Ms Shen's own evidence makes that clear) and I accept that Ms Shen was in attendance at the 17 February 2016 meeting at the Wu Property (albeit that I also accept that it is quite plausible that she was not present during the whole of the meeting).
As to the 17 February 2016 meeting itself, the plaintiffs say that it is inconceivable that the responsibilities there foreshadowed vis-à-vis Ms Shen (i.e., appointing her a guardian, attorney and trustee) were without Mr Cong first speaking to Ms Shen to ascertain her willingness to assume those responsibilities. It is noted that Mr Glynn's note correctly recorded (unlike the Deed itself, I would add) who (as between Mr Cong and Ms Shen) was on the title of the various properties; that it records that Mr Cong foreshadowed an agreement between himself, Ms Shen and the three adult children; and that it contemplated that 16 Nicholson Street (or a property similar in value) would be gifted to the three adult children, such that they would each receive over $1 million. It is also noted that, according to Mr Glynn, Ms Shen spoke at that meeting within a group of the persons present. It is said that she did so in order to discuss Mr Cong's proposal.
The plaintiffs point out that Ms Shen's oral testimony was inconsistent with her affidavit evidence: that at [243] of her affidavit of 4 September 2020, Ms Shen deposed that she spent about 30 minutes in total at the meeting, in two segments of about 15 minutes separated by her attending to her children; whereas in her oral evidence, Ms Shen said that she was there for a shorter period of 20 minutes. The plaintiffs submit that Ms Shen's evidence about what occurred at the meeting (namely, that she did not understand a single word said at that meeting apart from her given name) is inherently improbable. It is submitted that Ms Shen's English-speaking skills were far more advanced than that.
The plaintiffs submit that, given the importance of the meeting and the fact that it was self-evidently concerned with Mr Cong's testamentary wishes, it would be expected that Ms Shen would have asked her husband about what had occurred; but that when that was put to Ms Shen, her response was that "I thought my husband knew everything, so I didn't think it was necessary to ask him one more time". Further, the plaintiffs submit that Ms Shen's alleged indifference to Mr Cong's testamentary intentions was belied by her review of the documents on 27 May 2016, as recorded in the email sent by Ms Stefadouros and Ms Lan on that day (though, of course, Ms Shen denies that she did this).
As to the above submissions, while I appreciate the logic of the submission that Mr Cong would not have given instructions for the appointment of Ms Shen as guardian, attorney and trustee without first speaking to Ms Shen about this, it cannot be assumed that he did so (and certainly not that he did so in terms that made it clear to her precisely what obligations she was being asked to assume - there is an obvious difference between being appointed as an enduring guardian or attorney for someone prior to death and being appointed trustee of that person's deceased estate). Insofar as reliance is placed on Mr Glynn's note of the discussion, this simply records the topics discussed and instructions received. Mr Glynn's recollection that Ms Shen spoke at the meeting with a group of persons present says nothing about what was discussed (and hence it is no more than speculation that it was about Mr Cong's proposal). The impression I gleaned from Mr Glynn's evidence in this regard was that Ms Shen's conversation with others was some kind of side discussion not necessarily concerned with the instructions that Mr Cong was giving Mr Glynn.
As to the plaintiffs' submissions about the inconsistencies in Ms Shen's account of events and Ms Shen's English speaking skills, I have already made findings as to Ms Shen's credibility as a witness and as to her speaking skills. As to the submission that Ms Shen was not likely to have been incurious about Mr Cong's testamentary intentions, I wholeheartedly agree. It does not sit comfortably with Ms Shen's disagreement as to the 16 Nicholson Street proposal; nor does it sit comfortably with Ms Shen's obvious self-interest in protecting her and her children's financial security. However, while I accept that makes it implausible that Ms Shen took no interest in what was said at the 17 February meeting, it does not mean that she understood all of what was there said. In her affidavit affirmed 22 June 2018 at [37], Ms Shen deposes to conversations where she said to Mr Cong words to the effect "give me some money" and "have you decided how much you are going to give me? You've been thinking for some time". This is completely inconsistent with her professed indifference to Mr Cong's testamentary intentions. To me, it makes it inherently implausible that Ms Shen would not have been very astute to make sure that she was going to receive provision (and indeed substantial provision) under the 2016 Will).
As to the submission that Ms Shen 'reviewed' the draft documents, I consider it most unlikely that Ms Shen herself read the draft 2016 Will and Deed sent through by Mr Glynn in late April 2016 (or would have understood them beyond some general idea that they involved the payment of a monetary sum per year and something after 10 years by reference to the Campsie properties), but I consider it more probable than not that Ms Shen was involved in some discussion of the contents of those documents in a conversation with Mr Cong and Ms Lan. I place weight on the fact that Ms Lan's contemporaneous email stated that it was on behalf of both Mr Cong and Ms Shen and that the instructions there conveyed were prefaced with the words "[b]ased on discussions with them". I also rely on Ms Lan's evidence in cross-examination in that regard (see above). Further, I consider it more probable than not that Ms Stefadouros did have some kind of discussion with Ms Shen about the 2016 Will and Deed - at least to the extent that Ms Shen must have understood that it related to the elder children sharing in the Campsie properties and having an additional amount of money over 10 years - but I doubt (particularly having regard to Ms Stefadouros' evidence in the witness box) that (whether she "skimmed" the Will and Deed or whether she read them more carefully) Ms Stefadouros was capable of giving any readily understandable explanation of the terms of the 2016 Will and Deed; and I am not persuaded to the requisite degree of satisfaction that she did so.
Fourth, that Mr Cong was not inexperienced in testamentary matters, having familiarity with Wills as a consequence of his earlier dealings with Mr Pirintji. I accept that Mr Cong had a degree of experience in the making of Wills, having made at least three before his 2016 Will. (I have referred to those in the chronology of events above.)
Fifth, that Ms Lan took considerable trouble to explain to Mr Cong and Ms Shen the operative parts of the draft documents, as a result of which Mr Cong and Ms Shen amended those documents; and that those amendments bore Ms Shen's imprimatur in that the amendments reflected an expression of her interests. I accept that Ms Lan genuinely attempted to explain the documents and, on the balance of probabilities, that she did so in a conversation both with Mr Cong and Ms Shen. However, the extent to which Ms Lan was able to do so, with no disrespect at all to Ms Lan, to my mind leaves room for there to have been some doubt as to the understanding of both Mr Cong and Ms Shen (but certainly Ms Shen) as to the import of those documents. I say that not least because there is a live debate in the present proceeding (about which reasonable legal minds may differ) as to the proper construction of the Deed, in particular. The likelihood of Ms Lan (who apparently knew nothing of the proposed arrangements other than what she read when she received the drafts) being able to offer a simple explanation as to how the clauses of the Deed fitted coherently together seems to me to be highly unlikely.
As to the amendment to the Deed to make provision for the refund of the immigration bond in relation to Ms Wu, I accept that it is probable that this change was requested by Ms Shen and I so find. There is no logic to it having been included at Mr Cong's sole request.
Sixth, that Mr Glynn also explained the documents to Mr Cong and Ms Shen on the occasion of the execution of the documents on 3 June 2016.
The plaintiffs submit (by reference to the oral testimony of Ms Lan, Mr Glynn and Ms Bull; Mr Glynn's file notes; and the written communications Mr Glynn authored and received) that the process of preparing the Deed and the 2016 Will was as explained by Mr Glynn and Ms Bull (as I have set out above). The plaintiffs say that weight should attach to the fact that Mr Glynn had, unexceptionally, a standard practice used to obtain instructions and advise clients; a fortiori where his practice accords with common sense. The plaintiffs say that, on the other hand, there can be no confidence that a full and candid explanation has been given by Ms Shen as to how the Deed and the Will came to be considered and approved; and that it can be inferred that Ms Shen concealed the true position to avoid telling the truth.
As considered above, I accept Mr Glynn and Ms Bull's evidence of what occurred on the occasion when the 2016 Will and Deed were executed - i.e., that both were present when the documents were executed.
I find on the balance of probabilities that, at the meeting on 3 June 2016, Mr Glynn read at least some of the provisions of the 2016 Will and Deed (and I place weight on Ms Bull's evidence in that regard, which I consider to be more reliable than that of Ms Shen and Ms Stefadouros) and, to that extent, gave an explanation of the documents executed on 3 June 2016.
However, I cannot accept that it was a detailed word for word reading out of all of the documents - first, because the time that the meeting is said to have taken (even though Ms Bull said it was longer than the usual time taken for witnessing a Will) would probably not have allowed for that and, second, and more importantly, because if that had been the case, it seems to me incomprehensible that Mr Glynn would not have realised that there were some obvious typographical errors. As to those errors, the Will is dated 3 May 2016 (not 3 June 2016); the Deed refers in Recital G to a Will dated 2 May 2016; and cl 9(c) of the Will, apart from being oddly formatted, seems to be missing some concluding words ("and at the expiration of this period ….").
Nor can I accept that there was a complete explanation given of the relevant documents because had there been, I would have expected that Mr Cong (at least) would have realised that Recital A of the Deed wrongly recorded that Mr Cong and Ms Shen were the registered proprietors "in joint names" of all seven of the listed properties (whereas his instructions to Mr Glynn in the earlier conference - see the file note above - made clear that he was aware that five of those seven properties were in Ms Shen's name solely). Moreover, if there had been attention to Recital A and it had been thought that all the properties were in joint names, then one might have thought that a question would have arisen at least in Mr Glynn's mind as to whether the holding was as tenants in common or joint tenants, because if the latter, then cl 9(c) of the Will would make no sense because on death Mr Cong would have no interest in those properties capable of disposition by Will.
Another discrepancy, though perhaps this would not have been immediately apparent on a reading of the 2016 Will in full, as referred to above, was that cl 7 does not make a lot of sense because there were no "long term holdings" held by Jolly Trading and it is not clear what "assets" it was there contemplated as "the ones best sold for the purposes of discharge of all debts".
All of those difficulties are compounded by the question as to what explanation Mr Glynn would have given as to the operation of sub-cll 2(b)-(d) of the Deed (i.e., whether they were cascading provisions or alternative provisions or otherwise were able to be read together in a consistent or coherent fashion). I address the difficulties of construction of the Deed in due course. Suffice it here to note that Mr Glynn's understanding as to how Mr Cong intended the scheme under the Deed to work was not explained, so it is hard to be confident that Mr Glynn would have been able coherently to explain its operation.
Seventh, that Mr Cong was an experienced and able businessman; that he was able to understand legal documents and legal concepts, despite English being his second language (the plaintiffs referring to Mr Pirintji's evidence in this regard).
I accept that the evidence establishes that Mr Cong was indeed an experienced and able businessman. Mr Cong ran an apparently successful business (in that he was able to finance the acquisition of a portfolio of properties) for a number of years and, as Mr Knox explained, was familiar with currency exchange fluctuations (and conducted his business successfully on a counter-cyclical basis).
As to Mr Cong's ability to speak and understand spoken English, I have no doubt as to this, given the many witnesses who gave evidence as to his dealings in English with them. As to Mr Cong's ability to understand legal documents and concepts in English, that is a quite separate issue. However, I have no doubt that Mr Cong would have been able to understand legal concepts if explained to him in English without undue legalese. The very fact that Mr Cong operated in the business community in Australia for many years, and communicated in English with his first wife and family and lawyers in Australia (as well as, it would seem, doctors and others associated with his medical care), demonstrates this.
Eighth, that Ms Shen was also commercially sophisticated. The plaintiffs point out that Ms Shen had a business background in China and that she had bought a number of properties as part of an investment strategy.
As to this, the evidence as to Ms Shen's business acumen or commercial sophistication is, to my mind, mixed. True it is that Ms Shen's evidence was that in China she managed a number of employees in one or more hair-dressing salons but the extent to which that translates into commercial sophistication on her part is unclear (even apart from the evidence of Ms Joyce that Mr Cong had suggested that the operation of hair-dressing salons in China was commonly a front for prostitution - as to which I make no finding at all). Moreover, the evidence of various of the family members is rife with references by Mr Cong to Ms Shen being of rural or peasant background, which is hardly consistent with commercial sophistication or business expertise.
As to the acquisition of properties as part of an investment strategy, this appears to be a characterisation of Ms Shen's apparent interest in the property market and her view (apparently shared with Mr Cong) that real property in the Campsie area would appreciate considerably if the anticipated rezoning in that area were to occur. Certainly, there were various property acquisitions in a short time during Ms Shen's relationship with Mr Cong (and her evidence suggested that she played an active part in sourcing and bidding for those properties), although again that does not of itself necessarily bespeak commercial or business acumen (and one might think that bidding for properties at auction for considerable sums without having bank finance arranged - as seems to have been the case with 43 Amy Street; and contrary to her husband's wishes - if Ms Shen's evidence as to a hospital conversation before the auction is not accepted in relation to that acquisition; is not consistent with commercial sophistication or business acumen). Similarly, the ultimate debt burden borne by Ms Shen in respect of the many properties that were acquired over the relevant period is arguably not consistent with a considered investment strategy. (I consider below her evidence as to the operation of Jolly Trading, which is also of some relevance in this context.)
That said, I certainly consider that Ms Shen displayed that she was commercially "savvy" or had commercial "nous". In cross-examination, it was apparent that she well understood aspects of land tax and CGT; and she was also very quick to be able to respond to questions as to the level of debt on the properties and ability to service them. I have no doubt that, as Ms Shen said in cross-examination, she well knew what was paid for the properties and what debt was secured by them.
The plaintiffs also submit that Ms Shen's English skills are (and were) far more proficient than she was prepared to concede. It is said that, like Mr Cong, Ms Shen could understand legal concepts and, in particular, that she understood what she was signing on 3 June 2016. Reliance is placed on the evidence of Mr Allen as demonstrating that Ms Shen was able to understand advice from her legal representatives, and give instructions to them, concerning a conveyancing dispute; and on other occasions, in relation to the making of a Will and a pre-nuptial agreement with her second husband.
There are obvious difficulties in assessing Ms Shen's ability to speak and understand English, given that her evidence was taken through an interpreter throughout the course of the hearing. Certainly, my observation was that Ms Shen relied heavily on the interpreter in Court to translate what was taking place while other witnesses were giving evidence and during submissions; and I did not observe any conduct on Ms Shen's part that was inconsistent with her not being able confidently to understand English. That said, it beggars belief that Ms Shen is not able to converse at least to a minimal or basic extent in English given that she has had dealings over the years with her step-children and others such as Ms Stefadouros (none of whom speaks Mandarin) and with a number of lawyers (Mr Glynn, Mr Allen, and Mr Hand) (again, there being no suggestion that there was any communication with any of them in Mandarin) and to be fair to Ms Shen, she did not suggest otherwise - except insofar as she maintained that at, say, the 17 February 2016 meeting, she did not understand a single word other than her name.
I find that Ms Shen was able to understand basic conversational English (and I do not accept that she was incapable of understanding a single word at the 17 February 2016 meeting other than her name - indeed she appeared at one stage to accept that she heard reference to one or more of the properties as well, though there may have been room for confusion having regard to the street name of at least one of the properties).
Of course, an ability to speak basic English does not mean that Ms Shen would also readily be able to understand basic legal concepts (or read legal documents). However, again, it seems to me inconceivable that officers of the Court (Mr Allen and Mr Hand) would not have complied with their professional obligations in order to satisfy themselves that Ms Shen understood the instructions that were being given to them at the mediation and the settlement of the dispute involving 43 Amy Street; and the basic legal concepts relating to the dispute that was there mediated are not particularly difficult to grasp.
I find that Ms Shen was capable of understanding basic legal concepts if explained to her carefully in basic English. Of course that begs the question, which I consider in due course, whether any such explanation was given to Ms Shen in relation to the 2016 Will and Deed.
Ninth, that Mr Cong and Ms Shen believed that their business was profitable and that their financial positions were secure; noting the evidence that each told Mr Cong's social worker that this was the case.
Tenth, and seemingly related to the ninth, that Jolly Trading was a successful business.
It is said by the plaintiffs that Mr Cong intended Jolly Trading to continue, noting that a number of years earlier Mr Cong had invited Laurence and Teresa to participate in the business; that Mr Cong had arranged for Ms Shen to work in the business; and that Mr Cong had contemplated in February 2016 offering 25% of its shares to Ms Stefadouros for $200,000. The plaintiffs say that the company's financial statements understate its true value; and point to evidence that suggests that Mr Cong and Ms Shen dealt in large sums of cash.
As to these matters, I place limited weight on the notes recorded by the social worker (having regard to the possibility of errors in the social worker's understanding of what was said and that it is reliant on what Mr Cong and Ms Shen chose to say to the social worker at the time in response to queries as to their position). That said, the note of the social worker does serve to corroborate other evidence - such as the note Mr Glynn recorded of his instructions in relation to the sheepskin business (an estimate there put on it of $1 million which must have reflected (rightly or wrongly) Mr Cong's opinion or estimate of the worth of the business at that stage).
I have little doubt that Mr Cong regarded the Jolly Trading business as a successful business (and one for which a not insubstantial sum might be paid for a portion of the shares in the company). I cannot accept Ms Shen and Ms Stefadouros' assertions as to the instructions received from Mr Cong for the closure of the business (which are inconsistent with his instructions as to the Will). What I am satisfied that Mr Cong was contemplating was that Ms Shen and Ms Stefadouros might choose to continue on with the business of Jolly Trading; not that they would set up an entirely new company and assume its business.
I accept that there is evidence of some income being received or paid out in cash, which means that I approach the financial statements with a degree of caution (though I make no findings, and do not here suggest, that there was any untoward business activity - c.f., the assertions made in Ms Joyce's evidence). However, I accept that there would be insufficient evidence to warrant a finding of insolvency.
Eleventh, that if Ms Shen did not have a copy of the 2016 Will before Mr Cong's death, she received a copy on the afternoon of his death and she acted thereafter knowing the terms of the 2016 Will. The evidence as to this issue is that (as noted in the chronology of events) a copy of the 2016 Will was emailed to Ms Shen's attention at the "sheepproducts@hotmail" address on the day of his death.
The plaintiffs say (and the evidence establishes) that on the day of Mr Cong's death, Ms Stefadouros contacted Mr Glynn to obtain a copy of the 2016 Will. It is submitted by the plaintiffs that there should be an inference that, if not earlier, from this time Ms Shen had possession of the Will and was apprised of its contents.
I am not satisfied that the evidence establishes that Ms Shen had a copy of the 2016 Will prior to Mr Cong's death. However, a copy was clearly sent to Ms Stefadouros on the day of Mr Cong's death. It is inherently implausible that Ms Stefadouros did not draw it to Ms Shen's attention at or about that time (whether or not Ms Shen paid any attention to it at that stage is another matter); though I do not suggest that she did so on the day of Mr Cong's death (when I would have thought Ms Shen had plenty of other matters to occupy her mind). What is clear, nevertheless, is that Ms Shen had a copy of the 2016 Will by the time that she went to the bank with Ms Stefadouros to withdraw money from Mr Cong's bank account and I am comfortably satisfied that she understood at or around that time that she was the beneficiary (or a beneficiary) of Mr Cong's estate, since she took steps that are only consistent with that position (see the chronology of events above). I also think it extremely unlikely that Ms Shen did not take steps to acquaint herself with at least the terms of the 2016 Will (and most probably the Deed if that accompanied the 2016 Will when the document was emailed to Ms Stefadouros - though that is another potentially problematic issue) after Mr Cong's death. Whether she understood them is a different matter.
On the balance of probabilities, I find that at least by the time of the transfer of the Wu Property to Ms Wu in July 2017, Ms Shen had a broad understanding of Mr Cong's testamentary intentions as including that the three elder children would receive an inheritance out of the value to be derived from the anticipated increase in value of the Campsie properties (as evident from her conversation with Teresa on the eve of the anniversary of Mr Cong's death).
Twelfth, that, after Mr Cong's death, Ms Shen acknowledged her obligations in conversations with the elder children. The plaintiffs say that Ms Shen's decision in November 2017 to seek probate of Mr Cong's Will constitutes a clear admission that she understood and approved the terms of that testamentary instrument; and (further) that it was duly witnessed by Mr Glynn and Ms Bull.
The plaintiffs submit that Ms Shen's conduct in applying (in 2017) for a grant of probate of the 2016 Will is inconsistent with her current complaints. It is said that the 2016 Will not only referred to the Deed, but directed Ms Shen qua trustee to retain the ownership of the Campsie properties in order to maximise their value, thus supplementing the Deed's purpose. The plaintiffs say that Ms Shen accepted that, at the time she applied for probate in November 2017, she had read the terms of the 2016 Will, noting that Ms Shen accepted that her lawyers "read through everything", including the 2016 Will; and (at T 588.19) that Ms Shen accepted that she also understood the affidavit that was read out to her by her then lawyer, at that time. The plaintiffs say that no credence should be given to Ms Shen's subsequent disavowal of that fact, nor her assertion that she did not understand what the application was for (see T 727.36-43).
It is submitted that Ms Shen's assent to the documents preparatory to a grant of probate constitutes a clear admission that she understood the terms of the 2016 Will; that it had been properly attested; and that she was prepared to accept it as her husband's last testamentary instrument. The plaintiffs say that Ms Shen thereby also accepted that she, as trustee, was obliged to retain the Campsie properties to give effect to the Deed.
The plaintiffs further say that this was not the only admission by Ms Shen as to the 2016 Will. They refer, by way of example, to the evidence that Ms Shen told Edmund after Mr Cong's death that she was waiting for the Campsie properties to be rezoned and her enquiry of him as to whether he would take out a loan to alleviate her liability for CGT; and the evidence that Ms Shen also spoke to Teresa about the 2016 Will and her obligations thereunder.
In broad terms, I accept the account given by Teresa and Edmund of their conversations with Ms Shen after Mr Cong's death; and I accept that Ms Shen acknowledged at the very least that, under the testamentary arrangements that Mr Cong had discussed with her, the Campsie properties were to be held with a view to their rezoning within a 10 year period. So much is evident from Edmund's conversation with Ms Shen, which I accept occurred.
The fact that Ms Shen lodged an application for probate in respect of the 2016 Will is more problematic, since that application was not pressed and in the current proceeding, Ms Shen seeks probate of the earlier 19 August 2014 Will and challenges Mr Cong's testamentary capacity in respect of the 2016 Will. The question is whether the fact of affirming the affidavit in support of the application for probate (notwithstanding that it was not formally read) and the filing of an application for probate (with which Ms Shen did not proceed) amounts to an admission against her.
In Le Meilleur Pty Ltd v Jin Heung Mutual Savings Bank Co Ltd [2011] NSWSC 1115 (Le Meilleur), I considered whether there had been an admission in the course of submissions in the proceeding (admittedly in a very different context than that which now arises).
I there noted that an admission or acknowledgement as to the state of the parties' rights at the time (as contemplated in Sasson & Partners Pty Ltd v Fahevu [1999] NSWCA 400) may involve an admission as to matters of mixed law and fact; and that there was a dispute as to whether admissions of matters of mixed law and fact are admissible as evidence (referring to what was said by Handley JA in Pitcher v Langford (1991) 23 NSWLR 142 at 160, his Honour there referring, among other authorities to Grey v Australian Motorists & General Insurance Co Pty Ltd [1976] 1 NSWLR 669 (Grey) at 684 per Mahoney JA; Jones v Sutherland Shire Council [1979] 2 NSWLR 206 at 231; and Allen v Roughley (1955) 94 CLR 98 at 142 per Kitto J; c.f., the analysis in Heydon, Cross on Evidence (7th Australian ed, 2004, LexisNexis Butterworths) (at [33465])). In that context, see, for example, Dovuro Pty Ltd v Wilkins (2003) 215 CLR 317; [2003] HCA 51 (Dovuro) at [68]-[70] per Gummow J (McHugh and Heydon JJ agreeing) (where the asserted admission went to the existence of a duty of care); Eastern Express Pty Ltd v General Newspapers Pty Ltd (1992) 35 FCR 43; 106 ALR 297 at [68] per Lockhart and Gummow JJ (where the asserted admission was as to the existence of a proscribed purpose for the application of s 46 of the Trade Practices Act 1974 (Cth)). (Statements or conduct said to constitute admissions can, of course, in any event form part of the evidentiary material for consideration in a particular case.)
One of the examples given by Glass JA in Grey (to which Gummow J referred in Dovuro in the context of noting that different questions arise where the suggested admission includes a conclusion which depends upon the application of a legal standard), which is pertinent to the admission here said to have been made, was "an admission that … his grandfather possessed testamentary capacity". Such a statement in Glass JA's view was one that "added to the record something which is, not merely of dubious value, but by definition valueless, owing to the witness' unfamiliarity with the standard governing his answer". The same might arguably be said here in relation to the admission said to be constituted by the application for probate. On one view, that involves simply an acceptance that this was the final Will of the deceased and a decision not to challenge (or the absence of an awareness of a basis to challenge) testamentary capacity, which might well change on the applicant becoming aware of other facts or receiving different legal advice for example. Clearly, no issue estoppel arises from the withdrawal of the application.
As to the significance of an affidavit that has not been read in proceedings (because the application was not pursued), that is something that can be relied upon for the fact that the deponent attested to what was contained in the affidavit but does not amount to an admission per se, in my opinion; it simply forms part of the evidentiary material before the Court.
Had it amounted to an admission, then the question whether leave for its withdrawal should be given (and I note that no such leave was here sought) would turn on issues such as the question of prejudice by its withdrawal and how the admission came to be made in the first place.
As I noted in Le Meilleur, there are said to be two competing policies at least in relation to the withdrawal of formal admissions (first, that an admission should not be permitted easily to be withdrawn, so as to make the procedure for formal admissions meaningless, but, on the other hand, not to discourage parties from making admissions out of fear that once given they cannot be withdrawn, there citing Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 per Rogers CJ at CL). Reference may also be made to what was said by Kinsella J in McFadden v Snow (1952) 69 WN (NSW) 8 as to the withdrawal of admissions, his Honour there referring to the adoption by Street CJ in Ell v Hunter District Water Supply & Sewerage Board (1927) 27 SR (NSW) 437 at 441 of a passage from Bowen LJ in Cropper v Smith (1884) 26 Ch D 700, speaking as a member of the UK Court of Appeal, to the effect that there was no known kind of error or mistake "which, if not fraudulent or intended to overreach, the Court ought not to correct, if it can be done without injustice to the other party" and that "Courts do not exist for the sake of discipline, but for the sake of deciding matters in controversy" (see also Jeans v Commonwealth Bank of Australia Ltd (2003) 204 ALR 327; [2003] FCAFC 309 per Hill, Madgwick and Conti JJ). In any event, no application for leave to withdraw any such admission was here made. I simply note that there is authority to suggest that admissions made otherwise than in the formal course of proceedings have merely an evidentiary significance and that the "admitting" party is entitled to dispute the accuracy of the admission (by evidence that it was influenced by mistake, misunderstanding or ignorance, or that it is otherwise inaccurate or unreliable) (see Nominal Defendant v Gabriel (2007) 71 NSWLR 150; [2007] NSWCA 52 at [113], [144]).
In any event, I rest my conclusion that Ms Shen acknowledged that she had some obligations in relation to the holding of the properties pending rezoning on the conversation she had with Edmund after Mr Cong's death (not the filing of an application for probate or affidavit in support thereof). The difficulty is that Ms Shen did not there make clear that she understood what those obligations were; and ultimately, I can take very little from this.
Thirteenth, that, since Mr Cong's death, Ms Shen has deliberately taken steps to dissipate the assets that Mr Cong believed should pass to the elder children. In particular, the plaintiffs point to the fact that Ms Shen transferred the property at the Wu Property, Campsie to her mother for no consideration (and after executing a transfer form which the plaintiffs say falsely recorded the receipt of consideration); and it is said that she did so knowing the terms of the 2016 Will.
I have set out above the circumstances of the transfer of the property at the Wu Property. Ms Shen accepted in cross-examination that no cash was paid for the transfer; and that there was no borrowing from her mother in consideration for which the transfer might have been made. I reject the explanation that the transfer was provided by way of some kind of security or agreement reached for the provision of a loan by Mr Shen or the payment by Mr Shen of the debts of Jolly Trading. I found Mr Shen's evidence to be unreliable and I am not satisfied that the payments made to Jolly Trading were payments of family money as opposed to repayment of debts due by customers in China.
I accept that there is a basis for the suspicion held by the plaintiffs that Ms Shen has acted to dissipate assets that might otherwise have been available to them (not least given the admitted subsequent breach by Ms Wu and Ms Shen of the freezing orders made prior to the hearing by Henry J by reason of the encumbering of that property to OUF - but it is not necessary here to explore those, which were the subject of apology by Ms Shen when the matter was before me). The other explanation that Ms Shen gave for the transfer of the Wu Property to Ms Wu was that it was to minimise the incidence of CGT. While I accept that the CGT exposure seems to have been of concern to Ms Shen (that being the basis on which she suggested that the property might be transferred to Teresa), it is difficult not to conclude that the way in which Ms Shen dealt with the Wu Property (ascribing a monetary consideration to the transfer that simply was not ever paid and putting forward a variety of reasons for the transfer) is most likely to have been in order to put that asset out of the control of the estate and into Ms Wu's hands (and hence under Ms Shen's control through her mother - since it is abundantly clear that Ms Wu follows her daughter's instructions or directions).

[151]

Preliminary issue as to standing to sue on behalf of the estate

The first and second defendants identify the following claims made in the proceeding as being claims sought to be made on behalf of the estate, for which they maintain that the plaintiffs require leave to sue in the name of the estate. It is noted that, for the purpose of the proceeding, the third defendant, Ms Goodwin, represents the estate and that she makes no claim (having filed a submitting appearance). The first and second defendants say that there is no suggestion that the third defendant has been asked to bring such a claim and refused; nor that the third defendant has been offered funds to obtain any independent advice. (The first and second defendants suggest in effect that this is an example of Ms Joyce or Edmund seeking to maintain control of the litigation.)
The first and second defendants say that the claims sought to be made on behalf of the estate, for which leave is required are the claims: (i) for specific performance of the Deed between Mr Cong and Ms Shen, or damages in lieu of or in addition to specific performance; (ii) for declaratory relief to the effect that, by virtue of the implied terms of the Deed, or a parol agreement binding Ms Shen's conscience, the four Campsie properties (and/or the proceeds of sale thereof) held by Ms Shen became held on trust for the estate of Mr Cong for the purpose of securing the performance by Ms Shen of her covenants in the Deed; (iii) amounting to a construction suit in respect of the Deed to settle the effect of the covenants; (iv) for damages at law for breach of covenant; (v) for the taking of an account of Ms Shen's dealings with trust property; (vi) for equitable compensation or an account of profits in respect of alleged breaches of fiduciary duties; (vii) that (unspecified) proportionate interests in seven parcels of land (the four Campsie properties and the three properties at Burwood) were held by Ms Shen on purchase money resulting trusts for Mr Cong; (viii) under s 37A of the Conveyancing Act to avoid the transfer of the Wu Property to the second defendant and that she transfer ("reconvey") it to the estate of Mr Cong; and (ix) that seek to make Ms Shen accountable for transactions involving Jolly Trading (notwithstanding that the first and second defendants say that the company must be the proper plaintiff and that no interim administrator of the estate has been appointed with powers to procure its re-registration and the prosecution of such a suit by the company).
The first and second defendants complain that the plaintiffs are here asserting many claims in which they have no interest (and that it is Edmund, not Ms Shen, who is intermeddling in the estate). The first and second defendants say that Mr Cong died leaving substantial debts owed on the 16 Nicholson Street and 43 Amy Street loan accounts; that his interest in those properties lapsed (by survivorship) on his death; and that the debts were afterwards paid off by Ms Shen. It is said that the estate is clearly insolvent and indebted by over $1 million to Ms Shen for discharging those debts. Further, it is noted that, if there were any residue, it would pass to Ms Shen.
The first and second defendants say that, were the estate to sue Ms Shen for specific performance of the Deed or any other remedy, it would incur costs; and that the question on a leave application would be whether it is in the interest of the estate to sue. Noting that no provision has been made for the estate's costs, the first and second defendants say that it is not in the interest of creditors or beneficiaries for these claims to be brought, or for the estate to be exposed to the costs thereof.
Reference is made to Harmer v Armstrong [1934] 1 Ch 65 at 88-89; 94, where the English Court of Appeal held that, in a controversy between beneficiaries of a trust as to whether it is to the benefit of the trust to enforce a promise in favour of the trustee, "the Court has the power to decline to enforce the contract until the question whether it is for the benefit of the trust that the contract should be enforced has been determined in an application in the matter of the trust for leave to use the name of the trustee".
The first and second defendants say that the plaintiffs are not here claiming in the character of beneficiaries (let alone as creditors) and they contend, by reference to the examples given in Ramage v Waclaw (1988) 12 NSWLR 84 (Ramage v Waclaw), that there is no analogous case or appropriate exception applicable to permit the claims sought to be made by the plaintiffs on behalf of the estate to be brought by them. Rather, the first and second defendants say that the plaintiffs are here claiming (not by virtue of interest) as strangers and volunteers who would benefit if those who are interested chose to sue; but that it is not for the plaintiffs to make these decisions. The first and second defendants contend that leave to sue should be refused and that the claims sought to be made in the name of the estate be dismissed for want of any application for leave to sue in its name.
In their reply submissions, the plaintiffs say that there is no need to consider whether leave should be granted to sue on behalf of the estate where the plaintiffs possess causes of action directly on the Deed and by reference to their right to vindicate trust claims (which I address in due course). The plaintiffs also maintain that they have an interest, as beneficiaries under the 2016 Will, by reason of the provision for them as annuitants.
The first and second defendants also challenge the standing of the plaintiffs to sue on the Deed but I consider that in due course. As to the question of standing to sue in relation to the specific claims identified above, while it is not disputed that beneficiaries have standing to challenge the 2016 Will, there is an issue as to their standing to bring claims held by the estate (such as, for example, the resulting trust claims).
In Scallan v Scallan [2001] NSWSC 1129 (Scallan), Windeyer J considered an application by a beneficiary to set aside certain (inter vivos) transactions by the deceased on the grounds of either undue influence or unconscionable conduct, or in the alternative under the Contracts Review Act. The proceedings before his Honour had been instituted at a time when there were contested probate proceedings that had not been determined and therefore there had been neither a grant of probate nor a grant of administration (general or limited) in the estate of the deceased. Windeyer J noted (at [9]-[12]) that the defendant (the executor) claimed that the plaintiff (a beneficiary under the Will) had no standing to bring an action and it was therefore a nullity; whereas the plaintiff argued that her position was analogous to that of a beneficiary seeking to bring proceedings for enforcement of a right of action vested in a trustee which the trustee refuses to bring (relying on a number of cases including Ramage v Waclaw; Hilliard v Eiffe [1874] LR 7 HL 39 and Hayim v Citibank NA [1987] AC 730). His Honour said (at [10]): None of these cases really bear upon the situation. In all of them there was a legal personal representative of the estate or trustee of a trust, who either refused to take action or was unwilling to do so. It is not necessary to write a treatise on this interesting subject. In Marshall v D G Sundin & Co Limited (1989) 16 NSWLR 463, it was held that proceedings by a named executor before a grant were a nullity. That decision was followed in Darrington v Calderbeck [sic] - Caldbeck] (1990) 20 NSWLR 212. The power to appoint a person to represent an estate given by Pt 8 r16 of the Rules cannot assist if the proceedings cannot be instituted without such order. The difficulty can be solved in appropriate cases by obtaining a grant of administration ad litem ….
His Honour concluded that the appropriate course would be to apply for a limited grant for appointment of an administrator ad litem who would then pursue the claim. His Honour considered the proceedings to be a nullity but said that, had he not come to the conclusion that the proceedings should be dismissed, he would have thought it appropriate that they be stayed pending the determination of the contested probate proceedings in relation to the Will of the deceased.
In Hewitt v Gardner [2009] NSWSC 705, I considered that the proceeding there could be distinguished from that in Scallan, since the plaintiffs (as beneficiaries and, in the case of one of the plaintiffs, as the executor named in the previous Will) had standing to bring the probate claim made in the undue influence proceedings (referring to the procedures discussed by Murphy J in Re Smith (deceased) [1978] VR 596, with which Young CJ in Eq, as his Honour then was, relevantly agreed in Pratt v Estate of O'Sullivan [2005] NSWSC 1046). I concluded (at [4]) that notwithstanding that the probate claim had been somewhat irregularly brought, the proceeding could be pursued irrespective of the fact that the plaintiffs had no standing to bring or pursue the inter vivos undue influence claim (concluding that the undue influence proceeding could not be said to be wholly a nullity and that there was power under r 7.10 of the UCPR to appoint a representative of the estate to maintain the proceedings in relation to the inter vivos undue influence claim). I there had regard to what was said in Watkins v Combes (1922) 2930 CLR 180 (Watkins v Combes); and the conclusion reached by Yeldham J in Marshall v D G Sundin & Co Pty Limited (1989) 16 NSWLR 463 (Marshall v D G Sundin), and followed by Windeyer J in Scallan, to the effect that Pt 8 r 16 (the precursor to r 7.10) could be of no assistance where the proceedings were incompetent from their commencement (see also the discussion in Bridgewater v Leahy [1997] QCA 36 per Fitzgerald P).
In the present case, there has been no application by the plaintiffs for leave to bring any claims on behalf of the estate (and the plaintiffs' submissions, insofar as they maintain they have standing to bring claims directly under the Deed or the like, suggest that it is accepted that there is no such application for leave). In the absence of such an application (and leave being granted), those claims should be dismissed. That does not, however, dispose of the claims brought by the plaintiffs in their personal capacity (and I address those claims in due course).

[152]

Merger or release by appointment of promisor as executor

The second matter to note at this point is that the first and second defendants place reliance on the rule in Commissioner of Stamp Duties (NSW) v Bone (1976) 135 CLR 223 (Commissioner of Stamp Duties v Bone) at 227 to argue that the appointment of Ms Shen (an obligor, on the plaintiffs' case) as executor operates as a release of her obligations to the estate from the date of death, provided that the appointment is taken up through a grant (that rule being based on the common law rule, arising particularly in the case of debtors, that it is not possible to sue oneself).
The first and second defendants accept that there is an exception to that rule (namely, that equity fastens onto a debtor an equivalent liability to account to "those interested in the estate (whether creditors, legatees, residuary legatees, or next of kin) for the amount of the debt") but point to the exception to that exception (referring to the rule in Strong v Bird (1874) LR 18 Eq 315 (Strong v Bird), where the testator had shown an intention to forgive the debt in his or her lifetime and remained of that intention at the time of death it being said by Jessel MR that there was then "no equity against [the executor] to take the property away from him" (see at 319). (I note in passing that the modern rule in Strong v Bird as outlined by Kitto J in Cope v Keen (1968) 118 CLR 1 at 8 was described by the editors of the fifth edition of Meagher Gummow and Lehane's Equity Doctrines & Remedies as "a sorry example of equity abused" - see at [30-05]).
The first and second defendants submit that the primary exception should not run against an executor (here, Ms Shen) who is not a debtor so as to require specific performance of an obligation to benefit third parties (here, the plaintiffs) not taking through the estate but as "volunteers" by the courtesy of the testator and the executor on behalf of those who are interested in the estate, as such. It is submitted that in such cases volunteers would not have any equity (invoking the maxim that equity does not assist a volunteer). (I should add that the plaintiffs dispute the proposition that they are strangers and volunteers.) The first and second defendants say that even a party to a Deed cannot obtain specific performance if there is not substantial consideration (but would in that case be relegated to rights at law) and that the plaintiffs are not in "even so favourable" a position as that.
Further, the first and second defendants say that the appointment of Edmund as co-executor does not avoid the problem because of the rule that a release by a co-obligee is effective against all.
As to the significance of the fact that as yet there has been no grant of probate, the first and second defendants note that in In Re Applebee; Leveson v Beales [1891] 3 Ch 422, at 429, Stirling J expressed some hesitation as to the contention that it was necessary for there to have been a grant (but that in that case his Honour said that, even if it were, the plaintiff was there ready and willing to prove; and it is noted that his Honour would have given the plaintiff an opportunity of so doing, if necessary).
The first and second defendants point in the context to the detailed review by White JA of the authorities in relation to the position of executor and acts prior to the grant of probate in Deigan (as executrix for the estate of the late Lockrey) v Fussell (2019) 19 BPR 39,853; [2019] NSWCA 299 (Deigan) (his Honour there noting that the executor's authority derives from the Will and that the testator's property (including choses in action) vests upon death - see his Honour's reasons at [174]ff).
The first and second defendants say that the same issue affects cl 2(e) of the Deed (which made provision for the payment to Ms Shen of the immigration bond in the event that Mr Cong died before it was refunded); accepting that Ms Shen could not, as promisee, sue herself as executor. Further, the first and second defendants say that insofar as cl 2(e) is a testamentary provision, it is void by reason of s 6 of the Succession Act (and they point to the invalidity of cl 2(e) of the Deed in support of their submission - that I consider elsewhere - that Mr Cong did not have knowledge of and approve the 2016 Will, i.e., contending in effect that he cannot have had full understanding of this).

[153]

Plaintiffs' submissions

The plaintiffs say that Commissioner of Stamp Duties v Bone is inapplicable on the basis that it is authority only for the limited proposition that the appointment of a debtor as executor extinguishes a cause of action in debt at the date of death (because an executor cannot sue himself or herself); and noting that, in equity, the appointment of a debtor as executor did not extinguish the debt unless the testator in his or her lifetime forgave the debt (this being the primary exception referred to above).
The plaintiffs say that the true basis of the common law rule was identified in Commissioner of Stamp Duties v Bone by Mason J, as his Honour then was, as being the significance attributed to a voluntary act on the part of the testator; the rule there being said to reflect "the presumed intention of the party having the right to bring the action" and they note that the rule was not absolute in its operation. The plaintiffs say that, being a rule founded upon presumed intention, it is displaced if (for example) the testator expressly devised the debt to pay a legacy to a third party; since in that case, the testator clearly intended the debt to survive him or her.
The plaintiffs contend that the principle has no application to the Deed in the present case. They say that no authority has been identified for the proposition that it applies to inter vivos transactions (such as those put in place by the Deed itself); and that the common law principle would operate to defeat the actual intention of Mr Cong because the Deed's purpose was to provide for the plaintiffs after his death (referring to the circumstances of its creation and, in particular, to Recital H). It is said that, where Mr Cong intended to benefit the plaintiffs, and where Ms Shen expressly acknowledged that intention (here referring, I assume, to her execution of the Deed - which presupposes her understanding of its provisions), and encouraged Mr Cong to proceed with it, any presumption of the kind encompassed in the common law rule is displaced and equity should give effect to the shared assumption.
Insofar as the first and second defendants have contended that the equitable rule should be displaced because the plaintiffs are mere volunteers, the plaintiffs say that the rule in Strong v Bird does not exhaustively state the exceptions to the maxim that equity will not assist a volunteer. The plaintiffs submit that the maxim is neither prescriptive nor governing in the present case.
As to the former, reference is made to the observations of Mason CJ and McHugh J in Corin v Patton (1990) 169 CLR 540 at 557 that: …[i]t would be a mistake to set too much store by the maxim. Like other maxims of equity, it is not a specific rule or principle of law. It is a summary statement of a broad theme which underlies equitable concepts and principles. Its precise scope is necessarily ill-defined and somewhat uncertain. It is subject to certain clearly established exceptions… and the plaintiffs also citing Young, Croft & Smith On Equity at [11.160].
As to the latter, the plaintiffs point to the recognition that equity may assist a volunteer when to decline to do so would be against the conscience of the defendant, who would be taking advantage of the defendant's own wrong; and equity will assist a volunteer whether contest is not between the donor and the volunteer, but between the volunteer and a third party.
The plaintiffs say that Ms Shen is a volunteer insofar as she is a beneficiary under a resulting trust. Further, they say that it is against the conscience of Ms Shen that she should be permitted to have undertaken to Mr Cong to carry out his wishes and then not to have done so (Ledgerwood v Perpetual Trustee (1997) 41 NSWLR 532 (Ledgerwood) at 540). This is said also to be consistent with the reasoning of the Court of Appeal in Williams v Legg (1993) 29 NSWLR 687 (Williams v Legg) at 694. It is noted that equity imposes a personal obligation upon a donee to prevent an unconscionable assertion of rights; hence their Honours identified that equitable intervention was conditioned upon the acceptance of the gift in the context of the donee's undertakings.
In any event, the plaintiffs say that Ms Shen was not a debtor at the time of Mr Cong's death and that no debt was released. It is said that Ms Shen's obligation under the Deed was owed to third parties in futuro; and that it was unaffected by her appointment as a co-executor. The plaintiffs contend that Ms Shen's obligation is enforceable by the plaintiffs directly (either for the reasons submitted above or in accordance with the principles identified by Dixon J (as his Honour then was) in Birmingham v Renfrew (1937) 57 CLR 666 (Birmingham v Renfrew) at 687-688).

[154]

Determination as to merger/release

By way of introduction to this issue, there is, as noted above, division in the authorities as to whether an executor has title over the deceased's estate (including choses in action) at the time of death or only following a grant of Probate, which is raised here in the context of an argument over whether the appointment of Ms Shen as executor operates to release any claim by the estate to enforce the obligations under the Deed against Ms Shen.
In Deigan, to which the first and second defendants have referred, White JA followed the reasoning of the Judicial Committee of the Privy Council (at 227) to the effect that the interim vesting of the deceased's estate in the Public Trustee in New South Wales pending the grant of Probate did not affect the general position that the appointment of a debtor as executor had the effect at law "that the cause of action in debt is extinguished: the liability of the debtor as such is extinguished, granted that the executor proves the will, with effect from the death" for the reason that at law the executor cannot sue himself or herself.
White JA considered the authorities that had proceeded on the basis that the position of an executor before grant was assimilated to that of an administrator in England (Ex parte Callan; Re Smith (1968) 87 WN (Pt 1) (NSW) 595; (1968) 1 NSWLR 443; Byers v Overton Investments Pty Ltd (2000) 106 FCR 268; [2000] FCA 1761 (Byers v Overton); Marshall v DG Sundin but concluded, against the background of ss 44 and 61 of the Probate and Administration Act 1898 (NSW) (Probate and Administration Act) and the historical analysis set out in his Honour's reasons, that those authorities were incorrect and that the executor did have power to deal with chattels of the deceased before or without a grant of Probate to those entitled under the Will ([173]). Bathurst CJ, while observing that there was great force in the reasoning of White JA ([5]) did not consider it appropriate to decide that the decision of the Full Court of the Federal Court was plainly wrong in circumstances where it was unnecessary in that case to do so; and Macfarlan JA similarly refrained from expressing a final view on that issue.
The contrary view (that reached in Byers v Overton) is that an executor in New South Wales has no title over the deceased's estate until a grant of Probate (and hence it is here argued that an obligation owed by the executor to the deceased is not extinguished until Probate is granted).
As to whether the fact that there are here co-executors affects that question (on the basis that one of the co-executors might sue the other), as a matter of principle (as the official personality of co-executors is not distinguishable or divisible - see Valverde v Inch (2019) 19 BPR 39421; [2018] NSWSC 366 per Lindsay J at [85]ff) a co-executor could not commence proceedings in the name of the estate against his or her co-executor as the chose in action would be effectively extinguished. It may, however, be relevant in that context to note that in Commissioner of Stamp Duties v Bone, all three named executors owed debts to the deceased; whereas in the present case, the obligations under the Deed are owed only by one of the two named executors (Ms Shen).
If the reasoning in Commissioner of Stamp Duties v Bone and Deigan is followed (and assuming that the common law rule as to the release of executors is applicable beyond a case of debt to a case where there are obligations under a Deed of the present kind), then the executors would have rights in relation to the choses of action here sought to be enforced prior to the grant of Probate and Ms Shen's obligations under the Deed (assuming them otherwise to be enforceable) would be extinguished at law (by reason of her being named executor) but the effect of the primary exception (assuming that be applicable) is that equity would fasten upon the obligor an equivalent obligation to account to all those interested in the estate for the executor's prior obligations under the Deed ("whether creditors, legatees, residuary legatees or next of kin" in the words of the Privy Council at 228). (It will here be remembered that under the 2016 Will the plaintiffs' only interest in the estate is as beneficiaries of the annuities for which provision was there made.)
On the other hand, if the reasoning in Byers v Overton Investments and Marshall v D G Sundin is followed, then the appointment of an obligor as executor would not extinguish the chose in action represented by the claim of the deceased under the Deed (until a grant of Probate is made). In these circumstances, as there has not yet been a grant of Probate, if an executor does not have title to enforce the chose in action prior to Probate, the concern as to an executor suing himself or herself would not arise (and arguably if Probate were to be granted to the co-executor alone, and not to the obligor, then the chose in action would be unaffected and the executor with the grant would be able to commence proceedings against the obligor).
Section 44 of the Probate and Administration Act provides that: 44 REAL AND PERSONAL ESTATE TO VEST IN EXECUTOR OR ADMINISTRATOR (1) Upon the grant of probate of the will or administration of the estate of any person dying after the passing of this Act, all real and personal estate which any such person dies seised or possessed of or entitled to in New South Wales, shall as from the death of such person pass to and become vested in the executor to whom probate has been granted or administrator for all the person's estate and interest therein in the manner following, that is to say: (a) on testacy in the executor or administrator with the will annexed. (b) on intestacy in the administrator. (c) on partial intestacy in the executor or administrator with the will annexed.
Section 61 of the Probate and Administration Act provides: 61 PROPERTY OF DECEASED TO VEST IN NSW TRUSTEE From and after the decease of any person dying testate or intestate, and until probate, or administration, or an order to collect is granted in respect of the deceased person's estate, the real and personal estate of such deceased person shall be deemed to be vested in the NSW Trustee in the same manner and to the same extent as aforetime the personal estate and effects vested in the Ordinary in England.
As referred to above, with respect to the extinguishment of a debt on the appointment of the debtor as executor and whether, in New South Wales, the vesting of the estate in the Public Trustee prior to grant modifies such a rule, the Judicial Committee of the Privy Council held the following in Commissioner of Stamp Duties v Bone (at 227-228):
The appointment of a debtor as executor has undoubtedly the effect at law that the cause of action in debt is extinguished: the liability of the debtor as such is extinguished, granted that the executor proves the will, with effect from the death. The reason is that at law the executor cannot sue himself: and their Lordships as at present advised see no sufficient reason for holding that the interim vesting of the estate in the Public Trustee under the law of New South Wales pending the grant of probate affects that general position.
But it is fully established, and their Lordships consider that there is no need to expound the theory behind the outcome, that equity will at once fasten upon the executor an exactly equivalent obligation to account to those interested in the estate (whether creditors, legatees, residuary legatees, or next of kin) for the amount of the debt. The obligation of the debtor to the testator which existed at the moment of death is converted by the combined operation of law and equity into exactly the same obligation with a different technical character or label or method of enforcement. Their Lordships in those circumstances can find no substance in the contention of the respondents that the result of the appointment of the debtors as executors is to deny to any claim against them the quality of property of the testatrix at her death.
In Deigan, as noted above, White JA gave a detailed analysis of Commissioner of Stamp Duties v Bone and the appeal therefrom to the Privy Council (see from [150]ff); and concluded that that reasoning should be followed contrary to that of Emmett J, then sitting in the Federal Court in Byers, which was upheld on appeal by the Full Court of the Federal Court (in Byers v Overton Investments Pty Ltd (2001) 109 FCR 554; [2001] FCA 760). In Byers, Emmett J considered whether an executrix had the right to commence an action on behalf of the deceased's estate prior to a grant of probate. Although expressing some reservation, his Honour was not prepared to say that the reasoning of Yeldham J, as his Honour then was, in Marshall v D G Sundin, or Young J, as his Honour then was, in Derrington v Caldbeck (1990) 20 NSWLR 212, to the effect that proceedings brought prior to the grant of Probate were incompetent (based on their Honours' construction of ss 44 and 61) was clearly wrong (and disposed to conclude, for the reasons outlined above, that their conclusion was correct). As noted, the Full Court of the Federal Court dismissed the appeal from that decision, their Honours there concluding that s 61 made a distinction between the powers of the executor before and after Probate that did not exist at the common law.
I have referred above to the consideration of this issue in Deigan. Only White JA there addressed the issue as to the powers of the executor between the date of death and the grant of Probate in relation to assets such as a chose in action of the kind here sought to be enforced. The majority (concurring in the result) considered the issue on which White JA reached a conclusion contrary to that in Byers v Overton to be not necessary for the determination of the issue in the appeal.
If an executor obligor does not have title to the deceased's chose in action as obligee until a grant of probate, then it must follow logically that the chose in action is not extinguished at the time of death by the appointment of the executor obligor under the deceased's Will. By contrast, if an executor obligor obtains title of the deceased's chose in action as obligee at time of death without a grant, then it follows that the chose in action is extinguished due to the principle that an individual cannot sue oneself.
What is undisputed is that (at least in cases of debt and logically one would assume also in cases of a chose in action under a Deed between the deceased and the executor), once a grant of Probate has been made to an executor obligor, the chose in action of the deceased obligee is extinguished albeit that equity would fashion an entirely equal obligation on the executor obligor to account to those interested in the estate for the executor's prior obligations under the Deed.
The divergence in the reasoning as between White JA in Deigan and that of the Full Court of the Federal Court gives rise to difficult issues of precedent for a primary judge. As a matter of comity, I am bound to follow the decision of an intermediate appellate court unless satisfied that it is plainly wrong. However, as a matter of precedent, I am bound by decisions of the Court of Appeal of this Court. Here, however, White JA's conclusion on the relevant issue was one that the fellow members of the Court of Appeal in Deigan did not consider it necessary there to determine; and hence it is a determination by a single judge of appeal after a considered view of the historical position and the detailed analysis of the relevant authorities.
Had the issue been necessary here to determine then I would have followed his Honour's reasoning (as a matter of precedent and because, with respect to their Honours who have reached a contrary view, I consider it to be correct). However, in the present case I do not consider it necessary to make a determination that the Full Court of the Federal Court was plainly wrong on that issue because I consider that the Deed is not enforceable against Ms Shen for other reasons.
That said, I consider that insofar as the common law rule is based on the presumed intention of the testator (as was recognised in Commissioner of Stamp Duties v Bone), it would be a nonsense to presume that Mr Cong did not here intend Ms Shen to be bound by the obligations entered into (with all the formality of a Deed) at the very time of execution of the 2016 Will. That situation is very different to the situation where there is a pre-existing debt or obligation and a Will is later executed appointing the debtor or obligor as the executor.
As to whether the rule applies to obligations other than obligations in relation to debts (and whether the primary exception is then applicable if it does), I have not been taken to any authority to suggest that the rule would not apply to choses in action of the kind under the Deed (since the difficulty of an executor suing herself as obligor would still arise in that context) but similarly I see no reason to think that equity would not step in to recognise an exception of the same kind as that which would be applicable in the case of debt so as to bind the conscience of the executor obligor. As to the submission that equity will not assist a volunteer, here I would have thought that (assuming the Deed otherwise to have been enforceable against her) Ms Shen's conscience should be bound and hence the exception to the primary exception would not apply.
In any event, as I discuss in due course, I consider that the Deed is not enforceable against Ms Shen for other reasons. Hence the above conclusions are not determinative in the final outcome. As to the standing issues raised in the course of submissions, I consider those in due course.

[156]

Plaintiffs' submissions

The plaintiffs, as propounders of the 2016 Will, accept that they bear the onus of proving that the 2016 Will was the last Will of a "free and capable" testator who "knew and approved of its contents at the time it was executed so that it can be said that the testator comprehended the effect of what he was doing" (see Tobin v Ezekiel (2012) 83 NSWLR 757; [2012] NSWCA 285 (Tobin v Ezekiel) at [44]ff per Meagher JA (Basten and Campbell JJA agreeing)).
It is noted that in Tobin v Ezekiel, it was said (at [45]) that if the Will is rational on its face and is proved to have been duly executed, there is a presumption that the testator was mentally competent (which presumption may be displaced by circumstances which raise a doubt as to the existence of testamentary capacity, in which case the evidential burden will shift to the party propounding the Will to show that the testator was of "sound and disposing mind"). Meagher JA there went on to note (at [46]) that, upon proof of testamentary capacity and due execution, there is also a presumption of knowledge and approval of the contents of the Will at the time of execution (which presumption may in turn be displaced by any circumstance which creates a well-grounded suspicion or doubt as to whether the Will expresses the mind of the testator, in which case the proponent must prove affirmatively that the testator knew and approved of the contents of the document).
As to the issue of execution, the plaintiffs say that the 2016 Will, on its face, was regularly executed, relying on the evidence of Mr Glynn and Ms Bull, each of whom deposed that Mr Cong signed the 2016 Will in their presence, and who recorded their attestation by signing the 2016 Will.
The plaintiffs say that, to the extent that the accounts of Mr Glynn and Ms Bull differ from those of Ms Shen and Ms Stefadouros, the accounts of the former should be preferred (on the basis that neither Ms Shen nor Ms Stefadouros would be accepted as a witness of truth). The plaintiffs note that Mr Glynn is a solicitor of considerable experience whose practice was to request Ms Bull to attend and witness the execution of Wills on behalf of his clients.
The plaintiffs point to the rebuttable presumption, in the absence of proof to the contrary, that the formal requirements of the Succession Act have been complied with (citing Weiss v Weiss [2020] NSWSC 1064 at [70] per Hallen J); and they submit that, the evidence of Ms Shen and Ms Stefadouros not being persuasive, there should be a finding that the 2016 Will was duly executed.
As to Mr Cong's knowledge and approval of the contents of the 2016 Will, the plaintiffs point to the evidence of the meetings Mr Cong had with Mr Glynn in late 2015 and early 2016 to provide instructions about the contents of the 2016 Will and the Deed; and to the fact that Mr Cong had received from Mr Glynn drafts of the documents and had commented upon them. They also point to Mr Glynn's oral evidence both of his general practice when taking instructions in relation to the preparation of a Will (see T 443), in the course of which Mr Glynn said that in this particular case, the initial conference with Mr Cong was because Mr Cong had an illness, so he (Mr Glynn) needed to determine in his own mind whether Mr Cong had capacity to provide instructions; and to Mr Glynn's recollection of the questions he had asked Mr Cong (see T 443.3): A. I asked him about his property. He was able to identify his property. He was able to identify his beneficiaries, his young children and his older children. He was able to acknowledge that, on my advice, he had obligations to all of those children and his wife. More particularly, he appeared to be clear and that he didn't appear, in my mind, to suffer any infirmity or inability to express.
The plaintiffs point to the observation of Macfarlan JA (with whom Bell P and McCallum JA agreed) in Drivas v Jakopovic (2019) 100 NSWLR 505; [2019] NSWCA 218 (Drivas v Jakopovic) at [52] that an experienced solicitor's evidence is valuable when considering testamentary capacity, as solicitors become attuned to recognising when the capacity of a client may be suspect.
The plaintiffs point to Mr Glynn's evidence that, during the conference on 3 June 2016, he gave the 2016 Will to Mr Cong to read unaided; and to Ms Bull's account, that Mr Glynn "went through" the 2016 Will with Mr Cong. The plaintiffs say that Ms Bull's recollection of the events that occurred during the execution of the 2016 Will is supported by the fact that, although she had witnessed Wills for clients of Mr Glynn "a few times a year" over a period of "two or three years", she could not recall witnessing a Will for any other Asian client of Mr Glynn; and that Ms Bull had a firm recollection that Mr Glynn had asked her to attend the conference for the purpose of acting as a witness while he read through the 2016 Will with Mr Cong, because Mr Cong was ill at that time.
In any event, the plaintiffs say that the question whether Mr Glynn read out the 2016 Will to Mr Cong prior to Mr Cong signing it need not here be resolved; it being submitted that Mr Cong knew and approved of the contents of the 2016 Will because it had been prepared by Mr Glynn on the basis of oral and written instructions received from Mr Cong over the course of several conferences in late 2015 and early 2016 (the written instructions having been emailed to Mr Glynn by Ms Stefadouros and Ms Lan at the direction of Mr Cong) and it was against this background that Mr Cong executed the 2016 Will on 3 June 2016. Thus, the plaintiffs say that Mr Cong knew of the terms of the 2016 Will and, by his signature, indicated his approval of it.
Therefore, it is said that the 2016 Will was duly executed. The plaintiffs submit that the 2016 Will was rational on its face, noting that it described a scheme for the distribution of Mr Cong's assets among the children of his first marriage and his second family (all of whom had a moral claim to his estate) and noting that while there was no provision for his ex-wife, who may have had a moral claim on his testamentary bounty, Mr Cong had previously entered into a property settlement with her.
The plaintiffs thus submit that, being a rational and sensible document on its face, there is a presumption that Mr Cong was mentally competent (referring to Tobin v Ezekiel at [45]).
That raises the issue of the contention by the first and second defendants that Mr Cong lacked testamentary capacity because, among other reasons, he was deluded about the nature and extent of his property and his capacity to dispose of property belonging to Ms Shen in his 2016 Will, which I consider in relation to issue (xxi) shortly.

[157]

First and second defendants' submissions

First, as to the formal requirements for execution of the Will, the first and second defendants say that Ms Bull's evidence was out of line with all other witnesses; and they point to the objective problems with the documentation that would have to have been noticed if her account were correct. However, as I understand their submissions, the issue that is taken with Ms Bull's evidence is principally as to whether Mr Glynn "read through" or explained the 2016 Will; not (although I accept that this was Ms Shen's evidence) as to whether Ms Bull was actually physically present at the time that the 2016 Will was signed by Mr Cong. If I be wrong in that, and the first and second defendants do contest the formal attestation of the 2016 Will, then (for the reasons explained earlier) I accept Ms Bull's account that she did indeed witness the signing of the 2016 Will by Mr Cong.
Second, as to the issue concerning Ms Bull's recollection that the Will was read through by Mr Glynn, I repeat the finding made earlier. I accept that there was some reading of parts of the Will but, as noted earlier, I do not accept that it was read through line by line (nor do I think that was necessarily Ms Bull's evidence) nor do I accept that there was any detailed explanation of the provisions or the effect of the provisions.
The first and second defendants submit that the conflict in the evidence as between Ms Bull and Mr Glynn (to which I have referred earlier) gives rise to divergence and confusion in the plaintiffs' own case; and they submit that the fact that neither Mr Glynn nor Ms Bull kept a file note means that there is an absence of the evidence that should exist had Mr Glynn performed his duty (of explaining the contents of the 2016 Will). It is submitted that the consequence of this must be seriously adverse to any finding of knowledge and approval.
Concerning the issue of knowledge and approval, the first and second defendants (as did the plaintiffs) referred to what was said by Meagher JA in Tobin v Ezekiel at [46]-[48] and to the passages cited by his Honour from Nock v Austin (1918) 25 CLR 519 at 523-524, 528.
The first and second defendants accept that evidence that a testator actually read a Will is not the only way of proving knowledge and approval; and that knowledge and approval may be shown by instructions prior to execution (citing Astridge v Pepper [1970] 1 NSWR 542 at 548; Paraskov v Paraskos [2002] WASC 109 at [50] (Paraskov); In the Will of Steward (deceased) [1964] VR 179; and Fincham v Edwards (1842) 163 ER 656); and that it is not necessary that a testator read every word, nor that the testator understand the legal effect of the words used. Further, the first and second defendants note that it has been said that "[i]f the words were selected by a draftsman to whom the testator confided the task of drafting his will … the words must stand, even if the testator was ignorant of the actual words used" (citing In Re Horrocks (deceased) [1939] P 198 at 216); and that an illiterate person can make a Will (citing Paraskov at [50]).
However, the first and second defendants emphasise the necessity for it to be determined on the balance of probabilities that the testator knew and approved the terms and effect of the Will; and that it be the testator's true Will (citing Tobin v Ezekiel at [48]). It is further noted that the evidence required to satisfy that onus varies with the circumstances (citing Tobin v Ezekiel at [48]; Worth v Clasohm (1952) 86 CLR 439 (Worth v Clasohm) at 453; Bailey v Bailey (1924) 34 CLR 558 (Bailey v Bailey) at 570 per Isaacs J; and Barry v Butlin (1838) 2 Moo PCC 480 at 484); and that the authorities speak of the need for "vigilance" and "careful scrutiny".
While the first and second defendants point out that, in cases of a failing mind, it may be appropriate to make an assessment of whether the testator actually weighed the claims on his bounty (citing Hoff v Atherton [2004] EWCA Civ 1554), there is, however, no evidence that Mr Cong's mind was failing at the time of execution of the 2016 Will.
The first and second defendants further say (in support of the submission that the plaintiffs have failed to establish that Mr Cong knew and approved of the terms and effect of the 2016 Will) that Mr Glynn failed to meet the standards required of a solicitor retained to prepare and attend on the execution of a Will (referring here to the duties explained in GE Dal Pont and KF Mackie, The Law of Succession (3rd ed, 2021, LexisNexis Butterworths) at [24.6]-[24.7]).
In particular, the first and second defendants make the following criticisms of Mr Glynn: that he received instructions in writing without sitting down with the client to work through them; that he undertook to formulate a complex draft without conferring with the client to explain its legal consequences and ensure that it accurately reflected his wishes; that he did not take any file note on the occasion of execution or retain any record of such explanations as he gave; and that his file notes, to the extent that he had them, are "cryptic". It is noted that Mr Glynn only met with Mr Cong alone on one occasion (the 23 April 2016 café meeting in Randwick) and that this was before a major change to the draft Will. The first and second defendants further say that Mr Glynn did not establish clearly who his client was, noting that the file cover refers to Shen and Cong.
It is said (and I accept) that, as soon as the concept of the Deed was introduced, Mr Glynn had a clear conflict of duties; and should have advised Ms Shen to obtain separate advice. It is said that, apart from his duties of explanation, if he did comply with those duties, he could not do so with both clients present at the same time (as that would be likely to inhibit free discussion with either). It is noted that the only meeting that Mr Glynn attended with Mr Cong (or Ms Shen) after the Deed was first drawn was at the occasion on which it was signed on 3 June 2016, in the presence of both.
The first and second defendants say that this means that there cannot be confidence that on any occasion either of Mr Cong or Ms Shen was able to express his or her respective views to Mr Glynn without inhibition and embarrassment, even to the extent that Mr Glynn offered any explanations or entered into discussion as to the structure and its merits on that occasion (reference here being made to what was said in Bank of Montreal v Stuart [1911] AC 120 (Bank of Montreal) at 138-139, applying the earlier decision of the House of Lords in Willis v Barron [1902] AC 271). That principle (relied on here by the first and second defendants in support of their equitable defences to the actions brought on the Deed) is said also to illustrate the problems in Mr Glynn acting not merely on the Deed transaction but also on the 2016 Will at the same time (and in Ms Shen's presence). It is submitted that this deprives the Court of evidence relevant to an assessment of the testator's comprehension of his estate and the objects of his testamentary bounty. As to the importance of such evidence, reference is made, by way of example, to Dellios v Dellios [2012] NSWSC 868 (which was followed in Legal Profession Complaints Committee and Wells [2014] WASAT 112) in contrast to Drivas v Jakopovic.
The first and second defendants say that the earlier 2013 and 2014 Wills, and the drafting history of the 2014 Will (see the chronology of events above), points to the reduction over time of the degree of generosity shown by Mr Cong to the elder children in the respective Wills. They say that there is a disturbing pattern of "see-sawing" instructions and draft provisions from 15 March 2016 onwards and that there was not an explanation by Mr Glynn for the drafting history or the genesis of the Deed (which first appeared on 28 April 2016, the day after the very different 27 April 2016 draft of the Will). It is submitted that this radical change is itself a reason for doubt, raising the requirement for affirmative proof of knowledge and approval to discharge the plaintiffs' onus.
In this context, the first and second defendants point to Mr Glynn's cross-examination at T 485-T 486, which they say demonstrates that Mr Glynn exhibited a poor recollection and comprehension even when the specific changes were shown to him. It is noted that (at T 486.15-24): Q. That was all something that happened between 27 and 28 April, is that right? A. I, I think so, yes. I think so. My memory's not clear as to precisely, but it must be around that period, yes. Q. That was a very radical change to the structure, wasn't it? A. The addresses, yes. I don't know if it's radical, but they were changes. Q. How did you get instructions to make that change? A. I can't recall. Unless I've recorded it somewhere I can't recall.
It is submitted by the first and second defendants that the changes were indeed radical: the gift of an interest in 16 Nicholson Street was removed, an early version of the draft Deed came in, and a new cl 2(d) was inserted into the draft Will. It is noted that Mr Glynn did not recall the conversation that took place in his telephone attendance on Mr Cong on 28 April 2016; could not recall having a discussion at that time with Mr Cong about the values of the properties and could not recall talking about mortgage or debt at that time (at T 488.15-28): Q. At the time of the conversation you had no discussion with Mr Cong about the amount of indebtedness that was secured against the properties, or any of them, is that right? A. I can't recall talking about mortgage or debt at this time. There was a discussion but I, I can't recall when. Q. You had no discussion with him, did you, about how any debt secured against the properties was going to be serviced for ten years or five years or any other period of years, is that right? A. Yes. Yes, we had a discussion that his insurance payout would pay, service every debt. Q. Is that in any of your file notes? A. No, but that's a recollection.
The first and second defendants submit that the failure of Mr Glynn to record this memory about the life insurance nomination in his file notes or in any of his four affidavits is itself a very significant matter because of the evidence that that insurance nomination was never carried into effect. It is said that, if that was the basis for Mr Cong's decision to change his testamentary plan, then the failure to carry that into effect "knocks away" a premise for his approval of the scheme. In the course of this cross-examination (at T 490.32), Mr Glynn suggested that the undated filed note (Ex 6 at 20) was made on 23 April 2016.
The first and second defendants say that Mr Glynn was unable to explain the change in instructions from the draft Will of 27 April to the draft of 28 April with a draft deed for the first time on that day, the omission of Nicholson Street from the Will and the introduction of reference to the 4 Campsie properties; and that there is only the file note (Ex 6 at 26), which does not refer to a deed; it does not refer to the Campsie properties, except to give Mr Cong's address; and which it is said seems originally to have been written out as if it applied to 16 Nicholson Street, to which reference is twice made but each time crossed out. The first and second defendants say that how this was meant to apply to 16 Nicholson Street has never been explained, except so far as one might glean an idea from the previous instructions of 15 March 2016; that the crossing out is equally unexplained; and that how Mr Cong thought this could work is unknown.
By reference to Ex 1 at 3, the first and second defendants note that Mr Cong had attendances on his doctor (Dr Bing Liu), after the 23 April café meeting, on 24 April 2015 and at 4.15pm on 28 April 2016. (I do not here set out the medical notes of those attendances. Suffice it to note that the second of those notes record that a repeat CT the previous week was showing progressive disease, but that pain was "under control". There is nothing in those notes to suggest a failing mind.) The first and second defendants also note that Mr Knox recalled that Mr Cong in May 2016 looked very frail, and had been frail for some time (see Mr Knox' 12 October 2020 affidavit at [25]).
The first and second defendants say that the form that the Deed took was evidently the work of Mr Glynn; that Mr Glynn took it upon himself to form his own ideas about the legal structure to give effect to his understanding of broad instructions, and that Mr Glynn then did done nothing further to elicit from Mr Cong in his own words Mr Cong's wishes about how to achieve the result and whether the chosen method was appropriate, having regard to its impact on Ms Shen and his infant children (who the first and second defendants say the plaintiffs themselves accept he intended to be the primary objects of Mr Cong's testamentary bounty).
The first and second defendants say that the Deed (the method chosen by Mr Glynn) subordinates these primary objects to fixed returns to the elder children payable out of the assets of Ms Shen to an unlimited extent. Complaint is made that there is no file note, affidavit or statement in oral evidence that conveys any clear statement that Mr Cong understood that this was the effect of the instruments or that he intended it. It is submitted that "expecting that his optimistic expectations would be achieved is a very different thing from understanding that he was shifting all the risk to his widow and infant children, whom he thought were his primary objects".
The first and second defendants further say that Mr Cong could not even read the documents (a proposition that I do not consider is established on the evidence) and they point to Ms Stefadouros' email of 28 April 2016 in which Ms Stefadouros found them "very complicated" and asked Mr Glynn to put in something that was already there. The first and second defendants say that it can be presumed that this was because Ms Stefadouros was not certain that it was there or not certain that what was there achieved what was wanted. Pausing here, it seems to me safe to assume that Ms Stefadouros would have found almost anything "complicated", given her evidence in cross-examination and I see no basis for transferring her lack of comprehension to Mr Cong (who seems to have been a commercially astute businessman and who was apparently well able to read documents in other contexts - as per Mr Pirintji's evidence).
The first and second defendants also point out that Ms Stefadouros communicated in the same email an instruction that the annuities could be postponed to the end; but that this instruction was not carried into effect in any subsequent draft. Thus, it is submitted that there is grave reason for concern that Mr Glynn was not paying proper attention to appreciating and encapsulating what his client wanted to achieve. (Pausing here, insofar as this and other submissions suggest a scrutiny of Mr Glynn's drafting or advice akin to a professional negligence suit, I do not consider that it is here appropriate to embark upon such an exercise. Whether the structure adopted in the Deed was appropriate or effective to achieve what Mr Cong's instructions were in relation to his testamentary intentions; or whether Mr Glynn paid proper attention to his client's instructions, is not here the question. The relevant question is whether Mr Cong knew and approved the terms and effect of the testamentary instrument that he executed.)
The first and second defendants point out that no further advice or draft was forthcoming from Mr Glynn at that time, noting that in response to the query about his fee on 2 May 2016, Mr Glynn did not suggest that there was more work needed or any additional cost.
The first and second defendants raise a number of particular matters which they say bear on Mr Cong's capacity, knowledge or approval. First, cl 7 of the 2016 Will. It is submitted that there is real doubt that Mr Cong knew and approved of cl 7 of the 2016 Will. It is said that Mr Cong clearly did not expect that Jolly Trading would be the resource for discharging the holding costs of keeping the properties in place (pointing to Mr Glynn's oral evidence that his instruction was that this was to be done with the life insurance - see T 488-T 490); and the instruction (not complied with) in the email of 27 May 2016 to give Ms Shen his life insurance and superannuation). The first and second defendants say that Mr Glynn allowed Mr Cong to execute the 2016 Will and the Deed without any mention of this omission. (That, of course, assumes that Mr Glynn realised the omission - which seems to me to be unlikely, because it would be assumed that if he had, he would surely have rectified it.)
The first and second defendants submit that there cannot be satisfaction that cl 7 was ever explained, read to or understood by Mr Cong. It is noted that cl 7 was never subsequently revised or mentioned in any correspondence; no discussion of cl 7 appears in any file note; and no such discussion is mentioned in the affidavit of any witness. It is submitted that it was not discussed. It is said that there were bigger issues for Mr Cong involved in the subsequent revisions to the Will and the subsequent introduction of the draft Deed on 28 April.
In this context, the first and second defendants point to Mr Glynn's evidence that, at one of his meetings, Mr Cong told him that "the business is not generating as much money as it used to" (at [19] of his affidavit affirmed 13 October 2020) and his evidence (at T 488-T 490) that he was instructed that Mr Cong's life insurance was to be given to Ms Shen to fund the debts. The first and second defendants submit that, if he had thought about this, Mr Glynn could not have thought that cl 7 was either appropriate or intended by Mr Cong (and that if the statement about the business was said at the meeting on 23 April or 3 June 2016, then either the clause should have been adjusted or it should never have been put it in). (That last submission seems to me to elide the concept of advice to a client about a client's Will and following instructions given in the course of drafting a Will.)
The first and second defendants again point in this context to the evidence of Ms Stefadouros that the draft Will was very complicated (to which I have referred above) and to Ms Lan's oral evidence (that the first and second defendants say was confusing and inconsistent). It is noted that Ms Lan evidently needed the assistance of the interpreter to understand accurately the questions being put to her in cross-examination, though she was able to answer in English. The plaintiffs maintain that Ms Lan had neither the training nor the apparent grasp of English to stand as a substitute for a proper explanation of cl 7 by a lawyer to Mr Cong.
The first and second defendants say that it is not apparent from any evidence how and why Mr Glynn came to insert the name Jolly Trading into the blank spaces in the draft cl 7; that cl 7 is obviously a template for use where there is some holding company (whereas Jolly Trading was a trading entity not a holding company); and that the insertion of its name into such a clause was not appropriate (and the reasons why it was inappropriate were not explained to Mr Cong). As adverted to above, the first and second defendants also say that cl 7 was not consistent with cl 9(b). It is said that that inconsistency was also not explained by Mr Glynn; that Mr Glynn did not in his evidence explain why he did not explain the inconsistency to Mr Cong; and that it is likely that Mr Glynn passed over it when attending upon Mr Cong and focussed on other topics.
The first and second defendants submit that it cannot be concluded that Mr Cong knew and approved of the terms of cl 7; that its effect is obscure; and that, if it has the effect contended for in 77 of the amended statement of claim, it cannot be said that there is any evidence that Mr Cong knew that to be so, or that it was communicated to Ms Shen or that she represented that she would be bound by it. (It is submitted that the effect contended for would not be obvious even to a lawyer.)
Second, as to cll 9(c)-(d), insofar as the plaintiffs seek to assert that the Deed had some testamentary effect, the first and second defendants say that this is contradicted by its nature and by the operation of s 6 of the Succession Act (see below). Nevertheless, it is submitted that the formal statement in cl 9(d) that the Deed is attached is significant for the issue of knowledge and approval, as is the statement of the date. It is said that, on 3 June 2016, Mr Cong surely knew that he and Ms Shen had not previously executed the Deed (and that, if he thought the contrary, he was not of sound memory and understanding). It is noted that the dates refer to earlier drafts, of which the Deed at least was different from the final.
The first and second defendants say that the omission to correct the date, or to affix a copy of the Deed before execution, bespeaks the carelessness of Mr Glynn. (Again, this is not an exercise in determining the skill and competence of Mr Glynn's professional services.) It is noted that the Deed purports to annexe a copy of a Will, misdated. The first and second defendants say that it is not known in what order the Deed and the 2016 Will were executed, except that Mr Cong signed first. It is said that this would suggest that, at the time the 2016 Will was executed, there was no Deed in existence. It is said that annexation of a complete copy of the Deed would have required, if it annexed a 2016 Will as it says it does, that the 2016 Will be annexed to the Deed annexed to the 2016 Will.
It is submitted that these matters reflect on the question of due execution, since the 2016 Will is supposed to annexe the "Deed dated 2 May, 2016", by way of identification of the acknowledgment referred to in cl 9(d); whereas what has been attested does not include this "which was meant to be authenticated and is sought to be added afterwards". The first and second defendants say that this is irregular; and that the inattention paid to these details shows how little regard was paid to the formalities or to the requirements of bringing to the attention of Mr Cong what he was signing, what the documents were, and what they contained.
Pausing here, the fact that the 2016 Will and the Deed were signed in the same meeting may well explain issues such as the fact that the Deed was not actually annexed to the 2016 Will and vice versa. It may well have been anticipated that the documents were to be executed in effect simultaneously and then collated. However, I accept that it is troubling that there were obvious typographical errors (as adverted to earlier) because I accept that this makes it implausible that the whole of the documents was read out in detail at the meeting on 3 June 2016.
The first and second defendants say that explanation was needed as to precisely what cl 9(d) meant. It is said that, in its terms, it is no more than an acknowledgement. It is said that, to a reasonable reader, Mr Cong's acknowledgement in (d) contrasts with his direction in (c) and refers attention to the Deed as a complete statement of whatever was being agreed (but that the date is then misstated and the Deed is not annexed; and, in any event, the first and second defendants say that its provisions are most unclear). It is said that, in the 2016 Will, Mr Cong is certainly not directing Ms Shen to comply with the Deed, though the direction in cl 9(c) may overlap.
The first and second defendants say that there is no suggestion that the appointment of Ms Shen as executor and its effect on the Deed and the acknowledgement in cl 9(d) was considered by Mr Glynn or explained to Mr Cong; and that if the Deed was to be considered binding and enforceable, then Mr Cong had to pay attention to who was to enforce it. It is noted that Mr Cong's wish was that there should be no fighting in his family. It is said that he needed to consider this very carefully; and be advised how the structure could work.
The first and second defendants submit that it is certain that Mr Cong was not called upon to form an understanding of cll 9(c)-(d), or their relationship with cl 5 of the 2016 Will, or with cl 2(a) of the Deed (just as he was not advised concerning cl 7 of the 2016 Will or its relationship with cl 9(b)). It is said that the provisions, their operation and effect, were simply not explained to Mr Cong; and that the emails of 27 and 28 April from Mr Glynn show that he had no intention of explaining them, or anything else in the instruments. Reference is made to Mr Glynn's affidavit sworn 18 May 2020 at [29], reiterated in his further affidavit sworn 16 October 2020 at [12], that he asked Mr Cong to read them for himself. It is said that [29] of Mr Glynn's affidavit does not suggest that Mr Cong did so; it simply says that he signed the 2016 Will and the Deed.
Reference is made to the cross-examination of Mr Glynn (at T 502-T 503): Q. It's right, isn't it, that after you sent the emails of 28 April, your only subsequent interaction with Mr Cong before the meeting of 3 June was through other emails sent during May and the early days of June. Is that right? A. I think so, yes. Q. You had no conversation with him before 3 June meeting at which you gave him an explanation of the legal effect of what you had drafted. Is that right? A. In that time period you might be correct. The conversation I had with him, I'm going on memory, was prior to that period. Q. But that period begins with you sending the document? A. Correct, but on instructions that he would've provided to me before I sent the document. Q. But you understand what I'm putting to you? I'm putting to you that the first time you sent him a draft of this deed, after that time, you had no oral communication with him before 3 June meeting about what it meant? A. No. Q. Are you disagreeing or agreeing? A. I'm disagreeing with you. Q. Well, when? A. I prepared, we had a discussion; I sent him a draft, and the comment came back that it was too complicated and those instructions in writing were provided as to what was to be contained in the deed that was then to be signed. Q. Without any further oral discussion. Is that right? A. I can't recall a discussion immediately prior to the 3 June, but there had been discussions, there could have been discussions in a date in May; I can't recall. Q. There were no discussions on that subject at the meeting on 3 June, were there? A. Not - no, no, there was, there was not.
It is said that the cross-examination at T 500-T 502, just prior to the above passage, explored what explanation, if any, was given to Mr Cong of the effect of cl 2(a) of the Deed before execution; and it is said that Mr Glynn's answers were not satisfactory. At T 502.7-12, there was this exchange: Q. Are you saying that after you drafted this, you spoke to Mr Cong again and showed him what you'd drafted and took him through it, and explained what it meant? A. Yes, yes, I did, and that was more of his explanation, very strongly, that it would take that period of time for the properties to be rezoned, and they would only maximise the property value on rezoning.
The first and second defendants say that this answer was not really responsive and that it was followed by the cross-examination extracted in the previous paragraph above, demonstrating that Mr Glynn could point to no such discussion with Mr Cong after sending his draft of 28 April 2016.
Accordingly, it is said that the thrust of this evidence is that Mr Glynn could not recall ever discussing orally with Mr Cong the actual text that he had drafted; he simply assumed that he had correctly encapsulated Mr Cong's previously expressed wishes. It is noted that he received written feedback that it was "too complicated", but he can point to no further attendance or advice in which he attempted to resolve that concern. The first and second defendants say that there was no such discussion on 3 June 2016.
The first and second defendants say that Mr Glynn also did not explain to Mr Cong that Ms Shen would incur personal liability without limitation as to her assets; in particular, that Mr Glynn did not bring to Mr Cong's attention the difference between the investment manager concept in Mr Cong's written instructions of 15 March 2016 and the binding personal covenant to pay money without limitation to the subject properties that Mr Glynn put into the Deed. (It is noted that, according to Edmund, the 'manager' concept was part of what he was told - see Edmund's 9 July 2018 affidavit at [15], referring to Ms Shen's affidavit of 19 October 2017 at [19].)
The first and second defendants say that this is established by the absence of any such explanation in Mr Glynn's affidavit evidence and by cross-examination (at T 498.29-T 500.37). The first and second defendants say that the answer given at the end of that cross-examination suggests that Mr Cong was told that the value of the Campsie properties after the rezoning would be the limit of Ms Shen's obligation. The first and second defendants say that Mr Cong was not told that an effect might be that Ms Shen might lose her home or that the covenant might ruin her; and that Mr Glynn seemed not to know that Mr Cong wanted Ms Shen to have the Family Property as her home and the home for their three children. It is noted that all that Mr Glynn could recall telling Mr Cong was that Ms Shen would have an obligation to provide for the elder children.
It is noted that, in earlier cross-examination (at T 496-T 497), Mr Glynn agreed that he did not tell Mr Cong on 3 June 2016 that Ms Shen was undertaking a personal obligation to pay $3 million regardless of how the investments fared. Insofar as Mr Glynn suggested that this was volunteered by Mr Cong at the meeting on 23 April 2016, the first and second defendants say that this is not borne out by the file note (see Ex 6 at 20-21) and is contrary to the 27 April draft of the 2016 Will.
The first and second defendants further say that the file note of 28 April (Ex 6 at 26) is not an instruction to commit Ms Shen to personal liability; it is an instruction for a Will. It is said that it seems to have been Mr Glynn's decision to make the change from a Will to a Will with a Deed. The first and second defendants say that that may be an understandable device but that neither the reasons for adopting it, nor the important change in consequences for Ms Shen, were matters explained to Mr Cong. (I consider there is force to that submission in particular in relation to Ms Shen.)
Another matter said to have bearing on the issue of Mr Cong's knowledge and approval of the 2016 Will is the impact of the 43 Amy Street sale. The first and second defendants say that if a "sale" in clause 2(d) of the Deed means a completed sale of 43 Amy Street, then it would not apply to the sale for which Mr Cong and Ms Shen had already contracted if that remained uncompleted at Mr Cong's death, even if Ms Shen could not get out of that contract. It is submitted that the motive for reducing the amount payable could not have depended on such "accidents".
The first and second defendants point out that Mr Cong and Ms Shen knew that they had already entered into such a contract; they already knew they wanted to get out of it, because they had subsequently learned of the rezoning possibility; and it is said that if they could get out of it, they would not be entering into another sale during Mr Cong's lifetime (the life expectancy for whom I note was by then very limited).
It is noted that Mr Cong had the January 2016 advice from Mr Glynn that he could rescind in the event of his death. The first and second defendants say that, on the basis of that advice, Mr Cong's instruction made sense and the construction advanced by the plaintiffs would pose no problem for Ms Shen because she could simply rescind on the death of Mr Cong. On that advice, it is said that he only needed to provide for the event of completion before his death.
However, the first and second defendants say that, upon the plaintiffs' construction of cl 2(d), Mr Cong clearly did not know and approve the true effect of cl 2(d), which was to expose Ms Shen to a personal $6 million liability in the event that she could not get out of the 43 Amy Street sale, which he thought (wrongly) was a simple matter for her to make an election to rescind. It is said that Mr Cong did not want what the Deed does, and that Mr Cong did not want his son as executor, or any executor or administrator, to be able to enforce that. Thus, it is said that the 2016 Will was not his true Will.
The first and second defendants say that neither did Mr Cong intend, know and approve of either of the alternative constructions, i.e., that the sale referred to was: any sale contracted for before his death, or any sale contracted for before and still on foot at his death, or any sale contracted for before his death and actually completed (whether before or after his death). It is said that there is no evidence that any of these alternatives was actually brought to Mr Cong's attention and approved.
The first and second defendants maintain that Mr Cong could not read the 2016 Will and the Deed. It is said that Mr Cong was literate in Chinese, but not in English (by reference to the evidence summarised in Appendix C to the first and second defendants' submissions, which I do not here summarise) (the plaintiffs cavil with this by reference in particular to the evidence of Mr Pirintji and Mr Glynn). The first and second defendants say that the 2016 Will and the Deed are challenging documents for the most experienced lawyer; and that Mr Cong had no hope of reading and understanding them.
The first and second defendants also maintain that the 2016 Will was not read over and explained to Mr Cong on 3 June 2016. They say that [29] of Mr Glynn's affidavit sworn 12 May 2020 does not suggest that it was (nor does the reiteration at [12] in his affidavit sworn 16 October 2020). It is said that in his oral evidence (at T 496), Mr Glynn did not suggest that he read out the 2016 Will and that it is only in cross-examination that Mr Glynn said for the first time that Mr Cong looked at the 2016 Will; and that even then what he said was that Mr Cong spent "only minutes" looking at the pages (T 496.43) and he could not say how many minutes.
It is noted that at [29] of his 12 May 2020 affidavit, Mr Glynn said that he said to the deceased, "[t]his is your will, please read it. You will need to understand it, you need to sign every page" (T 495.31); that Mr Glynn's evidence (at T 502-T 503) is that there was no explanation of the effect of the text on 3 June 2016. It is noted that this was said to be evidence based on Mr Glynn's usual practice.
The first and second defendants point out that, in oral evidence, Mr Glynn conceded that other instruments were also executed on the same occasion, and that he signed certificates; and that Mr Glynn asserted that he explained other instruments but was not sure how many. The first and second defendants note that there were at least four instruments in all (the Deed, the 2016 Will, an Enduring Power of Attorney and an Enduring Guardianship appointment). It is said that the certificates would have required additional reflection. Mr Glynn accepted that the meeting went for half an hour or less.
The first and second defendants say that the instruments are of such length that a literal reading could not be completed in half an hour, even if there were no pleasantries, salutations or farewells. The first and second defendants note that Mr Glynn said it was an emotional farewell and they say that it is likely that the farewell itself would have taken some minutes.
As already noted, Mr Glynn did not make any file note of the occasion on 3 June 2016. The first and defendants point out that his first affidavit misstated the date of the 2016 Will (relying on the instrument itself, which bears a date a month before it was actually signed). As already adverted to, the first and second defendants submit that if Mr Glynn had read the Will over to Mr Cong, or if Mr Cong had read it, one or other of them would have noticed this and other "textual errors, omissions or drafting oddities", namely that: the 2016 Will was misdated; the formatting of the annuities clause preceding cl 9(c) has fallen out of the sequence of lettered paragraphs (comparing the 27 April draft with the 28 April draft); the date of the Deed referred to in cl 9(d) was incorrect; contrary to the statement in cl 9(d), no copy of the Deed was attached (a circumstance which it is said calls into doubt whether any attention was paid by Mr Cong to this clause); the names of Bruce, Leon and David given in cl 9(e)(ii) were out of order for their ages (David being the youngest and it is said that one might think that Mr Cong would notice and mention this); and that the 2016 Will in numerous places refers to trustees but did not establish any trusts.
It is submitted that if Mr Glynn had read the 2016 Will over and explained the 2016 Will to Mr Cong, one or other of them would have noticed, explained and taken instructions concerning the following substantial infelicities: the effect of appointing Ms Shen as executor would be to discharge her liability under the Deed (pausing here, the suggestion that Mr Cong would have appreciated this is inconsistent with the first and second defendants' submissions as to his ability to understand the 2016 Will and seems to me inherently unlikely for a non-lawyer); cl 7 is inconsistent with cl 9(b); Mr Glynn's boilerplate for cl 7 was not appropriate in virtually any of its sentences or phrases; Mr Cong had very little to dispose of; the gift of the annuities would abate unless there was residue capable of being designated under cl 10(p) as a fund for the annuities (and it is said that there was evidently no attention to what that fund would comprise); the annuities clause differs in effect from the instructions given through Ms Stefadouros at 2.55 pm on 28 April 2016, noting that the redraft issued later that day (Ex B at 37, 41) did not give effect to those instructions; the changes made to cl 9(c) left "orphaned" the words "and at the expiration of this period" (which serve no function and have no object unlike the draft Will of 27 April 2016, where these words prefaced a gift of 16 Nicholson Street); cl 10(o) was not appropriate because Mr Cong's instructions on 23 April 2016 were that his superannuation was to go to Ms Shen by binding nomination (Ex 6 at 20) (noting that Mr Glynn sent a form of binding nomination on 1 June 2016 though he did not insert the name of the superannuation fund and seems never to have attended to execution and delivery to the fund); and that the Will did not deal with life insurance nor was any binding direction given to the insurance company. As to the last, it is noted that Mr Glynn's file note of 23 April 2016 (Ex 6 at 20) says "Vivian to arrange *" but that this was not followed up by Mr Glynn even when he was reminded by item 3 of Ms Lan's email of 27 May 2016.
It is said that the last two matters (especially the last) are of considerable importance if Mr Cong thought that the insurance and superannuation were going to put Ms Shen in funds to keep the Campsie properties together for 10 years. It is noted that these instructions were clearly not carried out and that the email of 27 May put Mr Glynn squarely on notice that it was an instruction to him. In the event, the life insurance was paid to Ms Shen and two only of her three sons (Ex 36), which appears to have been because the nomination form prepared on 24 January 2014 before the birth of David (Ex Q at 520) was never updated to nominate Ms Shen alone.
Another document that was prepared with blank spaces but never executed was the Advance Health Care Directive emailed on 27 April 2016 (Ex B at 1, 6-25). It is said that this (lengthy) document was to provide directions as to the wishes of a dying man for his care, comfort and treatment, including directions as to when to withhold treatment that might hasten or delay his death; yet it was prepared in blank and never dealt with. It is submitted that (though I have some real doubts about this since they clearly serve very different functions) it was a document at least equally as important as Mr Cong's Will. In any event, it is submitted that if that document was not pursued, then it is not likely that a reading and explanation of the Will and the Deed was pursued with any or much greater diligence. (That seems to me to be some form of tendency reasoning.)
It is noted that another document signed on the same occasion as the Will was the Enduring Power of Attorney that Mr Glynn attested without crossing out the name of Mr Ellis below his (Mr Glynn's) signature (Ex 6 at 33). It is said that this was not a careful attendance involving clear and patient explanation; rather, it was hurried and perfunctory.
The first and second defendants submitted that if Mr Glynn had read the Deed over to Mr Cong, attention would have been drawn to the following errors or difficulties. First, that Recital A does not accurately state the proprietorship of five out of the seven properties mentioned, though Mr Glynn had noted the correct landholdings at his conference on 17 February 2016 (see Ex 6 at 17). It is said to be obvious enough that Mr Glynn did not refer to this file note when drafting the Deed and looked no further than his note of 23 April 2016 (Ex 6 at 20).
Second, that Recital G refers to a Will dated 2 May 2016 (but there was no such Will) and says that it is attached to the Deed and marked "A" (though that was not so). It is submitted that if this were read over it would have called attention to the erroneous date and the omission of the instrument. It is said that, clearly, no attention was paid to the recitals.
Third, at the heading of the operative provisions, Teresa, Laurence and Edmund are referred to, though they are not parties.
Fourth, that in cl 2(a) the word "to" has been left in, before the words "ten (10) years". It is noted that in the written instructions of 15 March 2016, the words "5 to 10 years" appear in respect of 16 Nicholson Street. It is noted that the same expression "5 - 10" appears in the file note of 17 February 2016 (Ex 6 at 17).
Finally, it is said (perhaps with no little of an advocate's flourish) that it is hardly possible to read through cl 2 as a whole without being perplexed (I refer in due course to the submissions as to the construction of the Deed). Again, reliance is placed on the email of 28 April 2016 from Ms Stefadouros saying that it is very complicated. It is noted that the instructions in that email say nothing about $6 million being paid in the event of sale; and that the instructions express the wish that the money be paid "within 10 years" whereas the Deed says "no sooner than 10 years". It is said to be notable that this was a response to a draft containing cl 2(a)-(c) but there was the desire that the instructions be "added". It is noted that "within 10 years" is consistent with Mr Cong's ideas as to timing in the March 2016 instructions (i.e., 5 to 10 years). It is also said to be noteworthy that this email speaks of what "he wants" and what "Zi Li has specified".
The first and second defendants point out that in Ms Lan's email of 27 May 2016, the direction reverts to "after 10 years after my death". The first and second defendants submit that "Mr Cong was painting with a broad brush and seeking legal assistance to put it into sensible shape". It is noted, again, that this email contains no suggestion that the "agreed amount" should be $6 million in case of a sale without a rezoning.
The first and second defendants say that, despite the introduction and conclusion of the email in which Ms Lan asserted that she was "acting on behalf of Zi Li and Yanjiao [Ms Shen]" and despite the sentence asserting a conversation "with them" and that "they want" to make changes, the actual numbered paragraphs speak "in the voice" of Mr Cong: at [1], there is reference to "before my death" and "the children I have with my ex-wife"; at [2], "my death"; at [3], "my said wife Yanjiao Shen" (it being noted that Ms Shen was not earlier referred to except in the salutation telling Mr Glynn that Ms Lan was acting on behalf of "Zi Li and Yanjiao"; at [4], "for Yanjiao's mum" and that "It goes to Yanjiao's account if I died". (It is said that only [5] is "possibly neutral".)
The first and second defendants say that there is no evidence that Mr Glynn ever discussed with Mr Cong the possibility that for some reason Ms Shen might not be able or willing to keep some or all of the Campsie properties for 10 years, and how this should affect the provision to be made in the Deed; and that there is no suggestion that Mr Glynn put to Mr Cong the construction that is now advanced by the plaintiffs.
It is noted that an email of 30 May 2016, concerning an appointment to sign, stated that at that time Mr Cong was still in hospital and cast doubt on whether he would be able to walk, suggesting that Mr Glynn might come to see Mr Cong at Burwood or the hospital. It is submitted that in that condition Mr Cong was going to need a careful and patient reading over of the documents, and explanation of their effect, which would necessarily include an explanation of how they fitted in with his objectives and other elements of his succession plan, including the destination of superannuation and life insurance. Pausing there, difficulty in walking does not to my mind bespeak a need for a "careful and patient reading" of documents; though I readily accept that if Mr Cong was in hospital (and particularly having pain relief) more time and care might have been needed to explain documents to him.
For those reasons, the first and second defendants submit that there cannot be the requisite satisfaction that Mr Cong knew and intended that he was making a Will that would (if the plaintiffs be correct) enable Edmund as executor to insist on performance of a promise to pay $6 million notwithstanding sale of one or more of the properties within 10 years, regardless of whether they were ever rezoned and regardless of Ms Shen's fortunes at the time of sale.

[158]

Plaintiffs' reply submissions

In response to the first and second defendants' detailed review of specific clauses of the 2016 Will, and in particular their complaints as to lack of an explanation of cll 7 and 9(c)-(d), the plaintiffs in their reply submissions say that it is not necessary to establish that Mr Cong understood all of the clauses of the disputed Will, pointing to the statement by Kunc J in Phillips v Phillips [2017] NSWSC 280 (at [133]) that an appreciation of the legal effect of every clause in a Will is unnecessary; rather, what must be shown is that the deceased understood that he or she was executing a Will and the practical effect of the central clauses in the document; and to the statement by Windeyer J in Kerr v Badran; Estate of Badran [2004] NSWSC 735 (Kerr v Badran) (at [49]) to the effect that knowledge of the extent of the estate does not necessarily mean knowledge of each particular asset or knowledge of the value of that asset.
The plaintiffs point out that Mr Cong had a number of conferences with Mr Glynn in order to prepare the 2016 Will and that on those occasions Mr Cong could identify his assets and the fact that he was the sole shareholder of Jolly Trading; and that at the meeting on 17 February 2016, Mr Cong was able to describe the relevant properties and correctly to identify the registered proprietors of those properties, the fact that he had superannuation and life insurance and that he had a sheepskin business.
The plaintiffs say that Mr Cong's signature is proof that he knew and approved of the 2016 Will's contents, referring to what was said by Hallen J in Bechara v Bechara [2016] NSWSC 513 at [127] as to the object of a signature on a testamentary document (his Honour there referring to what was said in Marley v Rawlings [2012] EWCA Civ 61; [2013] 2 WLR 205 at [51] per Black LJ; and by Philippides JA in dissent in Lindsay v McGrath [2015] QCA 206 at [19]).
The plaintiffs emphasise that: what was presented to Mr Cong, and what he executed, was clearly a Will; that there were successive drafts of the Will following a lengthy period of instruction and discourse with Mr Glynn; that the operative provisions reflected instructions that Mr Cong caused to be communicated to Mr Glynn (noting the authorities cited by the first and second defendants in their written submissions at [415] to the effect that knowledge and approval may be shown by instructions prior to execution); and pointing to the instructions Mr Cong caused to be provided to Mr Glynn over a period of months as recorded in the emails sent on his behalf by Ms Stefadouros on 15 March 2016 and 28 April 2016, and by Ms Lan on 27 May 2016. The plaintiffs say that the drafts of the 2016 Will and Deed were successively refined by Mr Glynn and tailored to reflect Mr Cong's further instructions.
The plaintiffs point out that in her affidavit of 22 June 2018, Ms Stefadouros does not suggest that Mr Cong did not comprehend the instructions he caused her to provide to Mr Glynn; nor that Mr Cong had any difficulty comprehending her explanations of the documents to him.
The plaintiffs again point to the evidence given by Ms Bull (at T 521.18; T 524.23) and Mr Glynn as to the reading through of the 2016 Will at the meeting on 3 June 2016; as well as Mr Glynn's evidence that there were several drafts of the Will because Mr Cong thought it to be too complicated and wanted it to be expressed in plainer English and that Mr Cong spent some minutes looking at the Will on 3 June 2016. It is said that Ms Bull was not challenged on her affidavit evidence to the effect that Mr Glynn would occasionally pause and ask Mr Cong if he understood what was being said, and that Mr Cong said he did. The plaintiffs say (and I accept) that Ms Bull's evidence was credible (though I add that, not surprisingly, Ms Bull was unable to recall what was said when the Will was read through) and that, in the case of Mr Glynn, it accords with good practice. The plaintiffs say that the 2016 Will reflected considerable forethought and attention by Mr Cong.

[159]

Determination as to issue (i)

As I have said in the context of the factual findings sought by the plaintiffs, I accept that the evidence establishes that there was compliance with the formal requirements for execution of the 2016 Will - that both witnesses were present when the documents were executed by Mr Cong. I have also found, on the balance of probabilities, that at the meeting on 3 June 2016, Mr Glynn read through at least some of the provisions of the 2016 Will (and Deed). As I have said, I place weight on Ms Bull's evidence in that regard, which I consider to be more reliable than that of Ms Shen and Ms Stefadouros. While I cannot accept that what occurred was a detailed word for word reading out aloud of all of the documents (having regard, among other things, to the errors that I consider would have been picked up by Mr Glynn - particularly the wrong dates ascribed in the documents to the Will and Deed - had the reading out been a word for word reading), it makes sense that what Mr Glynn would have focussed on were the substantive parts of the documents (rather than, for example, the boilerplate clauses) and it might be that this explains a failure to appreciate what is an error (at least insofar as the title to the properties discloses) in Recital A of the Deed.
I am comfortably satisfied that Mr Cong understood that he was executing a Will (and, from his history of making Wills and his conferences with Mr Glynn, knew and understood that he was here making his final testamentary dispositions - to which he had obviously devoted considerable thought over the previous year). I am also comfortably satisfied that Mr Cong understood the practical effect of the central clauses in the 2016 Will and Deed, i.e., the structure that he wanted to put in place (namely, that the provision for his elder children was to be made out of the Campsie properties - not, as he had previously intended, the 16 Nicholson Street property or, before that, 9 Ethel Street; that the Campsie properties should be held for a period of time to maximise the prospect of their value increasing through the anticipated high density rezoning; and that Ms Shen (and, through her, his infant children) should be provided for out of the residue of the estate and with the benefit of the Jolly Trading sheepskin business and life insurance payout). That Mr Cong understood the structure of his testamentary dispositions is evident from the instructions he gave, through Ms Lan, on 28 April 2016 for the adding of a particular clause.
I accept that it is unlikely that Mr Cong understood the legal effect of various of the clauses - that is unsurprising given that there has been considerable debate in this proceeding as to issues such as the construction of the clauses in the Deed and the import of the appointment of Ms Shen (the obligor under the Deed) as executor under the 2016 Will; and Mr Cong was not a lawyer. However, I am satisfied that Mr Cong did know and understood the effect of what was provided for under the 2016 Will and Deed; and that he intended the outcome for which provision was there made.
Therefore, subject to the issue of capacity which I consider below, I find that the 2016 Will is a valid Will.

[161]

Plaintiffs' submissions

The plaintiffs maintain that the Deed forms part of the 2016 Will noting the evidence that both were executed on 3 June 2016. The plaintiffs submit that both documents recorded Mr Cong's testamentary intentions. Subject to the qualification that the 2016 Will bears the date "3 May 2016", it is noted that each document refers to the other and that cl 9(d) of the 2016 Will assumes that Ms Shen "will pay" the amount determined in cl 2 of the Deed. The plaintiffs say that in her evidence, Ms Shen acknowledged that the 3 May date was a mistake. The plaintiffs point out that Mr Glynn kept the 2016 Will and the Deed together in a file after they were executed.
The plaintiffs refer to authority to the effect that a Will comprises documents to which it refers provided these documents exist at the time the Will is executed, citing In Re Berger (deceased) [1990] Ch 118 at 133; 135 per Buckley LJ (with whom Mann LJ agreed); and referring to the following passage in Williams, Mortimer & Sunnucks, Executors, Administrators and Probate (21st ed, 2018, Sweet & Maxwell) (at [9-44]): A document not formally executed as a will may in some circumstances be treated as part of the will. If so, it is said to be incorporated therein by reference. To be incorporated, the following three conditions must be satisfied: (i) the unexecuted document must be in existence at the time of the execution of the testamentary instrument in which it is to be incorporated; (ii) there must be a reference in the will or codicil to the informal document as an existing, not as a future, document; and (iii) the unexecuted document must be so described as to leave no doubt, in the circumstances, as they are proved to have existed, that the document referred to is that propounded.
The plaintiffs say that each of those conditions is satisfied in the present case: that the Deed was brought into existence at the time of the execution of the 2016 Will (the documents being executed simultaneously); that the 2016 Will makes a clear reference to the Deed (albeit there is a mistaken reference to the Deed being dated 2 May 2016); and that, as the Deed was executed simultaneously with the 2016 Will, and as there is no deed dated 2 May 2016, there can be no doubt that the reference in the 2016 Will to the Deed dated 2 May 2016 is in fact a reference to the Deed dated 3 June 2016.
In the alternative, and in support of a finding that the Deed is incorporated by reference into the 2016 Will, the plaintiffs submit as follows.
First, that extrinsic evidence may be used to construe the words contained in the 2016 Will ("the Deed dated 2 May 2016 which is attached to this my Will") as referring to the Deed dated 3 June 2016, so as to avoid part of the 2016 Will being rendered meaningless (reference here being made to s 32(1)(a) of the Succession Act). It is said that the ordinary meaning of the words "the Deed dated 2 May 2016 which is attached to this my Will" does not make sense as there is no deed bearing such date. Noting that the Deed was executed on 3 June 2016, the plaintiffs say that the reference to 2 May 2016 is a clerical error. The plaintiffs submit that the fact that Mr Cong's instructions to prepare the 2016 Will and the Deed occurred concurrently and the fact that the documents were signed, in effect, at the same time, point to an intention by Mr Cong that they form part of the same testamentary scheme. This intention is said to be confirmed by the language of the Deed which adopts the same clerical error as the 2016 Will and refers to Mr Cong having made "a Will dated 2 May 2016 which is attached and marked A to this Deed". The plaintiffs submit that a Will may be construed to avoid an interpretation that, in accordance with the ordinary meaning of the language used, does not make sense.
Second, and in the alternative to the above, the plaintiffs say that the 2016 Will may be rectified (and in particular, the reference to "the Deed dated 2 May 2016 which is attached to this my Will") so as to substitute the words "3 June 2016" in place of "2 May 2016", pursuant to s 27(1)(a) of the Succession Act. It is said that such rectification (if necessary) would only be necessary to give meaning to the reference to the Deed in the 2016 Will and to carry out Mr Cong's intentions. It is submitted that, as no final distribution of Mr Cong's estate has been made, the statutory requirements for making a rectification order are satisfied and, to the extent necessary, that an extension of time in which to apply for such an order is sought.
The plaintiffs thus say that the 2016 Will and the Deed should be regarded as mutually incorporated in the one testamentary exercise as constituting Mr Cong's last Will.

[163]

Determination as to issue (ii)

It is clear that the Deed was executed at the same meeting as the 2016 Will. There is some doubt as to which of those two documents was executed first.
The 2016 Will refers to a Deed dated 2 May 2016 which is said to be attached to the Will, which (bearing in mind that the 2016 Will was not executed until 3 June 2016) would suggest that what was being referred to was an already executed document. However, it is clear that the reference to the 2 May 2016 date was incorrect (as there was no such document executed on that day). Taking that consideration into account, it is arguable that the reference in cl 9 of the Will to a Deed dated 2 May 2016 should be understood as simply identifying a document bearing a particular date and not necessarily executed on that date.
The Deed, on the other hand, contains Recital A which is expressed as "Cong has made a Will dated 2 May 2016 which is attached and marked A to the Deed" - i.e., in terms that indicate that the 2016 Will had already been made as at the date of the Deed.
If Recital A is correct, i.e., that the 2016 Will had already been executed at the time the Deed was executed - and there was simply an error as to the date of the making of the 2016 Will (and I note that in a different context reference is made in submissions to the principle of estoppel by Deed), then the two documents could consistently be read together as indicating that the 2016 Will was signed first and then, perhaps after Ms Bull had left the meeting (since her evidence is that she left before the others) the Deed was executed.
Bearing in mind that Ms Bull was not present in the meeting at the outset (Mr Glynn going out to get her to come in for the witnessing of the Will), I have concluded on the balance of probabilities that the likely course of events was that the enduring guardianship and power of attorney documents were signed first (which would make Ms Shen's evidence that Ms Bull was not present when the documents were signed partially correct) before the Deed was signed. However there is considerable uncertainty as to whether the 2016 Will was signed before or after the Deed. I accept that Mr Glynn asked Ms Bull to join the meeting before the 2016 Will was executed and that Mr Glynn read through parts of the 2016 Will and Deed (but in all probability not the whole of each of those documents - since if he had done that he would surely have noticed some of the errors); and then Mr Cong executed the 2016 Will in Ms Bull's presence and (either before or after the 2016 Will) executed the Deed.
The precise sequence of the execution of the documents probably does not ultimately matter because the three conditions for incorporation of the Deed into the 2016 Will are in my opinion comfortably satisfied in the present case: the Deed (whether executed or not) was clearly a document in existence at the time of execution of the testamentary instrument and was referred to in the Will as an existing (not future) document; and the Deed is described in the Will (albeit with the wrong date), which leaves me in no doubt, in the circumstances, that the document referred to is that which is propounded.
It is not necessary for me to have resort to the alternative arguments put forward by the plaintiffs in support of that conclusion (i.e., a reference to extrinsic evidence as an aid to construction in order to avoid the Will being rendered meaningless; or the suggestion - with which the first and second defendants here cavil on the basis that a claim for rectification of the Will was not pleaded - that the 2016 Will might be rectified).
I therefore find that the Deed is incorporated into and forms part of the testamentary instrument comprised by the 2016 Will.

[165]

Plaintiffs' submissions

The plaintiffs (as also do the first and second defendants) note that the traditional formulation of the test for determining testamentary capacity is that stated by Cockburn CJ in Banks v Goodfellow (1870) LR 5 QB 549 (Banks v Goodfellow) at 565, namely:
It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and, with a view to the latter object, that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties - that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which, if the mind had been sound, would not have been made.
The plaintiffs emphasise in their reply submissions the presumption that a duly executed Will, rational on its face, was made by a person with testamentary capacity and that the test of capacity does not require the testator actually to call to mind his or her property or to reflect upon the respective claims - all that is required is that the testator should be able to do so (and if that is the case then the Will will be valid no matter how unreasonable or capricious it may be).
The plaintiffs note that the time for assessing capacity is when the testator gave instructions for the Will; and that evidence that the testator gave instructions for the Will, or that it was read over by, or to, the testator has been said to be the most satisfactory evidence of actual knowledge of the contents of the Will. Further, they emphasise (as Windeyer J noted in Kerr v Badran at [49]) the cogency of the evidence required to displace the presumption of testamentary capacity (his Honour there referring to the caution required in circumstances where it is recognised that freedom of testation is an important right). In reply submissions, the plaintiffs also emphasise the weight to be accorded to the evidence of the solicitor preparing the Will (see Drivas v Jakopovic at [52]ff per Macfarlan JA, as already referred to above).
The plaintiffs submit (and I have already found) that Mr Cong understood the nature of the 2016 Will and its effects (the plaintiffs noting that it was not the first Will he had prepared; and that it was signed in circumstances where Mr Cong understood that his life expectancy was limited). Further, it is said that Mr Cong understood that the plaintiffs had a moral claim against his estate and the 2016 Will and the Deed so provided for them.
As to the contention by the first and second defendants that Mr Cong had a "delusional optimism" about his estate, the plaintiffs submit (having regard to the fact that the sum of the purchase prices for the Campsie properties was $3.983 million) that there were rational commercial considerations underpinning the Deed, namely that: if there was no rezoning, Ms Shen would, after ten years, pay $3 million by reference to the four Campsie properties (and she would have the benefit of the uplift in their values since their acquisition and over the intervening ten years to meet that liability); whereas, if they were rezoned (or, I might add, if there was a sale of all or any of them), then Ms Shen would have to pay $2 million or so more than the acquisition cost (a figure which the plaintiffs say is not prima facie unreasonable having regard to the historic increases in Sydney property prices and the benefits which Mr Cong and Ms Shen perceived there would be as a result of the rezoning). It is submitted that the best measure of Mr Cong's and Ms Shen's views in that regard is their preparedness to disavow the contract for sale of 43 Amy Street (even at the risk of litigation) to take advantage of the perceived benefits of re-zoning (though I interpose here to note that in cross-examination Ms Shen denied that this was her motivation for withdrawing from the sale).
As to the liabilities attaching to the properties, the plaintiffs say that Mr Cong and Ms Shen together considered whether the mortgage repayments would be met by the rental income, noting that Ms Shen said in cross-examination that "at that time, I thought with this investment properties I would have rent income and possibly I only needed to pay a small gap" (T 609) but that this was not the only way of meeting the liabilities. The plaintiffs point to the evidence that Mr Cong had told Mr Glynn that the payout from his insurance policy would service the debt. The plaintiffs point to Mr Glynn's evidence that he had a clear recollection of discussing with Mr Cong that there was debt "and that there was an ability to service the debt through the insurance, or the superannuation, either one", a discussion that Mr Glynn said took place because of the binding nomination. Mr Glynn's recollection was that it was his suggestion that Ms Shen receive the superannuation or the life insurance payout and that would service the debt. I interpose here to note that the superannuation payment was around $60,000 so was unlikely to service the debt over a ten year period; the life insurance payout was more substantial but still would not cover the entirety of the debt obligations over a ten year period.
The plaintiffs say that the documents forwarded by Mr Glynn at 5.20pm on 28 April 2016 reflected the earlier communications of that day; and they point to Mr Glynn's evidence that, at some point at around this time, Mr Cong impressed on Mr Glynn "very strongly" that 10 years would be required for the properties to be rezoned and that "they would only maximise the property value on rezoning"; as well as Teresa's evidence as to the discussion with Mr Cong to the effect that his Will "changes as [his] stakes in the property change". The plaintiffs argue that it is difficult to see what "stakes" Mr Cong could there have been referring to other than what they maintain were his "undeclared" interests in the properties otherwise registered in Ms Shen's name. Pausing here, it does not seem to me that this necessarily follows - it might equally be that Mr Cong was there referring to changes in the property holdings per se; i.e., that the change from 9 Ethel Street coincided with the acquisition of the Family Property (since 9 Ethel Street was sold for the purpose of that acquisition). As to the change from the proposed bequest of Mr Cong's interest in 16 Nicholson Street (and leaving aside the difficulty that this would have required a severance of the joint tenancy during his lifetime - which never happened), this seems to have arisen as a result of the argument with Ms Shen as to the proposal that it should be transferred unencumbered.
Insofar as Ms Lan's email dated 27 May 2016 conveys instructions for an amendment to address what was to occur upon the sale of 43 Amy Street before Mr Cong's death, the plaintiffs say that the range of figures given in her email ($5 million to $8 million) reflects a rational adjustment to the earlier position. Noting that 43 Amy Street had been bought for $985,000 on 30 August 2014, the plaintiffs suggest that Mr Cong and Ms Shen rounded that figure up before deducting it from the range of $6 million to $9 million which was referred to in the earlier communications on 28 April 2016 (so as to reach the reduced amount there instructed to be included in the document).
The plaintiffs refer to the evidence given by each of Edmund and Teresa about their conversations with Mr Cong in relation to his Will (to which I have referred above) and to the meeting of 17 February 2016 at which Mr Cong was open about his testamentary intentions; and they argue that it is improbable that Mr Cong would have been transparent with Ms Stefadouros and the elder children about his testamentary intentions without disclosing them to Ms Shen. (I am not persuaded that this necessarily follows. It may well be that Mr Cong was simply assuring his elder children as to what he planned would be their inheritance. I cannot conclude, from those conversations, that Mr Cong necessarily made plain his ultimate testamentary intentions to Ms Shen at any particular time. More relevant, in my opinion, is that Ms Shen's own evidence confirms that Ms Cong was discussing his testamentary intentions with her.) The plaintiffs say that it cannot be suggested that Mr Cong took steps to conceal his decision-making or his intentions (noting that Ms Stefadouros never suggested that Mr Cong wished to conceal his actions from Ms Shen) whereas, they say, Ms Shen's case depends largely upon the proposition that this was what Mr Cong intended to do and achieved. (As I understand it, the first and second defendants' case in this regard is that Mr Cong misled Ms Shen into believing that she would have the absolute discretion to determine how much if anything the elder children would receive - almost a complete delegation of testamentary power; but I deal with this in relation to the unconscionable conduct claim in due course.)
As to whether Mr Cong understood the extent of his property holdings at the time of executing the 2016 Will, the plaintiffs refer to Carr v Homersham (2018) 97 NSWLR 328 (Carr v Homersham) where (at [113]) Macfarlan JA, distinguishing a delusion from a mistaken view, noted that it is insufficient (to demonstrate the absence of testamentary capacity) to prove that the deceased acted on a material mistaken belief in making his or her Will; and that, for a mistaken belief to rise to the level of a "delusion" which affects the validity of the Will, "there must at least be a high degree of irrationality in the belief and ordinarily evidence will be required that there has been an attempt to reason the deceased out of the belief, such that the deceased's adherence to it suggests that the deceased has a mental disorder or deficiency precluding the deceased from comprehending and appreciating 'the claims to which he [or she] ought to give effect'". His Honour there said that: … generally the circumstances must be such that it can be inferred that the deceased was wedded to the belief irrespective of its truth. If that is not the case, the belief is likely to be no more than a mistaken view, the holding of which cannot be inferred to reflect on the deceased's mental competence.
The plaintiffs say that, if Recital A of the Deed was a mistake (and as discussed above their submission is that it was not; and that it was intended in some way to reflect the understanding of Mr Cong and Ms Shen that the properties were jointly owned), it occurred notwithstanding that Mr Cong had earlier instructed Mr Glynn that Ms Shen was the registered proprietor of the Wu Property, 56 Duke Street and 58 Duke Street (as recorded in Mr Glynn's file note referred to above).
The plaintiffs submit that the scheme of the 2016 Will and the Deed indicates clearly that, notwithstanding that Ms Shen was either the sole or a joint registered proprietor of the Campsie properties, Mr Cong believed that he was at liberty to deal with them and to direct Ms Shen to make substantial payments in the future to the plaintiffs based on their future value after having retained ownership of them for a period of time.
It is submitted that the only real explanation for the apparent mistake is that Mr Cong believed, at least in relation to the Wu Property, 56 Duke Street and 58 Duke Street, that he was an owner of those properties because of the substantial financial contributions he had made towards their purchase; and, in those circumstances, it is submitted that Mr Cong's belief that he could deal with those properties was not irrational. Further, the plaintiffs say that there is no evidence of any attempt to reason Mr Cong out of his belief, such that his adherence to it could be said to suggest that he had a mental disorder or deficiency. The plaintiffs say that the language of the Deed is expressed in terms that reflect Mr Cong's belief rather than the true legal ownership of the Campsie properties.
The plaintiffs thus contend for a finding that, if Mr Cong's view about his ability to deal with the Campsie properties in his 2016 Will and in the Deed was a mistaken one, it did not rise to a delusion of the kind that rendered him mentally incompetent or lacking testamentary capacity; and hence that the plaintiffs have discharged their burden of establishing that the 2016 Will is a valid testamentary disposition.

[166]

First and second defendants' submissions

The first and second defendants note (and the plaintiffs accept, as I have indicated above) that onus of proof of capacity lies on the person propounding the Will (referring to Bailey v Bailey at 570; Re Hodges; Shorter v Hodges (1988) 14 NSWLR 698 (Shorter v Hodges) at 704F). As to the test of capacity set out in Banks v Goodfellow at 565 per Cockburn CJ, the first and second defendants point out that the third element in the test includes showing that the testator had the ability to evaluate and discriminate between the respective strength of the claims on his or her bounty (the first and second defendants here citing Bull v Fulton (1942) 66 CLR 295 (Bull v Fulton) at 341; see also Re Griffith; Easter v Griffith (1995) 217 ALR 284 (Easter v Griffith)).
The first and second defendants refer to various authorities on the question of capacity: noting that evidence of incapacity may be derived from the terms of the Will itself (referring to Callaghan v Myers (1880) LR 1 (NSW) 351; Watson v Kerridge (1888) 9 LR (NSW) Eq 35; Bailey v Bailey); that a radical change of intention or instruction is a matter that may raise doubt as to knowledge and approval or give rise to questions over capacity (referring to Hall v Carney [2012] SASCFC 76; In the Will of Severs (deceased) (1887) 13 VLR 572); that where no, or apparently insufficient, provision is made for those who ought to be objects of bounty, then fuller and clearer evidence of capacity is required, and the capacity must extend to a memory and understanding of the extent of the property to be disposed of, and the claims of those for whom the testator ought to provide (referring to Brown v McEnroe (1890) 11 LR (NSW) Eq 134 at 138); and they also refer to the observation in Williams on Wills (8th ed, LexisNexis Butterworths, 2002) at [4.15] to the effect that the question (where a testator is incapable of reading the Will and it is not read over to the testator) is whether the testator "was really aware of the contents".
The first and second defendants accept, as was recognised by Basten JA in Carr v Homersham (at [47]), that it is a "grave matter" to find incapacity and thus invalidate a formally valid Will, his Honour there referring to Gleeson CJ's statement to that effect in Easter v Griffith at 290. Nevertheless, the first and second defendants also note what was said in Manning v Hughes; Estate of Ludewig [2010] NSWSC 226 at [65] by White J, as his Honour then was, of the above quoted passage (in a passage cited with approval in Craig-Bridges v NSW Trustee and Guardian [2017] NSWCA 197 (Craig-Bridges) at [115]), namely that: 65. It would be a mistake to read the above passage as indicating that a will is to be admitted to be probate unless there is a doubt about the testator's (or testatrix's) capacity that is so substantial as to preclude a belief in that capacity. That would be to reverse the onus. What the High Court was emphasising in Worth v Clasohm was that applying the civil standard of proof, a court may be reasonably satisfied that a testator or a testatrix had testamentary capacity even though there is room for some doubt in relation to that question.
The first and second defendants say that the observation (at [45]) of Meagher JA in Tobin v Ezekiel is not to be understood as casting an onus of proof on the defendant; rather, that displacing the presumption means merely that the presumption is not available to establish capacity, which must then be affirmatively established by the plaintiff. It is noted that Meagher JA cited Worth v Clasohm where the High Court said (at 453): A doubt being raised as to the existence of testamentary capacity at the relevant time, there undoubtedly rested upon the plaintiff the burden of satisfying the conscience of the court that the testatrix retained her mental powers to the requisite extent. … The effect of a doubt initially is to require a vigilant examination of the whole of the evidence which the parties place before the court; but, that examination having been made, a residual doubt is not enough to defeat the plaintiff's claim for probate unless it is felt by the court to be substantial enough to preclude a belief that the document propounded is the will of a testatrix who possessed sound mind, memory and understanding at the time of its execution.
The first and second defendants further refer to the observation in Zorbas v Sidiropoulous (No 2) [2009] NSWCA 197 at [65] per Hodgson JA (endorsed by the Court of Appeal (see Craig-Bridges at [134]; Guthrie v Spence (2009) 78 NSWLR 225; [2009] NSWCA 369 at [196]), and by the English Court of Appeal (see Simon v Byford [2014] EWCA Civ 280 at [17])) to the effect that the most compelling evidence of understanding by a deceased may come from "reliable evidence (for example, a tape recording) of a detailed conversation with the deceased at this time of the will displaying understanding of the deceased's assets, the deceased's family and the effect of the will". The first and second defendants submit that the audio recordings made by Edmund do not demonstrate a sound mind, memory and understanding as to what Mr Cong had to dispose of, in terms of assets after liabilities, or an ability to weigh the claims on his bounty. (I accept that observation. However, it is apparent from the content of the audio recordings that the discussions - not surprisingly, perhaps - were not about those matters.)
Reference is made by the first and second defendants to the statement in Craig-Bridges (at [158]), as to a finding of testamentary capacity, that "it is one thing for a person to convey the appearance of full cognitive competence in ordinary conversations; it is another for the person to have testamentary capacity".
The first and second defendants submit that, in the present case, Mr Cong did not have a proper appreciation of the nature and extent of his estate, pointing to Mr Joyce's evidence of the conversation in hospital with Mr Cong in which Mr Cong said that he had $20 million in properties; whereas in truth it is said that, at that time, Mr Cong had nil. (This submission appears to assume that the plaintiffs' case that Mr Cong held a beneficial ownership in the properties which were in Ms Shen's sole name does not succeed; and, in any event, appears to be a submission that is incorrect to the extent that, even on the first and second defendants' case, Mr Cong did have a half interest in both 16 Nicholson Street and 43 Amy Street albeit that those interests were held with Ms Shen as joint tenants). The first and second defendants also point out that Mr Cong did not mention to Mr Joyce any debt (T 546.18).
The first and second defendants say that, according to the unchallenged valuation evidence, the value of the seven properties held by Ms Shen (including 43 Amy Street) as at 3 June 2016 together totalled $16,465,000 (a figure that I would interpose to note is perhaps not so far removed from $20 million - especially if one considers that there may well have been an instance of exaggeration or boastfulness on Mr Cong's part in this discussion, or a view towards the potential increase in value of the Campsie properties the subject of potential rezoning in the future) but they note that the properties were burdened by $8.335 million in debts, carrying interest of $25,337 per month (i.e., over $300,000 per annum, or $3 million over 10 years). The first and second defendants say that Mr Cong's reckoning was thus short by some $8.13 million, ignoring the interest burden; and they further say that to this there would need to be added the $30,000 in annuities per year and the school fees for the three younger children (said to be another $100,000 per annum overall).
The first and second defendants (somewhat emotively) submit that, whatever moral claim Mr Cong may have felt that he had, this did not entitle him morally to regard Ms Shen's contribution as zero; to disregard her own financial, borrowing and risk contribution; to disregard her time and effort in locating, securing and improving property; or to take back what he had given her in the past and which was hers to deploy, and which she had deployed (for example, in financing the acquisition of 58 Duke Street from her own resources). It is submitted that if Mr Cong felt he could behave like this, then he was lacking in the capacity to consider the moral claims of Ms Shen; and that any moral claim he had was not a legal claim.
Pausing here, the above submission seems dangerously close to inviting a finding of the kind one might make on a family provision claim as to whether there has been proper provision made for the adequate maintenance and provision in life of a claimant having regard to the circumstances of other persons with a claim on the deceased's testamentary bounty. The question of testamentary capacity goes to the capacity of the testator to understand the nature and extent of the testator's estate and to be able to reflect on and evaluate the claimants on one's testamentary bounty; not whether, when so doing, the testator has acted in accordance with society's expectations (as was made clear in the authorities referred to above). True it is that where no or apparently insufficient provision is made for those who ought to be objects of bounty, then this might raise a doubt as to the testator's capacity but freedom of testation must encompass the situation where a testator - who has the requisite memory and understanding of the extent of the property to be disposed of, and the claims of those for whom it might be thought he or she ought to provide - nevertheless chooses to act otherwise (and the mere fact that the testator has done so does not establish a lack of capacity; still less that the testator was operating under a material delusion).
The first and second defendants say that, so far as is known, Ms Shen and Mr Cong did not have at that time any current valuations or appraisals for any of the properties; and it is noted that in the 15 March 2016 written instructions to Mr Glynn, the then value of 16 Nicholson Street was estimated at $3 million but that nothing was said about the debts. The first and second defendants say that, assuming the value of 16 Nicholson Street was around $2.45 million as at 3 June 2016, then the equity in the property (after subtracting the mortgage debt of $1.16 million) would have been about $1.29 million; and that, after the refinance of early April 2016 with the borrowing of $1.3 million against 16 Nicholson Street, the equity would reduce to $1.15 million. The first and second defendants also point out that Mr Glynn's file note of 3 August 2015 (which puts a value of $2 million in relation to 16 Nicholson Street) records "nil" loans against this property (Ex 6 at 6) whereas in fact there was by then a NAB/Homeside loan of $1.16 million.
The first and second defendants say that (as Ms Shen said in her evidence) it was Ms Shen who was interested in real estate. It is noted that Mr Cong did not ask Ms Stefadouros to arrange for any valuations or discuss the debts with her (referring to Ms Stefadouros' affidavit sworn 22 June 2018 at [61], [69]). The first and second defendants say that, while Mr Cong became enthusiastic about the rezoning information received from his neighbour, Mr Cong did not make any enquiries in that regard. It is further submitted that, if the Recitals in the Deed be an accurate reflection of his instructions, Mr Cong thought rezoning was a Council issue and did not know it was a State Government proposal.
The first and second defendants say that this "exuberance" in respect of the rezoning was the reason that Mr Cong became upset about the 43 Amy Street sale; and they say that this seems to have become a fixed idea or obsession for Mr Cong, pointing to Ms Stefadouros' evidence (see her affidavit sworn 22 June 2018 at [59]) that, in early 2016, he told Ms Stefadouros that: I think the properties will go up a lot in ten years' time and if Amy want to sell the house, cover all debts, there will be a lot to share. I think they will double as houses double every 7 or 10 years.
Pausing here, the suggestion that Mr Cong had some fixed idea or obsession (amounting to a delusion) in relation to the prospect of the rezoning of the Campsie properties seems to me to be a stretch - though I accept that Mr Glynn said that Mr Cong had impressed upon him "very strongly" his views in this regard. However, there is nothing to suggest that anyone tried to reason Mr Cong out of this belief (and indeed, contrary to Ms Shen's evidence in cross-examination which I consider sought to downplay her own belief to this effect, the evidence of Mr Allen was that he formed the view that Ms Shen considered that she had been "tricked" or "cheated" in respect of the 43 Amy Street sale by reference to the later proposal for rezoning).
As to the conversations to which Teresa and Edmund depose in which they say Mr Cong told them he would leave them property (see Teresa's affidavit of 9 October 2020 (at [110], for example)), the first and second defendants say that, on the range of figures in the Deed, and assuming Ms Shen was to receive 70% (as Teresa said Mr Cong had suggested to her), then Mr Cong must have been assuming the property portfolio (of $20 million, to use the figure he gave Mr Joyce) would double in ten years to $40 million, leaving aside the requirement to finance the interest, annuities and school fees in that time. It is submitted that this would have been a ridiculous burden for a widow with three small children to bear; and it is pointed out that the attempt to carry on the sheepskin business was not successful (not surprisingly, it is said, given the evident risk and the skill that Mr Cong had and needed to run it, including knowledge of counter-cyclical business as described by Mr Knox). The first and second defendants submit (again, emotively) that: This burden is the principal reason why it has not been possible to maintain the portfolio. If the first defendant has been unsuccessful or in some respects imprudent it is not for want of trying to make a go of the business. It simply represents the shortsightedness of and unsustainability of the whole scheme. The criticism that a woman who cared daily for her husband as he died horribly and has tried to make a success of herself couldn't buy a nice car is just another low point in the plaintiffs' prudish and churlish desires to supervise and control every aspect of her life.
Pausing here, I do not suggest that the emotive nature of the above submissions is one-sided. For their part, the plaintiffs make similarly emotive comments about the first defendant's conduct. No doubt the truth lies somewhere in between the gloss placed by both sides on the conduct of the other. It does not assist in the ultimate determination of the issues in this case. One may be sympathetic or otherwise as to the plight of Ms Shen on the one hand and the plight of Edmund and Teresa on the other. That does not determine the testamentary capacity of Mr Cong. Whether or not maintenance of the properties for a 10 year period was likely to produce a sufficient increase in value to enable payments of the kind contemplated by the Deed, and whether Mr Cong took an overly optimistic view of the Sydney property market (without the benefit of valuations or otherwise), I do not accept that the regime provided for in the 2016 Will and Deed evidences a delusion on the part of Mr Cong such as to rob him of testamentary capacity.
Returning to their submissions, the first and second defendants say that Mr Cong took no financial advice about his testamentary planning; did not make prudent enquiries about the rezoning; and "bet" his second family's futures "on a speculative 10 year plan that would require considerable revenue funding and commensurate commercial enterprise, hard work, skill and acumen both to generate revenue, make prudent and astute decisions about the real estate investment portfolio, whilst living in the big house at [the Family Property] as a residence, not an investment" and caring for three infant children. Complaint is made that the plaintiffs' case requires the "dead weight" of a restraint on alienation of four of the other properties.
I deal with this last submission as to the perceived restraint on alienation in due course - but here simply note that, while there was a direction in the Will to "retain" the Campsie properties for "a period of no more than" 10 years, this specifies a maximum period of retention not a minimum period, and the Deed itself contemplated that one or more of the properties might be sold within that time. Although the Deed records the stated intention of Mr Cong and Ms Shen to retain ownership of the current properties until rezoning (RecitaI E), the agreement in cl 2(a) provides that Ms Shen is to retain ownership for "no longer than" ten years (again specifying the maximum period of time in which they were to be retained).
There is nothing that I can see in the Deed that would expressly preclude a sale of any or all of the Campsie properties at any time after the Deed was made (I consider the argument based on implied terms in due course). In any event, the thrust of the submission that this amounted to betting his second family's futures on a speculative ten year plan is the submission made for the first and second defendants, colloquially, that "Mr Cong had lost the plot"; that he wanted to please everybody with money he did not have; and that he did not have testamentary capacity.
As further indications of lack of testamentary capacity, the first and second defendants point to the fact that Mr Cong had no advice concerning the legal effect of appointing both Edmund and Ms Shen as executors in case a dispute arose concerning the Deed; and say that the origin, and Mr Cong's understanding, of the "cryptic element of discretion" in cll 2(b) and 2(d) of the Deed is unexplained.
As to the first of those matters, one would hardly expect a non-lawyer to understand the applicability or otherwise of the rule in Commissioner of Stamp Duties v Bone (or even to know that there was such a rule, with the exception thereto and the exception to that exception to which I have already referred). From a lay perspective, however, the prospect that there might be a dispute seems to have been recognised by the inclusion of a dispute resolution clause. In any event, as noted above, a testator does not lack testamentary capacity just because he or she does not know the legal effect of particular clauses in the testamentary instrument.
As to the second of those matters (the cryptic element of discretion), the complaint by the first and second defendants seems to be that there is a great divergence in the evidence as to what Mr Cong said to others (such as Edmund and Teresa) about his testamentary intentions and that it is unclear how far Mr Cong really understood the structure. I have considered the evidence as to those conversations above. Suffice it in the present context to note that Mr Cong's instructions as conveyed to Mr Glynn do not seem to me to show any lack of understanding of the discretion being given to Ms Shen as to the amount that he contemplated would be paid to the elder children depending on what happened in relation to the rezoning or sale of the properties. The only scope for misunderstanding here seems to be that on Ms Shen's evidence it was to be an absolute discretion (encompassing the proposition that she might choose to pay them $1 or nothing). That does not accord with Mr Cong's instructions and I do not accept that it is consistent with the contemporaneous evidence as to his testamentary intentions that Mr Cong ever contemplated that Ms Shen might pay the elder children nothing at all (as is effectively her present stance).
In summary, it is submitted by the first and second defendants that if Mr Cong intended the 2016 Will to operate on the footing that the Deed was effective and enforceable (and if he did not understand that the Deed was ineffective, void, voidable or liable to be set aside) then this means that the 2016 Will is not his true Will. The first and defendants appear to accept that a testator may, upon advice, take a "calculated risk" and intend his or her Will to operate either way; but they say that there is no evidence that that is what happened here.
This last submission again appears to me to assume that for a testator to have testamentary capacity the testator must understand the legal effect of clauses in his or her testamentary instruments. It seems to me axiomatic that a testator signing his or her last Will with the formalities attendant upon that process would (in the absence of evidence to suggest that it was intended to be some kind of sham or a farce) intend the document to be effective and enforceable (and that is indeed the presumption on proper execution of a Will that is rational on its face) and, to that extent, if (as I find was the case) the Deed was incorporated into that testamentary instrument, then I consider that it must have been intended that the Deed also would be effective and enforceable. If, for whatever reason, the Deed is not effective and enforceable, that does not to my mind carry with it the conclusion that the 2016 Will was not Mr Cong's true last Will - it simply suggests that his intentions may have miscarried.

[167]

Plaintiffs' reply submissions

In reply to the first and second defendants' submissions as to testamentary capacity (and delusion), and supplementary to their earlier submissions as to the issue of Mr Cong's capacity, the plaintiffs say that there are other matters that support a conclusion that Mr Cong had adequate mental capacity at the time of execution of the 2016 Will and the Deed. The plaintiffs refer in this regard to the documents (see the chronology of events above) that record Mr Cong's wish to ensure that all of his children would be provided for after his death; the fact that, notwithstanding his illness, Mr Cong continued to manage his sheepskin business and deal with his suppliers (pointing to Mr Cong's email communications with Mr Knox between 20 June and 22 June 2016); and the fact that, upon learning of the proposed rezoning of properties in the Campsie area, Mr Cong had sought advice as to withdrawal from the contract for sale of 43 Amy Street. It is submitted that such actions were the product of a sound mind; and, although feeble by reason of his illness at the time of signing the 2016 Will and the Deed, Mr Cong was not mentally incapacitated.
The plaintiffs say that the complaint that Mr Cong did not properly understand the extent of his estate (based on a comment to Mr Joyce that he had $20 million in properties) is ill-founded. It is said that the submission is founded upon a conversation which occurred during Mr Cong's hospitalisation, after instructions were given for the 2016 Will and the 2016 Will was signed. Reference is made to the well-established principle that capacity is to be judged at the time instructions were given and the Will executed. It is noted that the instructions were given no later than 3 May 2016 and the Will was executed on 3 June 2016. The plaintiffs say that Mr Cong's statement to Mr Joyce can thus only speak indirectly to an anterior point of time.
Further, the plaintiffs point to earlier statements made by Mr Cong as to what might be regarded as the pool of assets he shared with Ms Shen (see for example the file note of his discussion with Mr Glynn), which the plaintiffs say are all the more telling because they accurately recorded the legal ownership (as disclosed on any title search) of the various properties.
The plaintiffs emphasise that a finding of capacity does not require the testator to know all of his or her assets, let alone their value (citing Kerr v Badran; and D'Apice v Gutkovich (No 2) [2010] NSWSC 1333 at [105] per White J (as his Honour then was)).
The plaintiffs say that there are three further reasons why the defendants' complaint that Mr Cong did not understand the extent of his estate is ill-founded. First, that it would be unrealistic and inconsistent with common experience for statements of that kind to account for legal distinctions between legal and beneficial ownership. Second, that (allowing for exaggeration which they submit is able to be inferred from the context of the conversation) the amount identified by Mr Cong was not materially far from the true value in absolute terms of the real estate portfolio that he held with Ms Shen. Third, for the same reason, that little weight should be placed on the omission to identify the quantum of the liabilities attached to the real estate portfolio.

[168]

Determination as to issues regarding testamentary capacity and delusional optimism

The test for determining testamentary capacity as set out by Cockburn CJ in Banks v Goodfellow at 565 has been set out above. Writing extra-judicially in the Australian Bar Gazette (see "Testamentary Capacity" (1967) 2(2) Aust Bar Gaz 3), Myers J referred in this context to the three "R's" (i.e., the need for the testator to have the capacity to remember, to reflect and to reason), saying: He must be able to remember, so that he can call to mind the property at his disposal and those who may have claims upon him, to reflect so that he can consult within himself on the relative weight of their claims, and to reason so that he can judge, having regard to his assets, how far, if at all, he should give effect to them. … It is to be observed that it is not necessary for the testator to do any of those things. All that is required is that he should be able to do them and, if he can, his will will be valid no matter how unreasonable or capricious it may be. Testamentary dispositions are always relevant to the question of testamentary capacity, but I have never known a case in which they have done more than create suspicion on the one hand, or served to confirm capacity on the other.
I have already adverted to the caution required when approaching the task of determining testamentary capacity as sounded by Gleeson CJ in Easter v Griffith at 290; and to the authorities that have considered the circumstances in which the onus of proof of testamentary capacity is satisfied where there is doubt raised as to the presumption of capacity (see, in this context, Bull v Fulton at 343 per Williams J; Worth v Clasohm at 453). In Worth v Clasohm, it was said that: The effect of a doubt initially is to require a vigilant examination of the whole of the evidence which the parties place before the court; but, that examination having been made, a residual doubt is not enough to defeat the plaintiff's claim for probate unless it is felt by the court to be substantial enough to preclude a belief that the document propounded is the will of a testatrix who possessed sound mind, memory and understanding at the time of its execution.
As to whether Mr Cong was able to understand the nature of the act of executing and publishing a Will and the effect of the instrument, the answer in my opinion is indisputably "yes". He had executed Wills before and there is no suggestion that he was not of sufficiently sound mind so as not to understand that that was what he was doing when he gave instructions for his 2016 Will and when he executed the 2016 Will and Deed.
As to whether Mr Cong was able to call to mind the property which was in his power to dispose of and the persons who may have claims upon his testamentary bounty (and able to weigh the relative claims of those persons), again, to my mind, the answer is "yes". As to the first, Mr Cong correctly gave instructions to Mr Glynn as to the names in which the titles to the respective properties were held. True it is that the 2016 Will proceeds on the apparent assumption that Mr Cong was in a position to direct "my trustee" to retain the ownership of the Campsie properties (see cl 9(c)), when those properties (other than his half interest in 43 Amy Street) were not properties that were registered in Mr Cong's name. However, it seems to me that this makes sense when the Deed is incorporated into the 2016 Will (as per the acknowledgement in cl 9(d)).
I would construe these clauses of the 2016 Will as amounting, in effect, to an acknowledgement of the agreement that Mr Cong clearly understood he had reached with Ms Shen (by the signing of the Deed) as to the retention by Ms Shen of the Campsie properties (with a view to their rezoning in the future) and as to the amount that would be paid by her in due course to the three elder children following any rezoning or sale of the properties.
I accept that Recital A to the Deed recites incorrectly that Mr Cong and Ms Shen were the registered proprietors of all seven of the properties there named (which is inconsistent with the title and inconsistent with the instructions that Mr Cong had earlier given to Mr Glynn). That mistake is troubling. It seems to me more likely to represent an error on Mr Glynn's part than some intentional statement of the beneficial holding of the properties (since if it were the latter, there is no sound explanation as to why Mr Glynn would not have phrased the Recital differently - say with reference to an acknowledgement by the parties that although the legal title was held in Ms Shen's name for some of the properties it was understood by both that Mr Cong held a beneficial interest in them to a specified extent).
However, accepting that this was a mistake (which I think is the most likely explanation), this does not lead me to doubt Mr Cong's testamentary capacity; nor do I consider it to be evidence of delusion. Mr Cong clearly understood that the Campsie properties fell within a pool of assets that he was in a position to direct how they should be dealt with (if for no reason other than the fact that he had made an agreement with Ms Shen to that effect). He may have been mistaken as to the enforceability of his agreement with Ms Shen. It does not to my mind bespeak testamentary capacity that he thought he had such an agreement. Nor, as I explain below, does it amount to a delusion.
As to the question whether Mr Cong understood the value of the properties, again, I refer to the authorities cited in the course of the parties' submissions. It is not necessary that the testator know precisely how much his or her property is worth or how much debt is secured over that property. There is evidence that Mr Cong turned his mind to the existence of debts; and how they might be serviced. Whether he was right or wrong about the ability of those debts to be serviced is a different issue.
As to whether Mr Cong turned his mind to those with claims on his testamentary bounty, the evidence makes clear that he did so; and that he was capable of evaluating the relative weight of those claims.
Finally, as to whether Mr Cong's mind was possessed of a delusion that influenced the disposition of his property which, if his mind had been free of that delusion, would not have been made, the delusion asserted is a delusional optimism about the value of his assets (with some suggestion in submissions that the delusion extended to a fixed idea or obsession about the proposed rezoning). I am not satisfied on the evidence that Mr Cong suffered from a material delusion of either kind such as would deprive him of testamentary capacity.
I find helpful the analysis in Bull v Fulton at 341-342 by Williams J as to the potential impact of delusions on testamentary capacity: A sound and disposing mind is one which is able to reflect upon the claims of the several persons who, by nature, or through other circumstances, may be supposed to have claims on the testator's bounty and the power of considering the several claims, and of determining in what proportions the property shall be divided between the claimants (Burdett v Thompson). Such a capacity does not exist where the testator is suffering from a disorder of the mind which "shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties" (Banks v Goodfellow). … It is now recognized that the mere existence of a delusion does not deprive a testatrix of testamentary capacity. [footnotes omitted]
If there is a material delusion which has influenced a testator's testamentary dispositions, then the Will may be declared invalid (see Timbury v Coffee (1941) 66 CLR 277). Where a delusion does not influence testamentary disposition then the Will will be admitted. Relevantly, mistaken belief is not a delusion (see Du Maurier v Wechsler [2001] NSWSC 4 at [40]; upheld on appeal in Wechsler v Du Maurier [2002] NSWCA 13 (Wechsler v Du Maurier)). Whether a material delusion is operative was described in Wechsler v Du Maurier by Stein JA as whether the delusion is one that "poisoned [the testator's] affections and perverted [the testator's] sense of right or prevented [the testator] from natural faculties", which is to be determined having regard to the contents of the Will and the circumstances surrounding its execution (his Honour here citing Boughton v Knight (1873) LR 3 P & D 64).
In Shorter v Hodges, Powell J considered that the fact that the terms of the Will might there have been regarded as unjust to the defendant was immaterial (his Honour there concluding that the deceased had testamentary capacity and deliberately, albeit while under emotional stress, chose to make his Will in the way which he did).
In the present case, I am not persuaded that Mr Cong was suffering from a material delusion at the time that he gave instructions for the 2016 Will or when he executed the 2016 Will and Deed.
Accordingly, having regard to my earlier findings, I have concluded that the 2016 Will is a valid testamentary instrument and that it incorporates the Deed dated 3 June 2016. It operated validly to revoke the 2014 Will. In those circumstances, the 2016 Will with the Deed should be admitted to probate. I will consider below the claim by the plaintiffs that Ms Shen should be passed over as executor (and Ms Shen's contrary claim that Edmund should be passed over as executor).

[171]

Plaintiffs' submissions

The plaintiffs in their closing submissions addressed this issue and the issue as to the alleged breach by Ms Shen of the Deed together but I think it helpful first to consider the proper construction of the Deed and then separately to consider breach. There is also an issue raised by the first and second defendants as to the respective plaintiffs' standing to sue on the Deed but I address that in due course.
The plaintiffs point out that Recital H of the Deed states that the purpose of the Deed was to make provision for "Teresa, Laurence and Edmund upon the death of Cong"; and thus they say that the Deed should be construed in accordance with the principles of construction applicable to Wills which were described by Isaacs J in Fell v Fell (1922) 31 CLR 268; [1922] HCA 55 at 273-275, and cited by Hallen J in Serwin v Dolso [2020] NSWSC 370 at [56]. In that regard, the plaintiffs refer to the statement by Powell J, as his Honour then was, in Coorey v Coorey (Supreme Court of New South Wales, Powell J, 22 February 1986, unrep), to the effect that the first task, when construing a Will, is to ascertain the basis of the scheme which the deceased had conceived for dealing with the deceased's estate and then "so to construe the will as, if it be possible, to give effect of the scheme so revealed". (The first and second defendants maintain that the Deed is not a testamentary instrument and hence, as I understand it, their position is that its construction as a Deed, for the purposes of the probate issues, should be determined in accordance with ordinary principles. They accept that, although they maintain that it is not a testamentary instrument, its construction has some relevance for the probate issues raised in the proceeding.)
The plaintiffs say that the structure of the 2016 Will and the Deed was: first, that all of Mr Cong's interest in Jolly Trading passed to Ms Shen; second, that an annuity of $10,000 per year for ten years was to be paid to Teresa, Laurence and Edmund and that the trustee (Ms Shen) was to retain ownership of four Campsie properties (43 Amy Street and the Wu Property, and 56 and 58 Duke Street) for a period of "no more than ten years" after the date of Mr Cong's death so as to maximise the value of those properties as a result of any rezoning of them at the expiration of this period; third, to pay to Teresa, Laurence and Edmund an amount as contained in the "Deed dated 2 May 2016 which is attached to this my will"; and, fourth, to pay the residue of the estate to Ms Shen (or if she did not survive Mr Cong, to their children, Bruce, David and Leon).
That structure was provided for under cl 9 of the 2016 Will (as discussed above). However, the "agreed amount" that Mr Cong acknowledged in cl 9(d) would be paid to the three elder children, and the time at which that was to be paid, does not appear in the 2016 Will itself but falls to be gleaned from the provisions of the Deed.
As to the proper construction of the Deed, the most problematic clause is cl 2 (as extracted earlier). In opening submissions, the plaintiffs identified it as containing a series of cascading provisions (see T 6ff) and indicated that their preferred construction of the Deed was that cll 2(b)-(d) were to be read as alternatives, such that once one sub-clause applied, the others were no longer applicable. Accordingly, it was said that, if sub-cl (b) is triggered, then both sub-cll (c) and (d) are irrelevant.
In reply submissions as to the construction of the Deed, the plaintiffs say that cl 2(a) sets the outer limits of ownership by Ms Shen, defined by reference to the purpose identified therein; that it complements cl 2(b) in that it requires Ms Shen to retain the properties for a maximum of 10 years whereas the following clause (cl 2(b)) mandates a payment after the 10 years had come to an end; and that it is consistent with cl 9(c) of the Will.
Turning then to cl 2(b) (upon which the plaintiffs primarily rely on the basis that it has been triggered by the sale of the Campsie properties), the plaintiffs say that it is to be construed by reference to Recital E, which refers to the retention of ownership of the Campsie properties until rezoning or "until such time as the local authority determines the zoning of these properties". Referring to those concluding words of Recital E, the plaintiffs say that the draftsperson accepted that Ms Shen may sell the Campsie properties once rezoning had been determined; i.e., that Recital E did not assume an obligation on her part once the Council had made a determination on the issue of rezoning. The plaintiffs point out that none of the parties contends that rezoning is imminent; and that Ms Shen's position is that it will not occur.
The plaintiffs say that the tension between cl 2(b) and cl 2(c) is more perceived than real. The plaintiffs accept that cl 2(b) can be enlivened where (as cl 2(c) comprehends) there is no rezoning but a property has been sold but they say that the words of cl 2(b), considered in isolation, are not productive of uncertainty; relevantly, the plaintiffs say that the sale of any or all of the Campsie properties triggers Ms Shen's obligation under cl 2(b) to pay the agreed amount. The plaintiffs say that there is no warrant, textually or contextually, for reading the word "or" in the opening words of cl 2(b) as "and" (c.f., the first and second defendants' written submissions at [128]).
Further (c.f., the first and second defendants' written submissions at [126]), the plaintiffs say that the fact of sale is the trigger for Ms Shen's agreement to pay the stipulated sum, and not the occasion for its payment. The plaintiffs say that the plain words of the text operate such that a sale is one of the two triggers (the other being rezoning) which generates the obligation to pay the minimum sum of $6 million under cl 2(b).
Insofar as the first and second defendants (see their written submissions at [55]) suggest that there is uncertainty because of the interaction of cll 2(b) and 2(c), the plaintiffs note that the latter sub-clause does not refer to a sale. The plaintiffs say that this omission points to cl 2(b) covering the field to the extent that a sale occurs (subject to cl 2(d)). They say that cl 2(c) has no role to play where there is a sale; and that it yields to the specific circumstance envisaged by cl 2(b).
The plaintiffs argue that the fact that differing financial consequences are stipulated should not be taken to generate an unreasonable outcome which informs the question of contractual certainty (c.f., the first and second defendants' written submissions at [121]-[123]), or the construction of the Deed more generally.
It is further submitted that cl 2(b) should not be assumed to burden Ms Shen unfairly; that it recognises the possibility that Ms Shen may receive a substantial offer for one or more of the Campsie properties after Mr Cong's death; that she, and she alone, could choose to accept that opportunity or not having regard to her obligations to the plaintiffs; and that, in the event that Ms Shen sold any of the (non-rezoned) Campsie properties within 10 years, she would have an opportunity to re-invest those proceeds (for example, in substitute properties) to ensure that she is able to pay not less than $6 million to the plaintiffs in 2026.
It is noted that where the words of a clause are clear, there is a limit to which perceptions of commercial unfairness are relevant or even useful. Reference is made to Fitness First Australia Pty Ltd v Fenshaw Pty Ltd (2016) 92 NSWLR 128; [2016] NSWCA 207 where Leeming JA said: [32] True it is that the normal response of courts when one construction of a contract leads to absurd results is to reject it and prefer another which does not exhibit the same anomalies, as Lord Sumption JSC recently observed in International Energy Group Ltd v Zurich Insurance plc [2016] AC 509; [2015] UKSC 33 at [187]. But the starting point remains identifying the possible meanings the words chosen by the parties can bear, and reaching a conclusion based upon a consideration of text, context and purpose, as recently illustrated in State of Victoria v Tatts Group Ltd (2016) 90 ALJR 392; [2016] HCA 5 at [51]-[75].
Alternatively, the plaintiffs say that any inconsistency between cl 2(b) and cl 2(c) is resolved by interpreting cl 2(b) as a disincentive against an early sale of any of the Campsie properties by Ms Shen; in this respect, it is said that it is consistent with the scheme that ownership of the Campsie properties should be maintained for up to ten years to allow for the possibility of a rezoning to occur.
Further, and in the alternative, the plaintiffs submit that the tension between cl 2(b) and cl 2(c) may be resolved by interpreting the reference to "sale of any or all of the Campsie properties" in cl 2(b) to be a reference to the "sale of any or all of [such rezoned] Campsie properties". The plaintiffs say that the addition of this qualification would, consistently with Recital D, oblige Ms Shen to pay the higher (minimum) sum of $6 million to the plaintiffs only if a rezoning of the four Campsie properties had occurred. It is noted that courts may supply, omit or correct language in order to avoid absurdity or inconsistency. The plaintiffs say that the consequence of this alternative construction of cl 2(b) would render it inapplicable to the plaintiffs' circumstances by reason of the fact that no rezoning has occurred, in which case, the plaintiffs submit that Ms Shen is obliged to observe the promise recorded in cl 2(c) instead.
As to cl 2(d), the plaintiffs accepted, in opening submissions, that there was some ambiguity as to what was meant by "sale" in cl 2(d) (as to whether or not it meant a completed sale before Mr Cong's death) but they maintained that this probably made no difference in the present case because sub-cl (d) contemplates a rezoning.
The plaintiffs say that cl 2(d) is not engaged as there has been no re-zoning. They say that the word "sale" must mean completion of the exchanged contract; exchange of the contract had occurred before entry into the Deed. They say that this construction gives effect to the opening words "in the event of the sale of the said property" and that the parties should not be taken to have conditioned rights contingently upon an event which both knew had already occurred. It is said that this construction supports the plaintiffs' submissions as to the scheme of cl 2 construed as a whole. Clause 2(b), it is thus said, covers the field.
The plaintiffs further say that the transfer of the Wu Property to Ms Wu (even if avoided under s 37A of the Conveyancing Act 1919 (NSW), as to which see in due course) involved a sale triggering cl 2(b), for three reasons.
First, noting that the transfer was said to be for consideration, the plaintiffs say that Ms Shen should not lightly be allowed to depart from the fiction which she created. Second, the plaintiffs say that a commercially unreasonable result would enure if a gratuitous transfer fell outside its scope. It is noted that cl 2(a) identifies an outcome which Mr Cong and Ms Shen intended to secure, namely, the retention of the Campsie properties. It is said that such intention would be frustrated by a transfer of any of the Campsie properties, be it for a sale for full consideration or otherwise.
Third, the plaintiffs say that the conduct of Ms Shen in transferring the property constitutes a breach of the implied terms pleaded in [16] of the amended statement of claim - those being implied terms of the kind recognised in Brand v Monks [2009] NSWSC 1454 (Brand v Monks) at [332]-[333], namely, an implied term of co-operation of the kind recognised in Mackay v Dick (1881) 6 App Cas 251 (Mackay v Dick) at 263 (that where parties to a contract have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to what is necessary to be done on its part for the doing of what the contract said had to be done); and, second, an implied term of the kind referred to in Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 (Ansett Transport Industries) at 61 per Barwick CJ that "a party to a contract made on the footing of the continuance of a state of things may not by any act within its power or control do anything to destroy or relevantly to diminish that situation". The plaintiffs submit that Ms Shen has breached each of those implied terms by doing an act that diminished (if not destroyed) a premise informing the creation and efficacy of the Deed (namely, the transfer of three of four of the Campsie properties). It is submitted that the proper construction of cl 2(b) should recognise the principle that the party should not be permitted to take advantage of its own wrong.
In the alternative, it is said that Ms Shen has enlivened cl 2(b) by selling 56 Duke Street and 58 Duke Street in July 2019. It is noted that cl 2(b) conferred a discretion on Ms Shen as to the amount payable (between $6 million and $9 million). The plaintiffs say that, on its true construction, Ms Shen was obliged to pay at least $6 million. In the further alternative, as noted above, the plaintiffs submit that Ms Shen is obliged to pay $3 million pursuant to cl 2(c) of the Deed.

[172]

The plaintiffs' standing to seek declaratory relief

At the outset, the first and second defendants' position (for the reasons given in relation to the questions of standing to sue and the Commissioner of Stamp Duties v Bone point addressed above) is that the plaintiffs have no interest in any question of construction of the Deed; that it is a discharged instrument; that, even if it were still on foot, they are not privy to it; that it is not in the interest of anyone claiming through the estate to resolve these questions; and that the construction of the Deed is academic because it would not lead to any practical outcome. They further maintain (see below) that Laurence's estate has no standing to sue as the promise of payment contained in the Deed was only to him personally; not to his successors.
The first and second defendants accept (by reference to Clarence City Council v Commonwealth of Australia [2020] FCAFC 134 (Clarence)) that it is not always impossible for a third party to a contract to have standing to seek a declaration as to its construction and effect but they point out that (at [128]) it was there said that "the absence of privity supports an inference that the applicant has no real or sufficient interest to seek a declaration". The first and second defendants say that the displacement of such an inference in Clarence was an exceptional case and that this is not such a case.
While the first and second defendants acknowledge that questions of construction of the Deed have a secondary significance to the issue of probate and the defences seeking to impeach the Deed (if their primary submission that the appointment of Ms Shen as executor discharges the Deed from the date of death is accepted) (and thus they say that, in resolving the probate suit, it is necessary to appreciate and construe the terms of the 2016 Will and the Deed), the first and second defendants maintain that none of the plaintiffs has standing to seek declaratory relief. The first and second defendants say that the question is merely whether to admit or refuse Probate of the 2016 Will.

[173]

Construction advanced by the plaintiffs

As to the construction of the relevant sub-clauses of cl 2, the first and second defendants first consider the construction advanced by the plaintiffs.
The first and second defendants say that it can be seen from [64] of the amended statement of claim that the plaintiffs assert that what is meant by cl 2(b) ("upon rezoning … or sale … Shen agrees to pay …") is that the promise is to pay upon a sale, whether or not a rezoning happens. (Paragraph [64] of the amended statement of claim pleads that, as a consequence of the sale of the Wu Property, Ms Shen is bound to pay to the three elder children (and now in light of Laurence's death, to Edmund, Teresa and Laurence's estate) no sooner than 28 July 2026 but within a reasonable time thereafter, the sum of no less than $6 million.)
The first and second defendants say that this construction has the consequence that liability for the higher sum is not tied to a rezoning. They say that such a construction has the difficulties that: it does not reconcile with the purpose identified in Recitals D and E; it brings the clause into conflict with cl 2(c); and, upon the construction advanced that cl 2(d) refers only to a sale completed before death, it has the effect that liability for the higher sum would be triggered by completion of the contractual obligation that already existed at the date of the deed, depending on the accident of Mr Cong's lifespan. It is submitted that this is a wager "and a particularly capricious one". Further, it is said that, even if cl 2(d) refers only to a contracted sale, it still conflicts with cl 2(b); and that the plaintiffs' construction would impose a financial restraint on alienation by way of bond to pay a fine.
It is noted that in the plaintiffs' opening submissions (at T 8), the plaintiffs' case was put in effect on the basis that the sub-clauses of cl 2 are distinct alternatives and that the first in time to be engaged applies. The first and second defendants say that this assumes that it is a question of time (i.e., that cl 2(b) is engaged because its conditions were the first to be fulfilled) but they maintain that there is no reason why the argument could not apply in the reverse (and say that there is nothing stated in the Deed, or submissions, to indicate why the plaintiffs' position is correct).
The first and second defendants say that, although this argument (i.e., that the sub-clauses are alternative obligations) would resolve the conflict between sub-cll (d) and (b) (because it would mean that, if the sale of 43 Amy Street occurred before the death of Mr Cong, then the obligation under (b) never arises - because sub-cl (d) would apply), this construction has the consequence that, upon a sale of 43 Amy Street before the death of Mr Cong, and the rezoning of the remaining Campsie properties, then between $5 million to $8 million would be required to be paid without waiting for 10 years to expire. It is submitted that it is difficult to see why the policy of delaying payment for 10 years would be intended in the cases of sub-cll (b) and (c) if the policy was not also to be carried through in the case of sub-cl (d).
The first and second defendants further note that 87 of the amended statement of claim alleges that it was a breach of trust for Ms Shen to transfer 43 Amy Street, Campsie within 10 years of the testator's death or, alternatively, before it was rezoned. The first and second defendants say that this implies (in addition to an implied restraint on alienation) that the sale contracted for in December 2015 for 43 Amy Street does not qualify as a "sale … before [Mr Cong's] death" for the purposes of cl 2(d). The first and second defendants say that the plaintiffs' argument here proceeds on the opening words of cl 2(d), which are expressed as a contingency ("In the event of …") (i.e., as I understand it, that the sub-clause is not speaking of an event that has already occurred).
The first and second defendants postulate, in favour of the construction that cl 2(d) applies only to a completed sale (i.e., in favour of the construction advanced by the plaintiffs) the following arguments: first, that it would make little sense to make a large consequence depend on the accident of entry into a contract before death, if such a contract might be avoided or rescinded (though the first and second defendants say that this argument is not necessarily as good in the case of termination by the purchaser for breach by the seller); and, second, that a fact known to both parties at the time of entry into the Deed was that 43 Amy Street was already under contract for sale (in which case it is said that there was no need to provide for a contingency in sub-cl (d) - i.e., if "sale" included entry into a contract for sale, that had already occurred). The first and second defendants note in this regard that, prior to entry into the Deed, Mr Cong had received advice (in January 2016) from Mr Glynn to the effect that the contract of sale could be avoided in the event that Mr Cong died before completion; and that this advice was repeated on the day of execution of the Deed (see Ms Stefadouros' affidavit sworn 22 June 2018 at [107]; T 1026).
However, as against the construction for which the plaintiffs contend, the first and second defendants argue that if any sale triggers sub-cl 2(b) (divorced from the question of rezoning), then it attributes to the parties a harsh and capricious result (i.e., completion of the existing obligatory contract of sale of 43 Amy Street would expose Ms Shen to an obligation for at least $6 million, with or without rezoning of the Campsie properties, including the benefit of a rezoning of 43 Amy Street). It is said that this would defeat the purpose for which sub-cl (d) is provided. (That said, the first and second defendants accept that this contention is weakened if both parties at the time of entry into the Deed believed (as I consider the evidence suggests they did) that the existing contract of sale was not obligatory in the event that it remained uncompleted at the time of his death.)
The first and second defendants note that it is apparent from Ms Lan's email of 27 May 2016 that Mr Cong expected that the 43 Amy Street contract of sale would be completed by 14 June 2016 but they say that there is no evidence that Ms Shen believed this; and they note that Mr Cong was wrong in this recollection because completion had already been postponed to 14 November 2016 by arrangement between the conveyancer (Nian Ci Cao) and the purchasers' solicitor, through their exchange of emails on 4 and 6 April 2016 (Ex 40).
The first and second defendants argue that the harshness of the "completed sale" construction of sub-cl 2(d), though lessened, is not eliminated if the better view be that sub-cl 2(b) does not impose liability upon sale in the absence of a rezoning.

[176]

Uncertainty

The first and second defendants say that the literal reading of cl 2 produces inconsistency or repugnancy between its various limbs. It is said that a literal reading is that cl 2(c) operates on the expiry of 10 years if not all of the Campsie properties are rezoned for high density living "within 10 years". It is said that, when both (b) and (c), or (b) and (d), are engaged according to their own terms, there are conflicts.
It is noted that the plaintiffs' submission in opening spoke of a "preferred construction" that the clauses are alternatives (T 8.12). It is said that this implicitly recognises that the literal reading of the clauses produces inconsistent results and involves a search for a solution to attribute priority to cl (b). The first and second defendants say that one might just as well select (c) or (d).
The first and second defendants note that if there is an intractable inconsistency or ambiguity that cannot be resolved by a process of objective construction, this will result in the provisions being void for uncertainty, noting the oft-quoted test adopted by Barwick CJ in Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429.
It is said that, for the Deed to be valid, it must be possible on objective grounds for there to be assigned to it not merely a general intention but a "particular contractual intention"; a "definite and precise meaning"; and that the question of construction must thus be resolved objectively. It is noted that the meaning to be attributed to a contractual term is a question of law and not an exercise of discretion.
The first and second defendants argue that it is not permissible to say that cl 2(b) is engaged by looking at its terms in isolation; rather, it must be determined how these terms relate to one another and how they are to operate in a case where apparently conflicting provisions might both or all be engaged. It is noted that the plaintiffs' submission in opening was that a sale would engage cl 2(b) even to the exclusion of cl 2(d) if otherwise applicable.
The first and second defendants submit in effect that the particular sub-clauses cannot be construed in a harmonious way, having regard to the variety of future events to which they might have been potentially applicable, looking forward from the point of view of the objective bystander at the date of the Deed.
It is said that the plaintiffs' case on construction suffers from a "myopic" approach to cl 2(b) but that instruments must be read as a whole and, so far as possible, harmoniously and without capricious or irrational effects, but according to such policy as can be discerned from the terms of the whole instrument.
The first and second defendants argue that cll 2(c) and (d) are no more expressed to be limited or excluded by clause 2(b) than the reverse. The question posed by the first and second defendants is as to whether the clauses are really capable of inconsistent operation in one or more potential events and, if so, whether the Deed discloses some hierarchy of priorities or other means of selecting between them.
The first and second defendants say that while there are various ways in which one might read these provisions, particularly to avoid capricious and unreasonable outcomes, or outcomes that seem to have no rational policy, the difficulty lies in finding any definite indication of which solution to select. It is submitted that the Deed is intractable in this regard and, so, is void for uncertainty.

[178]

Sub-clause 2(a)

First, the first and second defendants argue that the function of sub-cl 2(a) is to introduce and regulate succeeding provisions.
The first and second defendants say that, on a literal reading of cl 2(c), the sum of $3 million might be payable in the event of no rezoning within 10 years, and yet a further payment might be required under cl 2(b) in the event of a subsequent sale or rezoning. Insofar as the plaintiffs' construction avoids this result by arguing in effect that the first sub-clause to be engaged in time displaces the others, the first and second defendants say that this approach does not require the presence of cl 2(a) and does not leave real work for that sub-clause to do.
The first and second defendants submit that cl 2(a) may instead be read as operating to prevent the succeeding clauses operating cumulatively on the basis that cl 2(a) is either: (i) a promise (indirectly expressed) to dispose of the properties within 10 years; or (ii) a promise to wait for no longer than 10 years for the purpose of determining (if the properties are still held) a selection between the application of cll 2(b), (c) and (d).
It is said that the first of those approaches ((i) above) suffers two difficulties: first, that there is no actual covenant to sell (and cl 2(b) envisages that there may be a sale at any time); and, second, that cl 2(a) "annexes a purpose to the limit on retention" and it is said that there is no bar to retaining ownership for any other purpose.
The first and second defendants submit that these difficulties support the view that cl 2(a) is intended to limit the time within which the rezoning is to occur; and that it limits the operation of cll 2(b) and 2(d) such that a rezoning after 10 years will not be a rezoning to which cll 2(b) or 2(d) can apply. (I see the logic to this but I also consider that the specification of the purpose in cl 2(a) would mean that if an event were to occur that made rezoning an impossibility, i.e., that the purpose is frustrated, then it presumably was not contemplated that the properties would need to be retained any longer.)
The first and second defendants submit that the limitation of ten years also confines the succeeding provisions to operate only if the properties are still retained at the time of rezoning or the expiry of 10 years; otherwise, they say, it was not necessary to say that Ms Shen would retain them for a maximum (but not a minimum) term (i.e., it would have been sufficient to say that cl 2 only applies to a rezoning of the properties within 10 years).
The first and second defendants point to the purposive link between retention of the properties and rezoning. The first and second defendants say that, if the payment at the higher figure is to be made regardless of whether the properties are still held at the time of rezoning, then there is an obvious disconformity with that purpose (and a lack of any need for its expression). However, the first and second defendants say that it does not follow that the purposive link is a source of obligation, as opposed to a condition for the obligation to arise.
The first and second defendants note (and I accept) that there are no words restraining sale. It is said that, on the plaintiffs' case, cl 2(b) confirms that. The first and second defendants say that Recital E speaks of an intention in precatory terms (an intention to retain); and that, unlike cll 2(b) and 2(c), cl 2(a) does not speak of what Ms Shen "agrees to" do - rather, it speaks only of what she "will" do (for no longer than 10 years). The first and second defendants say that the word "will" in this sub-clause is not obligatory. (Pausing here, that argument to some extent ignores the chapeau to cl 2, which does use the verb agree - in the words "agree between each other and with …".) The first and second defendants go on to note that in cl 2(d), Ms Shen does not make any promise at all; rather, in that sub-clause, Mr Cong directs and agrees. The first and second defendants say that cl 2(e) also is mandatory (using the words "is to be") and that the machinery provisions are replete with use of the word "must".
The first and second defendants point to cll 2(a) and 14 as the only operative provisions of the Deed that use "will" in reference to the conduct of a party. Significance is placed on the fact that cl 14 is another clause that does not impose an obligation but (it is said) indicates an absence of obligation, this being the clause stating that "[e]ach party will pay their own costs in relation to this deed". The first and second defendants note that neither party is obliged to pay the other's costs of the Deed; and that neither is promising to pay his or her solicitor; rather, they say, the clause is merely confirming that the other party does not have to do so.
The first and second defendants say that in this approach (i.e., that sub-cl (a) simply limits the time within which a rezoning triggering the relevant sub-clause(s) is to occur), there is no radical disconformity with cl 2(d); rather, that the operation of sub-cl (d) is to prevent the whole scheme from failing at inception as a result of completion of the pending 43 Amy Street sale and to adjust the figures in that event.
It is said that this approach (reading cl 2(a) as limiting the time in which the rezoning is to occur to 10 years; and confining the succeeding provisions to operate only if the properties are still retained at the time of rezoning or the expiry of 10 years) gives weight to the discretionary emphasis seen in the Deed, by cll 2(b) and (d); and to cl 2(b)'s identification of the value of the Campsie properties as a relevant matter.
The first and second defendants argue that the overall scheme is highly dependent on decisions, discretions and liberties of Ms Shen. It is noted that a party is entitled to perform in the manner least onerous to that party. Further, the first and second defendants point to: the absence of any consideration for the promise; the domestic setting of the Deed; the absence of machinery provisions dealing with mortgage liabilities and holding costs; and its dealing with circumstances for up to a decade into the future, that it is said would likely contain many vicissitudes whether foreseen or unforeseeable. The first and second defendants say that these are circumstances that, added to the other indications of discretion evident in the Deed, are consistent with the view that it did not impose an obligation to retain the properties but dealt with the situation that would arise if they were retained. (In reply submissions, the plaintiffs say that there is consideration for the promise - pointing to sub-cl 2(e).)
The first and second defendants place some emphasis on Mr Cong's view that he did not want any arguments after his death (and did not want Ms Joyce causing problems for Ms Shen); and knew that he needed to leave ample resources in the hands of Ms Shen for herself and that she needed to support their sons.
The first and second defendants say that, insofar as the plaintiffs suggest that cl 2(a) supports an implied restraint on alienation, there is a plain textual omission in that the clause reads "for no longer than to ten [sic] (10) years". It is submitted that it is likely that another number has been omitted (after the word "than" and before the word "to") but that, when setting an outer limit of "no longer than", it is not necessary to specify a range. It is said that that would fit with cl 9(c) of the Will; and that it is likely that the omission was deliberate and that it is the inclusion of the word "to" that was inadvertent.
The first and second defendants say that, on the plaintiffs' case, the words "no longer than" mean that that is the limit of a requirement to retain the properties for the purpose of rezoning. However, the first and second defendants say that no words impose an obligation to hold the properties and that a restraint on alienation would require clear expression. It is said to be a radically opposite understanding to either of the alternatives put forward above (i.e., a requirement to alienate or a limitation on the operation of the succeeding clauses). The first and second defendants say that the words "no longer than" are decisive against the plaintiffs' construction.
The first and second defendants say that cl 9(c) of the Will does not assist the plaintiffs because the direction there is again for a "period of no more than 10 years"; and this is not an operative term of the Deed (the 2016 Will being merely referred to but not incorporated therein). While the first and second defendants accept that it is permissible to refer to the 2016 Will as part of the extrinsic circumstances at the date of the Deed, they say cl 9(c) of the Will cannot be given operative effect as a term of the Deed.
Further, it is noted that cl 9(c) of the 2016 Will applies only to "my trustee" (in the singular case) and would never apply to Ms Shen were she to renounce or were she to be passed over as executor. It is also said that the words "and at the expiration of this period" are a drafting surplusage and have no command or object.
Pausing there, it strikes me that one possibility is that the words "and at the expiration of this period" might have been intended to be coupled with the succeeding sub-cl (d), in effect as an introduction to the following clause - i.e., that "and at the expiration of this period I acknowledge that my spouse will pay … the agreed amount …", in which case the problem is not one of surplusage but of punctuation. By way of comparison, the earlier draft of cl 9(c) of the Will concluded with the gift of Mr Cong's interest in 16 Nicholson Street to the elder children; whereas, here, there would be logic to the conclusion that, at the expiration of the period, it is acknowledged by Mr Cong that the agreed amount under the Deed would be paid to the elder children.
As to cl 9(d) of the 2016 Will, the first and second defendants say that this does not rise above the terms of the Deed and depends on finding what was there agreed.

[179]

Sub-clause 2(b) - sale as the trigger

The first and second defendants submit that, on the basis that the retention of the properties was something intended but not obligatory, it is not likely that disposal should trigger a large financial obligation, even if deferred; and that it is even less likely that this was intended when the prospective rezoning was the economic impetus for the Deed and the motivation for selecting differentials between the lower and higher figures. The first and second defendants say that it is still less likely given the express terms of cl 2(c), which remain capable of literal operation regardless of a sale, if the construction argued above for cl 2(a) be wrong.
It is said that, if Ms Shen is not required to wait at all, but is merely enjoined from waiting beyond 10 years, then it seems harsh that in the case of an earlier sale, she might be obliged to pay the price referable to a rezoning that has not happened and may never happen. (Though I would interpose here to add that it would be Ms Shen's choice to sell in those circumstances, knowing on this hypothesis of the obligations under the Deed in relation to payment and that the amount is not payable (at least under cl 2(b)) until "no sooner than" the expiration of 10 years.)
Further, the first and second defendants ask, rhetorically, why the higher obligation is to apply in the case of a sale of "any" of the Campsie properties but only in the case of a rezoning of all of the Campsie properties. It is said that the discrimen in this regard is between rezoning of "the Campsie properties" which means all of them, or a sale of "any or all" of them. It is noted that sub-cl 2(d) offers a reduction in one case. The first and second defendants query what purpose there would be in allowing it in one case but not in others.
It is said that a less capricious set of results appears on a different view of cl 2(b). In that regard, the first and second defendants say that the drafting of that sub-clause is complicated by the interweaving of three distinct concepts: the conditions for liability to accrue; the time for payment; and the evaluation of the amount.
The first and second defendants contend that the word "upon" (in the phrase "[u]pon rezoning of the Campsie properties or sale of any or all of the Campsie properties") indicates both a condition and a time; but that payment is postponed in case of a rezoning within 10 years of death. The amount is to be evaluated by Ms Shen "in her absolute discretion" but, it is said that, paradoxically, there is then set both a range, and a criterion for evaluation within the range. It is said that complexity is added by the fact that a time is appointed for the criterion to operate (i.e., "the then market value of the Campsie properties"), which it is said assumes that they are all still relevant (c.f., sub-cl (d), which refers only to "the remaining Campsie property"). It is said that the word "then" might refer to the time of rezoning, the time of sale, the 10th anniversary of Mr Cong's death, or the time of payment.
Pausing here, the words "such amount to be determined by [Ms Shen] as to the then market value of the Campsie properties" would to my mind most naturally be read as placing the assessment of the market value of the properties as at the date that Ms Shen determines the payment is to be made (as to which I accept there is a discretion - the clause simply providing that payment is to be "no sooner than" ten years from Mr Cong's death).
The first and second defendants argue that the fact that there is a discretion as to the amount to be paid is not an irrelevant or inoperative surplusage. The first and second defendants say that the language of the sub-clause in this regard does not lack significance as an aid to construction of the clause as a whole. It is said that Ms Shen may not be compelled to pay more than the minimum (nor is she liable to be controlled in her decision) but that Ms Shen does have to make a decision; i.e., that Ms Shen does not promise to pay $6 million - rather, Ms Shen promises to pay "an amount", which is then described. It is said that, before making her decision, Ms Shen is evidently at least entitled, if not obliged, to consider the market values of the Campsie properties. Moreover, it is noted that the payment is not required to be made at the 10th anniversary; but "no sooner than" that time. The first and second defendants note that the amended statement of claim at [64] suggests that it must be within a reasonable time thereafter; but they say that at least the time must be sufficient to allow Ms Shen that which she is permitted to do (even if she is not obliged to do any of it).
The first and second defendants say that a construction that refers the words "or sale" to the issue of timing avoids some of the difficulties with cl 2(b). They say that the plaintiffs' assumption is that sale is a trigger of liability, but that the clause may be construed as imposing alternatives as to the time for payment between which Ms Shen is entitled to select.
The first and second defendants say that cl 2(c) establishes that cl 2(b) has no operation in the absence of a rezoning within 10 years; i.e., that it is not an alternative; but an integral part of a scheme. It is said that cl 2(b) then operates only if there is a rezoning and establishes the time for payment as being the time of the rezoning, or of sale, at Ms Shen's election, provided that payment is to be no sooner than the 10th anniversary (but that it may be later if she chooses to sell later). It is submitted that Ms Shen may consider the market and make her decision as to the amount at the time of payment, which gives her the option to ascertain the market by the certainty of a sale; that Ms Shen may wish to sell one or all of the properties in order to make the payment or she may wish to await an advantageous time in the market (particularly bearing in mind that the properties are hers and the obligation is only to pay cash). It is said that, practically, Ms Shen is left with an interest in maximising the outcome.
Thus, it is submitted that the meaning of the words "[u]pon rezoning … or sale" in cl 2, taken harmoniously, is that, if there is a rezoning within 10 years, payment is to be made at a later time, which may be when one or more of the properties is subsequently sold. The clause is thus said to be giving the option as to timing to Ms Shen.
Insofar as the plaintiffs' case is in effect that the trigger is the sooner of rezoning or sale, the first and second defendants, again rhetorically, ask why it should not be the later; and insofar as it might be suggested that liability conditioned "upon rezoning" potentially long after sale seems irrational, the first and second defendants' answer is that: it is no more irrational than the plaintiffs' case; it is supported by the words "no sooner than"; and that the irrationality is removed on the construction advanced above for cl 2(a).

[180]

Sub-clauses 2(c) and (d) as limiting provisions, rather than distinct alternatives

In this alternative approach, the presence of cll 2(c) and (d) confines the operation of cl 2(b) to the case where cl 2(c) is not engaged, and, where cl 2(d) is engaged, confines the operation of cl 2(b) to within the lower monetary amounts provided for in (d); so that (c) and (d) are "qualifiers".
The first and second defendants note that if the properties (or in the case where (d) applies, the properties other than 43 Amy Street) are rezoned, then the higher obligation accrues. They argue that the word "upon" governs the timing of payment (not the conditions for liability to accrue) subject to the limitation that payment be "no sooner than 10 years after [Mr Cong's] death" (though it can be later than 10 years). It is said that, at the time of selecting the amount and making the payment, Ms Shen has regard to "the then market value of the Campsie properties."
In this timing, it is said that Ms Shen is allowed to postpone payment until sale; and therefore in sub-cl 2(c), it is not necessary to refer to the time for payment because "upon sale" and "no sooner than 10 years after my death" have already been mentioned, and "upon rezoning" is excluded by the hypothesis of no rezoning. It is said that sub-cl (c), on this approach, does not need again to specify a time for payment, but merely to state the different condition and the different amount.
Similarly, it is said that in sub-cl (d), it is not necessary to repeat all the verbiage of sub-cl (b) but merely to identify the differences. So, it is said that the omission of "or sale" and the reference to market value from sub-cl (d) do not represent the caprice of different policies for no reason; but merely the omission of unnecessary verbiage because sub-cl 2(d) is concerned only to regulate the subjects on which there is to be a difference from sub-cll (b) and (c).
The first and second defendants say that this view is supported by the absence from sub-cl 2(d) of any promissory words on the part of Ms Shen; rather, it is Mr Cong who directs and agrees. It is said that what Mr Cong is there doing is accepting qualifications on the promise in sub-cl 2(b).

[181]

Plaintiffs' reply submissions regarding alleged uncertainty of Deed

I have set out above the plaintiffs' response to the first and second defendants' submissions as to construction of the Deed. As to the submission by the first and second defendants that the scheme set out in cl 2 of the Deed is void by reason of uncertainty, the plaintiffs say that, although cl 2 of the Deed is "not a model of felicity", it is not so "obscure or imprecise that it does not reveal any particular contractual intention". Reference is made in this regard to what was said in Heydon on Contract (2019, Thompson Reuters) at [3.330]: Even if the contract seems to have more than one possible meeting or lead to more than one result or use very wide language or throw up difficulties in its interpretation, it is not necessarily void if the processes of construction lead to the choice of the meaning. It is only void "if the court is unable to put any definite meaning upon the contract." "[C]ourts will not likely except defeat in the search for meaning." The court's reluctance to nullify contracts by demanding unrealistically high standards of clarity is reflected in a willingness to face up to difficulty in construction. The court, said Lord Wright, will not uphold any purported contract which is "so obscure and so incapable of any definite or precise meeting that [it] is unable to attribute to the parties any particular contractual intention." Impossibility of identifying meaning, in that sense, is one thing. Mere difficulty in doing so is another. [citations omitted]
The plaintiffs say that sub-cl 2(a) is not uncertain; nor, properly construed, is sub-cl (b). In the alternative to their principal submission that there is no uncertainty, if any of the sub-clauses of cl 2 is invalid, then the plaintiffs invoke cl 11, which provides that "if anything in this deed is unenforceable, illegal or void, it is severed and the rest of the deed remains in force". It is submitted that cl 11 embodies the parties' agreement as to what consequences should follow upon the invalidation of any term; and that effect should be given to it in the event that any part of the Deed is determined to be void.

[183]

Implied term at 16

The first and second defendants note that 16 of the amended statement of claim pleads an implied term that Ms Shen would hold proceeds of sales as trustee on trust to make the payments due under the Deed. (It is noted that this implication is not pleaded to arise even in favour of Mr Cong.)
The first and second defendants submit that this is a pure question of construction and resolved on principles of general application where contractual words are asserted to establish a trust; and that, in essence, this case is one of the kind considered in Beswick v Beswick [1968] AC 58, where the claim of the third parties depends on the third party's ability to demonstrate a sufficient interest to procure a suit by the estate for specific performance.
Insofar as [16] and [17] of the amended statement of claim allege circumstances in which the 2016 Will and the Deed "were respectively made and executed", the first and second defendants say that the plaintiffs appear to rely on the following parol evidence: at 16(i)-(v), a number of statements (said to be contentious) that are not found in the terms of the Deed; and, at [17], a "mutual understanding" and "joint intention" particularised as deriving not merely from terms of the Deed, but also from the matters stated at [10] of the amended statement of claim (referring in turn to the pleading of the half-secret trust (pleaded elsewhere) and the alleged resulting trusts over unspecified proportions of the Campsie properties).
The first and second defendants say that none of these matters should be taken into account; and that they are all extraneous and impermissible matters. Reference is made to cl 5 of the Deed which supersedes and excludes every such "agreement", "understanding", "arrangement" or "representation" connected with the subject matter of the Deed.
It is noted that the plaintiffs point to the reference in the Deed to the 2016 Will as a circumstance allowing the 2016 Will to be used in aid of construction (although the first and second defendants say that the "Will" referred to was an earlier draft and it was not actually attached to the Deed).
Reference is made by the first and second defendants to cl 9(e) of the 2016 Will, dealing with the residue of the estate (which was left to Ms Shen or, if she did not survive Mr Cong, to such of their sons - with a further gift over to their children - as attain the age of 21 years). It is said that if the land were held on resulting trust for Mr Cong, as alleged, then the gift of residue under cl 9(e) of the Will is inconsistent with the implication. It is said that, if Ms Shen were to be the survivor (as in the event she was), then to give the property back to her was inconsistent with the implied charge or trust; and, if she were not the survivor, then to give the proceeds of sale to the sons (cl 9(2)(ii)) would be so radically inconsistent with the implication of a charge or trust as to make the implication impossible.
Insofar as the implied term alleged by 16 is said to arise by business necessity, the first and second defendants say that it does not pass the test in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 (BP Refinery v Hastings Shire Council), particularly where what is alleged is a term establishing an express trust. It is said that the plaintiffs themselves have not been able to give it clear expression; and that the required certainties of subject, object and intention are absent. The first and second defendants say that the required personal undertaking to act as trustee is absent.
As to the requirement of necessity, the first and second defendants say that the term is not necessary. It is said that the express promises in the Deed (if enforceable at all) are covenants to pay money; and, if they impose an obligation, they are capable of doing so whether or not there is security. It is said that the pleading does not identify any specific provision in the Deed that cannot work unless the implication is drawn or that would otherwise require it; and that the Deed, if effective at all, is effective without the implied term (and the implied term does not give it an effect that it would not otherwise have).
The first and second defendants note that it has been said that, before a constructive trust is imposed, there should first be a decision as to whether, having regard to the issues in the litigation, there is an appropriate equitable remedy falling short of the imposition of a constructive trust; but they say that this is not even a case where such considerations arise. The first and second defendants say that this is "a naked attempt to erect a trust structure on top of a common law covenant, purely by implication on ordinary principles of construction". It is said that the necessity of such implications must appear from the literal words of the text and that there is no such necessity.
As to the requirement that the term be obvious, the first and second defendants say that this also is not met. It is said that the term is not anchored in the text of the Deed, noting that the Deed contains no charging clause (whether over the land or its proceeds) and noting that the Deed contains an entire agreement clause in cl 5.
As to the requirement in relation to consistency, it is said that the term is inconsistent with an express provision of the Deed. It is noted that Recital A identifies Ms Shen as a "joint" proprietor and cl 2(a) speaks of her "ownership" which she "will retain". It is said that Ms Shen's ownership is acknowledged and (at least prospectively from the point of survivorship) unqualified.
As to the requirement that the term be reasonable and equitable, the first and second defendants again say that this is not met. It is said that if Ms Shen was a trustee of the land, she was entitled to resort to it for her expenses; and that if the land was beneficially held by Ms Shen (as it was), it was even more unreasonable to sterilise the proceeds of sale for so long a period as ten years, regardless of her proprietary rights, her reasons for sale, or her financial needs. On the other hand, if Ms Shen was not a trustee, it is said to be even more unreasonable to attribute so large an invasion of her rights to an implication lacking any concrete footing in the text.
Finally, it is said that the term is not capable of clear expression. It is noted that the implied term in 16 of the amended statement of claim refers only to a trust over the proceeds of sale of the Campsie properties. This is said to be inconsistent with the suggestion elsewhere in the amended statement of claim that the sale and transfer of the properties within 10 years and without a rezoning was itself a breach of covenant or breach of trust (see [49], [53], 54, 54, [55], 56(i), [57], 86 "or otherwise", 87-(c) and (e), 91-(c) and (e), [94] and [95]). Reference is also made to the claimed losses, which are alleged to be the value of the land itself (at 59-(ii) and 88). It is submitted that the plaintiffs themselves have not been able to express with clarity whether the implied charge is over the land or only the proceeds.
In this context, the first and second defendants also say that if Ms Shen was free to dispose of the properties within 10 years, then many of the breaches alleged are not breaches at all and there could not be a reasonable implication that the Campsie properties themselves were to be retained and held as security for the promises because there was no obligation to retain them at all. It is submitted that, there being no implied trust of the properties, or to hold them as security, it is still more remote to suggest a charge over the proceeds of sale.
In the context of the alleged implied term, the first and second defendants point to the claim made in respect of the proceeds of sale of 43 Amy Street, Campsie. It is noted that [74]-[76], 86, 87, 88, 92 and [93] of the amended statement of claim allege that it was a breach of trust for Ms Shen not to retain the proceeds of sale of 43 Amy Street, Campsie on trust for the plaintiffs and Laurence, to be paid to them in discharge of their entitlements under the Deed.
The first and second defendants say that this assumes that the plaintiffs and Laurence had such "entitlements" and that, if they did, there is no reason why it would be irrational that the obligation be unsecured.
It is submitted that the plaintiffs' own case divorces quantum from the availability of assets. The first and second defendants say that this is apparent from the claim that the transfer of 43 Amy Street was itself a breach (87), and in the proposition that the completion of the sale of 43 Amy Street after the death of Mr Cong did not enliven the exception in cl 2(d) of the Deed (see at [63]) so that the $6 million liability is said to accrue on 28 July 2026 under cl 2(b) regardless of whether any rezoning ever takes place.
The first and second defendants say that it should be concluded that the alleged implied term (at 16 of the amended statement of claim) and the consequent trust does not arise; and so, also, the suggested terms that the properties themselves were held on trust do not arise by implication from the Deed. It is said that the terms alleged at 16-(c) do not advance the matter.
The first and second defendants say that if such terms arose, as a matter of objective construction, that would merely heighten the difficulty in finding that Mr Cong knew and approved of the terms and effect of the Will, and the problems for accepting that the Deed was a just instrument so far as Ms Shen is concerned.
The first and second defendants further note that 16 pleads an implied term between the parties to the Deed (see also 15). The first and second defendants say that if the obligation to pay the three elder children is owed to Mr Cong, it would follow that the implied trust of the proceeds as security for the promise would also have Mr Cong as its object. It is said that the pleading at [17] seems to confirm this; in that, although it pleads a joint intention of Mr Cong and Ms Shen to benefit the three elder children, it concludes (in particular 17) with a cross reference to [10], which alleges a trust of the Campsie properties in favour of Mr Cong.
As an initial proposition, the first and second defendants note that [71] and [72] of the amended statement of claim allege that the Deed and the 2016 Will were intended to operate in combination and constituted Mr Cong's estate holding on trust for the plaintiffs (including Laurence) the benefit of the promises in the Deed.
The first and second defendants say that, if intended to take effect as a testamentary disposition (see [71] of the amended statement of claim), the trust would need to be effected by Will, conforming with s 6 of the Succession Act, subject to s 8 (noting that no application has been made under s 8).
The first and second defendants point out that cl 9(d) of the Will does not express, record or acknowledge any undertaking of the testator to constitute a testamentary trust, nor to recognise an existing trust by him of the promises under the Deed in favour of the plaintiffs or Laurence. The first and second defendants say that it rises no higher than the Deed.

[184]

Implied terms alleged at 16 and 16

Insofar as the terms alleged at 16 and 16 of the amended statement of claim are concerned, it is said that neither of the implied terms there alleged has any proprietary character founding a trust. It is noted that 16 alleges a negative restraint and that negative restraints do not confer a proprietary interest (referring to Redglove Projects Pty Ltd v Ngunnawal Local Aboriginal Land Council (2004) 12 BPR 22,319; [2004] NSWSC 880).
The first and second defendants do not concede that such terms arose, in the form pleaded, as implied terms of the Deed, but in any event say that if or to the extent that they did arise, they were merely contractual and owed only to Mr Cong.
It is said that the supposed breach of the term pleaded at 16 implies that the sales were not necessary in any event; and the first and second defendants say that no attempt has been made to demonstrate this. It is noted that the plaintiffs themselves consented to the sales of the Duke Street properties in 2019 ("no doubt recognising them as inevitable").
Insofar as the plaintiffs complain that Ms Shen did not keep Jolly Trading going, it is noted that Ms Shen pursued business unsuccessfully "through" Cong Australia International. It is submitted that running a loss-making business would be a breach of the term alleged at 16.
The first and second defendants also say that no such implication as alleged at 16 can arise (which they characterise as an implication that Ms Shen "was obliged to spend 10 years without making a loss, taking a holiday, educating her children or taking any step for her own enjoyment").
Further, it is said that if there was any obligation of this nature, it was owed to the other party to the contract and could not be owed to persons who were not privies.
It is thus submitted that each of the ways in which the plaintiffs seek to assert trust obligations owed by Ms Shen directly to the three elder children is affected by the same fallacy (i.e., that obligations were capable of arising in their favour by implication from the Deed rather than in favour of Mr Cong).
The first and second defendants further say that, to the extent that the plaintiffs seek to erect equities on top of the Will and the Deed, through the half-secret trust and equitable fraud claims, in each instance the plaintiffs rely on the Deed and its provisions. It is said that any equities founded in those instruments must be controlled by the nature and terms of the constitutive instruments and cannot be allowed to expose Ms Shen to inconsistency as to the object of her obligations.

[186]

Determination

The applicable principles for the construction of commercial contracts have been set out by the High Court in various authorities (see, e.g., Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104; [2015] HCA 37; Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7) and are well-known. Construction of the Deed in the present case requires, of course, consideration to be given to the fact that this was not a commercial or business transaction between arms' length parties - it was a Deed entered into between husband and wife for the purpose (as there recited) of making provision for the three elder children (Ms Shen's step-children) and in the context of the making of testamentary provision by Mr Cong in his 2016 Will.
The surrounding circumstances by reference to which the Deed is to be construed include the fact that Mr Cong was, at the same time, making his final Will; and that it was well understood by the parties to the Deed that Mr Cong did not have long to live.
I consider that the description of the Deed by the plaintiffs as "not a model of felicity" is charitable. Had it been drafted in more simple or clear terms then it is possible (though I would hesitate to say likely) that this litigation might have been avoided (or at the very least much reduced in its scale). However, Mr Cong himself (at the very least - bearing in mind that Ms Lan's email also suggests that Ms Shen had a role in this) played a part in the drafting of the Deed, insofar as it was at his instruction that the matters in cll 2(d) and 2(e) were included in the Deed (and the inclusion of cl 2(d) is part of the difficulty that has arisen in construing cl 2).
I consider in due course whether the Deed is properly characterised as a multi-party Deed Poll and enforceable by the plaintiffs (or otherwise by Edmund in his capacity as executor). Focussing solely at this point on the construction of the operative terms of the Deed, I have concluded as follows.
I cannot read cl 2(a) as simply introducing and regulating the succeeding provisions by limiting the time of retention of the Campsie properties or confining the succeeding provisions such that they operate only if the properties are still retained at the time of rezoning or the expiry of ten years (as the first and second defendants suggest it could be read).
Read with the chapeau to cl 2, sub-cl 2(a) contains an agreement that Ms Shen will retain ownership of the Campsie properties for no longer than ten years for the purposes of the rezoning of the properties. Two matters are here significant to my mind.
First, an agreement to retain the properties for "no longer than" a period of time in terms clearly sets a maximum period within which Ms Shen agrees to retain the properties. Implicitly, this must mean that Ms Shen agrees that the properties will be sold (if not before then) by ten years after Mr Cong's death since she is agreeing not to retain them for longer than that period. However, it says nothing to preclude a sale of the properties at an earlier time (and, as noted above, cl 2(d) itself contemplates that there might be a sale of 43 Amy Street prior to Mr Cong's death). In that regard, and subject to the next matters I raise, it cannot be said that Ms Shen assumed any obligation not to sell any or all of the properties at some time earlier than the ten year maximum period.
Second, the Deed makes abundantly clear what the purpose was for the retention of the properties for a period no longer than ten years - namely, that it was "for the purposes of the rezoning of the properties" (which is consistent with the statement in Recital D of Mr Cong and Ms Shen's belief that there was a proposal for the rezoning of the properties and that as a consequence they would increase in value). One significance of this is that if it transpired that a rezoning would not be able in the future to occur for some reason, then it would not be consistent with the scheme of the Deed (or the 2016 Will) that the properties would need to be retained "for the purposes of" rezoning. Another, it seems to me, and this is the qualification I make to the first point above, is that it might be said that Ms Shen's agreement as to the purposes of retention of the Campsie properties informs the content of her obligations under the Deed. In other words, if Ms Shen agreed that the properties were to be retained for the purposes of rezoning, it might be said that conduct (such as an earlier sale or transfer of the properties at a time when rezoning was still a reasonable possibility) which would frustrate the intended purpose of retention of the properties would amount to a breach of an implied term to co-operate in achieving the purpose there stated. It is in that sense that I consider that the implied terms pleaded in 16 and 16 of the amended statement of claim may have some work to do.
I do not regard as significant the obvious typographical errors in cl 2(a). Whether there was an omission of an earlier starting time for the retention period or there was an inadvertent surplusage by the inclusion of "to", nothing seems to me here to turn on it. As to the words "the these properties", either the errant "the" was included at a time when there was intended only to be a reference to one property (such as the 16 Nicholson Street property) or it was simply a typographical error (of the kind that bedevil even the most conscientious of proof-readers).
Turning then to cll 2(b)-(d), it was not suggested by anyone that the parties contemplated that there would be a succession of payments to the three elder children. Therefore, logically, only one such clause could ultimately have been intended to operate.
As to cl 2(b), I do not consider that the natural reading of the words "[u]pon rezoning … or sale" is as the first and second defendants have put forward in their alternative construction. I agree that the reading of the introductory words imports both a temporal element and sets the condition on which the agreement is to operate. Further, I agree that there is a distinction between the event of rezoning (being a rezoning of "the Campsie properties"), which must apply to a rezoning of all of the properties, and the event of sale (being a "sale of any or all of the Campsie properties"), which is differently worded.
Thus, I read the opening words as being that Ms Shen's agreement to pay under this sub-clause is one that is triggered either upon the rezoning of all of the Campsie properties or on the sale of any one or all of those properties. As to the suggestion that the clause might have harsh results if the sale of one or more of the properties was not in the context of a rezoning, the fact that the clause might operate harshly in some circumstances is not a reason for reading the words other than by reference to their normal meaning.
The next part of cl 2(b) is an agreement to pay the three elder children "no sooner than 10 years after [Mr Cong's] death" an amount to be determined in Ms Shen's absolute discretion (but having regard to the matters there set out - i.e., the range of amounts and the then market value of the properties).
This makes clear that, whenever the rezoning or sale triggering the obligation to pay was to occur, payment was not to be made until, at the earliest, 10 years after Mr Cong's death. That seems consistent with Mr Cong's apparent view (known to both parties) that the three elder children should not receive their inheritance until they were older. It does not, however, mandate a time by which that payment must be made. In the ordinary course where there is an obligation without specifying time for its performance, it will generally be implied that performance is to be within a reasonable time (which is no doubt the basis for the pleading to that effect - see prayer 10 of the amended statement of claim). However, I accept that it is likely that the intent of this clause was to leave it to Ms Shen's discretion as to when (at least within a reasonable time) that amount would be paid. That would be consistent with the possibility that the properties might be retained for the whole of the ten year period and only then sold (in which case it would not make sense for the payment to be required at precisely the same time - given that there might be vagaries or delays in the conveyancing process).
As to the amount of the payment, this is left to Ms Shen's "absolute discretion" but then (seemingly inconsistently with that absolute discretion) the clause specifies a minimum and maximum amount and directs Ms Shen as to how that amount is to be determined (by reference to the then market value of the properties). As noted above, I read the word "then" as directing attention to the time at which the amount is determined by Ms Shen. I accept that there would be room for some disparity if, say, the clause was triggered (as the plaintiffs say is here the case) by the sale of one property early in the ten year period but the amount is not to be paid until, at the earliest, the end of that period. However, it does not seem to me to be unworkable - even though on this scenario the property was not owned at that later time, it would be possible to determine its market value to be taken into account with the market value of the other Campsie properties for the purpose of determining where, within the range of amounts, the payment should be set.
As to sub-cl 2(c), there is no real ambiguity about this clause when read in isolation. The clause applies if the Campsie properties are not rezoned for high density living within ten years and then a specified amount is agreed to be paid. The potential problem here is as to which clause is to apply if there is a sale of any or all of the properties (triggering sub-cl (b)) but at the end of the period they have not been rezoned (triggering sub-cl (c)). As noted, this led to the debate as to whether the clauses were cascading alternatives or could otherwise be read consistently with each other; and as to whether there was a temporal component in that whichever was triggered first would apply. I come back to this after referring to sub-cl 2(d) since there is also a potential inconsistency between that and sub-cl 2(b).
Sub-clause 2(d) (added in accordance with Mr Cong's express instructions - and, according to Ms Lan's evidence, after consultation with Ms Shen) addresses the situation where there is a "sale" of one of the Campsie properties (43 Amy Street) before Mr Cong's death. In those circumstances, the clause provides that Mr Cong directs and agrees that "upon rezoning of the remaining Campsie property", an amount in a lesser range than that provided for under sub-cl (b) is to be paid, such amount again to be determined by Ms Shen in her absolute discretion (but without any reference in this sub-clause to the then market value of the property or properties).
As to whether "sale" in this sub-clause meant a completed sale, I consider that this must be the intended operation of the clause, having regard to the fact that Mr Cong and Ms Shen were well aware of the fact that 43 Amy Street was then the subject of exchanged contracts for sale. If the clause had been intended to be triggered by exchange of contracts for sale, then it would have been a simple matter to provide for that (and there would have been no need for sub-cl (b)). The words "[i]n the event of sale" (my emphasis) would also be rendered meaningless if a "sale" was already considered to have occurred as a result of exchange. I also consider that there is force in the submission that the reduction in the range of the amount to be paid in that circumstance is likely to reflect the reduction in the value of the pool of properties once 43 Amy Street was sold. Interestingly, sub-cl (d) provided for the payment to be made "upon rezoning" (not "no sooner than ten years after [Mr Cong's death]"). Therefore, the sub-clause contemplates that there might be an earlier payment of the amount determined by Ms Shen in her absolute discretion but within that reduced range if 43 Amy Street was sold before Mr Cong's death and the remaining Campsie properties were ultimately rezoned (there being no payment due under the sub-clause unless the remaining Campsie properties were rezoned). (That said, I have great difficulty with the proposition that completion of the sale of 43 Amy Street, pursuant to a contract for sale entered into with Mr Cong's knowledge and participation prior to the making of the 2016 Will and Deed, was a breach of trust by Ms Shen.)
It seems to me objectively unlikely (and as noted above no one contended for this) that it was anticipated that moneys would be payable under more than one of the three sub-clauses. How then to determine which would govern if there was an overlap? The issue does not arise in a practical sense as between sub-cll (b) and (d) (assuming I am correct in construing "sale" as meaning a completed sale) because there was no completed sale of 43 Amy Street before Mr Cong's death.
The potential for inconsistency is not such as to render the Deed uncertain in my opinion. I consider that sub-cl 2(d) is properly to be construed as a more specific clause that operates as a carve-out from sub-cl 2(b). In other words, sub-cl 2(b), when it refers to a sale of "any or all" of the Campsie properties, must be read, consistently with sub-cl 2(d), as not being triggered by a sale of 43 Amy Street if that occurred before Mr Cong's death. That also makes sense if, as Mr Cong and Ms Shen both considered, Ms Shen would have the ability to rescind the 43 Amy Street contract after Mr Cong's death (such that, as was the case with the other properties pursuant to sub-cl 2(b), Ms Shen had the discretion whether to sell - and thereby assume the obligation to make the higher payment under sub-cl 2(b) albeit that payment was not to be made before ten years had elapsed from Mr Cong's death - or to wait and see if all of the properties were rezoned for high density living within the ten years).
As to the interaction between cll 2(b) and (c), there is to my mind some logic to the construction that once sub-cl 2(b) is triggered the other sub-clause does not apply because, as a temporal matter, if there were to be a rezoning of all the properties within the ten years, then sub-cl 2(c) could not logically apply and if there were a sale before the expiration of ten years then that would bring to an end the prospect of any future benefit from the increase in value if there were a later rezoning (though the first and second defendants argue that it is not logical in those circumstances that the higher amount should be payable if there were not a rezoning).
Another possibility (and one which would assist in reconciling the two sub-clauses and removing the perceived harsh effect of the payment being at the higher amount even with no rezoning) is that the ten year period specified in both of the sub-clauses was intended to have the effect that, while a sale before the end of the ten years would trigger the obligation to make payment under sub-cl 2(b), since any such payment was not to be made sooner than ten years after Mr Cong's death (and by then it would be known if the properties had been rezoned) then if they were not rezoned by the end of the ten years, the amount payable would reduce to the lesser amount even though there had been an earlier sale. (In favour of this interpretation is that, the surrounding circumstances and factual matrix make it abundantly clear that the object of the Deed was to provide the elder children with a greater amount of money only in the event that the properties were rezoned. It seems to be contrary to the intention of the parties that Ms Shen would be required to pay the higher amount even if the rezoning did not ultimately occur.)
The first and second defendants say that there is nothing in the Deed to warrant the conclusion that the "first in time" triggers the liability such that the remaining sub-clauses then become irrelevant. On balance I would accept that, other than what can be drawn from the order of the sub-clauses, that is probably correct; and that would favour the second of the two possibilities (in the above two paragraphs) available to reconcile cll 2(b) and 2(c) being the preferable construction. However, I do not consider that the order of the sub-clauses is of no assistance in construing them. It seems to me significant that cl 2 is divided into a series of sub-clauses (i.e., each of sub-cll (b)-(d) is not in a separate clause). That reinforces my view that the sub-clauses are cascading provisions so to speak and that the way to approach the construction of those is to treat sub-cl 2(b) as the first event (so to speak) but then that its operation or effect is amended as and when the successive sub-clauses require it. Ultimately, it is the second possibility adverted to immediately above to which I adhere.
The plaintiffs, as I understand it, submit that if sub-cl 2(b) is not found to be applicable in the circumstances which have occurred, then sub-cl 2(c) is likely to come into effect (since the prospect of rezoning seems now to have been regarded as unlikely). If so, then one would wait to the end of the ten year period and if the properties are not rezoned as a matter of fact (whoever then owns them), then the amount payable under the Deed is reduced to the $3 million. That seems to me to be consistent with the logic of the Deed (and the obvious emphasis placed by Mr Cong (and Ms Shen for her part) on the prospect of the rezoning of the properties increasing their value). It is also consistent with Mr Cong being prepared for Ms Shen to have a discretion as to the amount (above $5 million or $6 million as the case may be) to be paid to the three elder children if the properties were to be rezoned, and there being no discretion as to the amount if the properties were not rezoned (such that Mr Cong would be assured that his elder children obtained substantial provision out of the estate - as was evidently his intention).
Accordingly, I find that the proper construction of the Deed, by reference to the text and context of the Deed (and the circumstances surrounding its execution) is as set out above.
I do not find the Deed to be so uncertain as to be unenforceable, noting that courts will strive to give effect to agreements solemnly entered into between parties. Nor would I find that it was a contract of wager. This was not some bet on the prospect of rezoning as such; it was the entry into an agreement whereby Ms Shen had the discretion as to how to deal with the properties (albeit with the purpose in mind of permitting the prospect of rezoning to occur) and to make a determination of how much Mr Cong's elder children were to share in his estate by reference to what transpired in relation to the rezoning. (In hindsight, the three elder children would likely have been better served by Mr Cong severing the joint tenancy over 16 Nicholson Street and leaving his interest in the property to them, with, say, a direction as to the payment of his share of the debt over that property to be paid from other assets of his estate, as it appears he intended at the time of the 2014 Will and in his first instructions to Mr Glynn. For better or worse, however, it appears that Mr Cong acceded to Ms Shen's protestations in relation to any such proposal - with the result that the three elder children have received little or nothing of what Mr Cong had intended them to receive; and everyone will no doubt have incurred a substantial costs liability in litigation that Mr Cong never wished to arise.)
As to the implied terms that have been alleged, I do not accept that the term pleaded at 16 of the amended statement of claim satisfies the test in BP Refinery v Hastings Shire Council. I do not consider that it is reasonably necessary to give business efficacy to the Deed and I think it is arguably inconsistent with the discretion given to Ms Shen as to when payments were to be made. The scheme of the Deed and 2016 Will is such that the obligation to make any payment under cl 2(b) (once triggered) was to make that payment no sooner than ten years after the date of Mr Cong's death. If the obligation was triggered by a sale of any or all of the Campsie properties, I see no basis for it to be implied that the proceeds be held on trust until then. It would make sense, for example, for any such proceeds of sale to be invested (in property or otherwise) in the interim. Similarly, the obligation under sub-cll 2(c) and (d) would not arise until either the expiry of ten years in the first instance or the rezoning of the Campsie properties remaining after a sale of 43 Amy Street before Mr Cong's death in the second; i.e., the obligation is not predicated on a sale of the properties in any event.
As to the term pleaded at 16, I accept that a term of the kind considered in Ansett Transport Industries is one that may commonly be implied into commercial contracts (see the discussion in Brand v Monks to which the plaintiffs have referred) and I see no reason in principle why such a term would not be implied into a Deed of this kind (albeit that the matters pleaded at (A)-(C) appear to me to be instances of the alleged breach of the term rather than the term itself). Though I add here (as I did parenthetically in Brand v Monks at [333]) that in Southern Foundries (1926) Ltd v Shirlaw [1940] AC 701 at 717, when considering argument based on such a term, Lord Atkin considered this not so much to be an instance of reliance on an implied term but on a positive rule of the law of contract that conduct which of the party's own motion brings about the impossibility of performance is in itself a breach.
While I do not accept that the Deed was one made "on the footing of the continuance of a state of things", if by that it was meant the retention of the Campsie properties (since the Deed itself contemplated that one or more of the Campsie properties might be sold prior to the anticipated or hoped-for rezoning of one or all of them), I would be inclined to the view that it should be implied into the Deed (assuming for present purposes that it is binding on Ms Shen) a term that Ms Shen not, by any act within her power or control, do anything to destroy her ability or put it out of her power to comply with her obligations therein. My only hesitation in that regard is the difficulty of identifying precisely what compliance with such a term would require, in circumstances where I do not accept that the Deed required Ms Shen to retain the properties for the purposes of performance of an obligation to make the payments contemplated to the three elder children (she could, for example, have chosen to sell one or more of the properties in advance of a rezoning).
In any event, even if there is such an implied obligation (as I am inclined to think there was) and even if the Deed remains binding on Ms Shen (as I do not consider is the case), I do not accept that Ms Shen has breached that obligation by the transfer of the Duke Street properties (which occurred after notice to the plaintiffs was given). The position of the transfer of the Wu Property I deal with separately in due course.
Finally, as to the implied term of good faith (see 16 of the amended statement of claim), the authorities as to the implication of a term of good faith in commercial contracts have been recently considered in Australian Competition and Consumer Commission v Geowash Pty Ltd (2019) 368 ALR 441; [2019] FCA 72. The present position in Australia is that there is no general contractual term, implied in law, requiring parties to act in good faith in the performance of a contract (Commonwealth Bank of Australia v Barker (2014) 253 CLR 169; [2014] HCA 32 at [42], [107]; Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45; [2002] HCA 5 at [40], [86]-[88]).
In Burger King Corporation v Hungry Jack's Pty Limited [2001] NSWCA 187, the Court of Appeal noted (at [164]) that there "appears to be increasing acceptance that if terms of good faith and reasonableness are to be implied, they are to be implied as a matter of law". The Court also noted (at [163]) that "the obligations of good faith and reasonableness will be more readily implied in standard form contracts, particularly if such contracts contain a general power of termination". Nevertheless, although there may be difficulty in complying with the test in BP Refinery v Hastings Shire Council, an obligation of good faith may also be implied in fact (in this regard, see the comments of Steytler J in Central Exchange Ltd v Anaconda Nickel Ltd (2002) 26 WAR 33; [2002] WASCA 94 at [52]).
As to the content of the implied obligation of good faith, the address of Sir Anthony Mason in 1993 (published as Contract, Good Faith and Equitable Standards in Fair Dealing (2000) 116 Law Quarterly Review 66 at 69) has been influential. The concept of good faith was there said to embrace three aspects: an obligation on the parties to cooperate in achieving the contractual objects (loyalty to the promise itself); compliance with honest standards of conduct; and compliance with standards of conduct which are reasonable having regard to the interests of the parties.
Ultimately, it is not necessary to explore this issue in detail - for while I would be inclined to consider that there was an implied term of mutual good faith contained in the Deed, I consider that any such implied term was owed to Mr Cong (not to the plaintiffs - who, though named in the Deed, are not parties thereto).

[187]

(iv) Whether Ms Shen breached the Deed

Breach of the Deed is pleaded at Section G of the amended statement of claim. There is a series of alleged breaches, all relating to the disposal of various of the Campsie properties: (i) at [49], that Ms Shen did not retain ownership of the Campsie properties, but caused "at least" the Wu Property to be transferred to Ms Wu on 15 February 2017 for the purported consideration of $1.675 million; (ii) at [52], that Ms Shen, to the extent that she in fact received consideration for the Wu Property and 43 Amy Street properties, breached the implied term pleaded in 16 by failing to retain the said proceeds on trust for the three elder children; (iii) at [53], [55], [57], that Ms Shen breached the implied terms in 16, 16 and 16 of the amended statement of claim by selling the Duke Street properties; (iv) at [54], that Ms Shen breached the implied term pleaded in 16 by causing "at least" the Wu Property to be transferred prior to the tenth anniversary of Mr Cong's death or alternatively before it was rezoned; by transferring the Wu Property to Ms Wu prior to the tenth anniversary of Mr Cong's death or alternatively before it was rezoned and without receiving money for the transfer, thus diminishing her ability to pay the moneys due under the Deed; and by not retaining the proceeds of sale of 43 Amy Street, thus diminishing her ability to pay the moneys due under the Deed; and by taking the steps pleaded at [27]-[38] of the amended statement of claim in relation to Jolly Trading; (v) at [56], that Ms Shen breached the implied term pleaded in 16 by failing to retain the sale proceeds in respect of any consideration in fact received for the sale of the Wu Property and 43 Amy Street properties; not acting in good faith (in relation to the transfer of "at least" the Wu Property) by diminishing her ability to pay moneys due under the Deed; knowing that by not retaining the proceeds of sale of 43 Amy Street, her ability to pay the moneys due under the Deed was diminished; and that a purpose of the transfer of the Wu Property to Ms Wu was to remove that property from the pool of assets that was available to the plaintiffs.
It is alleged that the three elder children have suffered loss and damage as a result of the breaches (particularised as being the value of 58 and 43 Amy Street upon each being rezoned or alternatively at the time of transfer; and the amount due to them under the Deed less the amount they receive in light of the matters pleaded at section E of the pleading - the claims in relation to Jolly Trading) (see [59]).
At [60], a further or alternative breach is alleged of the implied term pleaded in 16 by reference to the sale of Amy Street and failure to retain the sale proceeds on trust for the three elder children (see [50]-[51]) as a result of which it is alleged that the three elder children have suffered loss and damage particularised as being the amount of the proceeds of sale of 43 Amy Street.
It is alleged that on the true construction of cl 2(d) of the Deed, the sale referred to therein did not occur ([63]); and that in circumstances where the Wu Property has been sold, on the true construction of cl 2(b) of the Deed, Ms Shen is bound to pay to Edmund and Teresa and Laurence's estate the sum of no less than $6 million no sooner than 28 July 2026 but within a reasonable time thereafter ([64]; or in the alternative, that Ms Shen is bound to pay Edmund and Teresa and Laurence's estate (within that time) an amount of no less than $5 million (pursuant to cl 2(d) of the Deed); or, in the event that the Campsie properties are not rezoned in the manner stipulated in cl 2(c) of the Deed, an amount of not less than $3 million ([65]).
Specific performance is sought of the promises pleaded at [64] and [65] (see [66] of the amended statement of claim).

[189]

First and second defendants' submissions

The first and second defendants note that [64] and [65] of the amended statement of claim refer to Laurence's estate. However, the first and second defendants point out that the Deed does not contain any promise except to pay Teresa, Laurence and Edmund. The first and second defendants emphasise that the three elder children are not parties to the Deed. They say that a payment to Laurence's estate is not a payment to Laurence and they say that no intention to benefit the children's successors is evident.
It is noted that Recital H identifies the purpose of the Deed as limited to making provision for the three elder children and that it purports to attach a Will but does not do so (and, as noted above, that the 2016 Will refers to a deed dated 2 May 2016 - of which there was none).
The first and second defendants, however, accept that, for the purpose of construction, it is permissible to consider that the Deed itself indicates (as the surrounding matrix) that there was a Will, and, as Recital H says, that the Deed's purpose was to make provision for Teresa, Laurence and Edmund upon the death of Mr Cong. The first and second defendants say that those surrounding circumstances militate strongly against a construction that the promises were to pay Teresa, Laurence and Edmund and their successors. They say that cl 4 of the Deed does not assist the plaintiffs as they are not parties; and it refers to how the parties are bound, not how they are benefited (and they make the same submission as to cl 1(g)).
As to how the Deed was to operate in case of the death of one or more of them, the first and second defendants say that the most likely views are that: it is no longer possible to pay (all of) Teresa and Laurence and Edmund, so that the obligations lapse by frustration; or that the share of the deceased person does not have to be paid; or that the covenant is to pay the survivors in equal shares.
The first and second defendants say that the first of those views is supported by the requirement to pay "all" and for equal division with Laurence (which is now impossible). Although s 71 of the Conveyancing Act provides, relevantly, that in the absence of contrary intention and subject to the provisions of the relevant covenant, contract, bond or obligation, a "covenant, whether express, or implied under this or any other Act, and a contract by deed, and a bond or obligation by deed, made with two or more jointly, to pay money or to make a conveyance, or to do any other act, to them or for their benefit, shall be deemed to include, and shall by virtue of this Act imply, an obligation to do the act to, or for the benefit of, the survivor or survivors of them, and to or for the benefit of any other person to whom the right to sue on the covenant, contract, bond, or obligation devolves", the first and second defendants say that s 71 does not apply because the covenant was not made "with" the plaintiffs and Laurence.
Moreover, it is said that the expressed purpose of benefiting the three elder children personally as part of a succession plan; the language of payment to all and an equal division between them; and the evident competition with the interests of Ms Shen and her children, tells against any view that the parties intended that the survivors would share in a lapsed share of their brother after his death. It is submitted that the objective bystander would not think that was intended (and still less that it was intended that Ms Joyce should succeed to the interest of a deceased child).

[190]

Plaintiffs' submissions

Insofar as the first and second defendants submit that Laurence's estate lacks standing because, on the true construction of the Deed, it was intended to benefit Laurence only, rather than his survivor, the plaintiffs say as follows.
The plaintiffs say that, if the Deed can be enforced by the plaintiffs, it is because they are parties to it (for the reasons that I set out below in considering issue (v) - and placing reliance on what was said by Jervis CJ in Morgan v Pike where it is said that a person in the plaintiffs' position was both a party and a covenantee. It is noted that in The Rights of Strangers to Contracts under Seal consistently with that, R J Bullen considered that person who is named in a deed could be regarded as a party thereto, provided the covenantor had executed the document. The plaintiffs say that if, on the other hand, the Deed is in the form of a deed poll, the plaintiffs nonetheless derive rights thereunder.
The plaintiffs point out that, at common law, the death of one joint co-promisee extinguished that co-promisee's interest in the benefit of the promise which passed to the remaining co-promisees (as opposed to the position where the contractual rights were joint and several, in which case the several aspects of the promise would pass to the co-promisee's personal representative), noting that these principles are now subject to the operation of s 71 of the Conveyancing Act.
The plaintiffs refer to the observation of Professor J W Carter in Contract Law in Australia that co-promisees are almost invariably joint promisees. The plaintiffs say that nothing in the Deed expressly points to the rights being joint and several. Thus, it is said that, at common law, Laurence's interest passed to Teresa and Edmund but that the effect of s 71 is to pass the interest which would otherwise have been received by Laurence to his legal personal representative (i.e., the person to whom the right to sue devolves).
Further, in this context, the plaintiffs say (and I agree) that on no view can it be said that the Deed fails by frustration (c.f., the first and second defendants' written submissions at [72]-[73]).

[191]

Determination as to standing of Laurence's personal representative

Ultimately, the issue as to whether Laurence's legal personal representative has standing to sue under the Deed for performance of the obligation in relation to the payment of a one-third share of the moneys payable under cl 2 of the Deed (whichever clause be applicable) is not necessary to determine because I am not persuaded that the Deed can be enforced against Ms Shen, for the reasons set out in due course. Had the issue arisen for determination I would have concluded that the covenants in cl 2 of the Deed in favour of the three elder children were several (there being no provision that if one predeceased the others that child's share would be divided equally between the surviving children) and (subject to the Deed operating as a multi-party Deed Poll, which I consider below) would be enforceable by the legal personal representative of his estate. However, I am not persuaded that the benefit of the covenant in favour of Laurence was one that passed to his successors. In other words, while I consider that there would be standing, I do not consider that the cause of action on the covenant subsisted after Laurence's death.
Pausing here, the fact that Ms Joyce is ultimately the beneficiary of Laurence's intestate estate seems to me not to be to the point (though it no doubt would be a matter of some aggravation to Ms Shen were Ms Joyce to benefit as a result of this claim). While an expressed intention that Ms Joyce not be able to claim against Mr Cong's estate might arguably form part of the surrounding circumstances in that it constitutes a fact known to both parties, there is nothing to suggest that either addressed the possibility of the impact of Laurence's death occurring after that of Mr Cong, but before any payment was made under cl 2 of the Deed, and his intestate estate thus passing to Ms Joyce. The parties' intention that Ms Joyce should not get anything out of the estate would seem to me therefore to be irrelevant.

[192]

Determination as to the alleged breaches

Turning back then to the allegations of breach of the Deed (and assuming for present purposes that it is enforceable against Ms Shen), I find as follows having regard to the construction of the Deed that I consider to be the proper construction (as set out above).
I do not consider it to be in breach of the Deed (as alleged at [49]), that Ms Shen did not retain ownership of the Campsie properties, but caused "at least" the Wu Property to be transferred to Ms Wu on 15 February 2017 for the purported consideration of $1.675 million. That is because the Deed does not oblige Ms Shen to retain the properties for a minimum period of time; but rather Ms Shen agreed to retain them for no longer than the stipulated period (of ten years). Moreover, the Deed itself contemplated that there might be a sale of the properties absent a rezoning. Therefore, the mere fact that Ms Shen did not retain ownership of the Campsie properties (even though that was clearly intended for the purpose of the anticipated rezoning) is not a breach of the Deed per se (though I come back to this in the context of the alleged breach of an implied term of the Deed).
I do not consider that there was breach of an implied term (as alleged at [52]) that Ms Shen retain any consideration received for the Wu Property and 43 Amy Street properties, by Ms Shen failing to retain the said proceeds on trust for the three elder children. In circumstances where the obligation under the Deed was to pay an amount of money (varying in accordance with which sub-clause applied and the exercise of the discretion to determine an amount within the applicable range there specified) at some future time (no sooner than ten years at least unless cl 2(d) applied), I see no basis for the suggestion that Ms Shen was to hold the proceeds of sale from an earlier time on trust for the elder children.
As to the allegations (at [53], [55], [57]), that Ms Shen breached the implied terms in 16, 16 and 16 of the amended statement of claim by selling the Duke Street properties, while I accept that there might have been breach of an implied obligation not to obstruct or put it beyond Ms Shen's power to comply with her obligations under the Deed if Ms Shen were thereby to have divested herself of all the assets out of which performance of the obligations under the Deed might have occurred, as I have said earlier, I do not accept that there was such a breach by reason of the transfer of the Duke Street properties, which occurred after notice to the plaintiffs.
As to the alleged breach (at [54]) by Ms Shen of the implied term pleaded in 16 by causing "at least" the Wu Property to be transferred prior to the tenth anniversary of Mr Cong's death or alternatively before it was rezoned; by transferring the Wu Property to Ms Wu prior to the tenth anniversary of Mr Cong's death or alternatively before it was rezoned and without receiving money for the transfer, thus diminishing her ability to pay the moneys due under the Deed; and by not retaining the proceeds of sale of 43 Amy Street, thus diminishing her ability to pay the moneys due under the Deed; and by taking the steps pleaded at [27]-[38] of the amended statement of claim in relation to Jolly Trading, I consider that the transfer of the Wu Property to Ms Wu for no consideration does amount to a breach of the implied term here pleaded (but that the balance of the conduct alleged to be in breach does not amount to a breach of the implied term). That is because I consider that the transfer to Ms Wu of the Wu Property had the effect of putting that asset out of Ms Shen's power to resort to this for the purpose of meeting the obligations under the Deed (and in this regard I place weight on the fact that the transfer was in fact for no consideration - notwithstanding the amount recorded on the transfer document).
As to the allegation of breach (at [56]) by Ms Shen of the implied term pleaded in 16 by failing to retain the sale proceeds in respect of any consideration in fact received for the sale of the Wu Property and 43 Amy Street properties; not acting in good faith (in relation to the transfer of "at least" the Wu Property) by diminishing her ability to pay moneys due under the Deed; knowing that by not retaining the proceeds of sale of 43 Amy Street, her ability to pay the moneys due under the Deed was diminished; and that a purpose of the transfer of the Wu Property to Ms Wu was to remove that property from the pool of assets that was available to the plaintiffs, while I note my earlier finding that any such implied term of mutual good faith was owed to Mr Cong (and not the plaintiffs), I am satisfied that the transfer of the Wu Property to Ms Wu for no consideration was in breach of the implied term of good faith (for similar reasons to that above); but not the fact that the proceeds of sale of 43 Amy Street were not retained.

[194]

Plaintiffs' submissions

The plaintiffs say that the Deed executed on 3 June 2016 is a multi-party deed poll (a deed poll executed by two or more parties). Reference is made in this regard to the description of multi-party deed polls and the right to sue on them as contained in Nicholas Seddon, Seddon on Deeds (2015, The Federation Press) (Seddon on Deeds): A deed poll can be jointly executed two parties - a multi-party deed poll. This type of deed poll is confusingly called a "deed not inter partes". The parties have a common purpose in this type of deed poll as compared with different rights and obligations under a deed inter partes. It is not always self-evident a deed is inter partes or poll. The difference can be crucial: the privity rule applies to a deed inter partes but not to a deed poll. A deed poll can be enforced by a person sufficiently identified in the deed.
The plaintiffs also refer to the consideration by Doyle CJ of what constitutes a deed poll in Accordent Pty Ltd v Bresimark Nominees Pty Ltd (2008) 101 SASR 286; [2008] SASC 196 (Accordent) at [68]-[69]. There, his Honour referred to the discussion in Moody v Condor Insurance Ltd [2006] 1 WLR 1847 (Moody v Condor Insurance) at [15] of what Park J there described as the "somewhat arcane and esoteric aspects of the law relating to deeds". In particular, Doyle CJ noted that the distinction between an indenture and a deed poll was not purely one of form; and was to be drawn by a consideration of the operation and effect of the deed in question.
In Moody v Condor Insurance (at [16]), Park J contrasted a standard deed poll (a deed executed by one party alone by which an executing party makes a promise to someone not party to the deed) and a deed inter partes (a deed between two or more parties by which one or more of them makes or make promises to the other or others of them) and went on to say: … I hesitate to assert definitively that a deed inter partes could never create rights which could be enforced by a non-party to the deed against a party, but I certainly accept that the indications in the textbooks and authorities (which tend to be of considerable antiquity in this area) are to that effect: deeds inter partes create rights and obligations between the parties, and are not, or (putting it more cautiously) are not customarily thought to be, the kinds of documents to use if the intention is to confer rights on non-parties which they can enforce against parties.
The test applied by Park J in Moody v Condor Insurance (see at [18]) was whether one or more of the parties to the deed "in fact make promises to the other or others (as one would expect of a deed inter partes), or do they rather seek to use the document as a means for each of them to make unilateral promises to a person who is not a party to it (or to persons who are not parties to it)". There it was concluded that the documents in question were the types of deeds which were intended to (and did) create rights enforceable by non-parties.
It is noted by the plaintiffs that Park J went on to say that, although the guarantee in question was executed by the guarantor and by another party to the relevant transaction, properly understood the document performed two distinct functions, or created two different relationships; and that, relevantly, the document operated as a deed poll as between the guarantor and the plaintiffs in the action, who were not parties to the deed.
Reference is made to the decision of Slattery J applying this reasoning in The Application of the NSW Trustee and Guardian; The Estate of Critchley [2020] NSWSC 1635 (Critchley) at [49], his Honour saying that merely because a deed was for some purposes a deed inter partes did not mean that it could not also for other purposes be a deed poll.
The plaintiffs say that the language of the Recitals to the Deed and of cl 2 makes clear that the Deed made unilateral promises to the plaintiffs, noting that Recital C expressly acknowledged the plaintiffs and submitted that the inclusion of Recitals D and E is only meaningful when the Deed's purpose is construed as benefiting, inter alios, the plaintiffs (because those Recitals foreshadow cl 2). The plaintiffs also point to Recital H which identifies the Deed's purpose as being to "make provision for [the plaintiffs] upon the death of Cong".
As to cl 2, the plaintiffs say that the statement that Mr Cong and Ms Shen agree "between each other and with [the plaintiffs]" is a recognition that some bilateral rights are created by the Deed (principally, it is said, Ms Shen's entitlement to receive a refund of the $10,000 immigration bond). It is thus said that the Deed should be stated to be between Ms Shen and Mr Cong and, to that extent, operates as a deed inter partes but that the Deed performs a dual purpose. The plaintiffs say that the concluding words of the chapeau recognise that the signatories bind themselves to the plaintiffs; and the plaintiffs submit that this obligation recognises a promise, the substance of which is expressed in the balance of that clause.
As to the question of standing to sue on the Deed, the plaintiffs point out that a person for whose benefit a covenant in a deed poll is expressed to be made (if sufficiently named by reference) can sue on it (citing Wily as Liquidator of Anglican Insurance Ltd [2009] NSWSC 696 (Wily) where Barrett J, as his Honour then was, speaking of the significance of the advent of the deed poll, said that a deed poll can be sued on "by any person with whom the covenant was made" - his Honour there citing Chelsea and Walham Green Building Society v Armstrong [1951] Ch 853 (Chelsea v Armstrong) per Vaisey J, quoting the second edition of "Norton on Deeds" (see RF Norton, A treatise on deeds (2nd ed, 1928, Sweet & Maxwell) (Norton on Deeds)) at 29).
The plaintiffs here say that they are unambiguously identified within the Deed; and entitled to enforce it, even though they did not execute it.

[195]

First and second defendants' submissions

The first and second defendants say that the plaintiffs are not able to sue on the Deed as a deed poll; that it was a deed inter partes; and that none of the alleged trusts in favour of the plaintiffs (and Laurence) arises.
The first and second defendants maintain that a third party cannot sue on a deed inter partes even if named as a promisee (referring to Norton on Deeds at 28-29; Concrete Constructions Pty Ltd v Government Insurance Office of NSW [1966] 2 NSWR 609 (Concrete Constructions) at 615, 618-620). They say that it is said that it is not a basis for asserting that a deed is a deed poll that it names as promisees others who are not parties to the deed.
The first and second defendants say that where, upon the true construction of a deed, a promisee named in it is intended to be a party, then the effect is that the deed is intended to be a deed inter partes. They say that it must follow that, unless there are fulfilled the legal requisites of execution, attestation and legal delivery, it is an inchoate instrument for want of execution by one of the parties.
They say that the relevant distinction is between deeds inter partes (i.e., deeds between parties named in the deeds as parties on different sides of the bargain, on the one hand, and deeds poll (being unilateral instruments upon which others named in it as beneficiaries may sue), on the other.
The first and second defendants say that a covenant by two or more people together in favour of another or others would prima facie be a joint obligation, referring in this context to Glanville Williams on Joint Obligations (1949, Butterworths), at 35, which states that: … a promise is joint when a single promise is made by two or more persons without words indicating that each is to be bound individually as well as jointly. If there are such words, the contract is joint and several. The presumption is that a contract made by two or more persons is joint, express words being necessary to make it joint and several.
The first and second defendants say that in the case of a joint obligation the obligors, whether jointly or jointly and severally, are covenanting together in favour of some third person or persons sufficiently identified as the beneficiaries; thus the covenant remains unilateral in the sense that the two or more people who are together do not require the assent of the beneficiary. Reference is made in this context to Seddon on Deeds at [6.9]: On the face of it, the form of the deed will be determinative. If a deed is clearly a deed inter partes - it has two or more persons as named parties to the deed and they are on different "sides" - and the deed purports to confer a benefit on a stranger (a party not named as a party to the deed), that stranger cannot enforce.
The first and second defendants say that in the present case the Deed is a deed inter partes both in form and substance.
As to its form, it is noted that it is expressed to be between Mr Cong and Ms Shen; that cl 13 permits execution by exchange of counterparts, and the date of the Deed is to be the date of execution by the last party; and that the interpretation clause (cl 1) contains a jurisdictional submission by the parties and provisions in respect of the obligations of "parties" (referring to cll 1(d) and (g), and "possibly" to (h)).
As to its substance, the first and second defendants note that cl 2(a) of the Deed identifies what Ms Shen "will" do in the event of Mr Cong's death; cl 2(b) and (d) express agreement by Ms Shen to pay money in different events; cl 2(d) is expressed as a direction and agreement by Mr Cong addressed to Ms Shen, who is to determine and pay an amount, in certain events; and cl 2(e) directs that a payment be made to Ms Shen upon a contingency.
The first and second defendants also point to the machinery clauses that have covenants imposing mutual obligation by each party to the other: cl 3 (confidentiality) - which it is said must prevent delivery to the plaintiffs; cl 4 (binding the parties' successors and assigns) - it being noted that there is no covenant benefiting successors and assigns; cl 5 (the entire agreement clause, discharging prior representations and agreements between the parties on the same subject matter); cl 6 (permitting the parties to amend the Deed in writing and providing that amendment is not otherwise effective) - the effect of which is said to be to recognise that the parties to the Deed could take away the promises; cl 7 (providing for dispute resolution by mediation and negotiation between the parties, and the giving of notices therefor by each to the other, and contemplating by cl 7(d) that the Deed might be terminated, in which case the dispute resolution clause would survive); cl 8 (confining the effects of either party's acts of waiver of any breach); cl 9 (exempting either party from liability to the other for loss caused by failures occasioned by causes beyond its reasonable control); cl 12 (facilitating notices between the parties); cl 13 (providing for execution by counterparts); and cl 14 (providing that each party will pay his and her own costs in relation to this Deed).
The first and second defendants say that it is clear that at least the majority of these clauses are capable of having significant effects and consequences for defining, controlling, establishing and modifying the distinct rights and obligations inter se of Mr Cong and Ms Shen. It is said that it is clearly contemplated that Mr Cong will not have ownership of the Campsie properties or be the subject of any promise to pay $3 million, $6 million, or $5 million or any other amount to his children. Thus, it is said to be a deed between two sides.
If, however, the correct construction be that the Deed is a deed poll, then the first and second defendants say that the plaintiffs' action must be at law for breach of covenant or for debt; that the claim cannot lie in debt (because the conditions for a debt to accrue and fall due have not been fulfilled); and, if it is for breach of covenant, the action is for damages for breach of covenant.
It is said that the deed poll case will not support specific performance or injunctive or other equitable relief, because the plaintiffs are volunteers. Accordingly, it is submitted that the plaintiffs' action would be limited to damages at law, and that the plaintiffs must prove damage in respect of some identified loss (which it is said has not been attempted). Hence it is submitted that the action would be dismissed in any event or at best only nominal damages awarded. (The plaintiffs cavil with the proposition that they are volunteers.)
In any event, the first and second defendants say (for the reasons advanced in their submissions) that there has been no breach, whether or not the Deed is a deed inter partes or a deed poll.
The first and second defendants also point to the doubt expressed in Seddon on Deeds at [1.7] and [5.5] as to whether estoppels arise from a deed poll.

[196]

Plaintiffs' reply submissions

The plaintiffs say that there is no need to consider whether leave should be granted to sue on behalf of the estate where the plaintiffs possess causes of action directly on the Deed and by reference to their right to vindicate trust claims.
Further, the plaintiffs maintain that they have standing to sue on the Deed regardless of its status as a deed poll. The plaintiffs' position is that, if the Deed is a deed poll, then they have standing to sue (citing Wollongong Coal Ltd v Gujarat NRE India Pty Ltd (2019) NSWLR 432; [2019] NSWCA 135 (Wollongong Coal) at [55]-[56] per Leeming JA (with whom Bathurst CJ [at 12] and McCallum JA [at 122] agreed)); that if it is not a deed poll, then they nonetheless have standing because they are named in the Deed, even though they are not signatories to it (referring to cl 2 of the Deed).
In Wollongong Coal, at [55], Leeming JA endorsed the proposition in D Ibbetson and E Schrage, "Ius quaesitum tertio: A Comparative and Historical Introduction to the Concept of Third Party Contracts" in E Schrage (ed), Ius quaesitum tertio (2008, Duncker & Humbolt) at 26 that: In the case of deeds inter partes, i.e. where the document itself specified who the parties were, all that was needed was that the intended beneficiary be named as a party. While the person undertaking the obligation had to put his seal on the document, there was no such requirement in the case of the beneficiary: naming was sufficient.
Reference is made to Morgan v Pike (1854) 14 CB 473 at 486, also cited with approval by Leeming JA in Wollongong Coal; and to Matouk v The Entrance Seabreeze Pty Ltd [2010] NSWSC 649 (Matouk) at [60], for the proposition that a person may still be able to rely on a deed for his or her benefit, despite not having executed the deed, provided that person is named as a party to the deed.
As to the reliance placed by the first and second defendants (at [373] of their written submissions) on Concrete Constructions, the plaintiffs point out that Macfarlan JA there did not consider the cases referred to in Wollongong Coal and Matouk because his Honour was considering a simple contract, rather than a deed.
Insofar as the first and second defendants submit that the Deed is a deed inter partes, and not a deed poll, the plaintiffs say that this does not give effect to the chapeau to cl 2 and in particular the words "and with Teresa, Laurence and Edmund"; nor does it give effect to Recital H, which states the purpose of the Deed being to make provision for Teresa, Laurence and Edmund upon the death of Mr Cong. It is noted that recitals to a deed may be used to construe its operative provisions. The plaintiffs invoke the presumption against redundancy and the principle of construction that all the words of a contract are to be given effect.
The plaintiffs submit that their construction of the Deed recognises the test in Accordent that the matter is to be construed as a matter of substance. It is said (adopting Park J's reasoning in Moody v Condor Insurance at [15]) that Mr Cong and Ms Shen used the Deed as a means to make unilateral promises to persons who were not parties to it. The plaintiffs say that the provisions of the Deed cited above, and also Recitals E and G, suggest a clear intention that the plaintiffs could enforce the promises recorded in the Deed. It is also said to be relevant that Ms Shen's unilateral promise in favour of the plaintiffs was supported by consideration moving from Mr Cong (who agreed that in the event he died before the immigration bond was refunded, such bond was payable to Ms Shen (cl 2(e)).

[197]

Further submissions by first and second defendants

Further submissions were then filed by the first and second defendants on 9 April 2021, responding to the plaintiffs' submissions in reply of 31 March 2021, referring to Wollongong Coal, concerning the plaintiffs' specific claim to be entitled to sue under direct causes of action in covenant (i.e., a claim alternative to the plaintiffs' claim to represent the estate of Mr Cong to sue for performance of the Deed on the basis that he was the party to whom the promise was made).
The first and second defendants point out that (at [67] and [68] of the amended statement of claim) the plaintiffs allege that the Deed is a deed poll, operating for their benefit and that they are entitled to sue upon it. They say that it is only in answer to the first and second defendants' response (that the Deed is not a deed poll) that the plaintiffs have asserted for the first time that the plaintiffs can sue upon the deed as a deed inter partes; and that the plaintiffs should not now be permitted to do so (see below).
The first and second defendants say that the proposition that the plaintiffs can sue because they are named in the Deed is not supported by the authorities cited by the plaintiffs (Wollongong Coal, Matouk and Morgan v Pike) and is contrary to the proposition stated in the authorities that in the case of a deed inter partes, it is necessary that the beneficiary be named as a party to the deed in order to have any rights under it giving the right to sue (there referring to Leeming JA at [61] in Wollongong Coal). The first and second defendants note that in Wollongong Coal (at [53]-[54]), Leeming JA emphasised the continuing importance of the historical derivation and differences between the rules of privity as between deeds and simple contracts; and they emphasise that at [55], his Honour stated that "at common law, only a person expressed to be a party to a deed inter partes could sue on the deed" (emphasis added).
The first and second defendants say that if the plaintiffs' proposition is that being named in the deed as a promisee or beneficiary of the promise (as opposed to simply being named in the deed) is sufficient to constitute the promisee or beneficiary as a party to the deed, then that proposition is also not established by the authorities. It is noted that, in Wollongong Coal at [56], Leeming JA distinguished deeds poll as different in that "a person to whom a covenant or grant contained in a deed poll is made could enforce it", citing the decision of Barrett J, as his Honour then was, in Wily at [7]. Thus, the first and second defendants say that this passage distinguishes a promisee (who may or may not be a party) from a party to the deed.
It is noted that, in the passage cited from Wily, the phrase "any person with whom the covenant was made" was taken from Vaisey J's statement in Chelsea v Armstrong (which in turn adopted the statement from p 29 of Norton on Deeds, on which reliance was placed by the first and second defendants at [373] of their closing written submissions); and that Barrett J went on to refer to "classes of non-parties who typically derive rights under deeds poll" (those including beneficiaries under a declaration of trust by deed poll, as well as creditors to whom a guarantee is extended by a deed poll).
The first and second defendants say that promisees are not necessarily parties, referring to the statement in Norton on Deeds at 28 that "… it is a rule of law that no person can sue on a covenant made with him in a deed made inter partes, unless he be a party to such deed" (emphasis added) (and the first and second defendants further rely on the cases cited at 28, see, e.g., Gardner v Lachlan (1836) 8 Sim 123; Berkeley v Hardy (1826) 5 B & C 355; Forster v Elvet Colliery Company Ltd [1907] 1 KB 629).
Insofar as the plaintiffs have relied upon Morgan v Pike, the first and second defendants say that this case is not relevant in that it decided that a covenantee who is a party to an indenture may sue upon it, though the covenantee has not himself executed it. The first and second defendants say that this is a different question and turned upon the general rule that "if one party executes his part of an indenture it shall be his deed, though the other does not execute his part", noting that Jervis CJ at 484 expressly said that "for he is a party, although he did not execute, and parties to an indenture may sue, though strangers cannot" and, at 484-485, distinguished cases where the covenant is conditional on cross covenants.
As adverted to above, the first and second defendants say that the submission that the plaintiffs can sue on the deed as a deed inter partes is not a reply, but a new case. It is said that if the plaintiffs are not intending to assert that they were parties to the deed, because named as covenantees, then the submission that they can sue upon it must fail, for the reason given above; but that if it is part of their submission that because they were so named they were thus constituted as parties to the deed, then this raises an additional new issue - namely the issue as to whether the Deed was ever effective, given the terms of cl 13, providing that the deed may be executed in counterparts, that the counterparts will together constitute one and the same instrument, and that the date of the deed will be the date on which it is executed by the last party.
It is noted that a deed is effective when the last element for its creation takes effect, which is delivery. Reference is made to Seddon on Deeds, which states that: … a unilaterally executed document in the form of a deed will not generate legal liability if the intention of the parties is that mutual execution is a condition precedent to the creation of legal relations. This may be shown where: 1. … 2. exchange of counterparts is stipulated; or 3. a single document is contemplated and both parties must execute it.
The first and second defendants say that this principle does not conflict with the general rule stated in Morgan v Pike, which is a rule applying to a deed once it is brought into existence; rather, the principles discussed by Seddon on Deeds concern whether it ever becomes a deed. The first and second defendants say that this would be a significant additional issue, and therefore is a reason why the plaintiffs ought not to be permitted to add to their case the allegation that they can sue directly on the deed as a deed inter partes.

[198]

Determination

As to whether the Deed was a deed poll by which Mr Cong and Ms Shen jointly covenanted in favour of the three elder children (such that they are able to bring a direct action at law upon its covenants), as noted above, the test as to whether a deed operates as a deed poll rather than a deed inter partes is whether, as a matter of substance, objectively construed, one or more of the parties to the deed intended to use the document to make unilateral promises to or create rights enforceable by third parties (see Park J in Moody v Condor Insurance at [18]), as opposed to intending to make promises to the other parties to the deed (here, say, a promise by Ms Shen to Mr Cong as to steps that she would take to benefit the three elder children).
There was no suggestion at the time that the three elder children were to become party to the Deed (and it was not drafted in contemplation of their execution of it - there being no execution clause for any of them). However, there can be no doubt that the Deed was intended to make provision for them (that being the stated purpose in Recital H) and, given that it was executed at a time when Mr Cong's death was imminent and as part of a suite of documents that included the 2016 Will - even if, contrary to what I have found, it was not incorporated into the 2016 Will, it must in my opinion have been intended to make promises to and create rights enforceable by the three elder children. In other words, I consider that, read with Recital H, the chapeau to cl 2 makes clear that the Deed was encompassing an agreement between Mr Cong and Ms Shen as to the making of promises for the benefit of the three elder children; and that the words "between themselves and with Edmund, Teresa and Laurence" convey the intention that the promises contained in the Deed for their benefit were to be enforceable by them notwithstanding that they were not joined as parties to the Deed. The only other explanation for those words is that the Deed was intended to take part as a deed inter partes to which the three elder children would be party - and that is inconsistent with the fact that no provision was made for them to execute the Deed. I also note that in Critchley, Slattery J saw no difficulty in an inter partes deed also being enforceable in other contexts as a deed poll.
Accordingly, I have concluded that (assuming it is otherwise enforceable against Ms Shen - as to which see the equitable defences raised by her) the Deed is enforceable as a multi-party deed poll by Edmund and Teresa (but that the covenant no longer subsists on behalf of Laurence's estate since there is no indication that the promises that were there made to him were intended to enure for the benefit of his successors).
That makes it strictly unnecessary to consider the interesting academic debate (raised by the separate sets of supplementary submissions) as to whether the Deed could be sued upon by the plaintiffs as a deed inter partes (and hence it is also unnecessary to consider the complaint that this was a new case that arose only in reply submissions and should not be permitted to be run). Had it arisen, I would have considered that the legal requisites for a deed inter partes not having been fulfilled, a claim under the Deed by the plaintiffs in their own right other than as a claim under a deed poll would fail for want of execution by them; and that the decision in Wollongong Coal does not assist the plaintiffs because (as Leeming JA noted at [55]) at common law, only a person expressed to be a party to a deed inter partes could sue on the deed; and the scenario considered in that case was where there was a naming of a beneficiary as a party in the Deed, whereas here the naming of the plaintiffs in the Deed was as promisee or beneficiary not as party.

[201]

Plaintiffs' submissions

Further or in the alternative to the above, the amended statement of claim pleads the standing of the plaintiffs to sue on the Deed (at [70]ff) in a variety of alternative ways.
At [70], it is alleged that, by reason of the matters pleaded at [14] (that the express purpose of the Deed was to benefit the three elder children) and [17] (that Mr Cong and Ms Shen entered into the Deed with the mutual understanding and joint intention that the three elder children be benefited), and the fact that Ms Shen held the moneys realised by the transfer of the Wu Property (though I note there were none) on trust for Edmund, Teresa and Laurence's estate, there is standing on the part of Edmund, Teresa and Laurence's estate to enforce the Deed.
At [71], it is alleged that, by reason of the agreement of Mr Cong and Ms Shen that the Deed benefit the three elder children, and the fact that the Deed was executed concurrently with the 2016 Will, and Mr Cong and Ms Shen intended that the two instruments would operate in combination so as to benefit, among others, Ms Shen, the benefit of the promises in favour of the three elder children in the Deed is held on trust for them by Mr Cong's estate (in other words, that Mr Cong held, and his estate now holds, the benefit of the promises on trust for the three elder children) (the plaintiffs here invoking what was said by Einstein J in Gate Gourmet Australia Pty Ltd (in liq) v Gate Gourmet Holding AG [2004] NSWSC 149 (Gate Gourmet)).
At [72], it is alleged that, in circumstances where there has been no grant of probate of Mr Cong's estate, Edmund, Teresa and Laurence's estate have standing to enforce the trust pleaded at [71] against Ms Shen.
At [73], it is pleaded that, in circumstances where the Deed was executed concurrently with the 2016 Will, and Mr Cong and Ms Shen intended that the two instruments would operate in combination so as to benefit, among others, Ms Shen, then Ms Shen would be unjustly enriched if she took the benefits passing to her under the 2016 Will without accepting the burdens passing to Edmund, Teresa and Laurence's estate under the Deed; and hence Edmund, Teresa and Laurence's estate have standing to sue to enforce the Deed.
It is submitted by the plaintiffs that they have standing in equity to sue under the Deed because Ms Shen has made herself a trustee of the benefit of the obligation which she agreed to perform as recorded in the Deed (the plaintiffs referring to what was said by Dixon J, as his Honour then was, in Birmingham v Renfrew at 690, where his Honour made clear that the intended beneficiaries were there enforcing the constructive trust arising from the contract and the fact that testamentary decisions upon the faith of the contract had taken effect (not enforcing the contract as such)). I note that this appears to be a different trust from that which is pleaded at [71] (which is a trust of the benefit of the promises made in the three elder children's favour under the Deed of which Mr Cong is alleged to be the trustee).
The plaintiffs invoke the concept of equitable fraud, noting the breadth of that concept and that it can extend to unconscionable or inequitable conduct (see De Bruyne v De Bruyne [2010] EWCA Civ 519 at [51] per Patten LJ).
The plaintiffs say that, by promising in cl 2 of the Deed to pay moneys to the plaintiffs in the future from the proceeds of sale of the Campsie properties, Ms Shen constituted herself a trustee of the promise made to the plaintiffs (which required Ms Shen not to deal with those properties, or the sale proceeds derived therefrom, in a manner that was inconsistent with the promise).
Pausing here, strictly speaking the Deed did not make any promise as to the source from which the payment obligations under cl 2 were to be met - although I accept that it seems implicit in the scheme of the sub-clauses that it was contemplated that the proceeds of sale of the properties would be available to fund the payments. However, I see nothing that would require Ms Shen, assuming the payment obligation under one of the relevant sub-clauses was triggered, to fund that payment from the proceeds of sale of one or more of the properties. It might be, for example, that Ms Shen might have chosen (if the properties were rezoned or not, as the case may be) to retain the properties and raise funds elsewhere to meet the payment obligations (noting, of course, the obligation in cl 2(a) that the Campsie properties be retained for no longer than 10 years).
Leaving aside that possibility, it is said by the plaintiffs that, in breach of the promise and the fiduciary duty she owed to the plaintiffs (in her capacity as trustee of the promise), Ms Shen: transferred the Wu Property to Ms Wu without receiving any adequate consideration for the said transfer; retained the proceeds of sale of 43 Amy Street for her own benefit; sold 56 and 58 Duke Street and retained the proceeds for her own benefit; and failed to pay the plaintiffs an annuity in accordance with the Will.
It is said that, by these actions, and by depleting the assets of Jolly Trading and causing it to be deregistered, Ms Shen has deliberately frustrated the arrangement agreed with Mr Cong whereby the profits of the business would be applied to pay the mortgages on each of the Campsie properties to enable those properties to be retained by her for a period of not more than 10 years. It is said that, since Mr Cong's death, Ms Shen has acted unconscionably to defeat the promise that she made to Mr Cong and upon which his testamentary dispositions were structured.

[202]

First and second defendants' submissions

It is the first and second defendants' position that the plaintiffs are not party to any of the terms of the Deed and are not entitled to their benefits; and that, to the extent that there were any rights, they were rights of Mr Cong.
As to the alleged trust of a promise, the first and second defendants consider (from [143] of their written submissions) the allegations (at [71] and [72] of the amended statement of claim) that: Mr Cong was the object of the alleged implied trust of the proceeds of sale, as security for Ms Shen's promises to him; Mr Cong constituted himself as trustee of the promises (and, the first and second defendants say, presumably, of the security); and, as beneficiaries of the latter but not the former trust (i.e., the trust of the promises made by Ms Shen in the Deed), that they claim on behalf of themselves and the estate of Laurence to enforce against Mr Cong's estate their rights as beneficiaries of the trust of the promise, and to require the estate to sue in the name of Mr Cong for performance of the promises by Ms Shen and enforcement of the security therefor.
However, the first and second defendants complain that the pleading does not consistently take this position. It is said that [10] assimilates Mr Cong as the beneficial owner of the Campsie promises because of: the half-secret trust (alleged at [79]-[86]); and the partial (proportionate) purchase money resulting trusts alleged in relation to the four Campsie properties (at [114], [118]-[120], [122]-[123] and [125]-[126] of the amended statement of claim).
The first and second defendants point out that: the pleading of the half-secret trust at [80] identifies as its objects the three elder children (not Mr Cong); the pleading at [51]-[52] and [58]-[61] alleges as breaches of the implied term alleged in 16 that Ms Shen did not retain the proceeds on trust for the three elder children (rather than for the estate of Mr Cong); and the breaches of trust alleged at [74]-[76], 86 "or otherwise", 87, [88], [92] and [93], also assert that the proceeds were held on trust for the three elder children, rather than for Mr Cong's estate.
It is further said that 82 of the amended statement of claim does not allege a trust by Mr Cong of the promises made in the Deed. It is said that this paragraph must be read as asserting that Ms Shen charged the Campsie properties as security for the promises in cl 2 of the Deed. It is noted that [82] forms part of the pleading of a claim as to a half-secret trust between Ms Shen as trustee ([84]) and the three elder children as objects ([80]). It is said that in that case, the trust obligation is directly between Ms Shen and the three elder children. The first and second defendants say that the alleged half-secret trust thus does not seem to be relied on as part of the 'trust of the promise' case.
As to the resulting trusts case, the first and second defendants say that if the properties were held on trust for Mr Cong's estate, the proceeds would also belong to his estate, and there would be no need for an implied promise to hold them in trust for Mr Cong, whether for the performance of the promise in the Deed or at all. It is said that the occasion to constitute a charge does not arise where the obligor is dealing with the obligee's own property.
As to why the alleged term is said not to arise in favour of the three elder children, the first and second defendants say that there is a lack of the requisite certainty for the creation of a trust (identifying confusion and difficulty in the pleading as to the formulation of the implication sought to be drawn and in identifying the beneficiary of the promise).
The first and second defendants say that the suggested interposition of a direct trust obligation owed by the promisor to the three elder children would place in their hands direct rights as beneficiaries of Ms Shen as trustee, exposing Ms Shen to potentially conflicting demands. It is said that it would also pose potential difficulties for the trustee of the promise and potential conflict about the width of the trustee's powers and discretions to affect the rights of the three elder children (that it is said, if they exist at all, are evidently revocable).
The first and second defendants say that the rule of privity tells against the implication of a trust in favour of the three elder children. Reference is made in this context to Clarence (at [76]ff), where the Full Court of the Federal Court considered a challenge to standing to seek declaratory relief and reference was there made to the statement of Kitto J in Wilson v Darling Island Stevedoring Lighterage Co Ltd (1965) 95 CLR 43 (Wilson) at 80 that "the only persons entitled to the benefits … of a contract are the parties to it".
The first and second defendants accept that this rule does not preclude a declaration of trust being made by a contract or deed between a settlor and trustee, for the benefit of beneficiaries identified by name or class. However, they say that it does point to the difficulty in drawing such an implication from words that do not clearly convey that intention. It is said that the natural reading is that such obligations as are entered into are entered into in favour of the promisee party.
The first and second defendants say that, if security is given, it is to secure the promise made to the promisee; and that it makes little sense to think that security is given to third parties, not as stakeholders, but for their own benefit (to secure a promise to which they are not party and not entitled to enforce). It is said that this is particularly a problem for the identification of a trust which requires the personal obligation or undertaking of the trustee to deal with the trust property for the benefit of the beneficiaries; and that it would require very clear expression to bring about this result.
The first and second defendants say that a related point is the requirement for coherence in the drawing of implications. They point to the statement in JD Heydon and MJ Leeming, Jacobs' Law of Trusts (7th ed, 2006, LexisNexis Butterworths) (Jacobs' Law of Trusts) at [221] that where: … there is no direct expression of intention as to whether the benefit of A's promise to B is or is not to be held on trust; in these cases, it becomes a question of determining whether, form the words actually used in the contract, and in the light of all admissible surrounding circumstances, the promisee evinced an intention to be a trustee of the benefit of the covenant.
Insofar as Jacobs' Law of Trusts at [223] refers to authority insisting on the need for a clear expression of intention, the first and second defendants say that this must be so because of the ordinary requirements of certainty of intention, subject and object for an express trust.
The first and second defendants say that these principles address the question whether the promise in favour of Mr Cong was intended to be held on trust by him for the three elder children; and that, these being the requirements for implying an undertaking by Mr Cong to constitute himself a trustee for the three elder children of the promises made to him by Ms Shen in the Deed, there must be at least equivalent caution in drawing inferences of an intention by Ms Shen to constitute herself as a trustee, whether in favour of Mr Cong or directly in favour of the third parties.
The first and second defendants invoke the statement in Korda v Australian Executor Trustees (SA) Ltd (2015) 255 CLR 62 (Korda) at [11] that "[a] trust is not to be inferred simply because the court thinks it is an appropriate means of protecting or creating an interest" in answer to the plaintiffs' assertion that trusts should be inferred in this case arising out of the Deed or the Deed and the 2016 Will, with or without collateral parol representations.
It is said that the requirements of clarity, necessity and coherence cannot admit of processes of implication that operate in different directions in favour of different objects in respect of the same subject matter.
The first and second defendants further say that, if there was a trust of the promises, it would be revocable (citing Wilson at 67 per Fullagar J; Jacob's Law of Trusts at [222]) by the giving of a release, which the appointment of the obligor as executor achieves. It is noted that cl 6 expressly recognised that the Deed might be amended or varied by the parties.
The first and second defendants say that, if there is an implication that Mr Cong held the promise on trust for the three elder children, it would be a matter for the testator to enforce it, as trustee of the promise, by an action for specific performance, injunction, damages or such other remedy as might exist. It is said that this coheres with other aspects of the Deed that leave the parties in control, including: the entire agreement clause (cl 5), the power to make amendments and variations, (cl 6), the dispute resolution (negotiation and mediation) clause (cl 7) (which it is noted envisages that the Deed may be terminated, but the dispute clause will survive), and the "force majeure" clause (cl 10) (which it is said is presumably intended to add something to the severance clause - cl 11).
It is said that the nature of a power of revocation is such that Mr Cong would not be a trustee of that power; and that implications could not be drawn of direct equitable obligation to the three elder children that could survive a decision by the parties to vary or discharge the promises.

[204]

Determination

The principal indication that Mr Cong and/or Ms Shen agreed to make himself or herself a trustee of the benefit of the promises made in favour of the three children under the Deed is the chapeau to cl 2 in which it is stated that they agree between them "and with" each of the three elder children.
In Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107 (Trident v McNiece), the High Court considered the circumstances in which a third party insured was permitted to enforce the indemnity for which the policy provided. There, Gaudron J considered that a promisor who accepted an agreed consideration for a promise to a third party owed an obligation to that third party to fulfil the promise and that the third party could sue to obtain the benefit of that promise, invoking restitutionary principles of unjust enrichment.
In Gate Gourmet, Einstein J considered, among other issues, the identity of the promise(s) of a letter provided in its terms to provide financial support to the holding group in question. His Honour concluded by reference to the surrounding circumstances in which the letter came into existence that the letter was intended to give rise to legal rights and duties, being intended to have contractual force and that the Australian trading company was a promisee (see [242]-[243]) but went on to consider an alternative claim to the effect that the company could enforce the promise made for its own benefit (a Trident v McNiece claim) and held that the alternative claim was there made out (see at [262]) concluding that if the Australian holding company was the only promisee it obtained the benefit of the promises in the letter with the intention that they should subsist for the actual benefit of the Australian trading company (and other trading entities).
In the present case, in respect of Mr Cong, it was clearly his intention that the promise be not only with Ms Shen but for the benefit of the three elder children. It is for the executor or administrator of his estate to enforce that promise but, in the absence of such a suit (or at least where there is a refusal or inability to do so), the beneficiary of the trust of the promise would have standing to do so (Ramage v Waclaw). Nothing, however, turns on this in light of my conclusion (see below) that the Deed should be set aside as against Ms Shen.
It is more difficult to see Ms Shen as having assumed the obligation to hold the benefit of her performance of the promises under the Deed for the three elder children (not least due to the difficulty of establishing her knowledge and understanding of those obligations but in any event because this would require her to sue herself for the performance of those obligations). Accordingly, I find that this aspect of the claim fails.

[208]

(xxii) Whether Ms Shen knew what she was doing when she signed Deed

On the grounds identified in the defence, Ms Shen seeks a declaration that the Deed is void and an order that it be set aside or not enforced. These grounds are in the alternative: legal (uncertainty), equitable (undue influence, Yerkey v Jones, unconscionable conduct) and statutory (Contracts Review Act).
As to the equitable and Contracts Review Act defences, the first and second defendants say that the Privy Council's decision in Bank of Montreal at 138-139 is relevant.
It is noted that the relationship of husband and wife is not in itself a presumptive relationship of influence, but that it may be proved to be so (see Johnson v Buttress (1936) 56 CLR 113 (Johnson v Buttress)), where it is proved that the husband is in a position to exercise ascendancy or dominion over the wife. Further, it is noted that in respect of the relation of husband and wife, there are special considerations described by Dixon J, as his Honour then was, in Yerkey v Jones at 675-676, where his Honour spoke of equitable presumptions of an invalidating tendency, being: where a voluntary disposition in favour of the husband is impeached, the burden of establishing that it was not improperly or unfairly procured may be placed upon him by proof of circumstances raising any doubt or suspicion; and it may be a condition of validity of a voluntary dealing by the wife for the advantage of her husband that she obtained an adequate understanding of the nature and consequences of the transaction.
The first and second defendants submit that it is not an onerous burden for the wife to establish in fact a relationship of presumptive influence in such a case (citing Broadlands International Finance Ltd v Sly (1987) 4 BPR 9420 at 9425). Reference is also made to Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49 in this regard (the first and second defendants emphasising the requirement for close attention to the factual circumstances of the relationship and the transaction in such cases). In the present case, the first and second defendants point to the following evidence in relation to their case of influence.
First, the first and second defendants point to Ms Shen's evidence to the effect that she objected to the proposal that 16 Nicholson Street be left to the three elder children free of mortgage, and that Mr Cong afterwards proposed that she act with discretion if she became a rich woman. It is also noted that Ms Shen's evidence is that, after the meeting at Campsie with Mr Glynn, Mr Cong told Ms Shen "[t]he lawyer told me all the properties are under your name. You can decide whether to give and give how much. I told the lawyer this is exactly my intention" (see her affidavit affirmed 4 September 2020 at [248]; and see also Ms Shen's affidavit affirmed 13 October 2017 at [19], which is said to be supported in part by Edmund's 9 July 2018 affidavit at [15]).
The first and second defendants say that Ms Shen was led to believe that Mr Cong only requested her to look after his elder children "if in the future she intends to do so and has the ability to pay" (see her affidavit affirmed 4 September 2020 at [295]). (Pausing here, I interpose to note that the qualification "if in the future she intends to do so" would logically make such a request totally at Ms Shen's discretion and would hardly provide Mr Cong with any assurance that his elder children would be provided for in the future - a matter that to my mind is of significance in relation to the family provision claim.)
The first and second defendants say that, in February 2016, Mr Cong seems to have had no definite plan; that he was asked for formulate one; and that it took a month to send the email of 15 March 2016. They say that Mr Cong appears to have "exceeded the limits" in his later instructions to Mr Glynn but that Mr Glynn transformed those instructions even further (from a role of management of the properties to the position of a covenantor to pay an ascertainable sum).
The first and second defendants say that, on the plaintiffs' case, Mr Cong had a low regard for Ms Shen, treated her as a tool, dictated to her and had her meekly accept his dictation without demur. It is submitted that "[t]he very alacrity of [Ms Shen's] supine acceptance which the plaintiffs assert, and upon which they rely, would if accepted demonstrate the overpowering influence of Mr Cong" and the first and second defendants say that this is supported by the evidence of Mr Glynn himself in his affidavit of 13 October 2020 at [20], insofar as it deposes that he stood by and watched as Mr Cong directed his wife and she said "yes". The first and second defendants say that it was Mr Glynn's duty to protect Ms Shen from that behaviour. Complaint is made that Mr Glynn had, through Mr Cong, previously sent drafts "to sign" "without the slightest concern for her welfare or interest", notwithstanding that Ms Shen was named in the label on the cover of his file in equal position with Mr Cong.
It is submitted that Ms Shen had "not the slightest resemblance" of a proper understanding of the transaction; no advice, no translation, nothing to take away in her own language so that she could read and re-read and seek to understand it; and "nothing but the interposition of her husband whose project it was".
The first and second defendants point out that, by the time that the 2016 Will and the Deed were signed, Ms Shen had "everything worth anything" in her name (partly given and partly, it is said, the fruit of her own efforts and contributions), and it is submitted that the transaction was manifestly to Ms Shen's disadvantage for the benefit of volunteers to whom (as it is said Teresa concedes) Ms Shen did not want to be given too much. It is said that Ms Shen had confidence in her husband and followed his leadership.
The first and second defendants submit that the transaction was a "giveaway"; that even the $10,000 bond cannot pass by the Deed; rather, that it is also an asset available to Mr Cong's creditors. It is submitted that this demonstrates how "utterly unequal" Ms Shen was to any proper and prudent understanding and evaluation of this transaction.
It is said that, at best, Mr Cong was foolish and imprudent in exposing Ms Shen "to a speculative scheme of which he had made no proper investigation and to the hazards of a son as co-executor who has allowed himself to be used as a vehicle for his mother's passions"; at worst, Mr Cong's behaviour is described emotively in the first and second defendants' submissions as "dastardly".
The first and second defendants say that the truth is more likely that Mr Cong was "a sick, distracted, dying man, trying to provide for everyone, blind to the imprudence of it all, fearful of the malice of his ex-wife, but hoping that somehow it would all turn out well"; and that, by June 2016, he was too exhausted to think about it (and without the benefit of a translation, or anyone to work through with him the financial structure and legal implications). Criticism is made of Mr Glynn to the effect that his evidence suggests a belief "that a nod from a woman who speaks little English is informed consent"; and it is said that Mr Glynn "did the minimum for a low fee and moved on, leaving it to Mr Cong to work out for himself what it meant, and Ms Shen to her own devices".
The first and second defendants submit that Ms Shen was even more vulnerable. It is said that she, too, was exhausted; that she was never advised at any point by any lawyer about her rights before signing the Deed (see her affidavit affirmed 4 September 2020 at [308]); that she was busy taking care of Mr Cong and her three children (see [348]); and that she had no time to do anything else (see [351]). It is submitted that, by June 2016, Ms Shen was spending every minute she could with her dying husband and it is asked, rhetorically, what energy or enthusiasm could she have had to embark on concentrated analysis and argument without even a draft that she could read. It is noted that no one suggested that Ms Shen get her own advice. Reference is made to Ms Zhu's evidence that at the time Ms Shen was often tired and exhausted and she "was in bad shape" (see the affidavit affirmed by Guibin Zhu on 31 August 2020 at [14]).
The first and second defendants say that it is plain that there was a relationship of influence and that there is a presumption that the influence was undue. They say that the circumstances supply also all the elements of a catching bargain. Considered as a contract, it is submitted that the transaction was substantively and procedurally unjust.

[209]

Plaintiffs' submissions

The plaintiffs argue (c.f., the first and second defendants' written submissions at [654]) that the principle in Yerkey v Jones at 675-676 in support of the equitable presumption of an invalidating tendency does not here apply. The plaintiffs say that the first and second defendants identify no authority in support of the implied submission that the principle can apply to cases other than a third party taking security proffered by a wife; and that there is no authority that extends the principle to the facts of this case. Reference is made to Elkofairi v Permanent Trustee Co Ltd (2002) 11 BPR 20,841; [2002] NSWCA 413, where Beazley JA (as Her Excellency then was) said (at [47]): 47. This case is not one of guarantee. If it is sought to make the principles in Yerkey v Jones applicable to a case which is outside the case of a guarantee given by a wife as a volunteer in respect of her husband's obligations (again without commenting upon the possible application of the principle to other relationships) it would be necessary for the creditor to be on notice that the person seeking to impugn the transaction was a volunteer. Otherwise, the underlying premise upon which the principle operates is missing
The plaintiffs say that, in this case, it would be necessary for Ms Shen to show that the plaintiffs were (and each of them was) on notice that Ms Shen was a volunteer, in the sense that the transaction was for the immediate economic benefit of her husband and not one from which she obtained any real benefit. The plaintiffs say that, where Mr Cong was dying, and was making testamentary gifts, it cannot be said that any economic benefit passed to him at the expense of Ms Shen.
In any event, the plaintiffs say that Ms Shen was not a volunteer, noting that she received a benefit from the Deed, considered by itself, because she was to receive the immigration Bond of $10,000, referred to in Recital F and cl 2(e). The plaintiffs say that the Deed can properly be read as part of a single transaction which includes the 2016 Will: that they were executed concurrently to give effect to Mr Cong's plans; each referred to the other; and cl 9 of the 2016 Will complemented the Deed because of the direction to Ms Shen that she retain the Campsie properties. It is said that, under the 2016 Will, Ms Shen received significant benefits because she was the residuary beneficiary.
Insofar as Ms Shen relies upon her "supine acceptance" of her husband's direction, her exhaustion caused by her nursing of Mr Cong and a lack of independent legal advice, as well as her claimed ignorance of the arrangement, the plaintiffs accept that there is no doubt that Mr Cong was strong-willed or had a forceful personality. However, they say that the first and second defendants' characterisation of Ms Shen does not faithfully capture her own forceful personality (and they maintain that Ms Shen's evidence in this regard was false). The plaintiffs invite the inference (from the manner in which Ms Shen gave her evidence) that she is intelligent. It is said that Ms Shen was well able to handle herself in the difficult environment of the witness box. The plaintiffs further say that it is undeniable that Ms Shen had the wit and determination to: choose properties, research them and buy them at auction; manage Jolly Trading under the supervision of Mr Cong; take over the company and create its successor after Mr Cong's death.
It is said that, even where actual undue influence is alleged, it is not necessary for the parties upholding the transaction to show that the other had independent legal advice at the relevant time; but that, here, Mr Cong did not exercise undue influence. Reference is made to Watkins v Combes, where Isaacs J stated (at 193-194): But, ... more than mere influence must be proved so as to render influence, in the language of the law, 'undue.' It must be established that the person in a position of domination has used that position to obtain unfair advantage for himself, and so to cause injury to the person relying upon his authority or aid.
The plaintiffs say that the arrangement was not manifestly unfair to Ms Shen. They say that the gift to the plaintiffs was not a true gift, as it was supported by consideration from Mr Cong; namely his promise that the amount of the Bond would be paid to Ms Shen from his estate in the event that he died before the Bond was refunded from the Department of Immigration and Ethnic Affairs. It is said that unfairness must also be assessed in the context of the entire arrangement embodied in the 2016 Will (which the plaintiffs submit should be read with and as forming part of the same documentary record of Mr Cong's testamentary intentions). It is noted that, under the 2016 Will, Ms Shen took the full benefit of the value of Mr Cong's sheepskin business, the profits from which had enabled them to acquire a sizeable real estate portfolio. Further, it is said that while the arrangement required Ms Shen to provide a substantial gift to the plaintiffs in the future (the size of which partially depended upon the occurrence of an external contingency), it did not require her to give all or even a majority of her assets to the plaintiffs.
It is said (and I agree) that, by operation of the presumption of advancement and her right of survivorship, Ms Shen was to receive the substantial benefit of all of the properties purchased by her and Mr Cong during Mr Cong's life. The plaintiffs say that the gift to them was not so improvident or unable to be explained (on the basis of a familial and charitable desire financially to assist her husband's young adult children in the future) as to indicate that it was the product of actual undue influence by Mr Cong.
The plaintiffs also point out that at the time of entry into the Deed, Ms Shen had harmonious relations with each of the plaintiffs. It is said that none of them had found his or her feet in life. The plaintiffs invite a finding that the arrangement had been the subject of lengthy (and probably animated) discussion between Mr Cong and Ms Shen. It is noted that Ms Shen had recently purchased a $6.5 million house (the Family Property) with Mr Cong and, with his help, had accumulated a substantial real estate portfolio. It is said that her promise to Mr Cong to pay large sums of money to the plaintiffs in the future tied to the fortunes of the Campsie properties involved an acceptance by her that her relationship with Mr Cong had significantly and substantially improved her own financial station and future outlook. It is submitted that, in circumstances where her future needs and those of her children were adequately provided for, Ms Shen accepted a responsibility, as the plaintiffs' stepmother, to provide them with financial assistance in the future. The plaintiffs submit that Ms Shen's entry into the Deed was a considered decision. It is said that this was the product of her own free and independent exercise of will (citing Darmanin v Cowan [2010] NSWSC 1118 at [342]-[343]) and that actual undue influence is not established.
As to the reliance placed by the first and second defendants in their written submissions (at [657]ff) as to the rejection by Ms Shen of the proposal in relation to the 16 Nicholson Street property, the plaintiffs say that these: describe facts unrelated to the communications Ms Shen received concerning the Deed and do not address her own consideration of the document (and the plaintiffs here reiterate the findings of credit for which they contend).
The plaintiffs point out that the lack of independent advice does not mean that relief must be granted to an applicant under the Contracts Review Act, referring to West v AGC (Advances) Limited (1986) 5 NSWLR 610 (West v AGC) at 621 where McHugh JA (as his Honour then was) noted that the contract in that case was not unfair or unreasonable as far as the applicant was concerned and that it was difficult to see how the lack of independent advice could render the contract unjust.
The plaintiffs further say that in the exercise of the jurisdiction under the Contracts Review Act, account can be taken of the general policy of the law that parties should honour contracts (citing Baltic Shipping Co v Dillon (1991) 22 NSWLR 1 at 9).

[210]

Determination

I first consider the claim under the Contracts Review Act. Section 7(1) of the Contracts Review Act relevantly provides that: (1) Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following: (a) it may decide to refuse to enforce any or all of the provisions of the contract, (b) it may make an order declaring the contract void, in whole or in part, (c) it may make an order varying, in whole or in part, any provision of the contract, …
The reference to "the circumstances relating to the contract at the time it was made" in s 7(1) is not limited, in its terms, to those circumstances which were known to the party that seeks to rely on the contract at the relevant time, although a lack of knowledge of relevant matters may well be relevant to the exercise of the court's discretion (see In the matter of Reserve Hotels Pty Limited [2021] NSWSC 376 at [98] per Black J (citing Re Elsmore Resources Ltd (2016) 114 ACSR 297; [2016] NSWSC 856 at [65])).
Section 4(1) provides that "'unjust' includes "unconscionable, harsh or oppressive"; and s 9(2) directs the Court to have regard to certain matters, to the extent that they are relevant in the circumstances, in determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made.
In West v AGC at 620, McHugh JA (as his Honour then was) explained that a contract may be unjust under the Contracts Review Act because it contained "substantive injustice" - which arises because of the terms, consequences or effects are unjust - or it may be unjust because it contains "procedural injustice" - which arises because of the unfairness of the methods used to make it.
In applying the Contracts Review Act, two distinct steps are involved. As stated by Brereton J in Riz v Perpetual Trustee Australia Limited [2007] NSWSC 1153 at [51], and cited with approval in Kowalczuk v Accom Finance Pty Ltd (2008) 77 NSWLR 205; [2008] NSWCA 343 at [87] per Campbell JA (Hodgson and McColl JJA agreeing) (citations omitted): The first is whether the contract was unjust in the circumstances in which it was made, having regard to the factors referred to in s 9. This is a conclusion of fact, albeit one of ultimate fact involving a broadly based value judgment. The second, which arises only if the first is resolved in the affirmative, is whether any and if so what relief should be granted; this involves the exercise of a judicial discretion.
In the circumstances of this case, I consider that the Contracts Review Act claim is made good. While I accept that Mr Cong discussed his proposals with Ms Shen (and that she was privy to discussions, in English, that to some extent she could understand in relation to the arrangements), I am not persuaded that Ms Shen was able to understand the import of the contractual obligations she was there undertaking - and her evidence as to her understanding of the discretion she thought she was being given (which I accept) makes that clear. Furthermore, I think it very clear that Ms Shen should have been advised to obtain independent legal advice in relation to the transaction (which clearly had the potential for there to be onerous consequences for her). I am troubled by the fact that Mr Glynn was clearly focussed on the Will itself (in respect of which Mr Cong was his client) and I think it most likely that he simply relied on Mr Cong to explain to Ms Shen the transactions being undertaken and Mr Cong's instructions to him that Ms Shen agreed.
Further, in respect of the obligations imposed under the Deed itself, I find that the Deed, properly construed (as to which, see above), was substantively unjust. It imposed a significant personal liability on Ms Shen in circumstances where, for example, Ms Shen could have been liable for a substantial amount even if the rezoning did not lead to considerable price increases. While I accept that inherent in the scheme provided for under the Deed was that there would be an increase in property values over the ten year period, the magnitude of the sums involved reinforces my concern that there should have been proper and independent advice given to Ms Shen as to the personal liabilities that she was there assuming. I accept that lack of independent advice alone does not necessarily warrant relief. However, in the present case, lack of independent advice coupled with Ms Shen's language difficulties and the potential improvidence of the transaction (albeit that I accept the arrangements might have proved financially manageable) leads me to conclude that the contract was unjust in all the circumstances.
In those circumstances I have concluded that the appropriate relief is to set aside the Deed altogether (although it remains as an attachment to the 2016 Will as evidencing Mr Cong's testamentary intentions).
As to the unconscionable conduct claim, the principles relating to unconscionable conduct in equity, as set out in Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447; [1983] HCA 14 (Amadio), and developed in Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25 and other cases, are well known. A conclusion of unconscionable conduct requires the innocent party to be subject to a special disadvantage which seriously affects the ability of the innocent party to make a judgment as to their own best interests. The other party must also unconscientiously take advantage of that special disadvantage. As the High Court explained in Thorne v Kennedy at [38], before there can be a finding that there has been an unconscientious taking of advantage (which has also been described as 'victimisation' or 'exploitation'), it is generally necessary that the stronger party knew or ought to have known of the existence and effect of the special disadvantage.
Where a plaintiff has established the existence of special disadvantage and that the special disadvantage was sufficiently evident to the defendant, in that the defendant knew or ought to have known of that disadvantage, the defendant then bears the onus bears the onus of establishing that the transaction was "fair, just and reasonable" (Amadio at 474 per Deane J (with whom Mason and Wilson JJ agreed); Tillett v Varnell Holdings Pty Ltd [2009] NSWSC 1040 at [51]-[52] per Brereton J (as his Honour then was)).
Dal Pont states in Equity and Trusts in Australia (7th ed, 2019) at [9.05] that "[t]he modern "unconscionability" jurisdiction had its origins in the equitable jurisdiction over "catching bargains" (which is the terminology still, inaccurately, adopted for the modern doctrine" (see also Estate of Nitopi (No 2) [2021] NSWSC 748 at [239] per Parker J). The plaintiffs say that here the first and second defendants' defence relies upon the modern jurisdiction for the finding of unconscionable conduct that is sought.
As to unconscionable conduct on the part of Mr Cong, I do not accept that this is made good, nor am I persuaded that there was actual undue influence on his part. Based on the elements of unconscionable conduct set out above, regardless of whether Ms Shen was under any special disadvantage, I am not satisfied that Mr Cong's conduct was in exploitation of any such special disadvantage. As set out above, I have found that Mr Cong would have explained his testamentary desires to Ms Shen, and that he wished to benefit Ms Shen and their young children through his testamentary scheme, of which Ms Shen was a substantial beneficiary.
I turn now to the undue influence claim and the Yerkey v Jones claim. Undue influence arises if the free and independent will of the weaker party is overborne by the stronger party when entering a transaction: Johnson v Buttress at 134 per Dixon J.
As the plurality of the High Court explained in Thorne v Kennedy at [32]: The question whether a person's act is "free" requires consideration of the extent to which the person was constrained in assessing alternatives and deciding between them. Pressure can deprive a person of free choice in this sense where it causes the person substantially to subordinate his or her will to that of the other party. It is not necessary for a conclusion that a person's free will has been substantially subordinated to find that the party seeking relief was reduced entirely to an automaton or that the person became a "mere channel through which the will of the defendant operated". Questions of degree are involved. But, at the very least, the judgmental capacity of the party seeking relief must be "markedly substandard" as a result of the effect upon the person's mind of the will of another. [citations omitted]
Undue influence may be proved by presumption (presumed undue influence) or direct evidence (actual undue influence). The presumption of undue influence arises in established categories of relationships, including those of parent and child, guardian and ward, solicitor and client, physician and patient and cases of religious influence, as well as in circumstances where the particular factual relationship between the parties can be characterised as one where the stronger party is in a position to exercise dominion over the weaker party by reason of trust and confidence reposed in the former (Johnson v Buttress at 119 per Latham CJ). Where a presumption of undue influence arises, it can be rebutted by the stronger party satisfying the court that the transaction was a result of the free and independent will of the weaker party.
Actual undue influence requires direct evidence of the circumstances of the particular transaction to show that the transaction was not entered into as a result of the free and independent exercise of judgment by the weaker party (see Thorne v Kennedy at [34]). More than mere influence is required; it must be established that the stronger party has used their influence to obtain an unfair advantage for themselves and so as to cause injury to the person relying upon the stronger party's authority or aid (Watkins v Combes at 193-4 per Isaacs J).
As to Yerkey v Jones, the principle which derives from Yerkey v Jones operates in the context of a transaction in which the wife seeking relief is a surety for her husband's liabilities, and one who obtained no financial benefit from the transaction (see Garcia v National Australia Bank Ltd (1998) 194 CLR 395; [1998] HCA 48 (Garcia v National Australia Bank)).
The four elements which make it unconscionable to enforce a transaction of this kind were set out by the High Court in Garcia v National Australia Bank at [31]: first, that the surety did not understand the purport and effect of the transaction; second, that the transaction was voluntary (in the sense that the surety obtained no gain from the contract, the performance of which was guaranteed); third, that the lender is to be taken to have understood that, as a wife, the surety may repose trust and confidence in her husband in matters of business and therefore to have understood that the husband may not fully and accurately explain the purport and effect of the transaction to his wife; and fourth, that the lender did not itself take steps to explain the transaction to the wife or find out that a stranger had explained it to her.
The circumstances above, which make it unconscionable to enforce the guarantee, do not depend upon the creditor having, at the time the guarantee is taken, notice of some unconscionable dealing between the husband as borrower and the wife as surety. Further, the circumstances above are distinct from cases where there is a presumption of undue influence or actual undue influence, which may provide an alternative basis for the same relief (see Garcia v National Australia Bank at [23]).
In Garcia v National Australia Bank at [23] it was said that: In his reasons for decision in Yerkey v Jones, Dixon J dealt with at least two kinds of circumstances: the first in which there is actual undue influence by a husband over a wife and the second, that dealt with in Mueller, in which there is no undue influence but there is a failure to explain adequately and accurately the suretyship transaction which the husband seeks to have the wife enter for the immediate economic benefit not of the wife but of the husband, or the circumstances in which her liability may arise. The former kind of case is one concerning what today is seen as an imbalance of power. In point of legal principle, however, it is actual undue influence in that the wife, lacking economic or other power, is overborne by her husband and goes surety for her husband's debts when she does not bring a free mind and will to that decision. The latter case is not so much concerned with imbalances of power as with lack of proper information about the purport and effect of the transaction.
As to the Yerkey v Jones claim, I am comfortably of the view that the principle derived from that case does not extend to the circumstances of this case as it falls outside the context of a guarantee transaction.
As to presumed undue influence, the evidence to my mind makes clear that no such presumption arises in the present case. Ms Shen was well able to hold her own in the marital stakes - as evident by the outcome of the dispute in relation to 16 Nicholson Street. I consider that she signed the Deed because the testamentary arrangements as she understood them suited her down to the ground - she thought she had an absolute discretion not to give the three elder children anything in circumstances where she thought Mr Cong was planning to give them "too much". As that was not what the Deed provided, it is clear to me that Ms Shen cannot have known what she was signing when she entered into the Deed. For the same reasons, I am comfortably satisfied that there was no actual undue influence.

[211]

(vi) The equitable relief sought by the plaintiffs

Although raised as a separate issue in the list of issues prepared by the plaintiffs, this is largely dealt with in the balance of the reasons. However, for completeness I note the following.
The plaintiffs seek a declaration of a constructive trust in respect of the Wu Property and Ms Shen's assets to protect their entitlement to receive the benefit of Ms Shen's promise to Mr Cong as recorded in the Deed.
The plaintiffs say that the structure that Mr Cong put into place was one calculated to benefit both elements of his family (and that he did so in circumstances where Ms Shen knew and participated in his deliberations). They submit that the structure was calculated to confer benefits on Ms Shen in two ways: first, that a decision was made to benefit her (and her children) forthwith and to postpone discharging Mr Cong's moral obligations to his elder children for ten years; second, that Ms Shen received certain benefits immediately (including: control of Jolly Trading; the benefit of Mr Cong's interest qua joint tenant of 43 Amy Street; and complete control over the balance of the Campsie properties) notwithstanding the joint acknowledgement that the Campsie properties were co-owned and notwithstanding that Mr Cong enjoyed a beneficial interest in those properties.
The plaintiffs say that the structure put in place by Mr Cong should not be assessed with the benefit of hindsight and should be assessed by reference to the parties' own understanding. The plaintiffs say (and I accept) that the fact that Jolly Trading (for whatever reason) did not prosper is irrelevant (noting the evidence that both Mr Cong and Ms Shen considered before his death that the family's financial future was economically secure and that the business was prosperous - by reference to the July 2016 note of the hospital social worker); and that both Mr Cong and Ms Shen had proceeded on the basis that Mr Cong had an interest of some description in all of the Campsie properties (it being said that Ms Shen plainly did not contribute any money towards the purchase of the Campsie properties; that Mr Cong believed that they were his; and that Ms Shen understood that the description of ownership on the title was in part dependent upon Mr Cong's decision).
Thus, the plaintiffs say that the Deed conferred real benefits on Ms Shen (that she gained control of the Campsie properties, free from any legal claims Mr Cong might have asserted had he wished to provide otherwise for the elder children). It is said to be not without significance (and I accept the force of this submission) that Mr Cong had, earlier, been contemplating another scenario whereby his elder children might be benefited. (Pausing here, the fact that 16 Nicholson Street was held as joint tenants would not have precluded this being made part of Mr Cong's testamentary disposition in favour of his elder children - it would simply have required a severance of the joint tenancy during his lifetime.) Moreover, it is said that Ms Shen secured control of the Campsie properties for 10 years, which permitted her to enjoy the fruits thereof (rental income over that period), and the discretion about the amount which the elder children should receive. The plaintiffs say that Ms Shen's conscience was fastened by the terms upon which she secured those benefits.
Against that background, the plaintiffs seek a declaration of a constructive trust in respect of the Wu Property and Ms Shen's assets in order to protect their entitlement to receive the benefit of Ms Shen's promise to Mr Cong as recorded in the Deed.
The plaintiffs say that the Deed evinces an intention to create an interest that is appropriate to be created by a trust relationship and which otherwise warrants equitable protection (referring to what was said by French CJ in Korda at [10]-[11]); and that in the present case the Deed provides a suitable basis for inferring a trust relationship - being a multi-party deed poll arising in a familial relationship, which conferred beneficial interests on the plaintiffs and required (by its express and implied terms) Ms Shen to apply the proceeds of sale of the Campsie properties to make payment to the plaintiffs (and so not to destroy or diminish her ability to do so). As a result, the plaintiffs say that equitable remedies are available to them as beneficiaries of the trust (akin to mutual wills). It is said that Mr Cong was the promoter of an arrangement which sought to secure benefits to the elder children; and that Ms Shen accepted and adopted that scheme and undertook to act in their interests.
Further (or alternatively), the plaintiffs say that equitable relief is available because it would be unconscionable or unconscientious for Ms Shen to insist on the strict enforcement of the contract because Ms Shen's actions have made specific performance of the Deed an impossibility and damages insufficient.
The plaintiffs say that the insistence by Ms Shen on her legal rights of ownership of the properties would have harsh or oppressive results, or alternatively would result in an inequitable denial of her legal obligations under the Deed, which they maintain justifies a finding of unconscionability and equity's intervention. It is said that those legal rights have been exercised to promote her own interests at the expense of the plaintiffs. The availability of equitable relief in circumstances where specific performance of the Deed is no longer possible is said to be further consistent with the principle that the function of equity is "to supplement the law not to replace it". Reference is made, by way of example, in this context to Barns v Barns (2003) 214 CLR 169 (Barns v Barns), where Gummow and Hayne JJ recognised that, in some circumstances, even though a deed may not be an immediate declaration of trust binding assets, unconscientious conduct may enliven equitable intervention; and reference is also made by the plaintiffs to the principles recognised by their Honours (and by Gleeson CJ and Callinan J) relating to mutual wills.
The plaintiffs also refer to Muschinski v Dodds (1985) 160 CLR 583 (Muschinski), where Deane J relevantly described the purpose of the constructive trust as being "a remedial relationship superimposed upon common law rights" reflective of "the equitable principle that a legal owner should not be permitted to use his common law rights as owner to abuse or subvert the intention which underlay his acquisition and possession of those rights" and adverted to the possibility of the intervention of equity on the basis of unconscionability in both a commercial relationship and a personal one.
The plaintiffs refer to the following as also supporting a declaration of a constructive trust in favour of the plaintiffs.
First, the observation made in Varma v Varma [2010] NSWSC 786 at [497] that "there is no reason to deny the availability of a constructive trust in any case where some principle of law or equity calls for the imposition upon the legal owner of property, regardless of actual or presumed agreement or intention, of the obligation to hold or apply the property for the benefit of another" (citing Muschinski at [10] per Deane J).
Second, the fact that Ms Shen's promise to pay the plaintiffs a sum of money in the future was recorded in an instrument which is to be read with and interpreted as one instrument along with the Will, under which Ms Shen received the gift of Mr Cong's interest in Jolly Trading and the residue of his estate (reference being made to what was said by Dixon J (as his Honour then was) in Countess of Bective (at 419)). The plaintiffs say that the expression of the beneficial purpose in the Deed was not simply a statement of motive or even an expectation, nor was the fulfilment of the beneficial purpose expressed as a condition upon which Ms Shen was to take beneficially the gifts bequeathed to her under the 2016 Will; rather, the gifts of Mr Cong's interest in Jolly Trading and the residue of his estate were made outright and Ms Shen took those gifts beneficially. The plaintiffs say that in this situation the third of the four types of gift identified by Dixon J is here relevant, namely that the "first person [Ms Shen] may take the gift beneficially, but the statement of the purpose, particularly if it involves the payment of money, may operate as an equitable charge thereon in favour of the other or others" and that "[w]henever a gift is made to one person beneficially, subject to his paying money to another, the provision takes effect as a charge, notwithstanding that words of condition are used, unless an intention clearly appears that it should operate by way of condition". The plaintiffs say that the provision made for them under the Deed operated as an equitable charge on the gift of Mr Cong's interest in Jolly Trading to Ms Shen; and that the destruction of the subject matter of that charge will not defeat the plaintiffs' interests in the fulfilment of Ms Shen's promise. By analogy with the doctrine of mutual wills, it is said that equity will secure the performance of the promise through a constructive trust over the survivor's assets.
Third, the plaintiffs say that the principles that underpin equitable intervention in the case of mutual wills are apt in the present case because, pursuant to the Deed, Mr Cong and Ms Shen agreed to apply the fruits of Jolly Trading and the potential upturn in value of the Campsie properties in a particular way to benefit the plaintiffs. Further, it is noted that Ms Shen received the benefit of Mr Cong's interest in Jolly Trading upon his death and the residue of his estate. The plaintiffs say that the equitable remedy that is available is a constructive trust over the survivor's assets, which comprise the benefit of the assets of the marriage, of the kind explained in Birmingham v Renfrew at 682-683, 687-688; and they refer to Barns v Barns at 84 and Ledgerwood at 540 in this context. The plaintiffs say that equity fastens a trust to bind Ms Shen's conscience, regarding as done that which ought to be done; and that it would be unconscientious to permit Ms Shen to depart from the arrangement now in circumstances where, by reason of Mr Cong's death, such arrangement became irrevocable on his part and he was deprived of an opportunity to make alternative testamentary arrangements (citing Birmingham v Renfrew at 690 and Jacobs' Law of Trusts at [13.42]). The plaintiffs say that execution of the Deed by Ms Shen in the present case is analogous with execution of a mutual will (i.e., that here there was a contract between husband and wife that property of the marriage was to pass in a particular manner; that Mr Cong performed the agreement by dying without having revoked the 2016 Will; and that the constructive trust attaches to all of the property of Ms Shen owned at the date of Mr Cong's death or after acquired by her (otherwise, inter vivos dispositions made by Ms Shen would enable her to defeat the trust) (citing Birmingham v Renfrew at 689; Jacobs' Law of Trusts at [13.42]).
Fourth, the plaintiffs invoke (in the alternative) the equitable doctrine of election as stated by Buckley LJ in Re Gordon's Will Trusts [1978] Ch 145 (Re Gordon's) at 153. They say that, as Ms Shen has elected to take the benefit of the 2016 Will, she is obliged to give effect to the disposition to the plaintiffs under the Deed in accordance with the principle that "no person can accept and reject the same instrument". (This submission, advanced in the alternative, assumes, contrary to the plaintiffs' primary submission, that Mr Cong did not have an interest in the Campsie properties that entitled him to deal with them in the Deed because Ms Shen was the true owner of them.) Reference is made to what was said by Viscount Haldane in Brown v Gregson [1920] AC 860 at 868; and to Williams, Mortimer & Sunnucks, Executors, Administrators and Probate (21st ed, 2018, Sweet & Maxwell) at [69.02]-[69.03]. The plaintiffs say that Ms Shen elected to take under the 2016 Will by her conduct in accepting the benefits and gifts devised under the Will (namely, the shares of Jolly Trading and the residue of Mr Cong's estate, including money in his bank accounts). It is said that, upon Mr Cong's death, Ms Shen immediately exercised control over Jolly Trading as if it were her own company, caused money to be transferred from the company's bank account and paid to her own account, and then ceased operating the company to commence a new venture with Ms Stefadouros (through Cong Australia International) that was in all material respects identical with the business that had been operated by Jolly Trading. The plaintiffs say that Ms Shen's election was constituted by this conduct, as well as her application for probate of the 2016 Will in November 2017 (demonstrating Ms Shen's affirmation of and election under the 2016 Will). It is said that Ms Shen's election to take under the 2016 Will is irrevocable (and it is noted that Jolly Trading has been deregistered and can no longer be restored to Mr Cong's estate).
The plaintiffs say that, by electing to accept the benefits passing to her under the 2016 Will, Ms Shen was obliged to perform her promise under the Deed, notwithstanding that it required her to deal with her properties in a particular way and then to sell those properties to pay the plaintiffs up to the monetary limits as set forth in the Deed.
As to their claim for immediate relief, the plaintiffs say that they are the beneficiaries of the constructive trust established by the Deed, the purpose of which trust was to provide for the plaintiffs on the basis that the Campsie properties would be held for a period of 10 years before being sold, with the proceeds of sale being used to make substantive provision for the plaintiffs.
It is said that, by reason of the actions taken by Ms Shen in breach of her duties, the trust purpose is incapable of being fulfilled; the relationship between the plaintiffs and Ms Shen has irrevocably broken down; the unifying intent of the 2016 Will and Deed has been subverted; and the plaintiffs can have no confidence that Ms Shen will, in the future, act in a manner consistent with her fiduciary duties as a trustee or with the promises given to them and to Mr Cong.
In those circumstances, it is said that although the prima facie relief would be the making good of the expectation created by the 2016 Will and Deed (see E Co v Q [2018] NSWSC 442 (E Co v Q) at [75] - a case, inter alia, of proprietary estoppel) which would ordinarily require the imposition of a constructive trust, because of the actions taken by Ms Shen, it is not possible for the plaintiffs to be placed, by way of proprietary relief, in the position in which they should have been. It is said that Ms Shen's actions have further rendered it impossible for the plaintiffs ever to receive the full benefit because the funds required to do so are simply no longer available (inter alia through her dissipation of the assets of the trust and Jolly Trading). The plaintiffs say that, to the extent that funds may be recovered, there is no utility in placing them in a new trust and that any such trust will be unable to fulfil the purpose intended by the 2016 Will and Deed. The plaintiffs say that the factual circumstances of this case render it one where (as in E Co v Q and Rodda v Ian Rodda Pty Ltd [2015] SASC 95) "a clean break is necessary even though that will involve an acceleration" of the plaintiffs' interest. It is said that no apparent prejudice would be caused in so doing; and, if there be prejudice, this is more appropriately addressed by the form of the orders to ensure proportionality than by denying the plaintiffs such relief.

[213]

Plaintiffs' reply submissions regarding equitable relief

As to the first and second defendants' written submissions at [140]-[142] (to the effect that cl 9(d) of the Will does not amount to a testamentary disposition or, if so intended, is not valid), the plaintiffs say that the matters justifying the grant of equitable relief were identified in their primary submissions (at [219]); and they start with the propositions that: Mr Cong was the promoter of an arrangement which sought to secure benefits to the elder children; and Ms Shen accepted and adopted that arrangement and undertook to act in the plaintiff's interests.
The plaintiffs say that the Deed does not have to be a testamentary instrument for it to bind Ms Shen's conscience, or to be a source of benefit enlivening equitable intervention; and that s 6 of the Succession Act is irrelevant to the question.
Insofar as the first and second defendants point (at [143]-[202] of their submissions) to a number of matters referable to the Deed which they contend preclude equitable relief, the plaintiffs say that equitable relief is here sought on bases other than the express and implied terms of the Deed. The plaintiffs maintain that equitable relief in the form of a constructive trust is justified in any case where some principle of law or equity calls for the imposition upon the legal owner of property, regardless of actual or presumed agreement or intention, of the obligation to hold or apply the property for the benefit of another.
Reference is again made in this context to cases such as Countess of Bective at 419 and Ledgerwood at 540, and the proposition for which they stand, namely that equity can, and should, fasten a trust to bind Ms Shen's conscience, regarding as done that which ought to be done.
Insofar as the first and second defendants contend that Ms Shen qua trustee would be subject to conflicting demands because of the rights vested in the elder children (see first and second defendants' written submissions at [150]), the plaintiffs say that this is a consequence of the Deed (not a reason for doubting the existence of those rights). Further, the plaintiffs say that, in the events which have occurred, the asserted conflict is more apparent than real. It is said that Ms Shen has conducted herself with no thought for the obligations she undertook. Reference is made to the transfer of the Wu Property to her mother (as her agent) in an attempt to remove that asset from the plaintiffs. It is said that it is difficult to see why Ms Shen should not owe obligations to those who were intended to benefit from her promises, and who were expressly named in the Deed for that purpose.
The plaintiffs accept that the imposition of a trust may involve practical difficulties but they say that such a trust, be it institutional or remedial in nature, is an orthodox remedy where a party has improperly misused an advantage.
As to the contentions set out in the first and second defendants' written submissions at [151]-[155], as to the rule of privity telling against the implication of a trust in favour of the three elder children, the plaintiffs say that this assumes that the privity rule has application (whereas the plaintiffs say that it does not). The plaintiffs maintain that the perceived difficulties in identifying a third party beneficiary do not exist where the Deed makes plain (in cl 2) that it binds the three elder children.
As to the first and second defendants' written submissions at [157]-[158] (referring to Jacob's commentary on the need for clear expression of intention that the benefit of the promise be held on trust) the plaintiffs say that these import the requirements of an institutional constructive trust. The plaintiffs submit that there exists the necessary certainty in the present case as to the identification of beneficiaries (the three elder children) and subject matter (the Campsie properties or the proceeds of sale thereof). The plaintiffs contend that the trust came into existence at the time that Ms Shen departed from position she represented to Mr Cong and the promises she undertook through the Deed (commencing with the misapplication of Jolly Trading's assets or the transfer of the Wu Property).
In the alternative, it is submitted that if a remedial constructive trust is granted then the first and second defendants' submissions as to certainty of intention have no relevance. It is noted that in Nolan v Nolan [2004] VSCA 109, [61] Ormiston JA noted the difference between an institutional constructive trust and a remedial constructive trust as follows: The first arise (at least in most cases) by reason of a lawful transaction which precedes any alleged breach, but the latter, if properly so described, come into existence only by reason of some act of fraud or other unlawful dealing. Although the first category are properly described as 'constructive trusts', the latter have been misdescribed as such and, at the highest, those who have been subjected to remedial relief should be called 'constructive trustees' only for convenience' sake to identify the kind of equitable relief against them.
As to the first and second defendants' written submissions at [171]-[172] (to the effect that parol evidence should be excluded), the plaintiffs submit that a court of equity will not, except by reference to legal principle, exclude from its consideration matters which bear upon the conscience of the person said to be affected, reference being made to the statement by French CJ in Korda (at [2]) that: The courts would look to "the nature of the transaction and the circumstances, including commercial necessity, in order to infer or impute intention". That approach is not limited to contracts for the benefit of a third party. In each case it is a question of fact for the courts to determine whether an intention to create a trust is sufficiently evinced.

[217]

(xi) Half-secret trust

At [77] of the amended statement of claim, there is an allegation of an oral agreement between Mr Cong and Ms Shen that there was to be a regime which provided for the maintenance of Mr Cong's family after his death, which regime was manifested in the terms of the Deed and the 2016 Will (77) and which contemplated that the assets of Jolly Trading would provide a continuing income stream for the beneficiaries of the 2016 Will and be a source of assets to discharge all of Mr Cong's debts (77).
At [79]ff of the amended statement of claim, it is alleged that cl 9(c) of the 2016 Will created a half-secret trust, the terms of which were not disclosed in the 2016 Will but were disclosed in cl 2 of the Deed; that the three elder children are the objects of that trust; that the terms of the trust are provided for in cl 2 of the Deed; and that the property of the trust comprised the benefit of Ms Shen's promises recorded in cl 2 of the Deed which was secured over the Campsie properties to the extent necessary to discharge that promise or the Campsie properties themselves for so long as Ms Shen's promises under cl 2 of the Deed remained unfulfilled.
It was alleged that the half-secret trust was communicated to Ms Shen prior to or at the time of execution of the 2016 Will (particularised by reference to oral communications between Mr Cong and Ms Shen and written communications insofar as they consisted of the inclusion of cl 2 of the Deed) ([83]); and that Ms Shen undertook to Mr Cong that she would act as trustee of the half-secret trust ([84]); and that it is against the conscience of Ms Shen that she should be permitted to have undertaken to Mr Cong to carry out his wishes and then not to have done so ([85]).
It is alleged (at [86]) that, since Mr Cong's death, Ms Shen has held on trust (pursuant to a half-secret trust or otherwise) for the plaintiffs: the Duke Street property and the Wu Property; and the proceeds of sale of 43 Amy Street; and (at [87]) that Ms Shen has acted in breach of trust (in relation to the transfer of the Wu Property; and sale of 43 Amy Street and the Duke Street properties); and by reason of which (see at [88]), Ms Shen has received a benefit (the proceeds of 43 Amy Street) and Edmund, Teresa and Laurence's estate have suffered loss and damage (being the loss of the value of the Wu Property and of 43 Amy Street, upon a rezoning or, in the alternative, if it was not rezoned).
At [89]ff, there are allegations of unconscionable conduct by reason of conduct inconsistent with the pleaded representation and which it is said was intended to frustrate the regime pleaded; and that, conversely, Ms Shen has taken the benefits of the gifts intended to her under the Will (without a grant of probate) (the business of Jolly Trading and the benefits of the moneys in Mr Cong's bank accounts); and that it was unconscionable for Ms Shen to take the steps pleaded at [91] without giving effect to the agreement pleaded at [77] and adhering to the representation pleaded at [24]; and that it would be inequitable for Ms Shen to retain such benefits without retaining those on trust for Edmund, Teresa and Laurence's estate (see [92]). It is alleged that the benefits and proceeds, and the traceable proceeds thereof, pleaded at [92], were and are held on trust for Edmund, Teresa and Laurence's estate ([93]).
Further, it is alleged that Ms Wu received the transfer of the Wu Property as agent for Ms Shen and in circumstances where Ms Shen was attempting to evade her contractual duties to Edmund, Teresa and Laurence's estate ([94]), and that Ms Wu holds the Wu Property on trust for the plaintiffs.

[218]

First and second defendants' submissions

As to the allegation at [77] of the agreed regime for the maintenance of Mr Cong's family after his death (to which I have referred above), the first and second defendants say that: cl 7 is a clause in the 2016 Will and references to debts are to be construed as referring to debts of the deceased (i.e., Mr Cong); the suggested effect of cl 7 (i.e., for the assets of Jolly Trading to be available to service debt or for its business to provide a continuing income stream for beneficiaries) is contrary to cl 9(b) of the 2016 Will (which devises the shares in the company and its business absolutely to Ms Shen); and, save for Mr Cong's equal liability for the 43 Amy Street and 16 Nicholson Street mortgage loan debts, the debts on the Campsie properties were all debts of Ms Shen.
The first and second defendants say (by reference to Appendix A to their submissions on resulting trusts and to their submissions concerning the financing of the Wu Property and the Duke Street properties) that Ms Shen borrowed in her own name. They point out that the Wu Property was unencumbered when, in April 2015, Ms Shen mortgaged it for $980,000 which she used, among other purposes, to finance the purchase of 58 Duke Street. It is said that this is not factored into the alleged agreement and is a serious barrier to accepting that there was any agreement along the lines suggested at [77] of the amended statement of claim that was then "manifested" in cl 7.
The first and second defendants say that the particulars to [77] (at items (iii) and (iv)) (namely, that Ms Shen read the terms of the Deed and of the 2016 Will) assert that Ms Shen did what Ms Shen here says she cannot do; and assert also that the 2016 Will was attached to the Deed (which it was not).
The first and second defendants further say that a major difficulty with the plaintiffs' case in this regard is that it assumes that Mr Cong knew and approved of cl 7 of the 2016 Will; and that he subjectively adverted to it in the "desire" referred to in the particular at 77 (that Jolly Trading would meet the debts secured over the Campsie properties). It is said that it also assumes that Ms Shen understood this and communicated to Mr Cong her acceptance of it. (Clearly the claim that Ms Shen represented to Mr Cong that she knew of and would implement the provisions of the 2016 Will and Deed - see at [25] - is predicated on this.)
The first and second defendants point out that the amended statement of claim does not distinctly allege that Ms Shen knew, approved and agreed to the condition that Jolly Trading was to supply the income from which she would be obliged to service debts on the Campsie properties. It is said that, without the communication to her of that condition, the claim in relation to Jolly Trading cannot be maintained (since it is essential to affecting her conscience with an equitable fraud that she should have accepted the pleaded "regime").
It is noted that [77] of the amended statement of claim alleges that Ms Shen agreed with Mr Cong that there "was to be a regime" which provided for the maintenance of Mr Cong's family after his death, as pleaded at (a) and (b); and that the particulars then assert (at item (v)) that: Cong's desire that Jolly Trading would meet the debts secured over the Campsie properties was manifested by clause 7 of the Will … and in his statements to the Second Plaintiff. …
The first and second defendants say that this goes beyond what the 2016 Will itself said. It is noted that cl 7 speaks of what the Will can do ("My will has been drafted to enable my family to benefit from …"); that it speaks of "debts" ("the assets held by Jolly Trading Pty Ltd have been identified as the ones best sold for the purpose of discharge of all debts although these debts are readily serviced by income…."), which it is said must be the debts of the estate; and it refers to "my executors and beneficiaries" taking "financial and taxation advice". It is noted that it does not speak of debts secured against the Campsie properties.
The first and second defendants note that the particulars at item (v) explain this not as an effect of the 2016 Will but rather as a "desire" of Mr Cong "manifested by" cl 7 of the 2016 Will and in Mr Cong's statements to Teresa that are set out in [35] and [36] of her affidavit sworn 18 July 2016. Insofar as the statements there relied on are: a statement by Mr Cong (which in examination in chief was corrected from June to April 2016) that "[m]y business will look after any debts on them" (seemingly referring to "my Campsie properties"); and a similar statement said to have been made in June 2016, the first and second defendants point out that these statements do not attribute to Mr Cong any representation that these opinions had been communicated to Ms Shen (and that they were admitted into evidence on a qualified basis under the "fact of communication" ruling).
The first and second defendants say that Mr Cong's statements to Teresa are not capable of being part of a case against Ms Shen because: they are not evidence of any fact affecting her conscience; they are not evidence of communication to Ms Shen; they do not express facts, but are merely predictions or opinion, and were not admitted to prove the reality or basis for those opinions; they are prayed in aid of the parol agreement alleged in the pleading in [77] and that was said to be manifested in the terms of the Deed and the 2016 Will (77); they are barred by the parol evidence rule and by the entire agreement clause in the Deed (cl 5); they are barred by s 6 of the Succession Act; and they are contradicted by the express terms of cl 9(b) of the 2016 Will.
It is said that the equitable fraud case paradoxically depends on the validity of the 2016 Will which the plaintiffs have to prove but seek at the same time to contradict and add to it.
Moreover, it is said that the consequences for which the plaintiffs contend could not be safely drawn from these "vague and unsupported assertions" of Teresa. It is said that they are contrary to the 2016 Will, not supported by objective evidence; and that her credit is seriously in doubt (this last being an issue I have already addressed).
Insofar as particular 77 asserts that Ms Shen acknowledged Mr Cong's instruction that the Campsie properties be "kept" for the plaintiffs' benefit until they were rezoned, the first and second defendants note that the language of the Deed and the 2016 Will is for the properties to be retained for "no longer than 10 years" (not that they are to be kept for 10 years).
Further, insofar as 77 identifies the evidence supporting this acknowledgement of instruction by reference to [46] of Teresa's affidavit sworn 18 July 2018, the first and second defendants note that part only of that paragraph was admitted; that it gives evidence of a conversation between Teresa and Ms Shen on an unspecified occasion after the death of Mr Cong; and that Ms Shen denies it (see her affidavit affirmed 4 September 2020 at [332]). The first and second defendants emphasise that Teresa did not give evidence of this conversation in her affidavit of 21 July 2017; and they say that, insofar as it is her evidence that the conversation occurred about a week after the first affidavit was sworn, it is remarkable that a supplementary affidavit was not promptly prepared, given the significance attributed to the conversations and a direction made by Hallen J soon afterwards for Ms Shen to prepare affidavits responding to the plaintiffs' evidence (which was then supposedly complete).
The first and second defendants point to the conversation set out in Teresa's affidavit affirmed 24 February 2020 at [21], which they say seems to be a different version of the same conversation as that given in [46] of her July 2018 affidavit. It is said that, if this is a reference to the same conversation in July 2017 (after Teresa had caused a lawyer to write to Ms Shen), then the version given in the 24 February 2020 affidavit is quite different in terms - noting that, at [21] of the 24 February 2020 affidavit, there is no statement of a direction from Mr Cong to retain the Campsie properties. It is noted that in Teresa's affidavit of 9 October 2020 at [102], there is another version of the same conversation, in which reference is made to the term "bigger slice of the pie" (and the first and second defendants point to the words "cut up the pie" at [46] of the 2018 affidavit). It is noted that, in cross-examination (see T 288ff), Teresa attributed additional words to Ms Shen - "maybe get 2 million, maybe get 3 million …" (T 288.50) - which do not appear in any of her affidavits.
Reference is made to the evidence given by Teresa in cross-examination at T 290-T 291, in which Teresa gave evidence that she understood that Ms Shen was "acknowledging what was set out in the will and deed" but agreed that Ms Shen did not use those particular words, saying that this understanding or perhaps assumption was "[b]ased from numerous conversations with everyone involved about the issue. There was an acknowledgement of, of the will and deed".
The first and second defendants say that this is a concession that Ms Shen did not make an acknowledgement in the terms Teresa had stated in her oral evidence; and that it impeaches the independence and reliability of Teresa's evidence on this topic, particularly when the context for this alleged conversation is that the proceedings had already commenced and Teresa had already served an affidavit. It is said that the conversations to which Teresa refers must therefore be conversations with "everyone involved about the issue" on the plaintiffs' side of the record (while the court case was going on). The first and second defendants maintain that there would be no confidence in Teresa's evidence that Ms Shen said these things to her. Pausing here, I accept that Teresa's evidence was to the effect that this was Teresa's understanding of what was said to her; not that Ms Shen said words to that effect to her - and I allow for the possibility of miscommunication and misunderstanding in this regard. The first and second defendants point to the fact that Teresa records no contemporaneous statement of the alleged representations (but only representations made on 28 July 2017 at their very last meeting, when Ms Shen was angry with Teresa because Teresa had confronted Ms Shen with a lawyer's letter).
Further, the first and second defendants complain that no correspondence in the period after 28 July 2017 confronts Ms Shen with having made any such admission; and that the plaintiffs did not serve any further affidavits before the first round of defendants' affidavits were due to be served in October 2017. It is said that these allegations were put in "as an after-thought" in July 2018.
Moreover, insofar as Teresa conceded that this evidence is "based from numerous conversations with everyone about the issue", the first and second defendants say that this should have been disclosed in [46] of Teresa's 2018 affidavit. The first and second defendants say that the evidence of Teresa on this topic was not truthful and does not provide a secure basis for the finding sought (invoking what was said in Watson v Foxman as to the fallibility of human memory). I have referred above to their complaints generally as to Teresa (and Edmund)'s affidavit evidence, which are repeated in the context of this issue.
The first and second defendants say that another difficulty for the plaintiffs' equitable fraud case is that it is not shown that Mr Cong ever knew and approved of cl 7 of the 2016 Will, it being noted that none of Mr Glynn's file notes refers to it, nor is there a reference to any instruction that forms the basis for it; and that none of Mr Cong's emails, through Ms Stefadouros or Ms Lan, refers to it. I have referred above to their submissions on this topic.
Other "evidential problems" identified by the first and second defendants in this regard include the fact that the email of 2 May 2016 from Ms Stefadouros on behalf of Mr Cong to Mr Glynn discloses that there was no agreement at the time of the 17 February 2016 meeting; that, although the email from Ms Lan of 27 May 2016 to Mr Glynn purported to be written on behalf of both Mr Cong and Ms Shen, Ms Lan disavowed that in [15] of her affidavit (though see her oral evidence as to consultation with both of them, which has been considered above); and that Ms Lan's email records as a fact that settlement on the sale of 43 Amy Street was due to occur on 14 June 2016 but that this was not the case (in that settlement had, on 6 April 2016, been deferred to 15 November 2016), which, it is said, tells against Ms Shen being party to the communication.
As to [78] of the amended statement of claim (which repeats the matters pleaded at [21]-[26] to establish reliance by Mr Cong), the first and second defendants say that those earlier paragraphs plead parol representations by Ms Shen and various matters of knowledge by Ms Shen of the terms of the instruments and of Mr Cong's wishes. It is said that, so far as Mr Cong's wishes are concerned, these allegations are barred by s 6 of the Succession Act and by the entire agreement clause of the Deed.
The alleged representations are that Ms Shen understood and assented to the terms of the Deed, understood the 2016 Will ([24]), of which it is said that there is no evidence, and that she would implement their provisions ([25]). Insofar as the representation that Ms Shen would implement the provisions of the 2016 Will and the Deed is said to arise "by reason of her execution of the Deed", the first and second defendants say that taking a binding obligation by covenant tells against reliance on a parol representation. It is noted that these representations are expressed to be limited to retaining the Campsie properties for no more than 10 years and it is said that this cuts across the acknowledgement alleged in particular 77 of the amended statement of claim.
Also, it is said that neither the alleged representations, nor the alleged acknowledgement, encompasses what is alleged by 77 in respect of using Jolly Trading as the source of income to service the mortgage debts (a central element of the alleged regime which is said to be absent from the alleged representations, acknowledgement thereof and, consequently, reliance thereon).
Insofar as Mr Cong's reliance is said to be that he would have changed the terms of his 2016 Will and/or the Deed, the first and second defendants say that this is virtually an admission that Ms Shen had no say or effective choice in the matter (otherwise, there could not be a Deed at all). It is noted that what changes Mr Cong would have made are not explained, nor the subject of any evidence. It is thus submitted that the pleading and evidence fail to establish detrimental reliance.
Further, it is submitted that a change to the 2016 Will could hardly hurt Ms Shen or help Mr Cong. It is noted that, by 3 June 2016, Mr Cong had already sold the Barnes Avenue and Ethel Street properties. It is accepted that Mr Cong had power to dispose of the shares in Jolly Trading, but it is submitted that these were not a substantial asset and that it was effectively up to Ms Shen whether Jolly Trading would continue as a going concern (noting that she could and did subsequently establish her own company). Further, the first and second defendants point to the evidence referred to earlier that Mr Cong said that the business was not making as much money as it used to do. It is said that Mr Cong could not have been relying on the alleged regime whereby Jolly Trading would be used to keep his scheme together for 10 years.
As to the equitable fraud case based on the alleged parol agreement with Mr Cong, and the representation, acknowledgement, knowledge and reliance as between Mr Cong and Ms Shen, the first and second defendants say that the consequence of the pleading at [89]-[93] is that the profits from Ms Shen's own work, and the benefits from her own property, are alleged to be held on trust for the three elder children.
The first and second defendants say that detrimental reliance by Mr Cong could sound only in a remedy for him or his estate (in which they maintain that the plaintiffs have no interest). It is said that, if the suit is to enforce a parol representation to Mr Cong, relied on by him to his detriment, as a result of Ms Shen taking the "benefit", then her retention of the benefit must be vital to the claim to hold her to the promise. The first and second defendants say that if this claim is an abandonment of the Deed and a claim to recover the "profits" or "benefits", then it is an inconsistent and alternative claim, and would result in any recoverable "profits" or "benefits" returning to Jolly Trading and swelling the value of its shares, which would then pass through the estate back to Ms Shen.
As to the half-secret trust claim, the first and second defendants say that the plaintiffs' case depends on the 2016 Will (and falls with it).
The first and second defendants say that, in the present case, the allegation is that cl 9(c) of the 2016 Will created a half-secret trust, the objects of which are disclosed in the Deed; but that cl 9(c) is not a gift of property and therefore it is said that the plaintiffs' argument fails.
It is noted that, at 82 of the amended statement of claim, the trust property is identified as comprising the benefit of Ms Shen's promises recorded in cl 2 of the Deed "which was secured over the Campsie properties to the extent necessary to discharge that promise" and that 82 identifies the trust property as the Campsie promises themselves, for so long as the promises in clause 2 of the Deed remained unperformed.
The first and second defendants say that cl 9(c) does not even purport to give to Ms Shen the benefit of the promises in the Deed; rather, that benefit passes to her by the gift of residue (if, contrary to the first and second defendants' primary case, the promises survive her appointment as executor at all). It is noted that the Campsie properties do not pass by the 2016 Will (since they are held in Ms Shen's name or, in the case of 43 Amy Street, by survivorship).
The first and second defendants say that the alleged security depends on the implied terms earlier pleaded and they say that this amounts to a repetition of the argument that an implied trust is to be drawn from the Deed in favour of third parties (the three elder children), not Mr Cong. It is submitted that the claim is internally inconsistent when it suggests that Mr Cong is the promisee, yet the half-secret trust is in favour of another. Thus, it is said that the requirements of certainty of intention, subject matter and object fail.
The requirement of communication is said also to fail given the want of explanation; and that the requirement of acquiescence fails given Teresa's evidence that Ms Shen did not want Mr Cong to give "too much".
The first and second defendants maintain that the equitable fraud claim is circuitous and cannot rise higher than the 2016 Will and the Deed operating together (and is dependent on Mr Cong's knowledge and approval of the 2016 Will being established). It is submitted that the claim cannot succeed in any event so far as it goes beyond those instruments. Moreover, they say that it fails evidentially.
The first and second defendants say that it is a circuitous claim because it is said to be an equitable fraud on Mr Cong in denying the efficacy of his Will but, if the Will is not efficacious for want of capacity, knowledge or approval, then neither can there have been reliance on the representation. Moreover, it is said that if the Deed fails on other grounds, the whole arrangement fails in any event. (It is further submitted that the alleged parol representation founding the equitable fraud claim is nothing more than an attack on s 6 of the Succession Act and on the parol evidence rule to add and subtract from the instruments "so as to make the deal even more onerous".

[219]

Determination

While I accept on the balance of probabilities that the broad thrust of the provisions was communicated to Ms Shen (by a combination of Mr Cong, Ms Lan, Ms Stefadouros and at the meetings with Mr Glynn at which she was present), I am not persuaded that Ms Shen knew the precise terms of those documents and I cannot accept that she understood the import of those provisions. Indeed, I have found on the balance of probabilities that (rightly or wrongly) Ms Shen understood that she was being given an absolute discretion whether to give $1 or nothing (or a much larger amount) to the three elder children out of the Campsie properties, which is why I think it likely that Ms Shen agreed to sign the Deed in the first place.
Whether or not Ms Shen knew and understood of the terms of the 2016 Will and Deed, however, I consider that Ms Shen must have conveyed to Mr Cong in some fashion that she agreed with his ultimate testamentary intentions (involving payments to the three elder children after the expiration of ten years from his death - the amount of which was to be at her discretion) and I think it beyond doubt that she conveyed to Mr Cong that she would implement his wishes. That is because not only did Mr Glynn's notes record that Mr Cong conveyed to him that Ms Shen "agrees"; and Ms Lan's email conveyed to Mr Glynn shared instructions of Mr Cong and Ms Shen as to the documents, but also because it is inconsistent with Mr Cong's obvious concern to put in place a testamentary regime to benefit (among others) his elder children that he would not have taken steps to put in place some other form of testamentary disposition that was not dependent on Ms Shen's agreement, had he not understood from his discussions with Ms Shen that she agreed with and would implement his testamentary wishes. So much is evident from Ms Shen's own account of her conversations with Mr Cong, to the effect that he trusted her to be the right person who would decide the right thing to do.
However, I cannot be satisfied that the making of the representation in the terms as here pleaded has been made good: namely, a representation (at [24]) that she understood the terms of the Deed and the 2016 Will, that she was content with them, and would abide by them; or a representation (at [25]) (pleaded as being by reason of her execution of the Deed) that she (a) understood and assented to the terms of the Deed; (b) understood the terms of the Will; and (c) would implement their provisions, including ownership of the Campsie properties for a period of no more than 10 years after Mr Cong's death. What I consider (and here find) was represented by Ms Shen to Mr Cong was no more than that she agreed with the regime that she understood he was proposing in relation to the provision to be made for the three elder children (and in that regard I consider that there was most likely a misunderstanding or miscommunication between the two as to what was intended to be implemented).
As to the question of reliance, I have little doubt that Mr Cong relied on Ms Shen to implement the arrangement to which he thought she had assented when he executed the 2016 Will and Deed. I think it almost unarguable that, had Ms Shen told Mr Cong that she understood the effect of what he was proposing to be that she had the absolute discretion to give the three elder children nothing at all out of his estate, then Mr Cong would have made a different Will. What the contents of that might have been could only be a matter of surmise. However, I do not accept the proposition that a change of the Will could "hardly have hurt" Ms Shen. It seems to me that one obvious course (had Mr Cong understood what Ms Shen's now position is stated to be) would have been for Mr Cong to sit down with Mr Glynn and take a more focussed view on what precisely he was able to dispose of under the Will without Ms Shen's consent - which could well have led to a severance of the joint tenancies in respect of the 16 Nicholson Street and 43 Amy Street properties and joint bank accounts; and might have led to a change of disposition in relation to the life insurance proceeds or the shares in Jolly Trading. It might also have elucidated Mr Cong's position as to the beneficial ownership of the properties put in Ms Shen's name. Therefore, it seems to me that Ms Shen may well have had something to lose had it been made clear to Mr Cong what her now position is in relation to the inheritance (or lack thereof) for his elder children.
In any event, the question of detrimental reliance turns on Mr Cong's position (not how Ms Shen might have benefited from it - although that would be relevant to questions as to whether it was unconscionable or unconscientious for her to resile from the position communicated to Mr Cong and on which he relied).
I therefore accept that Mr Cong relied on what he understood to be Ms Shen's assent to the testamentary scheme he was proposing and that this was detrimental reliance to the extent that Mr Cong thereby gave up the opportunity to make some other kind of testamentary provision that would more safely have assured that his elder children receive some inheritance out of his estate. However, since I cannot be satisfied that the representation(s) as pleaded were made; and I accept that there was a misunderstanding between Mr Cong and Ms Shen as to what that testamentary scheme involved, I find the representation claim has not been made good.
As to the half-secret trust claim, the plaintiffs say that it is not an essential element of such a claim that there be a representation of the kind pleaded.
As to the relevant principles, Viscount Summer outlined the necessary elements in Blackwell v Blackwell [1929] AC 318 (Blackwell v Blackwell) at 334: The necessary elements, on which the question turns, are intention, communication, and acquiescence. The testator intends his absolute gift to be employed as he and not as the donee desires; he tells the proposed donee of this intention and, either by express promise or by the tacit promise, which is signified by acquiescence, the proposed donee encourages him to bequeath the money in the faith that his intentions will be carried out
The above statement was approved by Dixon CJ in Voges v Monaghan (1954) 94 CLR 231 at 233. Directly after quoting the above passage, his Honour said that: But all these elements must be established to the reasonable satisfaction of the court. The evidence may be circumstantial or it may consist in admissions by the legatee upon whom it is sought to fix the trust, and the admissions may be express or by conduct or the proof may consist in both admissions and circumstantial evidence. When the issue is contested it will seldom include direct evidence of what passed between the testator and the legatee. But, in particular, the evidence must prove satisfactorily that the trust was ascertained and what it was.
The difference between a full secret trust and a half-secret trust turns on whether the Will indicates that a trust was intended. In a full secret trust, there is no indication in the terms of the Will that the trust exists. In contrast, a half-secret trust discloses that a trust exists but does not disclose the object and/or terms of the trust. For example, from GE Dal Pont and KF Mackie, The Law of Succession (3rd ed, 2021, LexisNexis Butterworths) at [4.74]: In the case of a 'half-secret' trust the testator supplies an indication in the will that a legatee is not to hold beneficially but as trustee … the will may read 'to X for the purpose I have communicated' or 'to X for purposes with which he is acquainted'. Here the secrecy concerns the name and description of the object. [footnotes omitted]
In Re Estate of Badger (deceased) [2021] SASC 25, a half-secret trust was found in relation to a Will that appointed a sole executor and trustee and by cl 1 gave the whole of the deceased's estate to the executor to "distribute the same as he shall know to be in accordance with my wishes".
The time at which the communication of a half-secret trust must be established was considered in Ledgerwood. There, Young J, as his Honour then was, held that a half-secret trust may be communicated by a memorandum to the trustee at any time before the testator's death (c.f., the position in other jurisdictions - see, for example, Blackwell v Blackwell at 339; In Re Keen; Evershed v Griffiths [1937] Ch 236).
In Ledgerwood, Young J considered the juristic basis for half-secret trusts at 536-7 and observed that there are two competing theories: One is that the trust flows from the will itself and the other is that the trust flows from the effect on the conscience of the person who has acquiesced in the half secret trust. The views are canvassed by the learned academic authors but the prevailing view is the latter. Because the trust flows from the effect on the conscience of the fiduciary, it matters not that there are problems with the formalities under the Wills Act or delegation of testamentary power or that there is a technical problem such as the beneficiary of the half secret trust witnessing the will. The main academic writings are Underhill and Hayton (at 235) and J G Fleming "Secret Trusts" (1947) 12 Conveyancer (NS) 28. Thus Megarry V-C could say in Re Snowden (deceased) [1979] Ch 528 at 535: "… the whole basis of secret trusts, as I understand it, is that they operate outside the will, changing nothing that is written in it, and allowing it to operate according to its tenor, but then fastening a trust on to the property in the hands of the recipient." … Because the doctrine of half secret trusts operates independently of the will, it matters not that a beneficiary under the will either witnessed the will or the memorandum of wishes: Re Young; Young & Young [1951] Ch 344 at 350. In so far as Re Fleetwood; Sidgreaves v Brewer (1880) 15 Ch D 594, may have decided contrary to this proposition, the decision in Fleetwood was erroneous.
More recently, in Duggan v White [2018] NSWSC 364, Parker J stated that: The "secret trust" doctrine is an illustration of equity's intervention to prevent fraudulent or unconscientious behaviour. If property is left under a will to a beneficiary, apparently absolutely, but subject to a separate understanding between testator and beneficiary that the property so left is to be applied for the benefit of someone else, then equity will enforce that understanding. Equity does so because it would be unconscientious for the beneficiary to accept the gift but ignore the understanding on which the gift proceeded: Voges v Monaghan (1954) 94 CLR 231 at 233, 240-241; Ledgerwood v Perpetual Trustee Co Ltd (1997) 41 NSWLR 532 at 535-540.
Thus, the concept of a half-secret trust prevents an unconscionable or unconscientious reliance on the statute of frauds. It applies to testamentary gifts and requires, in addition to the general requirements of express trusts (certainty of intention, certainty of subject matter and certainty of object) proof to the requisite degree of satisfaction as to: the testator's intention that the property be applied as directed; communication of this intention to the intended trustee/trustees; and acquiescence on behalf of the trustee/trustees.
In the present case, and leaving aside the difficulty identified by the first and second defendants as to the fact that cl 9(c) is not a gift of property as such, I accept that Mr Cong communicated to Ms Shen his testamentary intentions and that she must have conveyed her acquiescence to those. However, as set out above, I am not persuaded that Ms Shen understood those intentions and in those circumstances I do not consider it unconscientious on her part (for the purposes of the doctrine of half-secret trusts) now to act in accordance with what she understood to be those intentions.
In my opinion, therefore, these claims fail.

[221]

(xv) Whether Ms Shen acted as trustee de son tort regarding Jolly Trading

As to the claims in relation to Jolly Trading, by prayers 16(a)-(b), the plaintiffs claim a declaration that Ms Shen's benefits and profits from Jolly Trading are held on trust for Edmund, Teresa and Laurence's estate. Alternatively, by prayer 22, the plaintiffs assert a claim on behalf of Mr Cong's estate (extending to Cong Australia International). As to the latter, the first and second defendants say that the proper plaintiff to assert remedies in respect of wrongs to Jolly Trading is the company itself, and not the estate of its shareholder "and still less persons who do not through the estate take any interest in that company" (whether under the 2016 Will or the 2014 Will).
The allegations as to Jolly Trading commence at [27] of the amended statement of claim, and include that Mr Cong did not authorise the lodgement of the form for its deregistration (which was purportedly certified by him as sole director a year after his death) ([33]). It is alleged that the deregistration was not permitted by s 601AA of the Corporations Act 2001 (Cth) because the company was still carrying on business and had assets worth more than $1,000 ([37]) and that Ms Shen took other steps to cause Jolly Trading to cease to trade, including by transferring assets to other entities ([38]).
The plaintiffs allege (at [143]) that Ms Shen, by dealing with Jolly Trading and its assets (as pleaded in [134]-[142]) became a trustee de son tort and owed the fiduciary duties of a trustee to Mr Cong's estate; (at [144]) that Ms Shen is liable to account to the estate for the benefits she and others have received by her intermeddling; and (at [145]) that the chose in action that Mr Cong's estate has against Ms Shen on account thereof is an asset of the estate.
In essence, there is a claim that the benefits secured, including withdrawals of $689,000 and profits derived by Ms Shen from Jolly Trading, "and the traceable proceeds thereof" are held on trust for the plaintiffs.

[224]

Breach of implied covenant concerning Jolly Trading

At 16 of the amended statement of claim (as noted above), it is alleged that it was an implied term of the Deed that Ms Shen would not, by any act within her power or control, do anything to destroy or diminish her ability to pay the moneys due under the Deed by causing Jolly Trading to divest itself of its assets and cease trading.
The first and second defendants say that this implies that Ms Shen covenanted by an implied term "to work, or procure others to work, without in any way depriving herself of means (for example by paying substantial wages to a manager) to keep open and trading a company that depended on personal exertion and skill". It is submitted that this alleged implied term amounts to a term of indentured servitude. The first and second defendants note that there is no reference to Jolly Trading in the Deed; and they argue that the common law would not permit an implication so at variance with the freedom of association and freedom of trade. It is further said that, implicit in the implied term that Ms Shen should not deprive herself of means, by causing Jolly Trading to divest and discontinue its business, is the recognition that Jolly Trading was hers; yet, at the date of the Deed, it was not hers, because Mr Cong was still alive. It is submitted that the suggested implication has no textual basis and finds no support in the circumstances known to both parties at the date of contract.
The first and second defendants note that (at 54 of the amended statement of claim) it is alleged that Ms Shen breached the implied term alleged in 16 by taking the steps pleaded at [27]-[38]; those being, first, (at [31]) that Ms Shen depleted assets of Jolly Trading by transferring $689,000 to her own account; and, second, (at [32]-[38] and 54) that Ms Shen deregistered Jolly Trading, causing it to cease trading, including by transferring assets to Cong Australia International and/or Ugg Australia International.
As to the first, the first and second defendants point to an inconsistency between the alleged breach of the promise (to which they emphasise the plaintiffs are not privy) that Ms Shen should not deprive herself of means and the allegation that Ms Shen enriched herself. It is noted that the additional particulars to [31], supplied after subpoenas and discovery, increase the figure by which it is said Ms Shen enriched herself in breach of this obligation (and that these particulars include a sum of $11,360.80 paid on 19 August 2016 not to Ms Shen's account but to Invocare to pay for Mr Cong's funeral). As to the second, insofar as the complaint is made that Ms Shen closed the business of Jolly Trading, it is said that this amounts to a breach that Ms Shen shut down something that was hers (under the 2016 Will).
As to the allegation (at 59 of the amended statement of claim) that this alleged breach has caused loss to Edmund, Teresa and Laurence's estate (that loss being alleged to be "the amount due to the Plaintiffs under the Deed less the amount they will receive in light of the matters pleaded in section E hereof"), the first and second defendants say the following.
First, that Ms Shen enriching herself, if that were to be established, could not be a breach of the alleged implied term (which, as noted above, was that Ms Shen not deprive herself of the ability to pay the amounts under the Deed) (and, logically, that must follow). The first and second defendants also point to Ms Shen's evidence, and that of Ms Stefadouros, supported by the MYOB records (Ex 16), to the effect that Ms Shen was supporting the company over a long period and recouping advances, and that the company's foreign transfer account was used to remit Shen family money.
Second, that the decision to cease trading through Jolly Trading (which the first and second defendants describe as a "risky business" - presumably because of the evidence that it was affected by foreign exchange fluctuations and was counter-cyclical) and to trade through another entity (Cong Australia International) would not cause loss unless it could be proven both that the returns or loss that would have been made or suffered through Jolly Trading would have been better than the returns or loss that were made through Cong Australia International; and that it was practicable to continue trading through Jolly Trading without the assistance of the late Mr Cong or anyone to replace him and that it was unreasonable to trade through a new entity instead of an inherited one. It is said that no attempt has been made to prove any of this.
In this regard, the first and second defendants point to: Mr Glynn's file note of 23 April 2016 (Ex 6 at 20), referring to the possibility of Ms Stefadouros as a co-shareholder; the evidence of Mr Knox that Mr Cong was highly skilled (see his evidence as to counter-cyclical buying patterns - at T 541.36-50); the evidence that Mr Cong had in the past traded very substantially outside the terms of trade of his suppliers (in amounts up to $500,000 to $600,000) (which approach did not continue after Mr Knox sold his company); and Mr Knox's evidence that the amount due by the time of the emails annexed to his affidavit of 12 October 2020 was about $200,000 (which the first and second defendants say suggests that the volume of trade had markedly decreased). It is said that this is supported by the evidence of Teresa herself (referring to her affidavit of 18 July 2018 at [27] to the effect that, from 2015 when Mr Cong became sicker, he "stressed a lot about the family business as he was acutely aware that he was becoming less able to work the long hours it required of him") and to Ms Joyce's evidence that Mr Cong told her that he did not tell Knox International that he was in palliative care "[b]ecause it's bad for business" (see her affidavit sworn 23 July 2018 at [62]); as well as to Mr Glynn's evidence that, at one of his meetings, Mr Cong told him that "the business is not generating as much money as it used to" (see Mr Glynn's affidavit affirmed 13 October 2020 at [19]).
The first and second defendants say that other suppliers were complaining of overdue payments (referring to correspondence from Simon Matters of Thomas Foods and "Darren" from ALSP, annexed to Ms Stefadouros' affidavit sworn 7 September 2020); and to references in the correspondence with suppliers to business with China being slow.
The first and second defendants say that Jolly Trading was, at least for the last several years, dependent on shareholder support and the indulgence of suppliers; and that, by June 2016, creditors were pressing. It is submitted that Jolly Trading was insolvent because it was not able to pay its debts as they fell due; and that Jolly Trading only retained its fiscal reputation with suppliers because of shareholder support.
The first and second defendants say that Jolly Trading's 2016 financial statement supports the above conclusions and that this is also supported by the MYOB records in Ex 16, in particular by the Bank Register loan account entries under the "2-3400" heading, and also by the supplier account entries shown in that exhibit; and that no evidence was adduced to the contrary. The first and second defendants say that Ms Joyce's "tendency" evidence does not prove the contrary (and, for the reasons submitted in Appendix B to the first and second defendants' submissions on the resulting trust case, they contend that her tendency evidence was neither credible nor truthful).
As to Ms Shen's evidence that, one week after he went into Concord Hospital, Mr Cong asked Ms Shen to pay the creditors of Jolly Trading, it is submitted that, if Ms Shen were to have a reputation to enable her to continue the Jolly Trading business, it was a pragmatic need that Ms Shen pay the creditors. The first and second defendants say that, with the assistance of Ms Stefadouros, Ms Shen transferred money from her bank accounts to the account of Jolly Trading; noting Ms Shen's evidence that she had lent money to Jolly Trading and received repayments from it from time to time.
Finally, the first and second defendants emphasise that the alleged implied promise was a covenant in the Deed with Mr Cong, supporting a promise to pay third parties. It is submitted that breach of the implied term could not sound in substantial damage to Mr Cong or his estate. (Complaint is also made as to the cross-examination on this issue but it is not necessary here to dwell on that. I have referred elsewhere to Ms Shen's credit.)

[225]

Breach of fiduciary duty owed to the estate of Mr Cong

It is noted that (at [134]-[145] of the amended statement of claim) the same conduct relating to Jolly Trading is said to constitute Ms Shen as a trustee de son tort to Mr Cong's estate. The first and second defendants note that the claim is asserted on behalf of the estate ([143]-[145] of the amended statement of claim) and that it is limited to a claim for an account "for the benefits [Ms Shen] or others have received by her intermeddling" (the intermeddling being alleged at [134]-[142]).
The first and second defendants complain that the amended statement of claim does not identify any particular loss, harm or benefit, other than the payments themselves and taking the former business of Jolly Trading into a new entity. It is said that unless these "benefits" were themselves profits for which Ms Shen should be accountable to the estate, no consequential loss or benefit is identified as the subject matter for the claimed account (and none could now be asserted). The allegation is that Ms Shen took money from Jolly Trading ([134]) and that she took its business and diverted it to Cong Australia International ([140]).
The first and second defendants first raise an issue as to standing to bring this claim. They emphasise that Ms Shen is a substantial creditor of the estate (noting that Ms Shen paid off the 43 Amy Street and Nicholson Street loan debts after the death of Mr Cong) and that, under the 2016 Will, Ms Shen is the legatee of the Jolly Trading shares and business (cl 9(b)) and the residuary beneficiary. It is said that the plaintiffs have only the annuities charged on residue (cl 10(p)), but that there is no residue because of the debts and because of want of assets. (Under the 2014 Will, it is noted that the plaintiffs have no interest at all and Ms Shen takes the whole estate, subject to two legacies of $5,000 each to others.)
The first and second defendants submit that, even if Ms Shen were not a substantial creditor of the estate (and whether or not the estate has substantial assets), none of the alleged conduct was capable of affecting the three elder children because (even were the allegations to be established), the conduct could not add to or diminish the funds or assets available to meet the annuities or prevent them from abating.
Thus it is said that the plaintiffs have no interest to seek leave to assert this claim in the name of the estate; that leave to bring this claim should be refused and it should be dismissed (and it is submitted - though I note that elsewhere in their submissions the first and second defendants have sought the opportunity to make submissions as to costs after judgment - that, given that this objection has been raised "and wilfully ignored" so many times, the plaintiffs should pay indemnity costs).
The first and second defendants say that the plaintiffs' lack of interest in this issue is relevant to the plaintiffs' onus to show the obligation to account and the basis for such an account to be taken. The first and second defendants therefore say that the plaintiffs are not entitled to proceed as if they were representatives of the estate suing as plaintiffs; that they must show a real basis for intervention (including that there is a realistic issue that can fairly be pursued), and that they themselves are not needlessly intermeddling.
It is said that that is particularly so where no clear interest in the subject matter has been articulated and the claim and alleged obligations were not foreshadowed at the time of the relevant events, but only long afterwards (the complaint here being of events from August and September 2016 but not foreshadowed until amendments were proposed in the second half of 2018). It is submitted that it is not reasonable to expect a defendant to keep records and to be ready to account to persons who do not have any obvious interest and do not assert it at the time of the relevant transactions, and do not seek to bring forward any claim until long afterwards.
The first and second defendants note what was said by Bryson AJ, in relation to the claim for an account and as to the discretionary elements in giving and withholding the remedy where that right may be established, in Pennimpede v Pennimpede [2009] NSWSC 85 (Pennimpede v Pennimpede) at [161], [165], [183].
As to the defining of the fiduciary obligation and breach the subject of this claim, the first and second defendants say that the relevant factor in Mordecai v Mordecai (1988) 12 NSWLR 58 (the conflict of interest) is not present here, and that what is alleged amounts to no more than that Ms Shen breached a fiduciary obligation to benefit herself. It is submitted that it is not possible for such obligation to exist.
The first and second defendants further say that there is no basis for the allegation at [143] of the amended statement of claim that Ms Shen, by the alleged conduct, became a trustee de son tort; that Ms Shen is an executor (under whichever of the competing Wills that is admitted to probate) and that her title derives from whichever Will is held to be the last Will (citing Deigan, to which I have referred above).
It is noted that the plaintiffs have alleged that, under the implied term alleged in 16, Ms Shen was obliged to prevent by any means the lessening of her ability to pay the amount payable under the Deed (and that this extends to maintaining her interest in Jolly Trading). It is said that, if that be so, Ms Shen must have been entitled, as against the estate of Mr Cong, to get in whatever she could from Jolly Trading; and that no such step would be taken by her as executor or, if it was, it was proper for the executors to make over to her the entire interest in the shares, assets and business of Jolly Trading. (The first and second defendants say that that is so, even if (as they contend) the Deed is not enforceable or only contingently enforceable, because even in that case it would be proper for the executors to promote the wishes of the deceased that are referred to in the 2016 Will, if they neither conflict with any gift made by the 2016 Will, nor with any other obligation that they owe to creditors or beneficiaries.)
The first and second defendants note that the liability that stems from intermeddling is that which would accrue to the beneficiaries and creditors of the estate had the intermeddler obtained a grant (here citing earlier editions of Williams, Mortimer & Sunnucks, Executors, Administrators and Probate (21st ed, 2018, Sweet & Maxwell) at 114-117; GE Dal Pont and KF Mackie, The Law of Succession (3rd ed, 2021, LexisNexis Butterworths) at [10.19]). The first and second defendants say that in a claim for intermeddling, this is an element to establish liability to account; and that the liability is not the general obligation of an executor at the conclusion of an administration - rather, it is a particular claim for wrongdoing to the disadvantage of particular creditors and/or beneficiaries relative to their entitlements under a due administration (i.e., in the nature of a claim in devastavit). The first and second defendants also point out that liability on such a claim does not extend beyond the asset the subject of the intermeddling (citing Yardley v Arnold (1842) C & M 434 at 438 per Parke B; Coote v Whittington (1873) LR 16 Eq 534 at 547 per Malins VC).
The first and second defendants say that it has not been alleged (in [134]-[145] of the amended statement of claim) that the alleged intermeddling has diverted or diminished the interest or caused loss to any creditor or beneficiary; rather, that all that is alleged is that Ms Shen should account to the estate (which assumes misfeasance). The first and second defendants submit that, under either the 2016 or the 2014 Will, the executors are not accountable for the affairs of Jolly Trading provided that they did not fail in their duty to Ms Shen as legatee of the shares to use ordinary business prudence in taking such steps as might be required to protect the value of those shares and her interest in the company until transferring the shares to her. It is said that they would be under no obligation to take any such step unless they were in funds to administer and prosecute those steps; and that they would discharge their duty if they allowed Ms Shen to take control of the company and responsibility for its affairs on the footing that they should have no further obligation to her to watch over it. Therefore, it is submitted that (for the same reasons that the plaintiffs have not demonstrated any interest in the suit), no loss to any creditor or beneficiary has been articulated or proven.
The first and second defendants say that, insofar as the plaintiffs' complaint seems to be that what Ms Shen did involved wrongs to the company that diminished the value of the estate's shareholding, this would require the plaintiffs to show that Ms Shen was not entitled, as against the company, to do what she did (and that the estate is the proper party to complain about this). The first and second defendants point out that the plaintiffs have not alleged a fiduciary obligation owed to the company or that Ms Shen abused any office or fiduciary obligation (noting that Ms Shen was not a director of Jolly Trading); and have not identified the company's claim against Ms Shen. Moreover, it is noted that the third defendant, who represents the estate in the proceeding, has not applied for powers authorising her to apply to re-register Jolly Trading or to seek leave to bring any suit in its name. It is said that, although it is alleged that Ms Shen was not authorised to operate its bank account, this has not been proven and no step taken has been demonstrated to be wrong.
It is further said (I interpose to suggest rather sweepingly) that anyone is entitled to compete (a proposition that would come as a shock to parties suing on a non-compete covenant, for example); and it is contended that Ms Shen was as well entitled as anyone to compete with Jolly Trading. It is noted that Ms Shen was not a director, and had not entered into any restraint of trade (and it is said that even had she done so, there is no basis to think that such a restraint could have been enforceable).
The first and second defendants maintain that Jolly Trading was a vehicle for the personal skill and exertion of Mr Cong and that, upon his death, it was no better than any other vehicle for Ms Shen (with or without Ms Stefadouros) to conduct such a business (noting that personal knowledge of customers and suppliers that is in an employee's head can be used in other endeavours). The first and second defendants also note in this regard that such principles (i.e., as to the ambit of non-competition and confidentiality obligations) would apply even if the shares had not been given to Ms Shen by cl 9(b) of the 2016 Will (if it be valid), or by the gift of residue under the 2014 Will, and in either case, by virtue of Ms Shen's position ultimately as creditor of the estate.
In conclusion, as to the Jolly Trading claims, the first and second defendants point to inconsistency in that the pleaded "profits" and "benefits" from Jolly Trading: in the first of the claims, are said to belong to Ms Shen and it is said she should keep them so that she will have means to pay under her covenant in the Deed; whereas in the second of the claims, are said to belong to the estate of Mr Cong; and in the third of the claims, are said to belong to the three "volunteers". The first and second defendants say that there is nothing equitable about a claim that Ms Shen was obliged by parol agreement to do something that the Will in plain terms does not require (namely, to work for others for nothing for ten years and to contribute her substance to maintain an estate in place for them).

[226]

Plaintiffs' reply submissions

Insofar as the first and second defendants submit that Jolly Trading was insolvent in June 2016, the plaintiffs note that they have led no expert evidence in support of this allegation. It is said that if the business truly was not profitable, then Ms Shen's and Ms Stefadouros' decision to operate an identical business using the same suppliers lacked any commercial sense; and that no explanation has been given for the assertion that Jolly Trading's 2016 financial statements support a conclusion of insolvency.
The plaintiffs say that, although Jolly Trading recorded a loss from ordinary activities before tax of $34,038 for the year ending 30 June 2016, it does not follow therefrom that the company was unable to pay its debts as and when they fell due. It is noted that proof of insolvency requires an analysis of cash flow, which has not been performed; and it is submitted (and I agree) that, in the absence of such an analysis, it could not be concluded that Jolly Trading was insolvent at that time.
The plaintiffs point out that cl 7 of the 2016 Will recorded Mr Cong's wish that Jolly Trading would supply the income to service the debts owed on the Campsie properties. It is said that the basis for this wish was evident: that moneys passed freely between Jolly Trading's bank account and the joint account of Mr Cong and Ms Shen; that the bank statements typically recorded these transfers as loans; and that Ms Shen explained that "the company always borrowed money and then repay the money and borrow the money" (T 790.37-9). The plaintiffs say that, whatever be the true position of these transfers prior to Mr Cong's death, Jolly Trading's trading activities had enabled Mr Cong and Ms Shen to acquire several properties in the last few years of Mr Cong's life. Further, it is said that Ms Shen shared Mr Cong's confidence that Jolly Trading would continue to fund her liabilities. The plaintiffs say that this explains why, in circumstances where she knew that Mr Cong was terminally ill, Ms Shen nonetheless agreed to purchase a $6.5 million family home at the Family Property.
The plaintiffs (perhaps somewhat cynically) point out that, by August and September 2016, Ms Shen had "recuperated from her exhaustion" (there referring, to the first and second defendants' written submissions at [669], [671]), causing Cong Australia International to be incorporated, opening a bank account for Cong Australia International, and causing $809,000 to be removed from Jolly Trading's bank account and credited to her Westpac bank account. Although the plaintiffs seem to accept that Ms Shen was entitled to effect these transfers, the plaintiffs say that her explanation that these moneys represented "family money" that had been remitted from China by her brother, rather than moneys belonging to Jolly Trading, should not be accepted.
Pausing here, I have already made clear my inability to accept Mr Shen's evidence as to the basis for the transfers of moneys from China to Jolly Trading's bank account being loans from family money to Ms Shen in relation to the discharge of debts over the Wu Property due to the inconsistency and unreliability of his evidence. Nevertheless, it does not appear to be disputed that Jolly Trading's creditors were paid the amounts owing to them - and I note Ms Shen's affidavit evidence that the debts comprised of approximately $700,000 to Australian creditors (see also the evidence of Ms Stefadouros in cross-examination at T 1053.41-3) and that there was a lot of money that came in at that time.
The plaintiffs maintain that the first and second defendants' complaint that Ms Shen was obliged to work for the benefit of Ms Joyce's children misses the point - namely, that Jolly Trading was the true source of Mr Cong's and Ms Shen's wealth and that Mr Cong wished that Jolly Trading, through Ms Shen's custodianship, would continue to provide a source of wealth for all of his children, in part, through the payment of mortgage liabilities attached to the properties that had been acquired by him and Ms Shen prior to his death. (Accepting for present purposes that this was Mr Cong's wish, such a wish nevertheless does not in my opinion translate into a cause of action by the estate for the fact that Ms Shen chose not to continue the business through Jolly Trading - see further below.)

[227]

Determination

As to the factual allegations on which the Jolly Trading claims are premised (in effect that Ms Shen assumed the conduct of the business, arranged for the company's deregistration, and transferred the assets out of the company), it is self-evident that Mr Cong did not authorise the lodgement of the form for the company's deregistration since it was purportedly certified by him as sole director a year after his death. (Whether the company could be reinstated because its deregistration was not permitted by s 601AA of the Corporations Act 2001 (Cth) or otherwise is beside the point as no such application is here made.)
It is also the case that, after Mr Cong's death, Ms Shen assumed control of Jolly Trading and transferred its assets (around $689,000 from its bank account) out of the company but it is also the case that Ms Shen arranged for the payment of the company's debts (and, in circumstances where, under the Will, she was to receive the company shares and business, the fact that another company was set up effectively to take over the business of the company makes it difficult to see how there could be any complaint as to the incorporation of Cong Australia International to assume the business of Jolly Trading).
As to the claim based on the implied term pleaded at 16 of the amended statement of claim (see above) to the effect that Ms Shen would not, by any act within her power or control, do anything to destroy or diminish her ability to pay the moneys due under the Deed by causing Jolly Trading to divest itself of its assets and cease trading, I have already concluded that even though the broad term pleaded might be implied into the Deed as a matter of business efficacy, the particular allegation at (C) of the amended statement of claim is more in the nature of an instance of alleged breach rather than the content of the term. I do not consider that there is any basis on which a term of the specificity of that in particular [C] should be implied into the Deed (and hence it is not necessary to address the complaint that it would imply a bond of servitude of some description), although as noted above I accept that a more general term (i.e., not including the precise obligation contemplated by particular [C]) of the kind considered in Ansett Transport Industries would commonly be implied into a Deed of this kind.
The difficulty with the plaintiffs' case that Ms Shen had some obligation not to close down the business of Jolly Trading (as she did, according to Ms Shen, on Mr Cong's instructions) but, rather, to continue to carry on the business of the company in order to enable the income from that company to provide a continuing income stream for the beneficiaries or to service the estate's debts (which is what cl 7 of the 2016 Will suggests) is that there is no such obligation provided for under the Deed; and cl 7 of the 2016 Will is (as the first and second defendants note) in precatory terms and inconsistent with the unconditional bequest to Ms Shen of all Mr Cong's right, title and interest in the shares and business conducted by Jolly Trading. I do not accept that Ms Shen had any implied obligation under the Deed to carry on the business of Jolly Trading for the benefit of the three elder children or otherwise.
Turning to the allegations that, by dealing with Jolly Trading and its assets, Ms Shen became a trustee de son tort and owed the fiduciary duties of a trustee to Mr Cong's estate; and that Ms Shen is liable to account to the estate for the benefits she and others have received by her intermeddling, it is not disputed that a person (including an executor nominated under the Will) may become an executor de son tort where that person intermeddles with the deceased's estate before assets within the estate have actually vested in the executors by a grant of probate. Intermeddling, which can take various forms, is said to involve "tak[ing] upon himself the office by intrusion" and dealing with the estate "in such a way as denotes a usurpation of the functions of an executor" (see Peters v Leeder (1878) 47 LJQB 573 at 574 per Lush J).
It is noted that the doctrine of executor de son tort is a well-established part of New South Wales law (see Hiralal v Hiralal [2013] NSWSC 984 (Hiralal) at [165] per Slattery J). Its modern rationale is that no one should be permitted by refraining from taking out probate or administration to obtain possession of the deceased's property free from its liabilities (see Hiralal at [165] citing Williams, Mortimer and Sunnucks, Executors, Administrators and Probate (16th ed, Sweet and Maxwell) at 93).
The doctrine operates not only for the benefit of creditors but also for beneficiaries (Cash v The Nominal Defendant (1969) 90 WN (NSW) (Pt 1) 77 at 80-81). The liability that stems from the intermeddling is a liability to account for the property with which the executor de son tort has illegitimately dealt in that capacity, although (as noted by the first and second defendants) such liability is limited to the assets the subject of the intermeddling.
As to the plaintiffs' claim in this regard, I find as follows. First, I accept that, in acting to take control of Jolly Trading (the shares and business of which was clearly an asset of the estate) prior to a grant of probate or letters of administration, Ms Shen was acting as a trustee de son tort. However, as above (and as the first and second defendants submit), the liability that stems from such "intermeddling" is that which would accrue to the beneficiaries and creditors of Mr Cong's estate had Ms Shen first obtained a grant; and the liability would not extend beyond the asset the subject of the intermeddling.
In the present circumstances, it is difficult to see what claim could be made by creditors of the estate by reason of the fact that Ms Shen took control of the company and arranged for payment of its debts. The creditors of Jolly Trading would have been entitled to payment in the ordinary course and the obligations of an executor administering the estate and seeking to realise the asset comprised by the company would presumably have required the executor to pay out the company's debts. As to the decision to close down the business, the only beneficiary with an entitlement to the shares and business of the company was Ms Shen (and those assets were not designated, say, to bear the burden of the annuities). In those circumstances even if Ms Shen's conduct in relation to Jolly Trading following Mr Cong's death amounted to diverting the company's profits for her sole use, this would not have been a form of illegitimate "intermeddling" because of the nature of her interest in those assets. Mr Cong's wish that she use them for a particular purpose does not oblige Ms Shen so to do.
I accept that I am not in a position to make a concluded finding on the issue of insolvency (though had it been necessary, I would have concluded that, at least while its creditors were prepared to extend credit beyond the usual credit terms, there would be some difficulty in finding that the company was unable to pay its debts as and when they fell due). However, irrespective of whether the company was insolvent at the time, I cannot see that any loss from the intermeddling would be loss suffered by the plaintiffs in their own right (and they have not obtained leave to sue on behalf of the estate for any chose of action of the estate in this regard). It is relevant in this context to note that pursuant to cl 10(p) of the 2016 Will (set out above), the trustees of Mr Cong's Will were authorised to appropriate whatever part of the residue of the estate they considered sufficient for the payment out of the annuities; there was no right to resort to the shares and business of Jolly Trading to meet the annuities.
Therefore, I find that the Jolly Trading claims by the plaintiffs (including that the benefits said to have been derived by Ms Shen from the withdrawals of $689,000 and any profits derived by Ms Shen from Jolly Trading and the traceable proceeds thereof are held on trust for the plaintiffs) are not made good.

[228]

(ix) Equitable election

At [39]-[48] of the amended statement of claim, the plaintiffs plead their equitable election claim. It is pleaded (at [42]) that Ms Shen elected to accept the entire benefit of the 2016 Will and Deed (particularised by reference to Ms Shen's execution of the Deed and the receipt of benefits from or referable to Mr Cong's estate). At [41], it is alleged that, on the true construction of the 2016 Will and Deed, Ms Shen was obliged to retain ownership of the Campsie properties for no longer than 10 years for the purposes of rezoning thereof and that the proceeds of sale thereof would be paid to the three elder children (up to the monetary limit payable to them) and, to the extent that there was a surplus, such surplus would be paid to Ms Shen.
At [47] of the amended statement of claim, following alternative allegations as to the beneficial interests in the Campsie properties at the time of the making of the 2016 Will (first, at [44], that Mr Cong had a beneficial interest in the Campsie properties by reason of a resulting trust which was capable of being devised through a Will; second, at [45], that Ms Shen had a beneficial or equitable interest in the Campsie properties which Mr Cong was not competent to dispose of by Will), it is alleged that, to the extent that Ms Shen had a beneficial or equitable interest in the Campsie properties, her rights to dispose of or deal with that interest were or are suspended such that she could or can deal with them only in conformity with the terms of the Deed.
The particulars to [47] are that: (i) by executing the Deed, Ms Shen secured the benefits passing to her thereunder, namely the surplus as pleaded at [41]; (ii) by executing the Deed, and in the circumstances pleaded at [22]-[26] (the knowledge and representation allegations), Ms Shen ensured that she received the benefits and gifts passing to her under the 2016 Will; and (iii) it was not open to Ms Shen to accept the benefits and gifts passing to her under the 2016 Will without conforming to the provisions of the Deed and renouncing every right inconsistent therewith.
At [48] of the amended statement of claim, it is alleged that Ms Shen's rights in relation to the Campsie properties (such as they are) have been qualified as pleaded in [47]; i.e., that they were and are suspended such that Ms Shen could and can only deal with them in conformity with the Deed.
The plaintiffs rely on Countess of Bective and Roberts v Moses and Palmer [2018] NSWSC 1145 for the proposition that Ms Shen thus held the Campsie properties and proceeds of sale thereof on trust for them (as to which see also issue (x) below).

[229]

First and second defendants' submissions

The first and second defendants point out that the surplus (as identified at [41] of the amended statement of claim) does not pass to Ms Shen under the terms of the 2016 Will or the Deed; rather, it is a consequence of her ownership of the Campsie properties. It is said that the Deed proceeds on the basis that Ms Shen is the owner of the properties, at least by virtue of survivorship (and not by virtue of succession to the assets of Mr Cong); and that the Deed does not charge the Campsie properties with the payment (but that, even if it did, the residue or surplus would be Ms Shen's by virtue of proprietorship and not by virtue of the Deed). The first and second defendants say that the so-called "gift" (even if it did pass through the gift of residue, i.e., if some element of a resulting trust were made out) is not the subject of an annexed condition, because the 2016 Will, referring to the Deed, proceeds on the assumption that the properties are not a gift at all.
The first and second defendants say that this leaves, for the doctrine of equitable election, only the gift of shares in Jolly Trading and any other residue as property passing under the 2016 Will; and that these gifts are not expressed to be conditional (c.f., Williams v Legg).
Moreover, the first and second defendants say that the doctrine of equitable election does not apply to gifts contained in different instruments. It is noted that the 2016 Will refers to a Deed but does not purport to incorporate it as terms of the Will; nor is the covenant for payment in the Deed expressed by Mr Cong to be a gift by him. The first and second defendants say that it is a covenant with Mr Cong to pay money to third party volunteers; that the three elder children are not donees and therefore have no interest in the administration of the estate on this question; and thus that the doctrine of equitable election has no application.
Insofar as the amended statement of claim asserts that the election was made by execution of the Deed, the first and second defendants say that this cannot be so, noting that the 2016 Will "speaks from" the death of the testator. It is noted that an electing party is entitled to elect to renounce the conditional gift, or to take it under the Will subject to performance of the condition or to take it under the Will but "against" the condition, paying compensation to the disappointed beneficiary up to the value of the conditional legacy given by the Will. The first and second defendants say that, given that the shares in Jolly Trading are worthless - presumably meaning that they were worthless at the relevant time, since the company is now deregistered - and that the assets of the estate are insufficient to pay Ms Shen as creditor, such compensation in the present case is said to be nothing.
It is noted that the donee is not required to elect immediately but is entitled to be put into possession of all material facts, including an understanding of the values of the relevant assets, before being required to elect (the first and second defendants here citing O'Connor v S P Bray Ltd (1936) 36 SR (NSW) 248 (O'Connor) at 263-264). It is said that this would involve knowledge of the "surplus" in a scheme capable of operating for up to 10 years. The first and second defendants say that the inconvenience of that delay and uncertainty is said to be a strong indication that no such condition was intended to be annexed to the gift of shares or to the gift of residue under the 2016 Will.

[230]

Determination

The basis for the equitable doctrine of election (as distinct from election at common law) is that "a person cannot accept and reject the same instrument", in the sense that a person cannot pick and choose which parts of the instrument will be accepted and which will not (see Birmingham v Kirwan (1805) 2 Sch & Lef 444 at 449; Gregg v Perpetual Trustee Co (1918) 18 SR (NSW) 252 at 257-258 per Harvey J).
The doctrine applies, relevantly, in the circumstances illustrated by Buckley LJ in Re Gordon's at 153: If A by a disposition effected by an instrument such as a will confers a beneficial interest in property of which he is competent to dispose on B, and by the same instrument purports to confer a beneficial interest on C in property of which A is not competent to dispose, being the property of B, B may elect to adopt one of two courses. He may elect to accept the entire benefit under the will, in which case he will be equitably bound so far as he is able, to give effect to A's purported gift to C; or he may elect not to give effect to that purported gift. In the latter case, he will not forfeit his interest under the will, but will be equitably bound to submit to C being compensated out of that interest, so far as practicable, for being deprived of the beneficial interest which A intended to give him.
The alternatives available to B in the above example have been described as taking under or taking against the instrument (see O'Connor at 263 per Jordan CJ). As has been explained (see Qiao Liu, 'The Use and Misuse of Equitable Election' (2014) 36(3) University of New South Wales Law Journal 1053), "[w]here B takes under the instrument, it is under an equitable duty to hand its own property, wrongly disposed of by A, over to C. Where B takes against the instrument, equity requires it to compensate C out of A's property for any disappointment suffered by C to the extent of the value of B's property. In doing so, B has to give up A's property in specie but not necessarily its entire value".
Indeed, as to the latter choice of taking against the instrument, B's rights arising under the instrument are not necessarily destroyed - "[B] is required only to give up his benefits under it to the extent necessary to compensate the disappointed appointee, and may have any excess" (O'Connor at 163).
See GE Dal Pont, Equity and Trusts in Australia (7th ed, 2018, Thomson Reuters) at [15.105], it being there noted that "[i]n each case, the doctrine requires a clear intention on A's part to dispose of certain property, which is not in fact A's property, and a benefit given by the will to the true owner of the property (B). At the same time, B's acts will not be treated as constituting an equitable election if done in ignorance of the equitable duty to elect or without being fully informed as to the value of the relevant property(ies); after all, election means "free choice", and a choice that is not informed is not, in law, a free choice".
Accordingly, it is here necessary to consider, first, whether Mr Cong intended to dispose of property to Ms Shen, which he owned, and also property to the elder children which was in fact owned by Ms Shen; and whether Ms Shen made an election (i.e., was Ms Shen fully informed as to the value of the relevant properties and aware of the equitable duty to elect).
As to the first of those matters, Mr Cong certainly intended to dispose of the Jolly Trading shares and business under the 2016 Will; as to the second, Mr Cong made no testamentary disposition of ownership of the Campsie properties as such. Rather, Mr Cong's 2016 Will is best understood as an expression of his testamentary wish that Ms Shen deal with her interest in the Campsie properties in a particular way (and in accordance with the obligations she had entered into under the Deed). Certainly, having regard to my findings on the resulting trust claims, the Campsie properties were owned by Ms Shen such that Mr Cong had no right to give an interest in them to the elder children. Therefore, had the 2016 Will purported to give an interest in the Campsie properties to the three elder children then the scenario envisaged in the cases on equitable election might have been enlivened but in the present case it is not.
As to the second of those matters, while I consider it clear that Ms Shen was well aware of the value of the relevant properties, I do not accept that she was fully informed as to the equitable duty to elect. Therefore, even if the doctrine had been enlivened I would have difficulty in applying it here.
Insofar as the doctrine of equitable election applies to an election to take benefits under the 2016 Will (incorporating within that testamentary instrument, as I accept it does, the Deed), the gifts that were left to Ms Shen were the shares and business of Jolly Trading and the residue of the estate (burdened as the residue was with the annuities); and, if the resulting trust claim were made good, Mr Cong's beneficial interest in the properties the subject of that claim.
I accept that the election to take a benefit under the 2016 Will cannot have been made at the time of execution of the Deed but would have to be determined after the death of Mr Cong (and after Ms Shen had the relevant information to make an informed election). Moreover, this argument presupposes that the Deed is binding on Ms Shen.
I have therefore concluded that the claim based on equitable election for those reasons is not made good.

[233]

(xiii) Whether the transfer of the Wu Property is voidable

I consider together the issues relating to the transfer of the Wu Property to Ms Wu. At [94]-[95] of the amended statement of claim (in the section dealing with equitable fraud), it is alleged that Ms Wu received the transfer of the Wu Property as agent for Ms Shen and in circumstances where Ms Shen was attempting to evade her contractual duties to the three elder children; and that, in the circumstances, Ms Wu holds the Wu Property on trust for the plaintiffs.
At [96]-[103] of the amended statement of claim, the allegation is made of fraud on a power, the consequence of which it is alleged is that the transfer of the Wu Property is void or voidable and Ms Wu holds the Wu Property on trust for the three elder children.
The claim is that the Deed conferred a power on Ms Shen to deal with the Campsie properties for the purposes alleged at [41] of the amended statement of claim (namely, to retain the properties for no longer than 10 years and for the proceeds of sale thereof to be paid to the three elder children up to the monetary limit payable under the Deed and the surplus to Ms Shen); that, on the true construction of the Deed, Ms Shen's power to deal with or dispose of the Campsie properties was limited (i.e., the power was only to be exercised in accordance with the pleaded purposes); that Ms Shen acknowledged to Mr Cong before his death that she understood that the power was to be exercised for the said purposes and Mr Cong relied on that representation; and that Ms Shen has exercised the power for an extraneous purpose and in a manner beyond the scope of or not justified by the Deed and the 2016 Will.
The particulars to the allegation of extraneous purpose (at [99] of the amended statement of claim) are that Ms Shen: (a) transferred the Wu Property to Ms Wu without receiving any, or any adequate, consideration; (b) transferred the Wu Property to Ms Wu for tax reasons; (c) did not wait for a rezoning to occur before transferring that property; (d) transferred the Wu Property with no intention of paying any money to the plaintiffs; (e) acted to secure a benefit to herself or Ms Wu by reason of the transfer; and (f) has not paid an annuity to the "defendants" (which must be a reference to the plaintiffs) in accordance with the 2016 Will and the Deed.
At [100], it is alleged that Ms Shen has sold the Duke Street properties without making any payment in favour of the plaintiffs in breach of the power conferred upon her.
At [101], it is alleged that Edmund, Teresa and Laurence's estate "as the objects of the power" conferred upon Ms Shen, have standing to sue in relation to Ms Shen's exercise of the power which is alleged to be fraudulent in equity.
At [104]-[113] of the amended statement of claim, a claim based on s 37A of the Conveyancing Act is made, namely that the transfer of the Wu Property was with intent to defraud creditors (namely, the plaintiffs - who are said to be creditors as they are entitled to receive distributions of future payments under the Deed and the 2016 Will). It is alleged that the transfer is voidable and an order is sought that Ms Wu "reconvey" the Wu Property to Edmund, Teresa and Laurence's estate.

[234]

Fraud on a power

The plaintiffs say that the transfer of the Wu Property to Ms Wu was void or is voidable as it represented a fraudulent exercise of Ms Shen's power to deal with the property in accordance with the Deed. As noted above, it is alleged that Ms Shen's power to deal with the Campsie properties, as provided under the Deed, was limited to retaining ownership of them for no longer than ten years for the purpose of rezoning and then to pay the proceeds of sale from those properties to the plaintiffs and to Laurence up to the amount specified in the Deed. It is said that it may be inferred that the transfer of the property to Ms Wu for no consideration was done to defeat, in part, Ms Shen's promise to Mr Cong recorded in the Deed. (It is alleged at [106] that the transfer was for tax reasons.)
The plaintiffs point to the equitable doctrine of fraud on a power, which requires that a power conferred on a trustee by the trust deed must not be exercised for a purpose, or with an intention, beyond the scope of or not justified by the trust deed (the plaintiffs here referring to In Re Courage Group's Pension Schemes [1987] 1 All ER 528 at 538; Lord Napier and Ettrick v R F Kershaw Ltd [1999] 1 WLR 756 at 766). It is said that Ms Shen's transfer of the Wu Property was done, deliberately, for an ulterior purpose with an intention that went beyond the scope of the promise made by her in the Deed.
The plaintiffs say that, being the obvious persons who stood to benefit from the exercise of a power, they have standing to complain about its fraudulent exercise. It is noted that in Thomas on Powers (2nd ed, 2012, Oxford University Press), the author says at [9.02] that: [T]here are two basic elements in a fraudulent exercise of a power, first, a disposition beyond the scope of the power by the donee, whose position is referable to the terms, express or implied, of the instrument creating the power; and, secondly, a deliberate breach of the implied obligation not to exercise the power for an ulterior purpose.
The plaintiffs say that, by reason of Ms Shen's fraudulent exercise of her power to deal with the Wu Property, the transfer to Ms Wu is void or voidable, with the result that there should be a declaration that Ms Wu holds that property on trust for the plaintiffs.

[235]

Section 37A Claim

The plaintiffs further say that Ms Shen's transfer of the property at the Wu Property to Ms Wu is voidable pursuant to s 37A of the Conveyancing Act because it had the effect of diminishing trust assets and diminishing the first defendant's ability to pay money to the plaintiffs under the Deed and the 2016 Will. As noted above, the plaintiffs say that they are creditors for the purpose of s 37A, as they are entitled to receive distributions of future payments under the Deed and 2016 Will (the plaintiffs pointing out that "creditor" for s 37A relevantly includes future and prospective creditors).
Reference is made to the High Court decision in Marcolongo v Chen (2011) 242 CLR 546; [2011] HCA 3 at [32]-[34], where it is said that the relevant "intent to defraud" for the purposes of s 37A may be inferred from objective circumstances, and that it is only necessary to show dishonesty in the sense of an intent to hinder, delay or defeat creditors. It is noted that it is also unnecessary to show that the intent to defraud is the sole or predominant intent in relation to the transaction.
The plaintiffs say that in the present case the intent to defraud and to prejudice the plaintiffs as creditors is amply demonstrated by the following matters: that Ms Shen transferred the property to Ms Wu for no consideration despite claiming to, at the time, be under financial difficulty and when the property was valued at $1,395,000; the transfer was made less than 12 months after the death of Mr Cong and two months after the sale of another of the properties by Ms Shen (16 Nicholson Street); the transfer was made on the basis that Ms Shen had the whole beneficial interest in the property when (as contended in the resulting trust claim) the plaintiffs say that Mr Cong (and, in turn, his estate) had a substantial beneficial interest in the Wu Property; the transfer took place at the request and direction of Ms Shen; the transfer was false, in that it falsely asserted the receipt of consideration by Ms Shen from Ms Wu, when no such consideration passed; Ms Shen was aware that the Wu Property was one of the properties identified in the Deed to be held on trust for the plaintiffs; and, at the time of transfer, the property was unencumbered, and thus was an asset which was available to the plaintiffs as creditors.
The plaintiffs maintain that the first and second defendants have not established the defence in s 37A(3) is made out. The plaintiffs emphasise that Ms Wu was not a "purchaser" within the meaning of ss 7(1) and 37A(3) of the Conveyancing Act, as she did not provide any consideration (let alone "valuable consideration") for the interest she acquired. The plaintiffs point in this regard to Ms Shen's own evidence that Ms Wu did not advance any money to her, nor any other form of consideration (rather, Ms Shen claimed that her brother provided money to her) and to Ms Wu's evidence that she did not instigate the transfer (rather, it arose solely from a request by Ms Shen). It is submitted (and I accept) that Ms Wu was a willing cipher for this transaction. The plaintiffs noted that Ms Wu's oral evidence was to the effect that she became the registered proprietor at Ms Shen's request, and in so doing, she simply did what Ms Shen said.
As to the alleged loans by Mr Baoming Shen (Ms Shen's brother), the plaintiffs say that neither Ms Shen nor Mr Shen has told the truth on this matter and that the transfer ought therefore to be viewed as a voluntary disposition (see above as to my conclusions in relation to the alleged loans - suffice it to note that I am not persuaded on the evidence that the payments in question were loans).
Furthermore, it is said that, even if the funds advanced by Ms Shen's brother were capable of being taken into account for the purposes of s 37A(3), Ms Shen has failed to establish that she in fact received such moneys or that they would constitute valuable consideration for the transfer. The plaintiffs submit that, given the adverse credibility findings which they say ought to be made in respect of the defendants, and the absence of documentary records proving the alleged transfers, it cannot confidently be found that any money was received by Ms Shen from her brother to fund the Wu Property renovations or to discharge the mortgage on that property. To the extent that it might be accepted that any money was received, it is noted that Ms Shen's evidence was that only (approximately) $455,000 was advanced in respect of the Wu Property. It is noted that, on the first and second defendants' own valuation evidence, as at 3 June 2016, the property was worth around $1,395,000. Therefore, it is said that even if the transfer to the second defendant was in consideration for the loaned moneys, the property was transferred at a significant undervalue and not for "valuable consideration".
For those reasons, in their submissions the plaintiffs say that the transfer to Ms Wu should be declared void and the property transferred back into the estate of Mr Cong. The prayers for relief in the amended statement of claim, however, put this in the alternative (i.e., an order that Ms Wu reconvey the Wu Property to Edmund, Teresa and Laurence's estate or to Mr Cong's estate (see prayer 20)) (c.f., the declaration sought that Ms Wu holds the Wu Property on trust for Edmund, Teresa and Laurence's estate - see prayer 17).

[238]

Transfer to Ms Wu as agent and trustee; and the s 37A case

The first and second defendants suggest that the claim as to the transfer to Ms Wu as agent/trustee is a "surrogate" for the s 37A case, both involving the same allegations of fact.
As a first point, it is submitted (and there is some logic to this) that, if the purpose of Ms Shen in making the transfer was to defeat her contractual obligations, then it would be of the essence that Ms Wu was not to receive as agent for Ms Shen.
Apart from this, it is said that the basis of the transfer had nothing to do with the plaintiffs, other than that it followed their unwillingness to participate in the burdens of proprietorship at Duke Street when offered the opportunity. Its genesis was said to be the financial strain of holding the properties, for which Ms Shen sought a solution and obtained assistance from her family in the form of the contribution of substantial family funds. It is said that it was pursuant to those arrangements that the transfer was made to Ms Wu and that this also avoided taxation disadvantages.
As to the allegation that Ms Shen acted to defeat her contractual obligations, the first and second defendants say that this again assumes that the alleged implied terms exist and that the three elder children were parties to the contract (or, if not, that they have standing to sue on behalf of the estate) (referring to the above submissions as to those matters).
It is said that it is a further element of this case that Ms Shen subjectively knew and understood these contractual obligations and deliberately set out to defeat them. The first and second defendants emphasise that there is no evidence that the 2016 Will and the Deed were ever translated or interpreted to Ms Shen before the transfer of the Wu Property was made. (Pausing here, it will be recalled that the transfer of the Wu Property was in February 2017 and therefore the affidavit made in support of the abandoned application for probate in November 2017 had not yet been prepared let alone translated to Ms Shen by that stage.)]
The first and second defendants point to the evidence that, shortly after the death of Mr Cong, Edmund approached Ms Shen and obtained what he thought were original documents (and that Edmund gave no explanation of what he did with the documents after that). (It would appear that the original 2016 Will must have been in the possession of Ms Shen's lawyers at the time of the application for probate of that Will; and it seems clear from the letter from the plaintiffs' lawyers in April 2017 that they did not have the originals of the documents.)
The first and second defendants note that Edmund's evidence was that, at some point, he suggested to Ms Shen that she get the Will translated. It is said that, from this, it is clear that Edmund appreciated that Ms Shen did not understand its contents. (Pausing here, it would equally be consistent with the evidence that Edmund considered that it would be prudent to ensure that Ms Shen understood its contents, not that he thought she did not at the time. Certainly, as events have transpired, including the propensity of Ms Shen to explain any inconsistencies in her evidence by a failure to read English or understand documents and the litany of alleged failures of people to translate documents, or even when translating to do so properly, such advice was in hindsight sound advice. Though, even when it was accepted that documents were translated to Ms Shen in her cross-examination, her explanation was that she "forgot" or had maybe forgotten.)
In any event, the first and second defendants say that, with Edmund's understanding of Ms Shen's language difficulties, Edmund stood by and did nothing in the face of "express, direct and undisguised" notice that Ms Shen intended to transfer the Wu Property to Ms Wu. The first and second defendants point to this as rendering absurd the suggestion that this was an intentional plan by Ms Shen to defeat her contractual obligations. (The plaintiffs, however, point out that there was no suggestion at the time that the transfer would be for no consideration paid to Ms Shen for the property.)
The first and second defendants point to Ms Shen's evidence that she did not have any actual knowledge of the terms of the Will until the commencement of the current proceedings in July 2017. It is accepted that, after the death of Mr Cong, Ms Stefadouros received a copy of the Will from Mr Glynn but it is said that there is no evidence that Ms Stefadouros interpreted it to Ms Shen (and she was not competent to do so). It is also accepted that in late 2016 or early 2017, Ms Shen provided a copy of Mr Cong's Will to the bank and Mr Glynn provided a certified copy of the 2016 Will to DIB Financial at its request for Mr Cong's life insurance/superannuation claim. However, the first and second defendants say (and I accept) that on neither of those last two occasions was it necessary for Ms Shen to examine the 2016 Will or the Deed, or their terms.
Thus, it is submitted that neither of the elements of knowledge and intention is made out. It is said that the transfer was made for reasons unrelated to the plaintiffs or any suggested obligation to them or to the estate in respect of them; that the plaintiffs are not creditors; and that the plaintiffs are not in any event entitled to appropriate the money applied to pay off the mortgage over the Wu Property.

[239]

Plaintiffs' submissions in reply

The plaintiffs emphasise what was said by Stevenson J in Super Vision Resources Ltd v AC Holdings Co Pty Ltd [2020] NSWSC 65 at [301], namely that: 301. Super Vision is a creditor for the purpose of s 37A. The word "creditor" in s 37A has been held to include future and prospective creditors: Chen v Marcolongo; Chan v Lym International Pty Ltd (2009) 260 ALR 353; [2009] NSWCA 326 at [13], [18] and [27] (Allsop P, Giles JA agreeing). The decision of the Court of Appeal was reversed by the High Court, but this reasoning was not disturbed.
Turning to Chen v Marcolongo (2009) ALR 353; [2009] NSWCA 326, Allsop P (as his Honour then was) said: 27 On the question of the meaning of the phrase "any person thereby prejudiced", the evidence disclosed that Mrs Marcolongo had a bona fide claim for unliquidated damages and that Mr Mao (a director, or erstwhile director, of Lym International) accepted that the claim had force. I do not think that s 37A requires the proof, by a trial within a trial, that the claim will necessarily or even probably succeed. In advance of a hearing a party with a bona fide claim is prejudiced if a disposition of property by the defendant would leave the claimant without a likely adequate fund against which to proceed. This is consistent with the proposition that prospective creditors are included in the concept of creditors: Green v Schneller [ 2001] NSWSC 897; 189 ALR 464 at 468. The statute should be read liberally as one for the suppression of fraud. (Footnote omitted)
Insofar as the first and second defendants submit (in their written submissions at [644]) that Ms Shen did not have any actual knowledge of the terms of the 2016 Will until the commencement of the proceeding in July 2017, the plaintiffs say that this overlooks three contemporaneous emails sent to Mr Glynn, which record that Ms Shen was involved in reviewing drafts of the 2016 Will and the Deed, and suggesting changes to those documents (see the emails on 27 May 2016 from Ms Stefadouros and then from Ms Lan to Mr Glynn; and the email on 30 May 2016 from Ms Stefadouros to Mr Glynn). It is noted that Ms Shen did not describe any of these emails in her affidavits in chief or otherwise describe her review of the drafts of the Will and the Deed prior to their execution on 3 June 2016. Further, the plaintiffs point to Mr Glynn's recollection that Mr Cong said to Ms Shen, "I do not want any arguments about my affairs after I am dead. You must not sell within 10 years because the children will not get the benefit of a rise in value. I want you to follow my wishes".
The plaintiffs point out that Ms Shen met with Mr Glynn on at least three occasions and that Ms Shen understood that Mr Glynn was a lawyer assisting Mr Cong to prepare testamentary documents; and they say that, against this background, and the emails from Ms Stefadouros and Ms Lan referred to above, the submission that Ms Shen did not have any actual knowledge of the terms of the 2016 Will until July 2017 is not credible. Pausing here, I would accept (as I have indicated above) that any suggestion that Ms Shen did not have knowledge of the structure of Mr Cong's ultimate testamentary intentions is not credible. However, I am troubled by what I consider to be Ms Shen's genuine evidence that her understanding of what was proposed gave her an absolute discretion as to the amount (if anything) to be paid to the three elder children by way of testamentary disposition; and hence I cannot accept that Ms Shen had actual knowledge of the precise terms or effect of the documents, even though I accept that parts of them were read out or explained in her presence (or the concepts therein were discussed) on various occasions. There may be a distinction here to be drawn as to whether Ms Shen's evidence as to her discretion extended to the annuities. However, nothing here turns on this.

[240]

Determination

As to the claim based on there having been a fraud on the power, the difficulty I have is that the properties in question were in Ms Shen's name. I do not accept that her power to dispose of or deal with the properties was limited to the purposes pleaded at [41] of the amended statement of claim. I consider it consistent with the fact that the Deed did not specify a minimum period and simply provided that Ms Shen would retain the properties for "no longer than" ten years, and with the fact that the Deed itself contemplated that there might be a sale of one or more of the properties at an earlier time (see cl 2(b) for example), that it was open to Ms Shen to dispose of or deal with the properties at an earlier time. Indeed, the pleading appears to contend (at least in the context of the suspension of that right - see at [47]) that there was a right of disposal of the properties (albeit limited to a dealing in conformity with the terms of the Deed).
I do not accept that there was a power conferred on Ms Shen in relation to her dealings with the Campsie properties, as such. Rather, at most, the Deed amounted to an agreement by Ms Shen not to exercise that power for no longer than ten years or only to do so in a manner consistent with the stated purposes of the rezoning of the properties. Nor does the Deed make clear that the proceeds of sale of the Campsie properties were to be used for the contemplated payments to the three elder children such that Ms Shen would only retain the "surplus". The proper construction of the Deed in my view simply provides for payment of a sum (in differing amounts depending on which sub-clause applied and the exercise of Ms Shen's discretion on two of the scenarios) and at a time that again depended on which sub-clause applied and Ms Shen's discretion.
Therefore, I do not accept that the fraud on the power claim is made good.
As to the s 37A claim, I am more troubled. The plaintiffs were "creditors" for relevant purposes insofar as they were beneficiaries under the 2016 Will and entitled under the terms of the 2016 Will to an annuity payable for ten years as well as a payment of an amount which was to be determined in the future and the timing of which might be not sooner than ten years after the date of Mr Cong's death.
The transfer of the Wu Property occurred in February 2017 for no consideration. By April 2017, Ms Shen was clearly on notice by reason of the letter from the plaintiffs' lawyers, which must have been brought to her attention, that issues were being raised as to the status of the Campsie properties (by reference to the 2016 Will and the Deed). It is not to my mind insignificant that Ms Shen was very angry with Teresa after the receipt of that letter (and I accept as plausible Teresa's account of the conversation in the car on the eve of the anniversary of Mr Cong's death to the effect that the elder children would get nothing if they made a claim against Ms Shen).
That said, there was also clearly enough a concern on the part of Ms Shen to minimise the tax implications of the property portfolio (and the alienation of the property for tax reasons is pleaded by the plaintiffs). An issue to which that gives rise and which was not the subject of debate was whether the holding of such a purpose (together with, say, an intention to put the property beyond the reach of creditors) would mean that the relevant intention for the purposes of s 37A was not established. Ultimately, however, it is not necessary to reach a concluded view on this point because (as I explain in answer to the next issue) I am not persuaded that the Wu Property was held on resulting trust for Mr Cong's estate and hence, in circumstances where I do not consider the Deed to be binding on Ms Shen (for the reasons I set out later when considering her defences to the claim), I do not consider that the transfer of the property (albeit for no consideration) was void or voidable as a transaction with the intention of defrauding creditors.

[242]

Plaintiffs' submissions

The plaintiffs submit (and I accept) that neither Mr Cong nor Ms Shen was commercially naïve. They say that each was experienced in the acquisition of residential property (whether for their own use or for investment) and each understood what the land register noted in terms of ownership. Pausing here, that may certainly be said about Mr Cong (who had acquired a number of properties before his relationship with Ms Shen) but (despite her self-avowed interest in real estate investment) it is not clear what experience Ms Shen had in property investment prior to her relationship with Mr Cong.
The plaintiffs point out that Mr Cong accurately described the state of the titles of all of the properties at his meeting with Mr Glynn on 17 February 2016 (albeit that this is not recorded consistently in the Deed). It is noted that Recital A of the Deed records that Mr Cong and Ms Shen jointly owned the properties; that cl 2 records obligations imposed on Ms Shen referable to the properties; and that cl 9(c) of the 2016 Will directs Ms Shen to retain ownership of the Campsie properties, so as to maximise their value. The plaintiffs submit that Ms Shen's assent to these provisions, manifested by her execution of the Deed (which, in turn, referred to the 2016 Will) and various statements made to the plaintiffs, is explicable only if she understood that she was not free to treat the Campsie properties as if she were the sole beneficial owner thereof. (That submission assumes that Ms Shen was not only aware of but also understood the terms of the Deed when she signed it, and that she was aware of and understood the terms of the 2016 Will. I have real doubts about the level of her understanding of the terms of either document.)
The plaintiffs contend that the decision as to how to register the properties resulted from two matters.
First, Mr Cong's wish to put property in Ms Shen's name in order to avoid a potential claim from Ms Joyce (as to which property, the plaintiffs contend for at least 56 Duke Street but they say that it should be inferred that this applied to all the properties since its acquisition because there was nothing that made 56 Duke Street particularly vulnerable to a claim from Ms Joyce). The plaintiffs say that this appears to have been a long-held view because Mr Cong told Mr Pirintji that he did not want other persons telling Ms Joyce about that the sale of property.
Second, Mr Cong's concerns about tax. Reference is made to Teresa's evidence that Mr Cong said (see T 187.14): I've been buying and selling a lot of properties. Some of them I put under Amy's name or - and we take out a loan from a bank. The reason I do this is because it's better for tax and for me to not have them under my name. and then we pay the mortgage with the proceeds from, from the business. and that he said: I am buying properties. I am using loans from the bank which we take out in Amy's name. My business … with loans through profits from the sale of sheepskin and profit from the sale of properties.
The plaintiffs say that Ms Shen's stated position is that she was unconcerned about the state of the register; and that she was prepared to let her husband decide what should occur in this respect because she "didn't care".
The plaintiffs submit that Ms Shen acknowledged Mr Cong's equitable interests in the following ways. First, by Ms Shen signing the Deed, which (by Recital A) acknowledged that she and Mr Cong were the joint owners of the various properties. The plaintiffs argue that this involved no error (pointing out that the true state of affairs as recorded by the Registrar-General was known to Mr Cong, Ms Shen and Mr Glynn); and that Ms Shen is bound by the recital, as a matter of estoppel (referring to Franklins Pty Limited v Metcash Trading Ltd [2009] NSWCA 407 at [380]). (Again, the force of this submission is undermined by the issue of Ms Shen's level of understanding of the Deed; and it assumes that the defences raised by her in relation to the Deed do not succeed.)
Second, by Ms Shen admitting as much to the plaintiffs and to Ms Joyce. In particular, reference is made to Teresa's evidence as to the conversation in the car on the eve of the anniversary of Mr Cong's death (see above). The plaintiffs say that the proposition that they would receive nothing if they went to court assumes that, otherwise, they were entitled to the moneys to which Ms Shen had earlier adverted. Pausing here, it seems to me that the threat there made by Ms Shen is equally explicable by reference to her understanding that she had an absolute discretion as to what the elder children were to receive out of the estate.
The plaintiffs say that Mr Cong believed that he was the owner of the properties, referring to the description by Mr Cong of the properties (in various ways and contexts) on the premise that they were his. For example, they refer to Teresa's evidence that Mr Cong told her that he had been buying and selling a lot of properties (see above), as consistent with the properties being his to control; to Teresa's evidence that when Mr Cong described his testamentary intentions to her, he stated that the amount of money to be paid to his elder children was "dependent on the re-zoning of the houses in Campsie which I own"; that Mr Cong used the expression "my properties"; that in a conversation with Edmund about the terms of his Will, Mr Cong said "I want to ensure that all my Campsie properties will have gone up in value and will get a much better price when sold"; that, in relation to 56 and 58 Duke Street, Mr Cong told Edmund that "I have purchased two properties because they have potential for good price increases" and Mr Cong told Teresa that he was thinking of leaving one to her and her brothers and the other to Ms Shen (saying that "if I give you one and Amy the other then you will all be involved together"); that Mr Cong contemplated amalgamating 56 and 58 Duke Street, and then having the sale proceeds of the consolidated block divided between Ms Shen and the children of the first marriage; that, in relation to the Family Property, Mr Cong said to Teresa, "I bought a huge house. It's around 6 million dollars. I want to die in a big house because I had to sell the other in the divorce. I will sell some of my other properties to pay for it"; and that, when speaking to Laurence about his Will, Mr Cong said: I have specifically designated about $2,000,000 in property each for you, Edmund and Teresa. You will receive this in 10 years' time after the various properties I own have been rezoned and are more valuable…
The plaintiffs contend that the sole (or, alternatively, the primary) source of funds for the purchase of the Campsie properties and Burwood properties was Mr Cong and not Ms Shen. The plaintiffs further contend that Ms Shen largely depended on financial contributions provided by Mr Cong through Jolly Trading to purchase the 2 Duff Street, Burwood property and the Family Property. The plaintiffs say that, by reason of those contributions, Ms Shen holds her interest in the properties (and the proceeds from the sale of the properties) on resulting trust for Mr Cong's estate in such proportion as reflects Mr Cong's contribution to the costs of acquisition of the property. It is contended that, in breach of that trust, Ms Shen has transferred those properties to third parties and has failed to account to Mr Cong's estate for the benefits she has received. It is said that such actions have deprived the plaintiffs of any substantial inheritance from their father's estate.
There is perhaps some significance in the fact that there is contemporaneous evidence of Mr Cong intending to make a gift of the Wu Property and the Family Property to Ms Shen, as compared against the evidence in relation to his intentions regarding the other Campsie or Burwood properties.
As to the relevant principles concerning when a resulting trust will be presumed to arise, which were summarised in Amit Laundry Pty Ltd v Jain [2017] NSWSC 1495 (Amit Laundry) (at [161]-[168]), the plaintiffs submit that the primary fact giving rise to the presumption of a resulting trust in this case is that Mr Cong provided the purchase price (or a substantial proportion of the purchase price) of property which was conveyed into the name of another person, namely Ms Shen.
The plaintiffs accept that only contributions that bear the "character of purchase moneys" can found the presumption; but that this is broader than simply the price paid to the vendor. It is noted that incurring liability under a mortgage will amount to a contribution to the purchase price and that contributions include incidental costs of the purchase, including the deposit, legal expenses, stamp duty and registration. It is further noted that, while generally the relevant temporal focus of the enquiry is "at the time the property is acquired", that does not preclude regard being had to events prior and/or subsequent to the purchase.
As to contributions prior to the purchase, reference is made by way of example to Brown v New South Wales Trustee and Guardian [2012] NSWCA 431 (Brown v NSW Trustee) and Harvey v Barton [2013] NSWSC 1779 (applying Brown v NSW Trustee), where in each case a resulting trust arose in circumstances where money was received and applied to property some time later. As to contributions after the purchase, reference is made to Bloch v Bloch (1981) 180 CLR 390; [1981] HCA 56 (Bloch) and to the decision of Gleeson J, then sitting in the Federal Court, in Micheletto (Trustee) v El-Debel [2020] FCA 1031 (Micheletto).
The plaintiffs note that, once the basis for the presumption is established, the burden shifts to the party denying the trust to establish a contrary intent. In that context, they submit that although "intent" is principally to be considered by reference to "the acts and declarations of the parties before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction", regard may also be had to later testimonial evidence of intention (referring to Sze Tu v Lowe [2014] NSWCA 462 at [182]-[183] per Gleeson JA (Meagher and Barrett JJA agreeing)).
The plaintiffs submit that the evidence in the present case establishes, on the balance of probabilities, that a contribution of the requisite character has been made in respect of each of the properties (thus giving rise to the presumption) and that: each contribution was made with the intention, at the time of purchase, of Mr Cong acquiring a beneficial interest in each of the properties, rather than by way of loan or gift; and that this intention suffices to rebut any claimed presumption of advancement in respect of properties purchased after Mr Cong and Ms Shen were married (though in any event the plaintiffs say that there is no presumption for de facto relationships).
As to the contributions made to the various properties, the plaintiffs say as follows.
As to the Wu Property, that Mr Cong contributed at least $400,000 to the purchase and it can reasonably be inferred that Mr Cong contributed a further $90,250 (being payment of the deposit); and they say that Mr Cong further contributed $500,000 to discharge the mortgage (invoking the Bloch and Micheletto exception in this regard).
As to 16 Nicholson Street, that the deposit of $172,250 was drawn from Mr Cong's bank account; and that Mr Cong and Ms Shen jointly incurred liability for a mortgage of $1,160,000. The plaintiffs submit that it can reasonably be inferred that the remainder of the funds used in the purchase (of $517,115.15) were drawn from Mr Cong's bank account.
As to 43 Amy Street, that a total of $326,735.24 was drawn from the joint account of Mr Cong and Ms Shen, and they further jointly incurred liability for a mortgage of $700,000.
As to 56 Duke Street, that the deposit of $99,600 was drawn from the joint account of Mr Cong and Ms Shen and that it can reasonably be inferred that a further sum of $238,236.84 in joint funds was used in the purchase.
As to 58 Duke Street, that the deposit of $110,000 was drawn from the joint account of Mr Cong and Ms Shen; and it is said that it can reasonably be inferred that a further $337,448.47 in funds drawn from the re-mortgage of the Wu Property (in which it is said that Mr Cong had a beneficial interest) was used in the purchase.
As to 2 Duff Street, that the deposit of $243,000 was drawn from the joint account of Mr Cong and Ms Shen; and it is submitted that it can reasonably be inferred that a further $628,587.65 in funds drawn from the joint account was used in the purchase.
As to the Family Property, that Mr Cong contributed at least $4,500,000 to the purchase; and it is submitted that it can reasonably be inferred that such sum was transferred to Ms Shen by Mr Cong, being $500,000 from the re-mortgage of the Wu Property (in which Mr Cong had a beneficial interest) and $4,000,000 from the sale of the 9 Ethel Street and 2-4 Barnes Avenue properties.
The plaintiffs emphasise that, for each purchase, a significant proportion of the purchase price was obtained by way of bank loan. It is noted that minimal repayments were made to those loans and that, for 5 of the 7 properties (16 Nicholson Street, 43 Amy Street, 56 Duke Street, 58 Duke Street and 2 Duff Street), the loans were only repaid following sale of the property; whereas the loan in respect of the Wu Property was paid by way of contribution from Mr Cong (and the loan for the Family Property remains outstanding).
The plaintiffs submit that, consistent with the approach taken in Micheletto, it can reasonably be inferred that at no time (and in particular, not at the time of purchase) was it intended or believed that Ms Shen would (or could) make cash contributions to the purchase or to the discharge of the loan. Rather, it is contended that the intention of Ms Shen and Mr Cong was at all times that the properties would be financed through funds advanced by Mr Cong and/or from Mr Cong's business. It is noted that, on Ms Shen's own evidence, Mr Cong was responsible for paying the mortgages on each of the properties. It is submitted that this supports an inference that each of the loans (whether in Ms Shen's name alone or their joint names) was taken on the basis that Mr Cong alone would procure repayments; and that Ms Shen had entered the loans on his behalf. Accordingly, it is submitted that the contributions to the purchase price attributed to Ms Shen (by reason of her share in the loan liability) ought properly to be attributed to Mr Cong.
The plaintiffs say that it is also notable that the property purchases were primarily intended as an investment, rather than as an acquisition of a family home (with the exception of the Wu Property and the Family Property). It is said that, as recognised in Calverley v Green, it may be more readily presumed that mortgage payments inform the respective contributions under a resulting trust where the property is an investment property.
The plaintiffs say that, if the above is accepted, then there should be a finding that 100% (or close to 100%) of the contributions made to the purchase of all seven properties was from Mr Cong and/or Jolly Trading. It is contended that Ms Shen therefore holds 100% of the properties that remain on trust for Mr Cong's estate. Even if that proposition is not accepted, it is submitted that it is evident that Mr Cong made a substantial contribution to each purchase.
The plaintiffs further submit that the objective intention of Mr Cong was to acquire a substantial (if not the whole) interest in each of the properties. In this regard, they say that the properties fall into three categories: first, those purchased prior to Mr Cong's marriage to Ms Shen (the Wu Property and 16 Nicholson Street); second, those purchased in the joint names of Mr Cong and Ms Shen after their marriage (43 Amy Street); and, third, those purchased in Ms Shen's name alone after their marriage (56 Duke Street, 58 Duke Street, 2 Duff Street, and the Family Property).
It is submitted that the properties in the first category are typical of the situation in which a resulting trust has been held to arise. It is said that, for both properties, Mr Cong contributed at least 54% of the purchase moneys, despite at law acquiring a 0% and 50% interest (respectively). The plaintiffs contend that it should in fact be found that Mr Cong contributed 100% (or near to that amount). The plaintiffs say that there is no presumption of advancement, as Mr Cong and Ms Shen were not yet married; and that Ms Shen has made a bare assertion that the contribution to the Wu Property was a "gift". The plaintiffs submit that Ms Shen has failed to meet the onus of establishing that there was a gift. Given the adverse credibility findings for which the plaintiffs contend, they say that Ms Shen's bare assertion should not be accepted; and that there should be a finding that the Wu Property is held on resulting trust.
As to the second category (the 43 Amy Street property), in which Mr Cong was registered as holding a 50% interest, it is said that no presumption of advancement arises in respect of that 50%. The plaintiffs further submit that the evidence establishes that Mr Cong intended to retain his interest in that property (and treated it as if he held 100% of the interest). It is noted that, on Ms Shen's evidence, the property was sold at Mr Cong's insistence and direction, and contrary to Ms Shen's wishes.
Relevant to the second and third category of properties in particular, the plaintiffs say that the available evidence supports the finding that Mr Cong treated each of the properties as his own and that that intention was known to Ms Shen and others.
As to the third category of properties, the plaintiffs place weight (saying that this is of critical significance) on the fact that the first of these properties (56 Duke Street) was the subject of a contract for sale in Mr Cong and Ms Shen's joint names and that it was only at the time of settlement that this was changed to be a purchase in Ms Shen's name alone - referring to Ms Shen's evidence in cross-examination to the effect that Mr Cong did not want to keep his name on the title because after he died, it might bring more trouble to her, probably from Ms Joyce, which the plaintiffs say is the proper inference to be drawn (and Ms Shen's subsequent denial of this should not be accepted). This intention is said in turn to underpin each of the subsequent purchases (i.e., that those properties were placed in Ms Shen's name alone not because Mr Cong had no intention to acquire an interest in them but solely to frustrate any later attempt by Mr Cong's ex-wife to make a claim on them). It is said that it was an attempt by Mr Cong to hide the true ownership of (and contributions to) the properties.
The plaintiffs submit that the fact that Mr Cong intended to acquire, and retain, an interest in each of the properties is further evidenced by the fact that, on Ms Shen's evidence, she would only buy a property if Mr Cong agreed with the purchase and, if he disagreed, she would not; and that she knew and understood that Mr Cong wanted to leave the entirety of 16 Nicholson Street to the plaintiffs (despite Mr Cong only having, at law, a 50% interest in that property). Such conclusion is also said to be consistent with the fact that (despite Ms Shen, Mr Cong, and Mr Glynn being aware of the legal ownership of each of the properties), the Deed recorded that "Cong and Shen are the registered proprietors in joint names of the following properties". Pausing here, apart from the difficulty I have with Ms Shen having a real understanding of the terms of the Deed, I have difficulty with the proposition that if Mr Glynn was intending the Recitals to the Deed to be drafted in a manner consistent with recognition that Mr Cong and Ms Shen in fact had a joint beneficial interest in the properties then he would not have made that clear. Moreover, this submission is inconsistent with the proposition that Mr Cong had a 100% beneficial interest in one or more of the properties. Regrettably, the most probable explanation for the Recitals to the Deed, in my opinion, is that Mr Glynn made an error in the drafting of the document (since on its face Recital A is inconsistent with his own note of his instructions).
The plaintiffs submit that the weight of evidence lies in support of the conclusion that Mr Cong's contributions to each of the properties were made with the intention of acquiring (and retaining) a beneficial interest in each of them, which he could subsequently choose to dispose of as he wished. It is submitted that Mr Cong's conduct and statements regarding the properties were inconsistent with those contributions being a loan or gift, or with there being an understanding that Ms Shen would for any other reason acquire the sole interest in the properties.

[243]

First and second defendants' submissions regarding resulting trusts

At the outset, the first and second defendants in response to the alleged resulting trusts in the present case (which are said to arise presumptively from contribution to the purchase money - see amended statement of claim at [133]) rely on Calverley v Green for the proposition that only contributions to the purchase money are relevant to establish a resulting trust arising from unequal contributions to the purchase of property (the subsequent payments of mortgage instalments or otherwise to release a charge over property being concerned with a supervening event and casting no light on the parties' intentions at the time of purchase). Hence, they submit that consideration of evidence both as to the presumption (or rebuttal) of a resulting trust and as to the presumption (or rebuttal) of advancement must be limited to the circumstances operating at the time of purchase.
That said, the first and second defendants accept that supervening circumstances may be considered where they rise to the level of an admission as to the position operating from the time of purchase but they emphasise that in that case there would need to be conduct amounting to an admission by Ms Shen (who is said to be the resulting trustee) and they say that subsequent conduct of Mr Cong (or his subjective opinions after the event) does not establish an intention by Ms Shen to hold as trustee. Reference is made to what was said (at 261-262) in Calverley v Green by Mason and Brennan JJ, as their Honours then were, to the effect that, when a common intention is in issue, it is not ordinarily to be found in an uncommunicated state of mind; rather, it is to be inferred from what the parties do or say.
The first and second defendants say that money borrowed by Ms Shen and applied to the purchase is a contribution by her to the acquisition of the properties and that the same must be true of money given to her. I accept the former. As to the latter, that would depend on the intention and circumstances at the time.
Assuming a presumption of resulting trust does arise in relation to any of the relevant properties, the first and second defendants argue that the presumption of advancement also arises.
The presumption of advancement applies historically where, relevantly, property is purchased by a husband and transferred to the name of his wife. The first and second defendants refer to Ford and Lee, Principles of the Law of Trusts at [21.170] for the proposition that a presumption of advancement can also arise where property is purchased by a man and transferred into the name of the woman to whom he is engaged to be married (the authors there citing Moate v Moate [1948] 2 All ER 486; Wirth v Wirth (1956) 98 CLR 228 (Wirth v Wirth) at 238 per Dixon CJ); the presumption in those circumstances being on the condition that the marriage take place and, if it does not, a resulting trust operates (see Jobson v Beckingham (1983) 9 Fam LR 169; Jenkins v Wynen [1992] 1 Qd R 40; Bertei v Feher [2000] WASCA 165).
The first and second defendants point out that in Calverley v Green (which was not a case involving a fiancée), at 250-252, Gibbs CJ approved the view of Dixon CJ in Wirth v Wirth that the presumption of advancement applies in the case of "a transfer of property by a prospective husband to his intended wife in contemplation of the marriage for which they had contracted" as being "intelligible and likely to lead to a just result"; and they say that Deane J, at 268, appears also to have accepted that view.
As to the position of a de facto wife, the first and second defendants say that Calverley v Green is not authority that the presumption of advancement cannot apply in favour of a de facto wife, pointing out that there were differing views on the question held by the different members of the majority in that case. It is noted that (at 250-252) Gibbs CJ was of the view that the presumption of advancement could arise in favour of a de facto wife in appropriate circumstances, and that it did arise in that case but found that the presumption of advancement was there rebutted (and that his Honour did not regard Napier v Public Trustee (WA) (1980) 55 ALJR 1 as concluding the question against any presumption in favour of de facto wives - referring to the observation of Aickin J but noting that the question had not been argued and was not necessary to the decision); whereas (at 269) Deane J was of the opposite view (see also Mason and Brennan JJ at 256).
Pausing here, it seems that Ms Shen and Mr Cong were in a de facto relationship from at least 2010/2011 (i.e., before any of the relevant properties were acquired) and they were married on 9 June 2014 (see Ms Shen's affidavit affirmed 13 October 2017 at [46]); in submissions it was said that they were engaged by the time of the acquisition of 16 Nicholson Street.
As to the particular properties, the first and second defendants say as follows.

[244]

The Wu Property

The first and second defendants say that the evidence given by Teresa (in a paragraph of her affidavit not admitted to prove the truth of the statement by Mr Cong), to the effect that the Family Property was to be a substitution for the Wu Property, is not evidence of a resulting trust (rather, at best it is a supervening event; and was not pleaded as such). Further, as noted earlier in relation to the submissions as to her credibility, the first and second defendants say that Teresa should not be accepted as a reliable historian of Mr Cong's representations to her (noting that Teresa is interested in the outcome of the proceeding and pointing to anachronisms in her account of events; as well as the fact that assertions in Teresa's later affidavits were not advanced in her 2017 affidavit that was filed in support of her initial family provision claim).
The first and second defendants point out that [114] of the amended statement of claim does not allege that Mr Cong contributed any part of the purchase money for the Wu Property; rather, that he facilitated Ms Shen's purchase by making provision in or about January 2012 "of part of the purchase price" (the particulars of which identify that Mr Cong might have provided $90,250 for the deposit and that $350,481.79 used on settlement came from $400,000 deposited into Ms Shen's bank account).
The first and second defendants say that this is not an allegation that Mr Cong actually paid the purchase money as such and in the character of a purchaser; and that the facts alleged are not sufficient to assert a resulting trust because they are equally consistent with the use of money previously supplied to Ms Shen and held by her as her own money at the time of applying it to the purchase. Further, it is noted that the allegation is confined to part of the money.
The first and second defendants make the following points. First, the first and second defendants say that there is no evidence of Mr Cong paying purchase money in the character of a purchaser. It is said that Ms Shen was the active person in finding and securing the property, as well as being the legal purchaser under the contract; and that it was she who supplied the purchase money, which all came from her own bank accounts or from a bank loan to her. The first and second defendants say that it is immaterial that Mr Cong gave Ms Shen the sum of $400,000; they maintain that he did not advance that sum in the character of a purchaser. In this regard, they say that the defendants point to the fact that the $400,000 provided by Mr Cong was not paid by him to the vendor, nor to the bank to produce a bank cheque or other form of bank transfer, nor to the conveyancer, but instead to Ms Shen (and they say that not all of it was actually used by her to pay the purchase money).
Second, it is said that the uncontradicted evidence of Ms Shen is that this money was a gift in the circumstances that she was bearing Mr Cong's child. The first and second defendants say that this evidence is supported by Ms Joyce's evidence (at [18] of her affidavit sworn 23 July 2018) that Mr Cong contemporaneously declared to her that he had made this gift. The first and second defendants also point out that, in her communications with the Department of Immigration (on 12 December 2013 and again on 11 September 2014), Ms Joyce asserted that the Wu Property was Ms Shen's property (see Ex 23 at 65, 69), which they submit evidences that Mr Cong made it clear to Ms Joyce that the Wu Property was fully owned by Ms Shen. To the extent that the plaintiffs refer to Mr Cong's references in conversations to "my properties", the first and second defendants criticise the language in which those conversations are recorded; say that the "conversations" were not advanced at the first opportunity (in 2017); and emphasise that they amount to "interested assertions against a dead man".
Third, the first and second defendants say that Ms Shen borrowed $500,000 from a bank and applied it to complete the purchase (and hence this could not be considered a contribution by Mr Cong); they note that the deposit was paid from Ms Shen's bank account and that its derivative source has not been identified, save as to an account number.
Fourth, it is said that, if the view of Gibbs CJ in Calverley v Green be accepted, the presumption of advancement applied (on the basis that the circumstances of the relationship are apt to lead to the same conclusion as in Calverley v Green where his Honour found that the presumption arose). However, the first and second defendants say that, in view of the clear evidence of actual intention to make a gift, it is not necessary to decide this question. (I agree.)

[245]

16 Nicholson Street, Burwood

The first and second defendants note that the amended statement of claim (prayer 21(a) and pleading at [115]-[117], [133]) identifies the claim as a resulting trust of Ms Shen's interest in this property for Mr Cong's estate in such proportion as reflects his contribution to the costs of acquisition of the property (without there specifying - or specifying in the particulars provided on 14 September 2020 - what proportion).
The defence to the amended statement of claim (at [166]-[171], [206] and [207]) alleges that the purchase by Mr Cong and Ms Shen of this property was as joint tenants, at the time they were engaged to be married, and at the time of Ms Shen's birthday, and that $1.16 million of the purchase money was borrowed by them from NAB on a first registered mortgage security, and the balance contributed by Mr Cong. The first and second defendants allege a presumption of advancement by reason of their engagement and an actual intention of Mr Cong to advance Ms Shen. (I note that the reply at [10] denies that any presumption of advancement arises between a fiancé and fiancée but other than Ms Shen's assertion it is not clear when they actually became engaged.)
As to the pleading (at [11] of the reply) of the equitable election case, the first and second defendants say that this is not a contention that supports the existence of a resulting trust (rather, they say that it attempts to support the claim of a constructive trust superimposed at the time of execution of the Deed and the 2016 Will).
The first and second defendants point to the fact that the price was $1,722,500; and stamp duty was $80,247.50; totalling $1,802,747.50. They say that Mr Cong contributed the deposit of $172,250 on behalf of the purchasers (evidenced by the deposit receipt) and $472,115.15 on completion, making a total of $644,365.15. The sum of $1.16 million was co-borrowed by Mr Cong and Ms Shen from NAB/Homeside Lending on mortgage security (Ms Shen's half contribution, it is said, therefore being $553,000).
Thus, it is said that Mr Cong contributed $1,197,365.15 or approximately two- thirds of the total outlay of $1,802,747.50 but was registered as a joint tenant of the estate. It is said that if the whole estate in the land was held by the proprietors on trust for themselves in proportion to their respective contributions (i.e., approximately 2/3:1/3), the question then is as to whether the beneficial estate was intended to be held in joint tenancy or as tenants in common.
The first and second defendants note that the application of the legal rules as to the presumption of a tenancy in common or joint tenancy in respect of the beneficial interest held under a resulting trust was considered in Delehunt v Carmody (1986) 161 CLR 464; [1986] HCA 67 (Delehunt v Carmody), where the de facto couple had contributed equally to the purchase but the title had been conveyed only to the de facto husband. Gibbs CJ said that: If equity follows the law, it will follow the rules of law in their current state. Where, as a result of following the law, a beneficial joint tenancy would formerly have been created, now a beneficial tenancy in common will (in New South Wales) come into existence. In other words, although s.26 of the Conveyancing Act has no direct application to the present case, its indirect effect is to require it to be held that there was a resulting trust for the purchasers in an interest of the same kind as that which would have resulted if the land had been conveyed to them at law, i.e. as tenants in common.
The first and second defendants note that in the High Court the question whether the by then deceased (estranged) de facto's husband's 50% share should pass by way of survivorship to the de facto wife (who held the other 50% share as beneficiary of a resulting trust found by the Court of Appeal) was determined (in circumstances where there was no discussion or other circumstances that had passed between the couple that would enable a finding as to their actual intentions on how the title should be held - i.e., whether as joint tenants or tenants in common) by reference to the operation of s 26 of the Conveyancing Act 1919 in the hypothetical declaration of trust imputed to them as a result of the presumption of a resulting trust.
The first and second defendants say that the present case is distinguishable from Delehunt v Carmody in that, in the present case, the legal title to 16 Nicholson Street was held by both parties as joint tenants (but in any event they point to s 26(2) of the Conveyancing Act, which provides that s 26 does not apply, inter alia, in any case where the instrument expressly provides that persons are to take as joint tenants).
The first and second defendants say that the acquisition of the land by transfer into joint tenancy evinced an intention that the interest of Mr Cong in the land would lapse on his death and that thereafter the entire estate would be held by Ms Shen. In that situation, it is said that there is little scope for s 26(1) to have any derivative influence on the outcome in the present case. It is submitted that the joint tenancy is a strong circumstance indicating that, at the time of purchase, Mr Cong intended the survivor (ultimately Ms Shen) to take the entire estate by survivorship.
It is noted that the day before the contract to purchase this property was signed, Mr Cong had made the 2013 Will, under which (by way of the gift of residue to Ms Shen) any interest that Mr Cong might have in 16 Nicholson Street that was capable of surviving his death would have passed to Ms Shen (see cl 5(e)). The first and second defendants say that there could be little practical purpose in Mr Cong intending to retain the benefit of his unequal contributions in order that he could pass them through his estate, when his intention was to pass residue to her in any event. It is said that, from Ms Shen's perspective, this would make even less sense and it is not likely that she undertook such a trust obligation.
Further, the first and second defendants say that this property was purchased as an investment; and that there is nothing in the evidence to suggest that, at the time of purchase, Mr Cong or Ms Shen had any intention to sell it in the short term (even though Mr Cong knew that he was suffering from cancer and had communicated this to Mr Pirintji at the time of making the 2013 Will).
Again, the first and second defendants emphasise that the context in which the property was acquired; namely, that it was at the time of Ms Shen's birthday and they say that it was at the same time as Mr Cong promised Ms Shen a gift of $500,000, in contemplation of marriage, from the proceeds of the sale of Mr Cong's former matrimonial home at Woolwich. (Pausing here, in her affidavit affirmed 4 September 2020 at [118]-[120], Ms Shen deposes to a conversation with Mr Cong in early December 2013 in which Mr Cong said words to the effect that "I will receive half of the proceeds from selling 2 Werambie Street, Woolwich. As we are getting married soon, I will give $500,000 to you as a gift". Ms Shen then said that Mr Cong transferred $500,000 to her, which she used to repay the loan balance of $477,713.80 to Westpac and thereby discharged the mortgage over the Wu Property - not 16 Nicholson Street.)
The first and second defendants say that it is clear that Mr Cong's funds came from the ANZ account in which he was holding a portion of his share of the proceeds from the sale of Woolwich (not from Jolly Trading).
The first and second defendants point out (although they accept that evidence of subsequent conduct is of limited relevance) that Mr Cong never severed the joint tenancy. It is noted that the 3 June 2016 Deed proceeds on the footing that Ms Shen was a joint owner of 16 Nicholson Street and that the instructions to Mr Glynn on 17 February 2016 refer to their ownership without any mention of a trust (Ex 6 at 17).
The first and second defendants also point to Ms Shen's evidence that when Mr Cong approached Ms Shen about his wish to give 16 Nicholson Street to his elder children, he couched it as a request (and that she did not accept this proposal) (see her affidavit affirmed 4 September 2020 at [220]) (and they refer to the email of 2 May 2016 from Ms Stefadouros on behalf of Mr Cong to Mr Glynn in which the lack of agreement is confirmed). The first and second defendants say that it might have been expected that Mr Cong would have pressed Ms Shen at that time if she had undertaken to be a co-trustee of the property but that he did not do so. Further, the first and second defendants say that it is clear that in this discussion Mr Cong was seeking "to go beyond his rights" and was making a request, given that he was asking Ms Shen to pay off the mortgage and provide the property free of encumbrance to his elder children. It is said that this could not have been an obligation of a trustee. The first and second defendants point out that at that time Mr Cong had funds from which he could have done this himself but they say that the discussion proceeded on the footing that those would be needed to provide for Ms Shen and her children.
The first and second defendants say that, although it is clear from his March 2016 written instructions to Mr Glynn that Mr Cong still wished to pursue the idea of leaving 16 Nicholson Street to the three elder children, there is no evidence that Ms Shen ever accepted it (and that the email of 2 May does not suggest that she did); and that ultimately Mr Cong altered his instructions on 28 April 2016 (and that he never severed the joint tenancy).
The first and second defendants say that Recital A of the 3 June 2016 Deed acknowledges Ms Shen's joint ownership of 16 Nicholson Street. It is submitted that there was ample occasion for Mr Cong to assert any rights he had in respect of 16 Nicholson Street (for example to instruct Mr Glynn that his interest in it was two-thirds or to press upon Ms Shen that she was obliged to him) (or, I might add, to sever the joint tenancy); yet Mr Cong did not do so.
The first and second defendants contend that the plaintiffs' case is unrealistic insofar as it is suggested that Mr Cong and Mr Shen (who were cohabiting as a couple and with children) were acquiring property as joint tenants but intended the survivor to hold the property as trustee; and that each be presumed to have undertaken to the other to do so by a presumed declaration of trust. The first and second defendants say, and I would have to agree, having regard to Ms Shen's evidence in the witness box, that a declaration of trust over 16 Nicholson Street was the furthest thing from Ms Shen's mind. (Of course, Ms Shen would not need to have actually turned her mind to a declaration of trust as such for the purposes of the presumption of resulting trust - it would be sufficient for it to have been her understanding and intention at the time of acquisition of the property that the beneficial interest in the property be held by Mr Cong and would be his to deal with as he saw fit).
The first and second defendants also here again invoke the presumption of advancement on the basis that the parties were by then engaged to be married (and further note that, if the view of Gibbs CJ be correct, it would be enough that they were in a stable de facto relationship).

[246]

43 Amy Street, Campsie

Paragraphs [118]-[120] of the amended statement of claim concern 43 Amy Street, Campsie. It is alleged (at [118]) that Mr Cong and Ms Shen purchased that property as joint tenants in October 2014. It is noted that, at that time, they were already married. It is alleged at [120] that Mr Cong "facilitated the purchase of 43 Amy Street by the provision of part of the purchase price of $985,000". The first and second defendants say that this pleading suffers again from the vice that it does not allege direct contribution to the purchase money as such; and it is again confined to a partial claim.
The first and second defendants note that on 30 August 2014, Ms Shen bid for the property at auction (which Mr Cong did not attend); contracted in her sole name to buy the property; and paid the deposit of $98,500 by cheque immediately after the auction. This cheque was drawn on the 16 Nicholson Street offset account which was a joint account of Ms Shen and Mr Cong. It is said that Ms Shen was not accountable for her drawings on that account for her own purposes (c.f., Croton v R (1967) 117 CLR 326; Pennimpede at [155]) and that the pleadings do not present a case to the contrary; and thus, it is said that Ms Shen not being accountable for her own drawings from that joint account, there could be no presumption that she undertook to become a trustee by reason of this payment. Rather, it is submitted that this was a contribution by Ms Shen to the property.
It is noted that Mr Cong did not become a party to the contract to purchase 43 Amy Street; rather, he was added to the transfer (as joint tenant) by the direction of Ms Shen signed on 3 October 2014, when Ms Shen encountered a difficulty in obtaining finance (see her affidavit affirmed 4 September 2020 at [132]-[133]). The first and second defendants say that this suggests that Mr Cong became involved in the transaction in order to assist Ms Shen.
Mr Cong and Ms Shen co-borrowed $700,000 from Westpac for this purchase. A loan account and offset account were established in the names of Ms Shen and Mr Cong.
On 9 October 2014, to prepare for completion, Ms Shen transferred $300,000 from the 16 Nicholson Street offset account #3146 (held jointly by her with Mr Cong) to the Westpac offset account #3500 established under the 43 Amy Street facility (see her affidavit affirmed 4 September 2020 at [136]). The first and second defendants say that this payment transferred funds from one jointly held account to another jointly held account.
On 13 October 2014, the purchase was completed. On that day, Ms Shen attended the Westpac branch and paid $700,000 from the 43 Amy Street loan account and $228,235.24 from the 43 Amy Street offset account to complete the purchase (see her affidavit affirmed 4 September 2020 at [137]-[138]). Title was transferred by the vendor to Ms Shen and Mr Cong as joint tenants.
The first and second defendants say that, Mr Cong having contributed less than half (or at most half) of the purchase money in the character of purchaser, no presumption of a resulting trust arises in his favour. The first and second defendants say that, if the contrary were shown, then the presumption of advancement would apply, as the couple was married by this time. Moreover, it is said that this was another case of a joint tenancy. The first and second defendants say that there is no basis for presuming a resulting trust in favour of Mr Cong or for presuming or concluding that his interest, legal or beneficial was held as tenant in common.

[247]

56 Duke Street, Campsie

The pleading in relation to this property (at [122]-[123], [133]) takes the same form as for the other claims and is subject to the same criticisms by the first and second defendants as made in relation to the earlier pleadings.
This property was purchased for $996,000; stamp duty was $40,330. Mr Cong and Ms Shen were co-bidders and co-purchasers under the contract of sale dated 28 March 2015. Ms Shen paid the deposit from the joint 16 Nicholson Street offset account to which she was a party (see her affidavit affirmed 4 September 2020 at [143]).
The first and second defendants say that Mr Cong decided to retire from the transaction. On 15 April 2015, Mr Cong signed a direction to the vendor appointing Ms Shen to be the sole transferee. The first and second defendants say that this decision was not because he wanted to participate in ownership as a beneficiary but not be named on the legal title; rather, that it was because he did not want to participate at all. The first and second defendants point to the evidence as to the reasons that Mr Cong gave for this (see Ms Shen's affidavit affirmed 4 September 2020 at [144]), namely that he was dying "and cannot buy any properties under my name" and that he was afraid that his ex-wife would "try to get a piece".
The first and second defendants argue that the first of those reasons was a sound and convenient reason from a capital gains tax and income tax planning point of view; that, notwithstanding the roll-over provisions, there would be obvious complications that could be readily avoided by Mr Cong never becoming a proprietor and that, for the purpose of income tax planning, it would not be prudent for a dying man to acquire an investment property with a view to negative gearing. It is noted in this regard that when Mr Cong instructed Mr Pirintji for the 2014 Will, he expressed consciousness that he was "getting sicker" (see Mr Pirintji's affidavit affirmed 3 September 2020 at [12].).
The first and second defendants say that this has some support from Teresa's evidence (at T 187.16), as she places the conversation she describes in early 2015 (T 187.21) not too far from the time that Mr Cong "retired" from the 56 Duke Street purchase.
As to the second reason, the first and second defendants say that this was also a sound and prudent reason (referring to the behaviour of Ms Joyce that is apparent from Exhibits 42 and 43, from her 2010 or 2011 Project Wickenby allegations and from Mr Gorrell's evidence as to her own statements about her conduct to Mr Cong). (The first and second defendants say that this is also borne out by Ms Joyce's subsequent conduct in these proceedings - a submission which to my mind assumes that Ms Joyce has had a large degree of responsibility for the provision of instructions in relation to the conduct of the litigation and which cannot be assumed on the evidence before me.)
The first and second defendants say that these are compelling reasons for accepting that Mr Cong's actual wish was not to become a registered proprietor, referring to Ms Shen's evidence (at T 627.48) that there was a very easy explanation as to why the properties were purchased in her name and not Mr Cong's name or joint names, that being "… because my husband wanted to give these properties to me".
It is noted that, to complete this purchase, Ms Shen needed $937,903.44. Ms Shen borrowed in her own name from ANZ $700,000 on loan account #665. An ANZ offset account #13004 was also established in her sole name. On 4 May 2015, Ms Shen transferred $260,000 from the 16 Nicholson Street joint offset account to account #13004 in her sole name. (It is said by the first and second defendants that Ms Shen was not accountable for this payment (see above); that it was not a payment by Mr Cong; and that it was not a payment in the character of Mr Cong being a purchaser.) At completion on 11 May 2015, Ms Shen drew on the ANZ $700,000 loan to herself solely, and paid a further sum of $238,236.84 from her account #13004.
On these facts, the first and second defendants say that the only contribution made by Mr Cong in the character as purchaser was his equal share in the contribution of the deposit, but that this was before he chose to retire from the transaction. To the extent that any presumption arises from that payment, it is said to be rebutted by the presumption of advancement, by the fact of his deliberate decision to retire from the transaction and, further, by the reasons that he gave at the time.

[249]

The Family Property

The first and second defendants say that the only part of the pleading that asserts a trust in respect of the Family Property is [130]-[133] of the amended statement of claim; and that this pleading takes the same form and is liable to the same criticisms as set out above.
The first and second defendants say that the purchase of the Family Property was a deliberate decision following the news in mid-2015 that Mr Cong's cancer had reappeared (and was terminal). Reference is made to Ms Shen's evidence that Mr Cong expressed the wish that his youngest children be educated at a particular private school and that Ms Shen and the children live nearby in a nice position; and that, following this, he and Ms Shen inspected properties and located the Family Property (see Ms Shen's affidavit affirmed 4 September 2020 at [168]-[172]).
Ms Shen's evidence was that Mr Cong was enthusiastic about the Family Property (which enthusiasm, I interpose to note, is corroborated by Edmund's evidence as to conversations with his father) and that he decided to sell his properties at 9 Ethel Street, Burwood and 2-4 Barnes Avenue, Earlwood to finance the purchase of the Family Property, which he said would be a gift to Ms Shen. Ms Shen says that she suggested he ask the agent for a 6 month settlement period to allow time for these sales (see her affidavit at [174]-[175]) (and indeed the 6-month settlement period became a term of the contract). The first and second defendants submit (and I agree) that all of this confirms that the presumption of advancement applies.
The auction was held on 5 September 2015. Completion was not until 4 April 2016. As noted in the chronology, the 9 Ethel Street and 2-4 Barnes Avenue properties were put on the market and sold.
The first and second defendants say that nothing is pleaded in the reply against this express confirmation of a presumed advancement or to rebut the presumption of advancement by any fact or circumstance; and nothing is put in the evidence to do so. It is noted that Edmund (see his affidavit sworn 9 October 2020 at [34] - not admitted for the truth of the communication) referred to a conversation in which Mr Cong told him "I've bought this property" but that, in his oral evidence in chief, Edmund said (T 91.37-45): Q. I was talking about approximately April, May or June 2016. A. Okay, that's what I thought, okay. Yes, as I was saying I recall him being lucid and we talked fairly regularly and I didn't notice anything wrong. I remember a conversation at Campsie where he was talking - he said words to the effect of, "I'm not too worried about dying, I've organised for [the Family Property] and Amy and the boys, and you, your brother and your sister because of the will," and I recall myself - he said, "Do you want to see the will?" and I recall myself saying, "No, I don't want to see it," 'cause I'd already seen it and it was - yeah.
It is also noted that in cross-examination at T 106.34, Edmund reiterated his evidence (see at T 105.49, T 106.19, T 106.42) in relation to the April to June 2016 period: A. I, I remember he had a conversation with me with words to the effect of, "I'm not that worried about death. I've organised xxx [the Family Property] - I've taken - I've sorted Amy and the boys and you, your brother and your sister through the will," and then he offered to show me it and I said no.
Edmund's evidence was that Mr Cong never lived at the Family Property, and that the above conversation occurred at the Wu Property in Campsie (T 106.45-T 107). The first and second defendants note that his evidence would place Mr Cong offering to show him the Will before it was made, which they say indicates that his evidence must be treated with caution. I have dealt with this already. However, relevantly for present purposes, the first and second defendants emphasise that Edmund twice asserted in his oral evidence, in definite terms, that Mr Cong told him that the Family Property was for "Amy and the boys" (c.f., his assertion at [24] of his affidavit of July 2018).
The first and second defendants point out that Teresa, in her reply affidavit sworn 9 October 2020 at [100], has deposed that Mr Cong told her "I've bought a huge house" and that he said "I will sell some of my other properties to pay for it"; which it is said corroborates Ms Shen's evidence (and it is said that Teresa accepted in cross-examination that this property was for Amy and the boys - see at T 275.31; T 275.39).
The first and second defendants say that Ms Joyce's evidence (at [36] of her affidavit sworn 23 July 2018) of a visit by Mr Cong to the Family Property on 22 July 2016 (see above) is "fantasy". Reference is made to Ms Joyce's evidence (at [38] of that affidavit) that Mr Cong told her at another time in 2016 "Amy now has xxx [the Family Property]" (in the context of her evidence that he said that he was now "leaving xxx [the Wu Property] to our children" and that "I have had to sell 9 Ethel Street Burwood and use money from the sale of sheep skins").
The first and second defendants say that ultimately the plaintiffs' own evidence confirms the intention of Mr Cong to advance Ms Shen into the Family Property.
The first and second defendants are highly critical of the maintenance of the plaintiffs' claim to impeach Ms Shen's ownership and security in her home (particularly in light of the evidence referred to above) and they say that it may be inferred that the plaintiffs have persisted in this only for the purpose of "holding on to the freezing order at its maximum extent for as long as possible".
It is noted that Ms Shen exchanged contracts for the purchase of the Family Property on 5 September 2015. The price was $6.5 million. Ms Shen paid a 5% deposit of $325,000, by cheque drawn on her ANZ 56 Duke Street offset account (see Ms Shen's affidavit affirmed 4 September 2020 at [179]-[182]).
This cheque was covered by a previous deposit of $690,000 to that account on 20 August 2015, sourced from the 43 Amy Street offset account #13004 (Ex Q at 876). That sum in turn was covered by deposits of $650,000 on the same day (20 August 2015) and of $50,000 (on 1 July 2015) from the 43 Amy Street loan account #949688 (Exhibit Q at 874). $700,000 had been deposited into that account on 29 June 2015 (Exhibit Q at 874), $500,000 of which had been sourced from Ms Shen's Wu Property offset account #539 (Exhibit R at 113), the remaining $200,000 being sourced in equal measure from the joint offset accounts for 16 Nicholson Street (#3146) (Ex Q at 919) and 43 Amy Street (#693500) (Ex Q at 875). It is said that Ms Shen was thus both the proximate and the "remoter" contributor of the deposit.
Completion occurred on 4 April 2016. To complete the purchase, Ms Shen needed $6,176,201.33. Ms Shen borrowed $2,227,500 in her own name from Westpac (loan account #6600). Ms Shen paid $3,902,889.33 from her Westpac offset account #1738. Thus, it is said that Ms Shen as purchaser paid every dollar of the purchase money.

[251]

Determination of resulting trust claims

The legal principles in relation to resulting trusts have been stated in a number of cases (and were summarised in Amit Laundry as noted earlier) but it is helpful here briefly to restate some of those principles before turning to their application in the present case. The relevant presumption was formulated (at 266-267) in Calverley v Green by Deane J in the following terms (see also Gibbs CJ at 246-247 and Mason and Brennan JJ at 258): … where two or more persons advance the purchase price of property in different shares, it is presumed that the person or persons to whom the legal title is transferred holds or hold the property upon resulting trust in favour of those who provided the purchase price in the shares in which they provided it.
It is a presumption as to a declaration of trust (see Edelman J, sitting as his Honour then was in the Supreme Court of Western Australia, in Anderson v McPherson [No 2] [2012] WASC 19 (Anderson v McPherson) referring to it as the rebuttable presumption "of the fact of a manifest declaration" at [106]), premised on a presumed intention to create an equitable (beneficial) interest in the acquired property in someone other than, or in addition to, the person in whom legal title is vested. Once the primary fact giving rise to the presumption is established, the burden falls on the party disputing the existence of a resulting trust to rebut the presumed fact on the balance of probabilities (see Ryan v Ryan [2012] NSWSC 636 (Ryan v Ryan) at [57]; Weige v Cupton Pty Ltd (2012) 8 ASTLR 229; [2012] NSWCA 414 (Weige v Cupton) at [46]; Jacobs' Law of Trusts at [12-10]). Where that party fails to rebut the presumption, the court "upon consideration of all circumstances presumes there was a declaration [of trust] though the plain and direct proof thereof be not extant" (Cook v Fountain (1676) 3 Swan 585 at 591; 36 ER 984 at 987 (Lord Nottingham LC)).
The relevant factual enquiry is as to the intention of the party (or parties) who provided the funds for the purchase in question (see Black Uhlans Inc v New South Wales Crime Commission (2002) 12 BPR 22,421; [2002] NSWSC 1060 (Black Uhlans) at [136]; Dyer v Dyer (1788) 2 Cox Eq Cas 92; (1788) 30 ER 42 at 43; Fowkes v Pascoe (1875) LR 10 Ch App 343 (Fowkes v Pascoe) at 352; Re Kerrigan; Ex parte Jones (1946) 47 SR (NSW) 76 at 83; Nelson v Nelson (1995) 184 CLR 538 at 547; [1995] HCA 25 per Deane and Gummow JJ; and the search is as to proof of a "definite" not "nebulous" intention (Weige v Cupton at [46]; referring to Drever v Drever [1936] ALR 446 at 450 per Dixon J, as his Honour then was). It is important to note that the enquiry is as to the "objective, or manifest, intention ... not a subjective, uncommunicated intention but it is to be inferred from what the parties do or say" (see Anderson v McPherson at [156], his Honour there citing Calverley v Green at 261 (Mason and Brennan JJ)).
The relevant intention is to be found as at the date of purchase (or immediately thereafter) (Calverley at 251 per Gibbs CJ; and at 262 per Mason and Brennan JJ), although evidence of later acts and declarations are admissible (as admissions against interest) against the party who made them (Black Uhlans at [138] per Campbell J, as his Honour then was).
Establishing on the balance of probabilities that a contribution of the requisite character has been made is a "factual precondition" to a successful assertion that there is a presumption of resulting trust (Hamed v Elddin [2016] NSWCA 9 at [23] per Meagher and Gleeson JJA, and Sackville AJA; Elddin v Hamed (No 2) [2015] NSWSC 654 at [83] per Button J; see also Ong v Lottwo Pty Ltd (in liq) [2013] SASCFC 57 (Ong v Lottwo) at [40] per Nicholson J, with whom Kourakis CJ and Stanley J agreed); and it is essential that the alleged contribution bears the character of purchase moneys (Calverley v Green at 246 per Gibbs CJ; see also Ong v Lottwo at [28]-[30]).
In identifying the purchase moneys, a "broader concept" is to be applied than simply the stipulated consideration for the purchase (Black Uhlans at [144] per Campbell J). Regard may be had to the incidental costs of the purchase, such as legal expenses, stamp duty and registration (Murtagh v Murtagh [2013] NSWSC 926 at [81] per Hallen J; Ryan v Ryan at [46]; Martech Energy Systems Pty Ltd (in liq) v Bell [2005] VSC 198 at [8] per Hollingworth J; Shepherd v Doolan [2005] NSWSC 42 at [24] per White J, as his Honour then was; Black Uhlans at [144] per Campbell J; Ryan v Dries (2002) 10 BPR 19,497; [2002] NSWCA 3 at [52]-[53] per Sheller JA; Currie v Hamilton [1984] 1 NSWLR 687 (Currie v Hamilton) at 691 per McLelland J, as his Honour then was). What is significant "is the cost to the purchasers rather than the benefit to the vendor" (Currie v Hamilton at 691).
Incurring liability under a mortgage will amount to a contribution to the purchase price, it being recognised that "parties borrowing jointly in order to make up the acquisition cost are treated as having contributed the borrowed capital in equal shares" (Buffrey v Buffrey (2006) 12 BPR 23,619; [2006] NSWSC 1349 at [14] per Palmer J; Calverley v Green).
What is more problematic (and arises in the present case to the extent that the funds for mortgage repayments came from Jolly Trading), is the relevance - for the purposes of the resulting trust presumption - of mortgage repayments in the absence of a liability under the mortgage. It has been said that such payments are made towards securing a release of a charge over the property rather than as contributions to the purchase price (Calverley v Green at 252 per Gibbs CJ; at 257 per Mason and Brennan JJ) and hence not taken into consideration for the purposes of the presumption of a resulting trust; because "the extent of the beneficial interests of the respective parties must be determined at the time when the property was purchased and the trust created" (Calverley v Green at 252 per Gibbs CJ; 257 per Mason and Brennan JJ).
However, this proposition is subject to two qualifications, the second of which is here invoked by the plaintiffs.
The first exception (not raised in the present case) is that, in certain circumstances, such repayments may be recoverable on some other basis, such as a suit for equitable contribution or for a declaration of a constructive trust or equitable charge or lien; or a claim on some other restitutionary basis (see Black Uhlans at [143]).
The second exception (that is here invoked) is the so-called "Bloch exception", deriving from Bloch, where there was found to be sufficient evidence of a shared intention of each purchaser that the parties' respective interests in the property would be determined by their contribution, not just to the purchase price, but also by way of repayment of the loan and in discharge of the mortgage debt in respect of the land. In other words, where the property the purchaser(s) intended to acquire was "not the title to land subject to mortgage but the land freed of the mortgage", then the "price paid to free the land of mortgage" was taken into account in determining the parties' beneficial interests" (see Calverley v Green at 262-263; and see Jacobs' Law of Trusts at [12-11]).
As noted above, here, the plaintiffs contend that the present case is to be characterised as a Bloch (rather than a Calverley v Green) type of case. The facts and reasoning in those cases have been summarised in Amit Laundry (at [191]-[209]) and I will not repeat that analysis here. Relevantly, what is required is that there be evidence from which it can be determined that the parties' shared intention or consensus or understanding was that their interests in the property in question were to be determined not only by reference to their respective contributions to the purchase price but also to their later contributions to the loan repayments in discharge of the mortgage debt.
Hence, for a contention (as the plaintiffs here make) that mortgage repayments relevantly amounted to a contribution to the purchase price (for the purposes of giving rise to a presumption of resulting trust), the factual question would be whether it was the parties' intention at the relevant time that the parties' contribution to the purchase price (and hence their beneficial interest in the property) would be measured by reference to later mortgage repayments.
The presumption of resulting trust may be rebutted by evidence demonstrating that the actual intention of the relevant purchaser(s), who contributed unequally to the purchase price, was that the person(s) in whose name legal title was vested would be entitled to the use and enjoyment of their legal title for that person's own benefit (Anderson v McPherson at [155]; Calverley v Green at 251 per Gibbs CJ; 269 per Deane J).
As to any presumption of advancement (relevant for consideration only if a presumption of resulting trust arises), this was described by Gleeson CJ in Brown v Brown (1993) 31 NSWLR 582 at 589. Whether this is truly a presumption at all is an interesting debate (see, for example, Anderson v McPherson at [133]-[137] per Edelman J, referring to Martin v Martin (1959) 110 CLR 297 at 303; Calverley v Green at 247; 256; 265; 267; see also Nelson v Nelson at 547 per Deane and Gummow JJ; W Swadling, "Explaining Resulting Trusts" (2008) 124 Law Quarterly Review 72 at 73; W Ashburner, Principles of Equity (1902, Butterworths) at 148-9; J Glister, "Is There a Presumption of Advancement?" (2011) 33 Sydney Law Review 39) but not necessary here to explore. More relevant, for present purposes, is the question whether the so-called presumption of advancement applies to someone in a de facto relationship or fiancée (as Ms Shen was in respect of the acquisitions which occurred prior to marriage on 9 June 2014).
The general law recognised no presumption of advancement between a man and woman in a de facto relationship on the basis that de facto partners cannot be assumed to have intended the same consequences as a husband and wife who have entered into a formal marriage. In Calverley v Green, Mason and Brennan JJ said (at 260): The term "de facto husband and wife" embraces a wide variety of heterosexual relationships; it is a term obfuscatory of any legal principle except in distinguishing the relationship from that of husband and wife. It would be wrong to apply either the presumption of advancement … to a relationship devoid of the legal characteristic which warrants a special rule affecting the beneficial ownership of property by the parties to a marriage.
Deane J agreed with Mason and Brennan JJ in denying that the presumption should be extended so as to apply to the particular case, but his Honour did not go so far as to say that a presumption of advancement can never arise in any de facto relationship. Gibbs CJ dissented and was of the view that a presumption of advancement should be recognised. In respect of the particular relationship there being considered, his Honour said: The relationship in question is one which has proved itself to have an apparent permanence, and in which the parties live together, and represent themselves to others, as man and wife. It is true that in some cases a person may maintain a de facto relationship for the very purpose of preventing the other party to the relationship from obtaining any right or claim to property, but the question now asked arises only when the party has taken the deliberate step of purchasing property in the name of the other...it seems natural to conclude that a man who puts property in the name of a woman with whom he is living in a de facto relationship does so because he intends her to have a beneficial interest and that a presumption of advancement is raised.
As I noted in Ryan v Ryan (see [58]-[75]), a number of changes to the legislative regime governing property division between de facto couples upon dissolution of their relationship have taken place since the decision of Calverley v Green in 1984. Insofar as legislative change may support some adjustment to the existing categories of relationship to which the presumption applies in order to reflect "modern concepts of equality" (as referred to by Deane J in Calverley v Green), it may be that more recent legislative amendments to the Family Law Act 1975 (Cth) provide stronger ground for extending the presumption to de facto couples.
I consider that in light of modern social morés, there is no reason in principle to treat the presumption of advancement as limited to the husband and wife relationship as opposed to the de facto husband and wife relationship but, until Calverley v Green falls to be reconsidered at an appellate level, it remains a binding authority as to this issue and I am not satisfied that it can be assumed that a presumption of advancement here applies in respect of the acquisitions which occurred while Mr Cong and Ms Shen were in a de facto relationship (although there is authority (referred to above) to support the conclusion that the presumption applies to couples that are engaged to be married; and further, Mr Cong and Ms Shen were married by the time of the acquisition of 43 Amy Street and the subsequent properties).
It has been said that the presumption of resulting trust is more easily rebutted in the case of a relative or close friend (as is the case here) than it is if the property is vested in a complete stranger (see Wallington v Kokotovich Constructions Pty Ltd (1993) 11 ACSR 759 per Young J, as his Honour then was, relying on Fowkes v Pascoe at 352-353).
A shared intention of the parties contributing to the purchase price as to how the legal title would reside in them is not enough to rebut the presumption of resulting trust. What must be established, on the balance of probabilities, is that there was an intention on the part of the respective contributors that those holding the legal title were to take the beneficial interest in the property (see for example the discussion in Muschinski at 589-591 per Gibbs CJ; 598-599 per Mason J; 603 per Brennan J). So, for example, in Muschinski, the presumption of resulting trust was rebutted by evidence that the transferee was intended to acquire, by registration, an "immediate and unconditional" beneficial interest in the property (see at 593 per Gibbs CJ; 598 per Mason J; 603 per Brennan J; 612 per Deane J; 624 per Dawson J).
The question here, therefore, assuming the presumption of resulting trust has arisen in relation to one or more of the respective properties, is whether it was intended at the time of acquisition of that property that registration would confer on the legal title holder (Ms Shen) an immediate or unconditional beneficial interest to the exclusion of Mr Cong. The fact of registration, though certainly material, cannot be decisive in assessing the evidence of the contributors' intentions at the time of acquisition.
As indicated above, each of the relevant acquisitions needs to be considered separately (though of course it is relevant to note, chronologically, how the sequence of property acquisitions occurred - and see the chronology of events set out earlier).
The plaintiffs pin their resulting trust claims on the proposition that Mr Cong provided the whole or a substantial portion of the purchase price for the properties registered in Ms Shen's name (and, through the income received from Jolly Trading's business, made a substantial contribution to the mortgage repayments in respect of those properties).
As to the Wu Property, it is not disputed by the first and second defendants that Mr Cong paid the sum of $400,000 to Ms Shen prior to the purchase (nor that at least some of this money was used by Ms Shen to pay the purchase price). (The source of the deposit seems to be less clear.)
Insofar as the first and second defendants submit that the payment of $400,000 was not in the character of purchase money because it was paid not to the vendor (or bank or conveyancer) but paid to Ms Shen, I draw little from this in circumstances where it appears to have been paid out very shortly thereafter for the acquisition of the property and I would infer (from the timing of the payment and from Mr Cong's later statements to others about the Wu Property being for Ms Shen) that it was the intention or understanding of Mr Cong that it be used by Ms Shen for the acquisition of the property. Nor do I consider that much can be drawn, from the fact that Ms Shen was the active person in finding and securing the property, as to Mr Cong's intention in respect of the beneficial ownership of the property at the relevant time.
However, what I do consider to be significant is that the understanding of members of Mr Cong's first family was that the Wu Property was a property acquired for Ms Shen. In particular, I place weight on the evidence of Teresa that Mr Cong referred to the Family Property as a substitution for the Wu Property. To my mind that corroborates Ms Shen's evidence that the $400,000 was a gift, in circumstances where Ms Shen was then pregnant with Mr Cong's child. It is not implausible in those circumstances that Mr Cong was wishing to provide Ms Shen with the security of her own accommodation. And, as the first and second defendants point out, Ms Joyce's reports to the Department of Immigration disclose an understanding by Ms Joyce (which one might infer could only have come from Mr Cong) that the Wu Property was Ms Shen's property.
As noted above, the source of the deposit is not clear to me so little can be drawn from this other than that it is possible (and perhaps likely) that this money came from Mr Cong.
As to the payments used to discharge the (initial) mortgage over the property (it later being re-mortgaged to provide funds for the acquisition of other property), that initial mortgage being in Ms Shen's name (and therefore the amount of that borrowing being a contribution by Ms Shen to the purchase price), I accept that it is likely that these were made from Mr Cong's financial resources (since there is nothing to suggest that these were drawn from Ms Shen's family money and it does not appear that Ms Shen, who had immigrated on a student visa, had separate resources of her own). Moreover, I would accept that it is likely that it was Mr Cong's intention that he would fund the payments made to discharge the mortgage. However, I do not accept that this is sufficient to bring the case within the Bloch type of case, since I would infer that this was also with the intention of benefiting Ms Shen.
Accordingly, I do not need to resort to the presumption of advancement (even if it were to be applicable in the case of a de facto spouse) because I am persuaded that the evidence indicates an intention on Mr Cong's part to benefit Ms Shen such that the beneficial interest in the property was to remain with her. It is consistent with that intention that the Wu Property became the family home for a number of years (until the move to the Family Property).
I find that the resulting trust claim in respect of the Wu Property fails.
As to 16 Nicholson Street, the deposit was drawn from Mr Cong's bank account, as evidenced by the relevant receipt; and the balance of the purchase price was contributed by way of an amount paid by Mr Cong and a borrowing jointly incurred by Mr Cong and Ms Shen. I accept that on the first and second defendants' calculations, the contribution of Mr Cong and Ms Shen to the purchase price was thus in the proportions two-thirds to one-third. The title was held in their joint names as joint tenants. The property was intended as an investment property.
Ms Shen's position, as I understand it, is that the moneys contributed by Mr Cong were a gift to her (in the context that it was her birthday that month and she says that Mr Cong had promised her a gift of $500,000 out of the sale of the Woolwich property because they were engaged to be married). A birthday or engagement gift of some half a million dollars would have been a very generous gift indeed but in any event there is only Ms Shen's word for this (and I am cautious in accepting self-interested evidence from Ms Shen as to gifts; just as I am cautious in placing weight on the accounts given by Edmund and Teresa of the conversations with Mr Cong in which he referred to "my properties").
As noted above, the first and second defendants have also pointed to the fact that the day before the contract for sale was entered into, Mr Cong had made his 2013 Will (under which Ms Shen was the residuary beneficiary); and they say that there would have been little practical purpose in Mr Cong intending to retain the benefit of his unequal contributions to the purchase price (by way of a resulting trust) when any such beneficial interest would form part of the residue of his estate in those circumstances (to which Ms Shen would be entitled).
The difficulty with that argument is that it is not clear to me how much Mr Cong understood at the time as to the legal significance of property being held as joint tenants as opposed to tenants in common (and it seems even less likely that Ms Shen had any appreciation of the significance). Of course, Mr Cong had by this stage acquired two properties with Ms Joyce, each time as joint tenants, one of which was sold (the Haberfield property) and the other was the subject of the Binding Financial Agreement (the Woolwich property). So it may well be that Mr Cong attributed some significance to the title to 16 Nicholson Street being held as joint tenants with Ms Shen, which might enable some significance to be placed on the perceived inconsistency between an intention to retain a greater beneficial interest in the property than recorded on the title and the recognition that that interest would pass to Ms Shen as residuary beneficiary if the joint tenancy were not severed.
However, as the authorities referred to above make clear, the intention as to how the parties were to be recorded on the title is not determinative - what is relevant is whether it was intended at the time of the acquisition that registration would confer on the registered title holder an immediate or unconditional beneficial interest to the exclusion of the party contributing the purchase funds.
Applied in the context of this particular property, the question would seem to me to be whether the shared intention of Mr Cong and Ms Shen at the time of acquisition of 16 Nicholson Street was that Ms Shen would acquire a 50% interest as joint tenant (with the right of survivorship that would entail if the joint tenancy were not severed) notwithstanding that Mr Cong had contributed proportionately more to the purchase price than she had done.
The conduct of Mr Cong after the acquisition to which the first and second defendants have referred (such as the proposal put to Ms Shen in relation to the property being left unencumbered to the three elder children, or the failure of Mr Cong to assert any rights to a greater than 50% interest in the property) do not take the matter any further (unless they amount to admissions by Mr Cong), since the relevant question is the shared intention of the contributors at the time of acquisition of the property. Nor does the fact that the Deed recited that the property was held in joint ownership (since it clearly was on any view of the matter).
Accordingly, I accept that there is a presumption of resulting trust that arises from the unequal contributions to the purchase price not being reflected in the title to the 16 Nicholson Street property. If not rebutted, that would mean that Mr Cong's proportionate interest in the property would be a two-thirds interest, as opposed to his 50% share as recorded on the title, which would mean that Ms Shen held 1/6th of her interest in the property on resulting trust for Mr Cong but I would see no reason to disturb the apparent intention that the property be held by the couple as joint tenants (which would have the effect that unless the joint tenancy was severed, Mr Cong's then 4/6th interest in the property would pass to her by survivorship in any event). The only significance thus that I see for such a conclusion would be whether a greater share of the property (or proceeds of sale of the property) might be designated as notional estate (see below).
However, I do not reach that conclusion because I am satisfied, by reference to evidence of Mr Cong's intention to put the properties in Ms Shen's name for tax reasons, that the presumption of resulting trust is rebutted. Further, whether or not any presumption of advancement would have arisen at the time of the acquisition of the Wu Property, it seems clear that Mr Cong's intentions were to provide accommodation for Ms Shen and their then young child.
As to the evidence of intention, and noting that the presumption of resulting trust is more easily rebutted in the case of family members than strangers, I consider that the evidence of Teresa that Mr Cong said he was putting the properties in the name of Ms Shen for tax reasons (or for his tax reasons), which I accept, demonstrates that it was Mr Cong's intention that title vest in Ms Shen (as disclosed on the register) and I draw from this that he intended that the title accurately reflect the position (and hence that he did not intend to retain any greater beneficial interest that he might otherwise have had from his contribution to the purchase price).
I therefore find that the resulting trust claim in respect of 16 Nicholson Street fails.
As to 43 Amy Street, which was purchased in joint names as joint tenants, the deposit was drawn on the couple's joint account and the borrowing was jointly incurred. Accordingly, there was joint contribution and (since I do not accept that the Bloch exception applies in relation to any of the properties), no presumption of resulting trust arises; and the resulting trust claim fails.
As to 56 Duke Street, the deposit was from the couple's joint account (from which Ms Shen was entitled to withdraw moneys on her own account) and the purchase was completed by funds borrowed in Ms Shen's own name. To the extent that there was any contribution by Mr Cong, this requires the deposit to be seen as a contribution out of joint funds but even then, the first and second defendants say (and I accept) that the presumption of a resulting trust is rebutted. I consider that the statutory declaration makes clear that Mr Cong's intention was that Ms Shen be the owner of the property and that he did not intend to retain any beneficial interest in it. Moreover, there is evidence that Mr Cong wished to put this property in Ms Shen's name to avoid trouble for Ms Shen in the future from Ms Joyce. That can only sensibly have been a reference to trouble after Mr Cong died. It reinforces my conclusion that it was Mr Cong's intention that the beneficial interest in the property be held by Ms Shen.
As to 58 Duke Street, again the deposit was from the couple's joint account and the borrowing was by Ms Shen alone (including by re-mortgaging the Wu Property). Again, to the extent that there was any contribution by Mr Cong, this requires the deposit to be seen as a contribution out of joint funds (and I do not accept that it should be so characterised, since Ms Shen was able to withdraw from the offset account in her own right). However, even if half of the deposit is treated as being a contribution by Mr Cong to the purchase price, I consider that any presumption of a resulting trust in relation to this property is rebutted by the presumption of advancement (as Mr Cong and Ms Shen were married at this point) and by the evidence of Mr Cong's intention to put properties in Ms Shen's name for tax reasons and his concern to avoid trouble in the future for Ms Shen from Ms Joyce.
I find that the resulting trust claim in relation to this property is also not made good.
As to 2 Duff Street, again, the deposit was from the couple's joint account and the borrowing was in Ms Shen's name alone. For the same reason as set out above in relation to 58 Duke Street, I find the resulting trust claim is not made good in relation to this property.
Finally, as to the Family Property, the deposit came from Ms Shen's 56 Duke Street offset account (in Ms Shen's sole name). I have referred above to the circuitous path of funds between the various offset accounts, which suggests that the source of at least some of the deposit funds came from moneys held in joint offset accounts. The balance of the purchase price came from borrowings by Ms Shen in her own name and moneys from an offset account in her name (see above).
I have also referred to the audio recording in which Mr Cong can be heard to be saying that he needed to transfer funds to the bank for the borrowing in respect of that property. I accept that the ultimate source of moneys for this purchase may well have come from Mr Cong (as the audio recording suggests and as Edmund says his father told him by reference to the sale of the properties at 9 Ethel Street and 2-4 Barnes Avenue). The argument of Ms Shen that she funded all the moneys for this purchase appears to focus on the ultimate account(s) from which the moneys were drawn (not how the funds came into that account or those accounts).
However, it is not necessary to determine this because I consider on the evidence that any presumption of resulting trust is rebutted - not least because of the presumption of advancement (since the couple were by now married) but, and significantly, by the evidence to the effect that Mr Cong had the Family Property "organised" for Ms Shen and his three younger children. Although I found Ms Shen's evidence as to the "gift" unsatisfactory (in that it emerged late in the proceeding and seemingly as part of a forensic decision on her part not to put the complete picture before the Court at an earlier time in order to preclude further evidence from the plaintiffs), it is in substance supported by Edmund's account of the conversation with his father about the property.
Accordingly, I find that the resulting trust claim in relation to this property also fails. As a result, all of the resulting trust claims have failed.

[252]

(xvi) Succession Act claims - whether order for provision out of notional estate

The next issue or set of issues relate to the Succession Act claims (which the plaintiffs emphasise do not represent a subordinate, or ancillary component of their case). It is submitted that proper and adequate provision was not made for each of Edmund and Teresa; and that they should receive a significant legacy (particularly if there is doubt as to their ability to recover damages from Ms Shen and/or if proprietary relief is refused). Subject to the determination of the extent of equitable relief to which the plaintiffs are entitled, it is said that a family provision order may achieve practical justice (say, for example, if the plaintiffs would not be able to recover the benefits promised under the Deed until the tenth anniversary of Mr Cong's death).
Reference is made to the approach on applications by adult children as set out in Page v Hull-Moody [2020] NSWSC 411 (Page v Hull-Moody) by Hallen J. In the present case, the plaintiffs say that weight attaches to the promises made by Mr Cong to the plaintiffs as to what they would inherit under his Will. The plaintiffs refer to what was said in Alexander v Jansson (2010) 6 ASTLR 432; [2010] NSWCA 176 per Brereton J, as his Honour then was, with whom Basten JA and Handley AJA agreed (at [18]) and to the decision of the High Court in Vigolo v Bostin (2005) 221 CLR 191 at [114] per Callinan and Heydon JJ.
The plaintiffs say that, regardless of its legal significance, the Deed (in its own terms and incorporated into the 2016 Will) records Mr Cong's recognition of his need to support the plaintiffs and a promise to do so, as set out in cl 2. It is said that that obligation was confirmed by the numerous occasions Mr Cong repeated his promises to the plaintiffs. The plaintiffs say that Mr Cong did so out of recognition of his moral obligation to the elder children (something that Mr Glynn had impressed on him). It is said that those promises were also made because, as he told Ms Wang, he loved his children very much. Reference is also made to Mr Pirintji's oral evidence to the effect that Mr Cong was proud of all his children; and that Mr Cong said of the three elder children that they were all good children and that he wanted to look after them by leaving them something (see at T 929).
The plaintiffs say that the promises are not to be construed in isolation, noting that Mr Cong provided immediate benefits to Ms Shen and his three youngest children (out of recognition that they had immediate needs which could not be postponed) and that the structure he put in place was intended to ensure that the plaintiffs would not be prejudiced by the delay in their receipt of substantial benefits.
The plaintiffs submit that Ms Shen's decisions are the principal cause of the financial difficulties now confronted by the estate. It is said that, notwithstanding that Jolly Trading was intended to be a source of funds to meet, inter alia, the mortgage payments on the Campsie properties, Ms Shen transferred the business to Cong Australia International. It is noted that Ms Shen accepted that the latter was simply a continuation of the former business; and that Ms Shen has not identified any reason for divesting Jolly Trading of its assets. Further, it is said that Ms Shen transferred the Wu Property to Ms Wu with a view to defeating the plaintiffs' claims, a course that was calculated to defeat the plaintiffs' claims under the Deed and the 2016 Will.
The plaintiffs also contend that Ms Shen has conducted her affairs with "marked profligacy". It is said that, with no thought of the plaintiffs' needs, Ms Shen has embarked upon an extravagant lifestyle which has whittled away her assets and the proceeds of the sale of the Campsie properties. Complaint is made that, despite all the benefits Ms Shen received, only tiny amounts were ever paid to the three elder children (even though it is submitted that it was within Ms Shen's power to be more generous in this regard).
Accordingly, the plaintiffs submit that the question of what constitutes proper provision should take into account the expectations recognised and fostered by Mr Cong and by Ms Shen's conduct after his death.
It is said that each of Edmund and Teresa has considerable needs, as described in their most recent updating affidavits (Edmund's 11 October 2020 affidavit; Teresa's 12 October 2020 affidavit). It is said that neither has any assets of substance, nor prospects of note; and neither has a realistic chance of enjoying the lifestyle that their father wished for them.
The plaintiffs point to Teresa's evidence that Mr Cong told her that he wanted them to have a comfortable life and that he had made sure that they were left well off; and that he said that "[y]ou all have money to buy a house, pay off your HECS debt, travel, never have to worry about day to day costs, and be able to have nice things". Teresa says that Mr Cong also told her that he was planning to leave her and her brothers with an amount of money that is as high as possible, but that it is "dependent on the re-zoning of the houses in Campsie which I [i.e., Mr Cong] own".
The plaintiffs also point to Edmund's evidence that Mr Cong told him, on the occasion where he showed him the 2016 Will: You and Teresa and Xiao Ming [Laurence] will be all set up financially. You will each be able to buy a house and be financially comfortable, able to travel and not have to worry about your day to day living costs. You will have to wait for 10 years before getting the bulk of your inheritance because I want to ensure that all my Campsie properties will have gone up in value and will get a much better price when sold. Also I want you to be older when you receive the bulk of your inheritance. More mature. More responsible. Meanwhile, each of you will receive every year for 10 years, $10,000.00.
Pausing here, that conversation is consistent with Mr Joyce's account of the conversation in the hospital with Mr Cong to the effect that the elder children would be wiser after ten years. It is also consistent with the previous testamentary instruments which in each case made provision for a lengthy time before the three elder children would receive their inheritance under the Wills.
The plaintiff say that a defining feature of Teresa's past (and thus a driver for her needs) is the psychological damage caused by Mr Cong's violence (referring to the evidence, as seems to be conceded by the first and second defendants, that Mr Cong had physically abused Ms Joyce on at least one occasion in the past; and to Teresa's evidence at the hearing in relation to her father's violence towards various of the family members including herself on occasion). (It is not necessary here to revisit that evidence. I accept that Teresa has a genuine recollection of such events and I accept that she still suffers from depression and anxiety, no doubt contributed to - if not caused to some extent - by her memory of such events.)
The plaintiffs say that, far from there being any estrangement between Mr Cong and the plaintiffs, the evidence records a close and loving relationship between Mr Cong and his children (pointing to the emotion evident on Teresa's part when speaking of her father).
In their submissions, the plaintiffs address the matters identified in s 60(2) of the Succession Act briefly as follows.
As to s 60(2)(a), it is said that: each of the plaintiffs enjoyed a close and loving relationship with their father; and that that relationship persisted notwithstanding the violence he meted out to their mother and to Laurence.
As to s 60(2)(b), it is said that Mr Cong recognised that he owed obligations of weight to the elder children; and, concurrently, he recognised, and appropriately provided for, the obligations he owed to Ms Shen and to his younger children. It is emphasised that Mr Cong assumed that all of his obligations could be fulfilled in a structured way, over an extended period of time. Again, it is said that Ms Shen accepted that arrangement but has since subverted it by dissipating assets and living beyond her means.
As to s 60(2)(c), the plaintiffs say that it is relevant that, on any view, Mr Cong provided to Ms Shen very significant assets during his lifetime. The extent of that largesse depends upon the determination of the plaintiffs' other claims; however, the plaintiffs say that, on any view, Ms Shen received over a very short period properties and cash which could have amply provided for all of her reasonable, future needs. It is said that the full extent of that largesse will never be known. Cash transactions in large sums were made during and after Mr Cong's lifetime. The plaintiffs say that Ms Shen has not been candid as to her knowledge of such transactions, and why they were made. It is said that the cash transactions suggest that the profits generated by Jolly Trading far exceeded those disclosed in its tax returns. It is submitted that no weight should be given to any plea of financial embarrassment advanced by Ms Shen having regard to her lack of candour and her profligacy.
As to s 60(2)(d), it is said that neither of the plaintiffs is likely to generate sufficient income in future years to alter their present circumstances. It is noted that the present pandemic has shown their vulnerability to life's vicissitudes. Teresa's hours and pay have been reduced as a result of the pandemic, and her current gross annual salary is only $40,400. Her net monthly income exceeds her expenses by only a small margin. There is no realistic prospect that she would be able to save to pay off her existing indebtedness (including on account of Higher Education Contribution Scheme (HECS) and the loan owing to her mother's family trust, arising from the present litigation), let alone fund the acquisition of a house, buy a new car or provide for contingencies. Edmund's position is similar. It is said that it is difficult to see how, as software engineer, he will be able to purchase a modest home near the Sydney CBD, which would be convenient for his work.
As to s 60(2)(e), Edmund is receiving rent assistance from his mother, but it is said that Ms Joyce cannot be a source of ongoing financial assistance. Having regard to sub-s 60(2)(l), it is said that Ms Joyce is under no liability to support Edmund. Teresa is cohabiting with her partner, whose work has been interrupted by the pandemic and who has no assets of any significance. There is said to be no certainty that that relationship will endure.
As to s 60(2)(f), Teresa's condition is as noted above.
As to s 60(2)(g), it is noted that each of the applicants is young and it is said that it may be inferred that each will potentially enjoy an extended period in the workforce. However, it is said that neither has greatly prospered to date and Teresa's capacity to earn has been compromised by her depression and its complications. The plaintiffs submit (and I accept) that the extent of her distress was evident in her cross-examination. Her evidence was that such distress could, however, be triggered by anodyne events, such as seeing persons who resembled her father. It is noted that Teresa's evidence is that her depression and anxiety causes her to have trouble sleeping, and, to use Teresa's own words, to feel "not stable".
As to s 60(2)(h), it is said that each of the applicants tended to Mr Cong's welfare in his last days; and (in the case of Teresa in particular) took him to medical appointments.
As to s 60(2)(i), the plaintiffs accept that the applicants received benefits from Mr Cong during his lifetime. However, it is said that these were not intended to be exhaustive. It is said that, on the contrary, they indicate that Mr Cong wished his children to have a comfortable lifestyle of the kind he had created for himself.
As to s 60(2)(j), Mr Cong's testamentary intentions have been identified above. The plaintiffs emphasise that those intentions represented a long-held view that Mr Cong should provide for his eldest children. It is noted, by way of example, that: in his 2013 Will, Mr Cong left to his elder children all and any interest he had in 9 Ethel Street (which had been bought for $1,930,000) free of any mortgage; and in his subsequent 2014 Will, Mr Cong repeated that gift save that he substituted 16 Nicholson Street (which had been bought for $1,722,500 - albeit as joint tenants with Ms Shen) for the 9 Ethel Street property.
The plaintiffs submit that provision should be made for them because they have fallen on hard times and there are assets to provide for the sort of provision that both Mr Cong and Ms Shen recognised was appropriate. It is said that neither plaintiff enjoys financial security and that the plaintiffs' earnings are such that they have a proper basis to call upon the estate to provide for their future. In this regard, it is submitted that it is significant that the plaintiffs have not enjoyed the immediate ongoing support of $10,000 per annum which Mr Cong contemplated and have had to vindicate their claims in court, thus further diminishing their financial resources. It is also submitted (and I consider that there is force to this submission having regard to Teresa's distress in the witness box) that it can properly be inferred that Teresa's emotional state has not been assisted by having to relive the events of the past.
The plaintiffs contend that notional estate orders should be made in relation to the following assets: each of 16 Nicholson Street and 43 Amy Street (because they were jointly owned by Mr Cong and Ms Shen at the time of Mr Cong's death); the proceeds of Mr Cong's life insurance in the amount of $1.2 million (because Mr Cong could have nominated the plaintiffs as beneficiaries of his life insurance); the amounts held in the joint bank accounts of Mr Cong and Ms Shen, totalling $114,745.78; and Mr Cong's interests pursuant to the various resulting trusts.
It is submitted that there is no reason why the plaintiffs should have to wait for the expiration of the 10 years mandated in the Deed. The plaintiffs say that the actions of Ms Shen, abetted by Ms Wu, have undermined the raison d'être of the plan which Mr Cong formulated (and which Ms Shen accepted). It is said that, as Mr Cong told Teresa, the inheritances were to be paid in the future to allow for the possibility of the re-zoning and the subsequent improvement in the value of the properties, rather than when he died.

[253]

Disclosure

At the outset, the first and second defendants raise an issue as to the adequacy of disclosure by Edmund and Teresa of their respective financial circumstances. It is noted that it is incumbent on an applicant for provision out of a deceased estate to disclose as frankly and as fully as possible all details of his or her financial and material circumstances (the first and second defendants here invoking what was said in Grant v Roberts [2019] NSWSC 843 at [165], Collings v Vakas [2006] NSWSC 393 (Collings v Vakas) at [66]-[67] per Campbell J, as his Honour then was; Re the Estate of the late Marras [2014] NSWSC 915 at [238] per Bergin CJ in Eq; Singh v Singh [2015] NSWSC 1457 at [152]-[154] per Black J; and Stone v Stone [2019] NSWSC 233 per Hammerschlag J - in the latter case, his Honour noting the obligations of a party under s 56 of the Civil Procedure Act 2005 (NSW) in this context.
Much complaint is made by the first and second defendants that Edmund and Teresa have not identified fully and frankly their financial position. It is said that Edmund and Teresa: have identified large liabilities but have conceded that their liabilities are not fully identified; have not adduced into evidence their tax returns; do not know what additional liabilities they have as a result of their decision to accept appointment as legal representatives of the estate of Laurence in the present proceeding (notwithstanding that their solicitor must know this); have not identified how much they have paid the third defendant, Ms Goodwin pursuant to her indemnity, nor how much they expect to be liable to pay under that indemnity; and have not prepared, filed, served and read the usual costs affidavits for a plaintiff in a provision claim. It is submitted by the first and second defendants that Edmund and Teresa's costs of the proceeding must be enormous, but that the amount of those costs is unknown.
The submission made by the first and second defendants, in effect, is that Edmund and Teresa have conducted these proceedings without care that they might be exposed to the costs risks that a litigant would ordinarily bear (it being said that Edmund and Teresa are "straw" litigants and that they "have advanced these proceedings without prudent restraint, asserting strange and unreal claims, making claims on behalf of others, and making claims in which they are not interested").
Pausing here, the proceeding has been conducted on behalf of the plaintiffs by experienced Counsel and solicitors. I could not possibly form the view on the evidence before me that there was not a reasonable basis for those advising the plaintiffs to believe that on the facts known to them there was a reasonably arguable case as presented. Whether such a case ultimately succeeds is not determinative of whether there was a proper basis for the claims therein to have been made. Nor is the present proceeding the occasion for complaint as to whether the proceeding ought properly to have been commenced or continued (this is not, for example, an application for costs under the wasted costs jurisdiction). Moreover, the costs consequences (though I accept relevant to be taken into account on a claim for provision out of the estate) will necessarily not be able finally to be determined in advance of submissions on those costs. That said, difficulty in assessing costs does not excuse the non-compliance by the plaintiffs with the very clear requirements of the relevant Practice Note in relation to the filing of affidavits of costs in Succession Act claims of the kind that form part of the present proceeding and I will revert to this in due course.
The first and second defendants contend that Edmund and Teresa volunteered to accept appointment as legal representatives of the estate of Laurence because their mother (Ms Joyce) did not want to incur the ordinary hazard of a party in respect of the costs of the proceeding. (It is not appropriate here for me to speculate on the reasons why Ms Joyce may not have wished to become a party to the proceeding but it is not implausible that a desire to avoid the risk of adverse costs orders could have been part of those reasons.) The first and second defendants say that the consequence of that decision is that Edmund and Teresa have volunteered to allow an interested party and effective co-plaintiff (Ms Joyce) to avoid or attempt to avoid contributing to any costs liability that they might ultimately be held liable to pay. It is said that that was damaging to their own financial position and that such conduct does not commend them as fit for provision from another person's assets, particularly given that it was prejudicial to the first and second defendants.
The first and second defendants also submit that, in addition to their own costs and the costs of the estate of Laurence which Edmund and Teresa must be liable to pay, and their indemnity to the third defendant, Edmund and Teresa will incur very large liabilities which have already been described in evidence if they be ordered to pay the costs of the first and second defendants of these proceedings on the principal claim. The first and second defendants submit that, by reason of the above, any provision for Edmund and Teresa would be unlikely to be of benefit to them. It is submitted that it is likely that any such provision would be expended on repayment of the costs advanced by the trustee of Ms Joyce's family trust for the funding of the litigation. Further, it is submitted that it must be likely that if Edmund and Teresa receive no provision, Ms Joyce will not pursue Edmund and Teresa (because they are financially persons of "straw" and are her own children) and therefore any order for provision would effectively be an order for costs in favour of Ms Joyce.
The first and second defendants say that this is a consequence of the way the plaintiffs have chosen to conduct themselves and this proceeding. It is submitted that this is relevant to what is proper and adequate to their maintenance and advancement in life, both because it bears on the utility of any order for provision to achieve such an object but also because it bears on the impact on Ms Shen and the three younger children, in terms of the financial impact that the proceedings have had and the further impact of the provision here sought.
It is noted that it was the wish of Mr Cong that his family not engage in conflict. The first and defendants say that, contrary to Mr Cong's wishes, the plaintiffs commenced this litigation "to achieve immediate gratification" and that the plaintiffs in and from 2018 have escalated the litigation (and complaint is made that the plaintiffs have not scrupled to use the litigation as an opportunity for them or Ms Joyce to hurl vile insults at Ms Shen, comparing the litigation to "a re-run of Bleak House" - the latter submission being a reference I assume to the number of interlocutory stoushes that have taken place including in relation to the freezing orders that have been made and varied over the course of the proceeding). It is submitted that this is conduct that diminishes Edmund's and Teresa' claim upon the bounty of Mr Cong, especially when they seek it from notional estate.
The first and second defendants emphasise that Edmund and Teresa are adult children. They point to Teresa's evidence that Mr Cong wanted her to enjoy riches, but that she (and I interpose to note that I consider this to be to her credit) accepted that Mr Cong expected her to work for it.
It is said that Ms Shen offered Edmund and Teresa the opportunity to take property at Duke Street if they would undertake the financial burdens of ownership but that they were unwilling to shoulder those responsibilities (and it is submitted that the resources devoted to this litigation could have been devoted to that). It is said that this is conduct that is telling against the moral obligation of Mr Cong to make provision; i.e., that the behaviour of Edmund and Teresa having refused such an opportunity and then having made an extravagant claim in this litigation should not be rewarded.
The first and second defendants further submit that the "shopping lists" set out in Edmund's and Teresa's affidavits would have them living comfortable lives "for which most people have to work long hours in responsible positions" but that Edmund and Teresa "do not necessarily expect to submit themselves to that kind of work regime". Complaint is further made that Edmund's and Teresa's claims seem to be pitched "rather high" relative to the usual expectation of an adult child of working age; and noting that both Edmund and Teresa have a good education and are capable of working.
As to Teresa's stated desire to enter into charitable work, the first and second defendants say that this is a "luxury that she is not entitled to pursue out of a widow's pocket or at the expense of her brothers". As to Edmund, it is said that, despite "downplaying his prospects", he has had a fairly successful outcome with employee shares related to his career within a short time (pointing to his shares in a software company by which he was formerly employed) and that it should not be accepted that his prospects are as meagre as he suggests.
In any event, it is submitted that it is difficult to see how any order for provision could be used by Edmund and Teresa until they have paid their own costs and any costs that they are ordered to pay. Thus, it is said that the family provision claim is misconceived.
The first and second defendants point to the observations made by Robb J in Stojanovski v Stojanovski [2019] NSWSC 1713 at [578]-[589] as to the impact of costs on a provision claim that is made in the context of a larger case and, in particular, the first and second defendants point to the conclusion by his Honour at [590] to the effect that (even allowing for the statutory requirement that regard be had to the circumstances as they obtain at the date of the determination of the application) the deceased's testamentary obligations "whether considered in terms of the actions of a wise and just testator, or the application of contemporary accepted community standards" would not reasonably give rise to an expectation some years after the deceased's death, for the deceased to change his testamentary dispositions in favour of his adult sons "to make adjustments between them to compensate for the consequences of the decisions made by them in respect of the litigation in which they have engaged".
The first and second defendants submit that a provision order is not to be used as a "bailout" for the costs consequences of losing the primary case; and that it would follow that, if costs follow the event, an order for provision will be pointless in the present case. It is said that, even if that were not so, the burdens that have been thrust by the plaintiffs on Ms Shen (and by extension their half-brothers) have been so heavy that it would be unjust to subject them to any further exaction. Thus, it is submitted that the provision claim should be dismissed with costs.

[259]

Plaintiffs' reply submissions

The plaintiffs cavil with the proposition that they have failed to give full disclosure of their assets. It is noted that it was not put to them in cross-examination that they had neglected to disclose their assets; and that each swore an affidavit setting out his or her financial position as at October 2020.
It is accepted by the plaintiffs (see the first and second defendants' written submissions at [683]) that the plaintiffs have not prepared a costs affidavit in support of their claims for a family provision order. However, the plaintiffs submit that any such affidavit would be of little practical benefit given that the costs which might have been foreseen at a time close to the trial would have been exceeded given the prolongation of the trial and the interlocutory skirmishes which continued thereafter. Further, it is submitted that: it would be difficult to assess what costs and disbursements relate to the claims under the Succession Act, as opposed to the balance of the claims; and the size of the estate is not known because no affidavit from an administrator has been sworn and its costs are unknown. (Pausing here, the difficulty of estimating costs of the family provision proceeding is not to my mind a satisfactory excuse for non-compliance with the Practice Note in this respect.)
The plaintiffs submit that the appropriate course would be to defer the calculation of the amount of the final legacy until such time as the size of the estate, the estate's costs and the plaintiffs' costs are known. It is submitted that the estate can hardly complain of such a course where its financial position has not been fully put before the Court.
As to the complaint made in the first and second defendants' written submissions (for example at [684]) to the effect that the plaintiffs have engaged in wasting conduct and have been tools of their mother, the plaintiffs submit as follows.
First, that they have achieved success in their interlocutory applications in the face of opposition by the first and second defendants. It is said that wasting conduct cannot be constituted by successful applications for interlocutory injunctions and for leave to amend. As to the latter, it is noted that Slattery J gave leave to amend on 29 November 2019 (see Cong v Shen [2019] NSWSC 1675), rejecting the first and second defendants' submissions that the pleading was embarrassing and that the proposed amendments were so lacking in merit that leave should not be granted.
Second, as to the first and second defendants' submissions (see at [692]) as to the wish of Mr Cong for his family not to engage in conflict, and the complaint (that I have chosen not here to reproduce out of respect for Ms Shen) that the plaintiffs have allowed Ms Joyce to use this proceeding "to hurl vile insults" at Ms Shen, the plaintiffs point to the fact that their largest monetary claim is founded upon the Deed, which the plaintiffs say indisputably confers rights on them whether it be a deed poll or a deed inter partes.
Insofar as the first and second defendants' written submissions (at [690]ff) suggest that it was inappropriate for the plaintiffs to seek funding from Ms Joyce for the litigation, the plaintiffs say that it is not uncommon for a party to seek financial assistance from a family member and that the policy of the law generally permits such persons to provide funding free of the risk of paying costs if the other party is successful. It is said that there is no reason to doubt Edmund's and Teresa' own understanding that they have a liability to repay Ms Joyce's family trust.
The plaintiffs point out that the incurring of liabilities (even in unsuccessful litigation) does not preclude an applicant for a family provision order from obtaining such an order (referring, by way of example, to Glynne v NSW Trustee & Guardian [2011] NSWSC 535 at [209]; Zagame v Zagame [2014] NSWSC 1302 at [206]; Smith v Johnson (2015) 14 ASTLR 175; [2015] NSWCA 297 at [63]-[71]; and Webster v Strang; Steiner v Strang [2018] NSWSC 495 (Steiner) at [529], [571], [583] and [590]). It is noted that in Steiner, Kunc J said: I do not accept the defendants' submission that, as a matter of discretion, an order for provision should not be made where it is the creditors who will benefit. Providing funds to reduce or eliminate debt can be a very effective way to maintain advance a person who might otherwise be close to or in bankruptcy.
As to the first and second defendants' written submissions (at [698]-[699]) regarding the ability of the claimants to work in the future, it is said that this gives no weight to the evidence in the case of Teresa that her future in the workforce must be compromised by the conditions from which she suffers and in the case of Edmund to the effect that he does not anticipate his income will increase over time dramatically and his financial position is, consistently with his assessment, poor.
The plaintiffs submit that the usual expectation of an adult child of working age (c.f., the first and second defendants' written submissions at [698]) is not a useful benchmark in a case such as the present. They say that it pays no regard to the promises made by Mr Cong (which they say Ms Shen adopted and repeated) expressed in the Deed. It is submitted that those promises doubtless reflected Mr Cong and Ms Shen's own assessment (formulated over time) of what constituted appropriate future provision for Edmund and Teresa. It is said that the litigation does not constitute a frolic on the plaintiffs' part (c.f., the first and second defendants' written submissions at [696]) but a response to steps taken by Ms Shen to frustrate those testamentary promises.
As to the submissions in relation to notional estate, the plaintiffs refer to [149] of the amended statement of claim and point out that it identifies what may constitute notional estate and that this is more extensive than what appears in the first and second defendants' written submissions at [703] (the additional assets there sought to be designated including the Wu Property, the two Duke Street properties, 2 Duff Street; and the Family Property; as well as the assets of Jolly Trading).
The plaintiffs say that, by reason of s 79 of the Succession Act, it is immaterial that what can be regarded as notional estate property has been distributed between the date of death and the date of hearing. It is noted that the circumstances in which distributed property may be designated as notional estate include circumstances where the distribution has so depleted the estate and order for provision cannot be made (referring to Janes, Liebhold and Studdert, Wills, Probate and Administration Law in New South Wales (2nd ed, 2019, Thomson Reuters) at 443 [SA.79.10]).
In particular, the plaintiffs rely upon the commentary to [SA.79.10] of Wills, Probate and Administration Law in New South Wales. It is noted that, in Phillips v James (2014) 85 NSWLR 619; [2014] NSWCA 4, Beazley P (as Her Excellency then was) noted that all parties agreed that a notional estate order could be made where a devisee had property, regardless of whether that property was related or unrelated to the property of the deceased distributed under the Will. The plaintiffs say that, in this case, Ms Shen has received notional estate, not the least being the sum of $1.2 million from Mr Cong's life insurance policy, the amounts in the joint bank accounts and the jointly owned properties at 16 Nicholson Street ($2.47 million) and 43 Amy Street ($1.375 million), or the proceeds of sale thereof (and that the assets held on resulting trust also constitute notional estate where Mr Cong could have, as a co-owner, compelled the sale thereof - though I have concluded above that the assets are not held on resulting trust so that this last submission has no force).
The plaintiffs say that the importance of not interfering with reasonable expectations in relation to the aforesaid property (s 87 of the Succession Act) has no significance where 43 Amy Street was the subject of the Deed and where, otherwise, Ms Shen has appropriated the value of the remaining Campsie properties. It is said that, to the extent that Ms Shen may reasonably have expected to receive the proceeds of the life insurance policy, for example, any such expectation arose in the context of her agreeing to a distribution of assets as contemplated by the 2016 Will and the Deed which she has not honoured.

[260]

Determination - Succession Act claims and notional estate

As noted above, s 59 of the Succession Act empowers the making of an order for further provision out of the estate of a deceased if the Court is satisfied of the matters set out in s 59(1) of the Succession Act. The applicable principles on such an application were articulated by Hallen J in Page v Hull-Moody as referred to above (see [120]ff).
It is well-known that a determination as to whether a claimant has been left without adequate provision for his or her proper maintenance and advancement in life involves an evaluative judgment; that the question is whether "adequate provision for the proper maintenance, education or advancement in life" has not been made for the claimant; and that the time at which the adequacy of provision is to be tested is the time the Court is considering the application (see s 59(1)(c) of the Succession Act). If, at the time the application is determined, it is found that the deceased did not make adequate provision for the claimant's proper maintenance and advancement in life, then a determination must be made as to whether and what provision ought to be made for the claimant. That again involves an evaluative judgment.
Pursuant to s 60(1) of the Succession Act, the Court may have regard to the matters set out in s 60(2) of the Succession Act for the purpose of determining whether to make a family provision order and the nature of any such order. Those matters may be relevant both to the question of any inadequacy of provision and, if the provision is found to be inadequate, to the question whether, and if so what, order for provision should be made.
As to the exercise to be carried out, it is worth repeating what was said in Sgro v Thompson [2017] NSWCA 326 (Sgro v Thompson) by White JA (with whom each of McColl JA and Payne JA agreed): 86. … The most important word in s 59(1)(c) is "proper". Until the court has identified what is proper maintenance, education and advancement in life for an applicant, it cannot assess whether the provision made, if any, is adequate. What is proper requires an evaluative judgment that has regard to all relevant circumstances, not merely the parties' financial circumstances. Whilst the court will know the latter, it will only have an incomplete picture of the former. Of course, the court's assessment of what is proper maintenance, education and advancement in life must be made when the court is considering the application. That does not mean that considerable weight should not be given to the assessment of a capable testator or testatrix who has given due consideration to the claims on his or her estate.
There have been a number of cases in which the question of what is proper provision for an adult child has been considered. Suffice it to note that there are no special rules or principles applicable to claims of adult children (nor any presumption for or against there being a moral obligation to make provision for an adult child), as Hallen J recognised in Towson v Francis [2017] NSWSC 1034 (Towson v Francis) at [78]-[80], there citing Burke v Burke [2015] NSWCA 195; Nicholas v Tubb [2016] TASSC 53; Toscano v Toscano [2017] NSWSC 419; and Underwood v Gaudron [2014] NSWSC 1055. Each case must be considered by reference to its particular facts and circumstances (though see as a useful guide the summary of principles in Camernik v Reholc [2012] NSWSC 1537 at [159] per Hallen J).
As to the domestic violence evidence in the present case, its relevance goes not to any suggestion of reparation for past wrongs (see, for example, the not dissimilar situation where the relevance of historical sexual abuse allegations has been considered on applications for provision orders such as Page v Page [2016] NSWSC 1218 at [58] per Hallen J; Re Estate McNamara [2018] NSWSC 1661 (Re Estate McNamara) at [36]-[43] per Lindsay J; Jones v Smith [2016] VSCA 178 at [40] per Ferguson JA, as her Honour then was, with whom Whelan and Kaye JJA agreed). Rather, its relevance may lie in assessing the evidence as to various of the factors set out in the legislation (such as, for example, to explain any additional needs on the part of a claimant or to explain what might otherwise be seen as disentitling conduct).

[262]

Section 60(2)(a) - any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship

Edmund is the youngest of the three children from Mr Cong's first marriage. Edmund described his relationship with Mr Cong over the last five years of his father's life as friendly and cordial (see T 90) and it is clear from the evidence that Mr Cong wanted to maintain contact with Edmund and trusted him so as to make him a co-executor.
Although criticism is made by the first and second defendants as to a conversation between Edmund and Mr Cong in which the latter asked him to visit and Edmund gave what might be seen to be a non-committal answer, and evidence was elicited that Edmund's visits to Mr Cong coincided with the times when Edmund was tutoring his step-brother, Bruce, and were not as frequent as that to which Edmund deposed (see T 90-91; T 127), there is certainly evidence that Edmund visited his father in hospital and that he spent time with his father in the period up to his father's death. I do not accept that the evidence supports the assertion (as particularised in the first and second defendants' pleading) that Edmund failed in his filial duty to his father; and clearly Mr Cong cannot have thought so since he named Edmund as a co-executor.
I considered Edmund to be genuine in his affection for his father and in his reason for keeping a tape recording of conversations with his father.
As to Teresa, I accept that she also had a close relationship with Mr Cong (and indeed, as already noted, Pastor Yip certainly thought Teresa was the favourite child). Teresa gave the eulogy at Mr Cong's funeral. I also accept that Teresa assisted in accompanying Mr Cong to some of his medical appointments and visited him in hospital. Further, I note that Teresa accompanied Ms Shen to visit Mr Cong's burial site in 2017, which bespeaks devotion and affection for her father.
I considered Teresa genuine in her affection for her father and her sadness at his death.

[264]

Section 60(2)(c) - nature and extent of the deceased person's estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered

The nature and extent of Mr Cong's estate has been considered to some extent already in dealing with other aspects of the claims made in this proceeding. Having regard to the findings I have made above, the assets of Mr Cong's estate as at the date of death (other than day to day personal assets) comprised: the shares in Jolly Trading (the value of which was attributed by Mr Cong when he gave instructions for his 2016 Will at $1 million, consistent with the amount Mr Cong suggested Ms Stefadouros be asked to pay in order to acquire a 25% interest in the company; but estimated in the Binding Financial Agreement executed by Ms Joyce and Mr Cong in 2006 at $2.00); entitlement to a life insurance policy payment of $1.2 million; superannuation entitlement of about $60,000; and money in various bank accounts in his name.
Prior to his death, Mr Cong held a half-share, as joint tenants with Ms Shen, in the properties at 16 Nicholson Street and 43 Amy Street, and a share in the moneys held in their joint bank accounts (those joint bank accounts comprising of $20,555.06 and $36,817.84 as per Ms Shen's 2017 affidavit). By reference to the sale price of those two properties ($2,470,000 and $1,375,000 respectively), Mr Cong's share of those properties was worth around $1,922,500 - although there were debts secured over those properties ($1,680,000 over 16 Nicholson Street; and $699,112 over 43 Amy Street). Mr Cong's interest in the properties held as joint tenants with Ms Shen and the joint bank accounts passed by way of survivorship to Ms Shen on his death and did not form part of the assets of his estate (and, as I have found, the resulting trust claim in respect of those two properties fails).
In her affidavit as executor sworn in support of the 2017 application for probate, Ms Shen deposed to the existence of trade debts owing to Chinese trade creditors of Jolly Trading estimated at $377,000 and trade debt owing to Australian trade creditors of Jolly Trading estimated at $707,125. No amount was included for the debts owing to Jolly Trading by its debtors (though Ms Stefadouros' evidence was that a lot of money was going into the company - see T 1029).
In November 2017, Ms Shen deposed that the estate had a gross value of $11,521.34 and a net value of nil.

[265]

Section 60(2)(d) - financial resources (including earning capacity) and financial needs, both present and future, of the applicant, of any other person in respect of whom an application has been made for a family provision order or of any beneficiary of the deceased person's estate

As to Edmund's personal circumstances, his evidence is that he lives with his mother and that he is a software engineer (T 89). It is submitted that Edmund's financial position is not secure and (although it is not suggested that he is incapable of earning an income) that as a software engineer working from home Edmund does not appear to have prospects of producing a large income. Edmund's evidence is that he has assets in terms of shares in a technology company and that he has acquired a number of expensive watches (see T 136). Edmund's evidence is that he has a liability to repay his share of the loan from his mother's family trust in respect of the funding of this proceeding (which was in the order of $190,000 prior to the commencement of the hearing and does not include the costs of the hearing itself); as well as liabilities of $8,000 in HECS; and unpaid credit card debts of approximately $5,000 (see his affidavit sworn 11 October 2020). His evidence is that he has assets, comprised of a car, cash in a savings account, cash in a superannuation account and personal belongings, which in total are in the order of $60,000. As to monthly income and expenditure, Edmund's evidence is that his net monthly income is approximately $5,700 and his monthly expenditure is approximately $5,450 (see [12]-[13] of his affidavit sworn 28 February 2020 and [5] of his affidavit sworn 11 October 2020).
Edmund's evidence is that he has not purchased or sold any real estate; and has never purchased or sold any shares in public companies. As to future earning capacity, Edmund estimates that a software engineer with 10-15 years of experience would be granted a remuneration package of around $160,000; and that he can expect an increase of $55,000 over the next 10 years of employment.
Teresa is a marketing manager. Teresa's evidence is that she has assets, comprised of a car, cash in a savings account, cash in a superannuation account, and personal belongings, which in total are in the order of $22,500. Her evidence is that she has liabilities, comprised of a HECS-HELP loan, parking fines, and unpaid credit card debts, which in total are in the order of $17,000, as well as the liability to repay her share of the loan from her mother's family trust in respect of the funding of this proceeding (which was in the order of $190,000 prior to the commencement of the hearing and does not include the costs of the hearing itself) (see her affidavit sworn 9 October 2020 at [3]-[4]). Her evidence is that her monthly net income is approximately $2,600 and her monthly expenditure is $1,865.
As to her future financial needs, Teresa's evidence is that she attends fortnightly sessions with a psychologist to address anxiety and depression; and she estimates ongoing costs in this regard in the order of approximately $19,200. Teresa's evidence is that her future financial needs also include various other costs, such as those arising from dental surgery and further postgraduate study, as well as the costs of language lessons, property acquisition in Melbourne, and wedding expenses.
It is convenient at this point to deal with the complaint made as to failure of the applicants fully and frankly to disclose their financial circumstances. There is no doubt that it is incumbent on an application for provision to do so (see the authorities cited above). I accept that the evidence of financial circumstance was in relatively broad-brush terms (and there was some force in the complaint that relevant information such as tax returns had not been provided until a notice to produce was issued and was not explained in detail).
In Collings v Vakas, the application for family provision was dismissed in circumstances where a crucial element of the applicant's financial situation (her income and expenditure) had not been satisfactorily proved. In that context, Campbell J said (at [67]): …before a court can be satisfied that a plaintiff was left without adequate provision, the court needs to be persuaded that it has been presented, at least in broad outline, with the whole picture concerning the plaintiff's financial situation.
As noted earlier, the test as to adequacy of provision involves an holistic, multi-faceted and evaluative judgment. In the present case I am satisfied that I have sufficient information as to the current financial circumstances of Edmund and Teresa so as to be able to make a determination as to whether each or either of them has been left without adequate provision.
The position in the present case is distinguishable from cases where false evidence is given throughout the proceedings (see for example Ahmad v Ahmad [2002] NSWSC 579), or where there has been a deliberate expenditure of funds shortly prior to the application without offering any adequate explanation or documentary evidence as to what had been done with that money (see for example Mayfield v Public Trustee [2009] NSWSC 330; and as was the case in Leary v NSW Trustee and Guardian [2017] NSWSC 1113).
So, for example, although I accept that it is unfortunate that I was not given estimates as to the costs of the proceeding as a whole, I have sufficient information to enable me to conclude that the costs of the proceeding are likely to have been large (it appears that the amount funded up to the commencement of the hearing was in the order of $600,000 - that being $190,000 for each of the three elder children; on top of which would be the costs of the hearing itself); that the exposure of the plaintiffs to adverse costs orders is very real; that neither Edmund nor Teresa is in particularly well-paid employment and Teresa has health issues with which to contend; but both are at a relatively young stage of their working lives and have a good education (and hence the prospects of gainful employment throughout their lives).
Accordingly, I am not persuaded that this is a case where the application for provision should be dismissed for failure to provide full and frank information as to the applicants' financial and material circumstances.

[278]

Conclusion as to adequacy of provision under the 2016 Will

As noted above, the adequacy of provision is the threshold test for the making of a provision order and it is to be determined at the time of the application.
There is no doubt in my mind that the provision made for Edmund and Teresa under the 2016 Will is not adequate for their proper maintenance, education and advancement in life. Having regard to the assets (and potential notional assets) in Mr Cong's estate, there was, in effect, almost no provision made for them - since the annuities were dependent on there being residue (and were in the relatively small amount of $10,000 per year for ten years) and the provision of any other amount as contemplated by reference to the Deed was dependent on little other than Ms Shen's largesse (in circumstances where even the timing of the payments was likely to be dependent on her discretion as was the amount of the payments except in the event that the Campsie properties were not rezoned within ten years).
Having regard to the findings I have made in relation to the resulting trust claims, the estate ultimately was not a large estate; and I accept that Mr Cong also had moral obligations to provide for his widow and three younger children. However, and this is significant, substantial provision had been made for Ms Shen (and the three younger children) in Mr Cong's lifetime by way of the financial accommodation (and gifts) that permitted Ms Shen to acquire the extensive property portfolio that was in her sole name (including what Mr Cong himself referred to as the "big mansion" at the Family Property, which Mr Cong regarded as being "organised" for Ms Shen and the younger children); and the provision made for Ms Shen under the 2016 Will (which left to her the shares in and business of Jolly Trading, the company that had funded Mr Cong and his family's comfortable lifestyle up to his death, and the residue (such as it was) of his estate). In contrast, Mr Cong's three elder children were left with nothing other than charity from their step-mother; and the upshot in the present case is an illustration of the simile "as cold as charity".
I accept that it cannot generally be said that a parent has an obligation to provide an adult child with a home (see Fiorentini v O'Neill (New South Wales Court of Appeal, 4 December 1998, unreported) at 15; see also Delaney v Jones [2008] NSWSC 229). Nor is it the purpose of the statutory regime relating to family provision to ensure that there is an overall fair division of the estate (Gorton v Parks (1989) 17 NSWLR 1 at 6). However, I have concluded that in all the circumstances there was not adequate provision made for Edmund and Teresa (indeed there was, in effect, no provision made for them at all).
This then enlivens the jurisdiction as to whether and what order for provision ought to be made; and the question whether any property should be designated as notional estate.

[279]

Notional estate

Pursuant to s 78 of the Succession Act, an order may be made designating property as notional estate only: for the purposes of a family provision order to be made under Part 3.2 of the Act or for the purposes of an order that the whole or part of the costs of proceedings in relation to the estate or notional estate of a deceased person be paid from the notional estate of a deceased person.
Section 80 of the Succession Act (which broadly replaces s 23 of the previous Family Provision Act) sets out the power of the court, on an application for a family provision order or on its own motion, to make a notional estate order designating property specified in the order as notional estate of a deceased person if satisfied that the deceased person entered into a relevant property transaction before his or her death and that the transaction is a transaction to which the section applies (see ss 75 and 76).
Sub-section 80(2) provides that the section applies to the following relevant property transactions: (a) a transaction that took effect within 3 years before the date of the death of the deceased and entered into "with the intention, wholly or partly, of denying or limiting provision being made out of the estate of the deceased person for the maintenance, education or advancement in life of any person who is entitled to apply for a family provision order"; (b) a transaction that took effect within one year before the date of the death of the deceased and entered into when the person "had a moral obligation to make adequate provision, by Will or otherwise, for the proper maintenance, education or advancement in life of any person who is entitled to apply for a family provision order which was substantially greater than any moral obligation of the deceased person to enter into the transaction; and (c) a transaction that took effect on or after the deceased person's death.
In the present case, the assets sought to be designated as notional estate have been identified at [149] of the amended statement of claim. Relevantly, having regard to the findings made as to the resulting trust claims, the potential notional estate is limited to the following: Mr Cong's half share of 16 Nicholson Street and 43 Amy Street; the life insurance proceeds; the joint bank accounts; and the assets of Jolly Trading.
As to 16 Nicholson Street and 43 Amy Street, the relevant transaction giving rise to the claim that there be a notional estate order is not as at the date of acquisition of the properties - it is the date of Mr Cong's death - because it is the failure to sever the joint tenancy during the deceased's lifetime, which is the relevant transaction. Therefore it is not necessary to be satisfied of the matters that would be required if there was an application in relation to a transaction which took effect within the period of three years before the death (i.e., that it was entered into with the intention of wholly or in part denying or limiting provision for the maintenance, education or advancement in life of that or any other eligible person out of the deceased person's estate or otherwise).
I note the matters that must be considered under ss 83 and 87 before any such order is made (including the importance of not interfering with reasonable expectations in relation to property and the substantial justice and merits involved in making or refusing to make such an order). This is of particular relevance to the claim in respect of the life insurance proceeds, since (following the binding nomination) those were paid to Ms Shen and two of her infant sons (who, as the first and second defendants note, have not been joined to the proceeding). Any order designating the insurance proceeds as notional estate should be limited to Ms Shen's one-third share of those proceeds.
A notional estate order must not be made unless, relevantly, the deceased person's estate is insufficient for the making of the family provision order, or any order as to costs that the Court is of the opinion should be made (see s 88). That is clearly satisfied in the present case.

[280]

Proper provision in all the circumstances

I turn then to what I consider would, in all the circumstances, be the proper provision for Edmund and Teresa. I place significant weight in this regard on Mr Cong's clear intention that there be substantial provision made for his three elder children - and in particular that Mr Cong considered that Ms Shen and the three younger children were adequately provided for by the arrangements made in his lifetime for the acquisition of the Family Property in Ms Shen's sole name (and the provision made for Ms Shen under the 2016 Will).
I also note that Mr Cong, when putting in place his testamentary scheme, clearly thought that he had Ms Shen's concurrence with the proposal that provision for the three elder children could be made by reference to the value of the Campsie properties; but that this will not now be possible given that three of the four Campsie properties were in Ms Shen's name (and the fourth was held as joint tenants and passed to her on survivorship) and Ms Shen has made it abundantly clear, by her conduct and stance in this litigation, that she has no intention of acting in accordance with the scheme that Mr Cong thought he had put in place by agreement with her for the provision to be made for the three elder children. The adamance with which Ms Shen made clear in the witness box that she was to have the discretion to give the three elder children nothing or $1 (and the fact that the discretion was qualified in her mind by whether at the time of its exercise she then thought that she had become very, very rich) makes it very clear that Edmund and Teresa cannot expect to receive anything out of Mr Cong's estate (beyond the very small payments made to them in the first year after his death) without an order for provision.
As to what is the proper provision, again I emphasise that Ms Shen and the three younger children have been well provided for in the financial accommodation and support made possible for Ms Shen during Mr Cong's lifetime. The suggestion that Ms Shen and her children would be left destitute and on the street if Mr Cong's wishes were honoured is in my opinion farcical. I accept that there was extensive debt secured over the respective properties. However, what Ms Shen has done has been to transfer, for no consideration at all, the Wu Property to Ms Wu (over which I infer that Ms Shen would have access were it necessary to meet her family expenses) and to cease the Jolly Trading business (albeit having paid its trading debts but also having had the benefit of the debts owing to it). Ms Shen has shown what to me is an extraordinarily casual attitude to the disbursement of large amounts of money (the loan to Ms Stefadouros and the Lillian Street acquisition, for example - apparently on no more than trust); and her philosophy that when one has a large amount of debt, it is immaterial if one expends large sums on luxury items (such as a luxury family car), is also remarkable; all of which suggests that Ms Shen has had considerable sums of money at her disposal and the wherewithal to fund her family's lifestyle (with the support of her second husband no doubt).
On the basis that a rough calculation of the notional estate would be around $2.3 million (half the sale value of each of the 16 Nicholson Street and 43 Amy Street properties plus half the amount held in the joint bank accounts and one-third of the life insurance proceeds), and leaving aside the position of Jolly Trading (the value of which has not to my mind been established particularly given the level of debts balanced against the value one would put on the likelihood of a continuing income stream without Mr Cong alive); and having regard to the wishes of Mr Cong as to the level of provision he wished to make for his elder children, taking into account that they are likely to face a large costs exposure in this litigation; and taking into account all of the circumstances outlined above, I have concluded that the proper provision for Edmund and Teresa is that each receive a lump sum legacy in lieu of the provision made for them in the Will in the sum of $700,000.
While this is much less than Mr Cong intended (and led Edmund and Teresa to believe they would inherit out of his estate), his expectations as to the value to be derived from an increase in the rezoning of the Campsie properties have proven to be unrealistic and, in any event, cannot now sensibly be achieved (particularly without Ms Shen's assent). Moreover, while Mr Cong intended that the provision be paid in ten years' time, I consider that the obvious breakdown in the extended family relationships makes it appropriate that it be paid now.
While this is no doubt much more than Ms Shen would wish, it seems to me that it will permit Edmund and Teresa to meet some or all of their debts in relation to costs and to have a buffer to set themselves up in their lives, in circumstances where neither is well provided for as it is; and although able to look to their mother for financial support, the extent of that support over the years is not assured. I do not consider it appropriate to defer fixing a final legacy amount (as was suggested in the plaintiffs' submissions) until after submissions on costs for two reasons - first, the amount for which provision is to be made may well influence what costs orders are sought (especially in light of the intimation that the first and second defendants might seek special costs orders) and, second, that it was the plaintiffs' forensic decision not to serve the requisite costs affidavits.
For that purpose, I propose to designate as notional estate such of the proceeds of sale of the 16 Nicholson Street and 43 Amy Street properties (up to the maximum of Mr Cong's half share in those properties) as is necessary to meet the order for provision (i.e., the sum of $1.4 million).

[282]

Plaintiffs' submissions

The plaintiffs seek (see [150] of the amended statement of claim) a grant of administration of the 2016 Will in favour of Edmund to the exclusion of Ms Shen (pursuant to r 78.19 of the Supreme Court Rules, i.e., passing over the rights of Ms Shen as co-executor; on the basis that Ms Shen is not a fit and proper person to carry out the duties of executor and that the administration of Mr Cong's estate would be put in jeopardy if she were to be appointed.
In the particulars to [150], the plaintiffs refer to Ms Shen's denial (now vindicated) that she is liable under the Deed and assert that, in the premises, a conflict of interest would arise if she were to be appointed as executor. At [151] of the amended statement of claim, it is alleged that Ms Shen has misconducted herself (repeating the allegations at [27]-[38], in relation to Jolly Trading; at [49]-[65], in relation to the alleged breach of the Deed; and at [134]-[145], again in relation to Jolly Trading and Cong Australia International).
The plaintiffs say that Ms Shen's submission that she is entitled to avoid her obligations under the Deed is another reason why probate of the 2016 Will should be granted to Edmund. It is said that Ms Shen's position of conflict is obvious; that it requires a decision by her as executor whether to accept the truthfulness of her claim that she had no knowledge of, and is not bound by, the Deed; and it is said that Ms Shen has, by her own conduct, evinced a preference for her own interest over her executorial duty to the estate.
In reply submissions, the plaintiffs emphasise the alleged misconduct of Ms Shen as pleaded in the amended statement of claim relating to Ms Shen's alleged breaches of the Deed and her dealings with Jolly Trading's accounts to the detriment of the estate. It is said that, common to those paragraphs is the proposition that Ms Shen has advanced her own interests at the expense of beneficiaries. The plaintiffs note that an executor may be passed over where, because of disputation or otherwise, the proper administration of the estate will be prejudiced.

[283]

First and second defendants' submissions

In the cross-claim, Ms Shen seeks an order that probate of the 2014 Will be granted to Ms Shen (one of three executors named in the 2014 Will). It is noted that, of her co-executors, one (Ms Stefadouros) has renounced probate (Ex 24) and the other (Ms Lisa Wu) has failed to answer a Notice to Apply for Probate (Ex 25). Accordingly, it is said that the rights of both to representation of the estate have lapsed. This is on the basis of Ms Shen's primary case (which has not succeeded) that the 2016 Will is not the true Will of Mr Cong.
Alternatively, Ms Shen seeks probate of the 2016 Will, passing over Edmund, and with a declaration that the Deed is not testamentary and not to be included in the grant.
Insofar as the plaintiffs seek to pass over Ms Shen as executor (see [150] of the amended statement of claim), the first and second defendants say that Ms Shen has a right to the grant of probate and that the particulars to [150] do not assist the plaintiffs (for the reasons set out below).
First, as to the matter stated in the particulars at (i) (that Mr Cong was a party to the Deed), the first and second defendants reiterate their argument as to the release effected by naming Ms Shen as executor) and they maintain that this is also inconsistent with the plaintiffs' deed poll case.
Second, as to the matter stated in the particulars at (ii) (that the estate has standing to sue Ms Shen as the other party to the Deed and should do so), the first and second defendants say that this assumes that the rule in Commissioner of Stamp Duties v Bone does not exist and that it is contrary to the rule that an "estate" does not have standing. The first and second defendants accept that executors and administrators have standing but they say that this is not where there has been a release. As to the submission that the estate "should do so", the first and second defendants say that this presumes a matter that (even if the first and second defendants' primary submission were rejected) would still be a matter for the decision of the executors having regard to the interest of the beneficiaries (and not to the interest of volunteers and persons claiming not through the estate but as strangers to the estate, as it is said the plaintiffs are). The first and second defendants say that the plaintiffs' interest as legatees of the annuities does not alter this, since it gives them no interest as beneficiaries of the estate in performance of the Deed.
Third, as to the matter stated in the particulars at (iii) (that Ms Shen has denied that she is liable under the Deed), the first and second defendants say that this is not a valid objection; that being a question that the proceeding here is to resolve.
Fourth, as to the matter stated in the particulars at (iv) (that a conflict of interest would exist if Ms Shen were appointed executor because her duties would extend to prosecuting the estate's claim under the Deed against herself), the first and second defendants say that this assumes a conflict that does not exist because it is not possible for Ms Shen to sue herself.
The first and second defendants further say that the plaintiffs have no standing to assert a conflict in which they have no interest. It is said that they are not residuary beneficiaries or creditors; that they are third party volunteers, "seeking to meddle without interest"; and that even their interest as legatees abates as the estate was left at Mr Cong's death with substantial mortgage debts from the Nicholson Street and 43 Amy Street loan accounts, which Ms Shen afterwards paid off.

[284]

Determination

I have already concluded that the 2016 Will is a valid Will and that it incorporates the Deed. Therefore, Ms Shen's cross-claim insofar as it seeks probate of the 2014 Will cannot succeed; nor would I exclude from the grant of probate the terms of the incorporated Deed (albeit that it can stand in effect only as a statement of Mr Cong's testamentary intention or wishes and is not contractually binding on Ms Shen having regard to the findings made above).
The question is simply whether Probate should be granted to both of the named executors or only one and, if so, which one.
Section 74 of the Probate and Administration Act 1898 (NSW) provides a discretion to pass over a named executor where such executor "is not willing and competent to take probate". As the authors of Wills, Probate and Administration Law in New South Wales (2nd ed, 2019, Thomson Reuters) explain (at 667): The power to pass over the named executor is one necessary in order to prevent a person wholly unsuitable from assuming the office of executor and as such the power ought to be interpreted widely to ensure the due and efficient administration of the estate. Ordinarily, where a testator names a person as their executor, then it can be assumed that the testator expects the person will act properly. To pass over the named executor requires the proof of misconduct and not the mere existence of a conflict of interest. In Telfer v Telfer (No 2) [2013] NSWSC 823 the court passed over the named executor who had attempted to propound a codicil in circumstances where the court had concluded the executor must have known that the signature on the document was not genuine.
I have concluded that Probate should be granted of the 2016 Will with the Deed attached to both of the named executors. The position of conflict to which the plaintiffs have referred will not arise in light of the findings that I have made in relation to Ms Shen's liability under the Deed; the allegations of misconduct (on both sides) have not been established; and the risk of disputes in the future is not such that I would overrule Mr Cong's testamentary intentions in this regard. Moreover, perhaps unduly optimistically, I would hope and expect that Ms Shen and Edmund, both properly advised, would hitherto act consistently with their obligations as executors and work together to honour Mr Cong's testamentary wishes.

Cong v Shen

At a glance

Court

Decision date

Before

Source

Judgment (288 paragraphs)

Parties

Legislation Cited (10)

Cases Cited (221)

Cited By (6)