Guojin Huang v Jinghong Wei

The parties and their witnesses

1. The plaintiff, Guojin, is sixty three years old. He is a citizen of the People's Republic of China and lives in Quanzhou City, China. He also holds permanent resident status in Australia.
2. The defendant, Jinghong, is the plaintiff's former son in law. He was previously married to Guojin's daughter, Manjing. Jinghong is also a citizen of China and an Australian permanent resident. He ordinarily resides in Australia but gave evidence from China at the hearing of these proceedings.
3. Both Guojin and Jinghong gave oral evidence in addition to their sworn affidavits. Manjing also gave evidence for Guojin, as did Ms Zishan Lv (Zishan), who is Manjing's mother and Guojin's spouse. Jinghong's mother, Ms Chunhua Wang (Chunhua), gave evidence for the defence. A Sydney based lawyer, Mr Ji Ying Dai (Mr Dai) also gave evidence for the defence.
4. All of the witnesses in the proceedings appeared via videolink. With the exception of Mr Dai, who was in Sydney and spoke fluent English, the other witnesses gave their evidence from China with the assistance of Mandarin interpreters.
5. In addition to the aid of interpreters, several individuals were assisted for the purposes of giving their evidence by independent solicitors in China. Guojin was assisted by Mr Roncung Li and Ms Xiaochen Zheng. Jinghong and his mother were assisted by Ms Fanghua Li.

Findings of fact

1. Guojin and Jinghong presented completely different versions of events. There was disagreement between them on a wide variety of matters, including matters that were largely peripheral, such as the extent of any financial support provided by Guojin to Jinghong while he was in Australia. Their accounts were so different that they were unable to be reconciled, leaving the Court with a binary task: only one party could be believed, or else neither party was to be believed.
2. Many of the usual factors that could be called in aid to determine what occurred - contemporaneous notes, transaction documents, independent witnesses - were absent from the proceedings. There was one piece of direct, objective and contemporaneous evidence in the form of the transfer instrument. Much of the evidence was either circumstantial or uncorroborated oral testimony.
3. In light of this, the Court has borne in mind the legal principles applicable to fact finding, especially those factors which I set out in Maria Saravinovska v Krste (Chris) Saravinovski; Chris Saravinovski v George Saravinovski (No 6) [2016] NSWSC 964 at [462]-[473]. They may be summarised as: 1. The Court must have regard to the fallibility of human memory, which only increases with the passage of time and the competing interests of those persons involved (per McClelland CJ in Equity in Watson v Foxman & Ors; Commonwealth Bank of Australia v Foxman Holdings Pty Ltd (Receiver and Manager Appointed) (1995) 49 NSWLR 315 (1995) 49 NSWLR 315 at 318 9). 2. There must be "actual persuasion" that the alleged matter occurred in the sense that the Court may be reasonably satisfied of its existence, taking into account the seriousness of the allegation, the inherent likelihood of the alleged matter, and any consequences that would flow from such a finding (see: Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers appointed) (In liquidation) (No 2) (2011) 297 ALR 56 at [48]; [2011] FCA 1123 (Emmett J)). 3. The civil standard of proof that matters are to be proved on the balance of probabilities established in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 (Briginshaw) and codified in s 140 of the Evidence Act 1995 (NSW) (the Evidence Act 1995). 4. Evidence given by a witness will be preferred in cases where the version of events given is inherently probable in the circumstances or is given against their interest. 5. The fact that a witness is untruthful on some matters does not negate their credibility in its entirety. Evidence that is of logical probative value may be relied upon, whereas evidence that contains discrepancies or inadequacies, or is otherwise tainted, will not be relied upon. This is especially the case where the untruthfulness relates to ancillary matters (see: Cubillo v Commonwealth of Australia (No 2) (2000) 103 FCR 1 at [118], [121] (O'Loughlin J); [2000] FCA 1084; Sangha v Baxter [2009] NSWCA 78 at [155]-[156] (Basten JA, Handley JA agreeing)). 6. Disbelieving one matter does not automatically make the obverse true, although it may lend support to the existence of an alternative state of affairs. 7. Where leave is given for a party to rely upon affidavit evidence that is unable to be tested by cross examination, that evidence will be given reduced weight. 8. Not every issue before the Court is capable of resolution, nor is it always necessary to resolve every aspect. It will always be dependent upon the evidence available to the Court and the nature of the claim brought. Only the real issues in a matter must be conclusively determined.
4. Added to these factors, it is relevant that most of the witnesses were Chinese nationals who gave evidence in Mandarin. As I previously observed in passing in an interlocutory judgment in these proceedings (Guojin Huang v Jinghong Wei [2022] NSWSC 222 (Huang v Wei (No 1)) at [50]), the Court will exercise great caution, and generally resist, making findings based on the demeanour of witnesses in such cases because the Court is not equipped to make such assessments when the language and culture of the witnesses is so far outside the experience of the Court.

Uncontroversial facts

1. The following facts either were not disputed by the parties or were supported by unchallenged documentary evidence, so that the Court finds: 1. Guojin purchased the Property with his then partner, Ms Li Qing Fu (Ms Fu) in March 2005. The Property was initially subject to a mortgage with Westpac which was discharged by repayment of the loan in 2011. 2. Jinghong and Manjing were married in 2009. At the time of their marriage, both Jinghong and Manjing were studying at university in Australia. 3. Jinghong and Manjing resided together at the Property with the consent of Guojin and Ms Fu from 2007. The couple did not pay any rent. 4. In January 2010, Jinghong applied for an Australian partner visa which was sponsored by Manjing as his spouse. In the same month, Jinghong was granted a temporary visa while his application for a permanent visa was in train. 5. Jinghong provided a statutory declaration as part of his visa application dated 28 November 2011. Question 5 of that declaration asked Jinghong to "describe financial commitments you and your partner share, for example, joint/individual bank accounts, ownership of property or other major assets, pooling of financial resources and sharing of day to day household expenses". Jinghong's answer to that question made no mention of the Property but stated (emphasis added): "We have a joint account in Westpac, most of the household expense were paid by our joint account. Such as gas bill, electricity bill, water bill and broadband bill. In 2007 we bought our Chrysler Sebring, which is cost almost AUD28,000. We used both of our names to buy this car. We are planning to buy another new car in 2012. This year we also make a $65,000 of 12 month term deposit as a home investment … We still get lots of support from our parents since I am still studying and Manjing works part time. After graduation, I am thinking of setting up my own business and becomes the bread winner of our family." 1. A Westpac term deposit advice issued to Jinghong and Manjing on 28 September 2011 showed the couple had a term deposit of $65,000. During cross examination, Jinghong did not confirm how much of that term deposit came from Guojin but did not deny that Guojin had made a contribution. 2. During 2011, the relationship between Guojin and Ms Fu broke down. They decided to sever their assets and agreed that Ms Fu's half share in the Property would be transferred to Guojin. Mr Dai was retained to assist in the division of assets, including the transfer of Ms Fu's half share to Guojin. 3. In December 2011, Jinghong and Manjing travelled to China so that Manjing could undergo in vitro fertilisation (IVF) treatment. 4. Sometime in 2011 or 2012, Guojin and Jinghong struck an accord that a half share in the Property would be transferred to Jinghong. 5. Mr Dai was asked to assist in the transfer of a half share in the Property to Jinghong in addition to the transfer of Ms Fu's half share to Guojin. There was no fee agreement or any other documents (such as file notes) available to clarify whether Mr Dai acted for Guojin or Jinghong in that transaction or when he was instructed about the transfer to Jinghong. Mr Dai's evidence was that he acted for both Guojin and Jinghong in the transaction. 6. In January 2012, Mr Dai flew to Quanzhou, China. It was coincidence that Mr Dai needed to be in China at that time and he volunteered to meet with Guojin in order to obtain his signature on the transfer documents. That meeting occurred at the Golden Star Restaurant where Guojin was attending a gathering which included Manjing and Zishan. It was the first occasion that Guojin and Mr Dai had ever met face to face. It was unclear whether they had ever spoken before: Guojin maintained they had not, while Mr Dai said it was possible that they may have spoken but he could not recall. 7. At that meeting, Mr Dai and Guojin moved to a side table away from the main party. Mr Dai then presented Guojin with the relevant forms to convey Ms Fu's half share in the Property to Guojin, and for Guojin to convey a half share to Jinghong. Guojin signed the forms in Mr Dai's presence. The interaction lasted a matter of minutes. 8. Jinghong's permanent visa was granted in February 2012. 9. In March 2012, Mr Dai's firm (Wisdom Lawyers) arranged a valuation of the Property for stamp duty purposes. The Property was subsequently valued at $550,000. 10. On 18 March 2012, Mr Dai sent an email (the recipient is not discernible) requesting the sum of $8,896.50 as payment for the transfer, valuation and stamp duty. The amount was paid from a Westpac account in Manjing's name. 11. In June 2012, the Property transfer was registered with Guojin and Jinghong as joint tenants. Where the transfer form stated what consideration, if any, had been paid, an amount of $275,000.00 was handwritten. A notice of sale/transfer report issued by Land and Property Information NSW (LPI NSW) stated that the Property had been acquired by way of "sale" for a purchase price of $275,000. 12. In 2014, Jinghong and Manjing had a child together. 13. In late 2014, Jinghong returned to Australia without Manjing and their child. 14. At all times since his return to Australia in 2014, Jinghong has had exclusive use of the Property. 15. The relationship between Jinghong and Manjing broke down and the couple separated in February 2015. 16. In April 2015, Guojin lodged a caveat against the Property, prohibiting the registration of any dealings or interests. The stated reason for the caveat was that Guojin no longer had possession of the Certificate of Title and on that basis "seeks to protect his interests". 17. In 2018, custody proceedings relating to Jinghong and Manjing's child were commenced in China. 18. In June 2019, divorce proceedings between Jinghong and Manjing were finalised. 19. On 20 August 2019, a letter was sent to Jinghong by Thomson Geer on behalf of Guojin demanding the transfer of his half share to Guojin. That demand was not complied with.
2. The contents of the agreement referred to at [19(9)] above were the central issue in this case. As will be seen below, the protagonists gave totally contradictory versions of the agreement and there was a paucity of documentary evidence to assist the Court. What documentary evidence there was provided only limited help and required clarification by the parties and their witnesses under cross-examination.

Guojin's version of events

1. Guojin made three main allegations. These were: 1. The Property was transferred by Guojin to Jinghong in name only on the understanding that it was to assist Jinghong with his Australian permanent residency application. 2. No consideration was ever sought or paid for the transfer of the half share in the Property. 3. Jinghong has accrued a benefit in the form of rental income from tenants at the Property for which he must account.
2. Each of the allegations will be elaborated in what follows.
3. As to the first allegation, Guojin claimed that Jinghong asked for a share in the Property to be transferred to him in order to assist his application for permanent residency. In his affidavit of April 2020, Guojin alleged that: "18. In about 2012, prior to their return to China, I had a conversation with Mr Wei in Chinese, in words to the following effect: Mr Wei: "We might need to stay in China for around 2 years while we undergo the IVF treatment. It could be even longer than that, I just don't know. It depends on whether the IVF treatment is successful and how quickly we get a result. If I'm out of Australia for such a long period, it will affect my permanent residency application. It might amount to a breach of the visa conditions so it may mean that I will not be able to become a permanent resident in Australia. However, I will avoid this problem if you would add my name to the title for the Strathfield property. Even if I don't stay in Australia for the full two years I can still renew my visa, which will prevent my permanent residency application from lapsing." Me: "I want to do whatever I can to help you and Manjing to live in Australia, if that is what you both want. If it will help with your permanent residency application to have your name on the title of my apartment, I will do that for you."
4. Under cross-examination, Guojin stated that in fact there had been two conversations with Jinghong to the effect of what was stated in paragraph 18 of his affidavit. One of these conversations occurred over telephone and the other in person.
5. These exchanges were the basis of Guojin's decision to convey the half share to Jinghong. Without the representation about assisting with Jinghong's permanent residency application, Guojin said that he would not have entered the arrangement. Nor would he have entered the arrangement if he had known that the success of Jinghong's permanent residency application did not require the signing over of any interest in the Property.
6. Guojin gave evidence that he did not receive any legal advice about the transaction beyond what he was told by Mr Dai. He alleged that Mr Dai did not explain anything to him during their meeting in January 2012 about the effect of the transfer, or any necessary fees and costs associated with it such as stamp duty. Zishan, who married Guojin in 2012 and was present on the day of the meeting with Mr Dai, also stated that Mr Dai had not explained anything to Guojin in relation to these issues.
7. Guojin's case was that implied within the agreement were stipulations that Jinghong's share in the Property was to be returned to Guojin upon one of the following events: 1. The resolution of Jinghong's application for permanent residency; 2. Jinghong's permanent return to Australia; 3. The dissolution of Jinghong and Manjing's relationship; or 4. Otherwise upon demand by Guojin.
8. The effect of this is that it was understood by both parties that Jinghong's interest in the Property was of a temporary nature. It was always subject to revocation and did not involve Jinghong becoming a beneficial owner in the Property.
9. In support of this theory, Guojin pointed to contemporaneous documents issued to Jinghong in January 2010 by the Department of Immigration and Citizenship (DIAC) (as it then was) which provided: "[I]t is likely that your permanent Partner visa application will not be decided until at least two years have passed from the date you made your application. To be granted the permanent Partner visa you must be physically in Australia, so if you intend to travel overseas around that time, you should advise DIAC in writing and give an indication of when you expect to return to Australia."
10. Manjing gave evidence that she was present during the conversation between Guojin and Jinghong about the latter's visa status and that "[Jinghong said] putting his name on this property will help to resolve his visa problem" (Tcpt, 1 March 2022, p 88(17-18)). Under-cross examination by Mr Foley, Manjing stated that the conversation related to Jinghong's need to renew a permanent residency visa rather than to the grant of permanent residency. This created some measure of confusion which was never resolved in the evidence.
11. Zishan maintained under cross examination that in late 2011 Guojin told her that the purpose of the transfer was to assist with Jinghong's visa application while he was in China with Manjing undergoing IVF.
12. Guojin stated that he became aware sometime in 2019, after the divorce proceedings between Manjing and Jinghong were finalised, that Jinghong's permanent residency was never contingent upon his owning property in Australia.
13. No expert (or other) evidence was tendered by either party to explain the visa process. It was put by Mr Withers SC that the reality of the visa process was irrelevant: what actually mattered was the understanding of the individuals involved. The Court accepts that proposition. Regardless of whether Jinghong was ever required to remain in Australia for a period of two years, or if it related to the grant or renewal of a visa, the crucial issue is whether Jinghong ever told Guojin that transferring the Property to him would assist with his immigration status and whether Guojin agreed to do so in reliance on that representation.
14. As to the second allegation (see [21] above), Guojin asserted that no consideration was ever requested or paid by Jinghong in relation to the transfer. In his affidavit evidence, he claimed that the field about consideration on the transfer form was blank at the time he signed the document. That figure, it was alleged, reflected half the amount of the stamp duty valuation of the Property undertaken on behalf of Mr Dai's firm and was inserted by Mr Dai after Guojin signed the transfer form. Guojin was unaware that the figure of $275,000.00 had been inserted on the transfer form until the divorce proceedings between Jinghong and Manjing in 2019.
15. Mr Dai's evidence on this point was critical. Although he was a personal friend of Jinghong, and gave evidence in Jinghong's case, it was submitted by Mr Withers SC that Mr Dai could be considered an independent witness (the only independent witness because the others were all close family relations of the parties). The following exchange took place during cross-examination of Mr Dai (Tcpt, 3 March 2022, pp 239-40(47-50; 1-45): "WITHERS SC Q. You prepared a transfer document - A. Yes. Q. Which we can see at page 309? A. Yes. Q. That's the draft of the transfer document that you referred to in paragraph 18 of your affidavit, is that right? A. Yes. Q. And when you presented it to [Guojin] for his signature, that occurred at a meeting or at a social event that occurred on 20 January 2012 at the Golden Star Restaurant in Quanzhou? A. Yes, it happened. I can't recall the name of the restaurant but, yes, it was a social event in a restaurant in Quanzhou, China. Q. You sat down at a table and you obtained his signature of that document, didn't you? A. Correct. Q. Then at page 319, you'll see a copy of the document that's been signed by him? A. Yes. Q. When it was signed, it did not include that figure that you have there for item D, "Consideration 275,000" did it? A. No, it did not. Q. Because you included that figure there afterwards? A. Yes, I did. Q. You included that figure after you had obtained a valuation of the property from Quadrant Valuations Pty Ltd, yes? A. Yes, yes, I did, yes. Q. The valuation came in at 550,000? A. Yes. Q. Therefore you understood stamp duty was to be payable on half that amount, being 275,000? A. Yes. Q. That's why you included that figure there? A. That's correct. Q. You did not include the figure of 280,000 because [Jinghong] never told you that he was paying that much money for the property. A. Well, I don't know where that figure came from, but Mr Wei's never told me that."
16. When asked why he had not simply left the consideration field blank if none was to be paid, Mr Dai explained his understanding of the practice of the Office of State Revenue at that time required the insertion of a figure based on valuation even in related party transactions. It was suggested in written submissions for Jinghong that an inference could be drawn that Jinghong had informed Mr Dai he was purchasing the Property and Mr Dai's failure to recall was simply due to being unconcerned with such details in the context of a family transaction. However, Mr Dai was directly asked whether he made any such assumption and his response was that he did not.
17. Mr Dai did not recall what advice or explanation about the transfer form he had given Guojin at their meeting in Quanzhou. In particular, he did not know if he explained the implications of being joint tenants with Jinghong rather than tenants in common or the need for stamp duty to be paid. He assumed that he would have done so in accordance with his usual practice.
18. During cross-examination, Mr Foley pressed Guojin that if the agreement had truly existed as he claimed, why hadn't he sought to recall the Property in 2015? At that time, the alleged conditions would have been fulfilled, being that Jinghong had returned to Australia having already obtained his permanent residency. He was also in the process of separating from Manjing. Guojin's response was that he had not done so because he did not want to add further turmoil to the fractured relationship between Manjing and Jinghong, hopeful that they might reconcile. The Court accepts Guojin's explanation. It appears perfectly natural that a parent might refrain from taking actions that could further imperil an already fractious relationship between a child and their spouse. It is also consistent with the fact that Guojin eventually made such a demand in August 2019 after the conclusion of divorce proceedings between Jinghong and Manjing, an event that extinguished the possibility that they would reconcile.
19. Mr Foley also pressed Guojin about the caveat lodged against the Property in 2015. If the agreement existed, why was there no mention of it in the caveat? Guojin gave evidence that it was Manjing who had conferred with solicitors in Australia to have the caveat lodged. Manjing was only asked whether she acknowledged that the caveat did not mention any agreement. It was argued for Guojin that neither Guojin nor Manjing was under any obligation to disclose the subject of conversations with solicitors for the purpose of lodging the caveat because of legal professional privilege.
20. In written submissions, Mr Foley drew the Court's attention to obiter dicta by Hodgson CJ in Equity in Wayne Lawrence Pty Ltd v Hunt & Ors t/a Hunt Musgrave & Peach [1999] NSWSC 1044: "[15] It appears to be the law that where legal professional privilege or other privilege is claimed, that of itself cannot be the basis of an adverse inference being drawn against the party claiming privilege. However, in my opinion, where a party is claiming to make out a case, and that party bears the onus of proof, and where that case could be given positive support by calling evidence of legal advice or lack of legal advice, the failure of that party to call that evidence can be taken into account in deciding whether that party has discharged the onus of proof which it bears."
21. In written submissions in reply, Guojin disputed the applicability of Hodgson CJ in Equity's dicta. First, it was not Guojin who sought to deploy the caveat in support of his claim, but Jinghong who sought to rely on the caveat as a means of discrediting that claim. Second, the expressed basis of the caveat was still valid even if it did not mention the agreement. Third, no adverse inference could be drawn as a matter of law (for this proposition the plaintiff relied on the judgment of McHugh J in Giannarelli & Ors v Wraith & Ors [1991] HCA 2; (1991) 171 CLR 592).
22. Finally, the third allegation (see [21] above) related to rental income received by Jinghong while he had exclusive use of the Property. The only evidence to substantiate this claim was hearsay in the form of an affidavit by a solicitor, Mr Pavros Stavropoulos. That affidavit was tendered as evidence pursuant to s 63(2) of the Evidence Act 1995 (NSW). The reasons for the admission of this are contained in the Court's earlier procedural ruling in Huang v Wei (No 1). The contents of the affidavit are also summarised in that ruling: "9. The relevant paragraphs in the affidavit recount two alleged telephone conversations between Mr Stavropoulos and a woman known only as "Fay" on 22 April 2021. Mr Stavropoulos had Fay's mobile phone number. The substance of those conversations was that Fay had rented a room at the property from Mr Wei for about four months in 2018. There was no formal tenancy agreement. She paid rent of about $300 $350 per week to Mr Wei. Rent was always paid in cash and no receipt was ever provided. There were said to be approximately four other tenants living at the property at the same time as Fay, but she could not remember any of them."
23. An affidavit of attempted service recounted evidence of a process server who attested to having met Fay at the Property. Fay had allegedly told the process server that she was a tenant at the Property and paid rent to Jinghong by depositing it into his bank account.
24. Manjing gave evidence that paying tenants had previously resided in the Property with her and Guojin from about 2008. Rent from those tenants was paid directly into an account in Manjing's name but she had stopped receiving rent around late 2014. A Westpac bank account statement for Manjing showed what appeared to be rental income that was paid until approximately April 2015. Manjing claimed that, despite the account being in her name, Jinghong also had access to it.

Jinghong's version of events

1. Jinghong denied all of Guojin's allegations. Jinghong gave evidence that: 1. Guojin offered to sell a half share in the Property to Jinghong. 2. Jinghong paid Guojin 1.68 million Renminbi (RMB) (an amount equivalent to approximately $280,000 Australian dollars at that time) as consideration for the transfer. 3. Jinghong had not received any rental income from the Property.
2. In his affidavit of 1 February 2021, Jinghong alleged that he had the following conversation with Guojin: "13. Towards the end of 2011, the Plaintiff said to me words to the effect of: Huang: "That property in Strathfield that you were living in, I will leave to you and my daughter. However, I want you to pay for your half. I think it's worth $560,000 so if you pay me $280,000, I will transfer half to you. I need the cash for my business here, so you will need to pay me in RMB. We will use the exchange rate of RMB 6 to $1 AUD. The amount is RMB 1.68m." Me: "Let me think about it and speak to my parents."
3. During cross-examination, Jinghong clarified that the agreement between himself and Guojin was struck by September 2011.
4. Jinghong then spoke to his mother, who he assumed discussed it with his father, such that his parents agreed to assist him financially to purchase the half share in the Property. Jinghong gathered 1.68 million RMB from his parents in the form of "168 bundles of 100 x RMB100 bills" which was delivered to Guojin in "three black bags".
5. Jinghong's mother, Chunhua, gave evidence in support of her son's account. She attested that she raised the money used to purchase the half share in the Property from a combination of 600,000 RMB cash of her own savings held in safes at her home, money owed to her by her brother totalling 750,000 RMB, and the remainder from persons described only as "other debtors". Chunhua's brother was unavailable to corroborate her evidence as he passed away in 2017. She could not recall the identities of the other debtors. A scintilla of documentary evidence was provided in the form of two photographs, without timestamps, purporting to depict safes in her home.
6. Jinghong alone delivered the money to Guojin. Guojin then counted the money in Jinghong's presence, a process that Jinghong stated under cross-examination only took "[a]bout one to two minutes" (Tcpt, 3 March 2022, p 201(30)). Jinghong did not receive any receipt for the transaction and there was no other documentary evidence to confirm the payment.
7. Both Jinghong and Chunhua said that Jinghong's father had some involvement in the matter, including counting the money with them before it was delivered to Guojin, but not that he was present when Jinghong initially spoke to his mother. Jinghong's father was not called to give evidence. Guojin submitted this gave rise to an adverse inference in accordance with Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 (Jones v Dunkel) at 321 per Windeyer J. Mr Foley submitted for Jinghong that the failure to call Jinghong's father fell within an exception to Jones v Dunkel because the evidence he could have given would be merely cumulative to Jinghong and Chunha's evidence (Manly Council v Brooke Byrne & Anor [2004] NSWCA 123 at [61] [66] per Campbell J (Beazley JA, Pearlman AJA agreeing)). For the reasons at [63(5)] below, the exception does not apply in this case.
8. Mr Withers SC pressed Jinghong under cross-examination about the information he had given to DIAC on 29 November 2011 referred to at [19(5)] above. It was put to Jinghong that, if any agreement to pay for the Property existed, he would have disclosed it to DIAC. The fact that he had not disclosed any such agreement was indicative that no agreement existed at that time. Jinghong unequivocally agreed with that proposition and in doing so contradicted his assertion that the agreement was struck in late 2011.
9. Mr Withers SC also asked Jinghong why, if he had $65,000 in a term deposit account with Westpac, that money was not applied towards the purchase price he paid to Guojin or even mentioned to his mother when she was trying to gather the required funds. Written submissions for Guojin argued that, according to the exchange rate allegedly agreed between the parties, AUD$65,000 was equivalent to about 390,000 RMB, a figure that would easily have covered the balance of funds after contribution from Chunhua and her brother. Jinghong's explanation was that Guojin had asked for the funds to be paid in RMB and he did not want to go through the process of converting the $65,000 from Australian dollars to RMB.
10. On the issue of rent, Jinghong denied that he had rented any rooms in the Property after the last tenants moved out in early 2015. Any rent received prior to that was paid to Manjing. He also denied any knowledge of the woman known as "Fay" who claimed to have paid rent to him. Mr Foley also pointed out that there was a discrepancy in the evidence as to whether Fay had paid her rent in cash or directly to Jinghong's bank account.
11. It was submitted for Jinghong that Guojin's motivation in calling for the return of the Property was animus caused by the breakdown of Jinghong's relationship with Manjing. The couple have been embroiled in custody proceedings in China related to their son. Other proceedings have also taken place in China between Jinghong and Guojin's relatives. Under cross examination, Manjing did not express anger towards Jinghong about their relationship but admitted to feeling "upset" by his actions during their divorce proceedings. Manjing did state that she was "angry" when Jinghong opposed her application for sole custody of their child in 2018. Guojin also conceded that he felt anger towards Jinghong for the breakdown in the marriage but said that he had remained hopeful they would reconcile.

Consideration

1. As I have already recorded, there was a scarcity of contemporaneous material to support either side's assertions. Almost all the evidence was circumstantial. Sifting through the conflicting accounts of the witnesses was made even more difficult due to barriers of language and culture because the Court could not rely on the nuances of demeanour.
2. Even without the assistance of demeanour, it was clear that there were deficiencies and inconsistencies in each witness' evidence. These were examined in microscopic detail by experienced counsel and set out in many pages of written submissions. To make that observation is not to criticise the parties or their lawyers. Each side has deployed those matters with keen forensic industry to demonstrate how the other side's witnesses cannot be believed. Counsel for Jinghong went so far as to suggest the possibility of a "third option" where the Court may find itself unable to believe either party. In that case, it was submitted by Mr Foley, the Court should find that Guojin had failed to discharge his burden of proof.
3. Without intending any discourtesy to the dedication of counsel in preparing their detailed submissions as to the facts, it is not necessary to address most of them. Having seen the case unfold, I have no doubt that the key to its resolution is the answer to one question: did Jinghong pay the equivalent of AUD$280,000 in cash to Guojin for a half share in the Property? As neither side suggested that Jinghong's interest in the Property was given to him, it was only open to the Court to accept one side's version of events (if at all). This was not a case where the Court might find that there had been an innocent misunderstanding or failure of recollection.
4. The Court has come to the firm view, on the Briginshaw standard, that it is Jinghong's case that is built on a lie, assisted by his mother, Chunhua. The principal basis for this conclusion is the uncontroverted evidence of Mr Dai. The Court accepts the submission of Mr Withers SC that Mr Dai was the closest to an independent witness in the matter. Although he admitted to being a personal friend of Jinghong, Mr Dai's evidence in the witness box was clear that he genuinely regarded himself as acting for both parties in the transfer and had no personal interest in the outcome of the proceedings. The Court accepts that was his state of mind at all relevant times. The fact that Mr Dai did not follow any of the usual, prescribed formalities which accompany such a retainer, especially when acting for both parties, does not derogate from that conclusion.
5. Most compelling was Mr Dai's evidence, which is referred to at [35] above, regarding the transfer form which, when signed by Guojin, did not have a figure for consideration. What was later inserted was done for stamp duty purposes. The Court finds that there was no mention of any purchase price to Mr Dai by either Jinghong or Guojin. This neutralises what might otherwise be the decisive effect of any reference in either the transfer or the report issued by LPI NSW that the Property was subject to sale for valuable consideration.
6. It is also not necessary to reach a conclusion as to what Mr Dai did or did not explain at his meeting with Guojin in Quanzhou. The decisive point is that it is inconceivable that the consideration figure would have been left blank if the parties had agreed a price that had either been paid or was to be paid. There is no suggestion that one or other of the parties told Mr Dai to leave the consideration figure blank. Given the transfer form was left blank at the time it was signed, I readily accept Mr Dai's evidence that his understanding was that this was an intra-family transaction where money was not changing hands.
7. Mr Dai obtaining Guojin's signature on the transfer with the consideration left blank is the paramount piece of evidence that persuades the Court there was never any agreement for Jinghong to pay for his interest or that he should receive a beneficial interest in the Property, and that Jinghong in fact did not pay for his interest. This piece of evidence is so fundamental that it has the consequence of completely discrediting Jinghong (and his mother) in the eyes of the Court, such that his uncorroborated evidence on any matter of importance cannot be accepted.
8. This conclusion is supported by several additional factors raised on behalf of Guojin, including: 1. Failure by Jinghong to disclose - and use - the $65,000 term deposit for the purchase of the Property, especially in circumstances where this allegedly forced his mother to expend considerable effort to raise the money by collecting various debts. 2. Failure by Jinghong to disclose anything related to acquisition of the Property in his response to DIAC (see [19(5)] above). 3. The unusual fact that the payment was to take place after the transfer (as opposed to before) at a purchase price that was above the valuation figure. The purchase price had allegedly been set at $280,000 in comparison to the $275,000 for the valuation. If the purchase price was as Jinghong alleged, it should have been inserted into the transfer form for stamp duty purposes, being the higher of the two figures, and should in any event have been inserted at the time Guojin executed the transfer. 4. Evidence given by Jinghong under cross-examination related to the time it took for Guojin to count the money ("[a]bout a minute or two"). Even if, as was put by Mr Foley, Guojin counted the money in bundles rather than by individual notes, it is an unbelievable estimate. 5. Failure to call Jinghong's father to give evidence. In this case, the so-called rule in Jones v Dunkel should apply because the evidence related to matters of critical importance (the existence and payment of the purchase moneys). Moreover, it was necessary given the deficiencies already identified in Jinghong and Chunhua's evidence about how the money was obtained. It therefore cannot be said that evidence given by Jinghong's father would have been no more than a duplication. On that basis, the Court infers that the failure to call Jinghong's father is because his evidence would not have assisted Jinghong's case. This makes it easier for the Court to reach its stated conclusion, already supported by other evidence, that Jinghong never paid anything to Guojin and that there was never any agreement that he should do so.
9. There is one additional matter which I have taken into account in rejecting Jinghong's case. According to Jinghong (see [46] above), Guojin said "That property in Strathfield that you were living in, I will leave to you and my daughter" (emphasis added). However, the transfer specified that the two men held the Property as joint tenants. This meant that if Guojin predeceased Jinghong (the more likely possibility given their respective ages), the latter would become sole owner of the Property by survivorship. That is not consistent with the desire attributed to Guojin to leave the Property to both Manjing and Jinghong. From this the Court draws two conclusions. First, the words were not said. Second, if they were said, the issue of survivorship was considered immaterial because Jinghong was never intended to hold an interest in the Property for any extended period of time.
10. The complete rejection of Jinghong's version of events does not mean the Court automatically accepts Guojin's account. But in the absence of any suggestion of a gift, Guojin's explanation for the transfer is plausible, and is supported by both the proven circumstantial evidence and the evidence of Manjing and Zishan. I am satisfied, on the balance of probabilities to the level of actual persuasion, that Guojin's version of events is what transpired and that he and his witnesses were witnesses of truth.
11. Given the conclusions in the preceding paragraphs, the Court finds that words to the effect of those attested to by Guojin referred to at [23] above were said. Guojin agreed to put Jinghong's name on the title to the Property, transferring a legal half interest to him on the understanding that it would assist his immigration status. No consideration was ever paid by Jinghong. There is nothing to suggest that the beneficial interest was ever intended to be transferred to Jinghong absolutely or that the legal interest was to be held indefinitely. The legal consequence of these findings is that the Court finds there was an actual common intention between Guojin and Jinghong that Jinghong was to hold the legal interest in his half of the Property for Guojin, in effect as bare trustee, while Jinghong's residency application was pending. That intention will be enforced by the Court imposing a constructive trust on Jinghong's interest int the Property in favour of Guojin.
12. The relevant legal principles in relation to a common intention trust were set out by White J (as his Honour then was) in Re estate of the late Doolan; Shepherd v Doolan [2005] NSWSC 42 in this passage which I respectfully adopt: "[31] One class of case where equity will intervene to prevent the unconscientious denial by the legal owner of another party's rights, is where the parties agreed, or it was their common intention, that the claimant should have an interest in the property owned by the other. And the claimant acted to his or her detriment on the basis of that agreement or common intention (e.g. Grant v Edwards [1986] Ch 638; Green v Green (1989) 17 NSWLR 343; Maharaj v Chand [1986] AC 898 at 907). … [34] Where a constructive trust is imposed, based upon the parties' common intention as to the ownership of property upon which the claimant has acted to his or her detriment, the inquiry is as to the actual intention of the parties. The law does not impute a presumed intention to the parties based upon what the Court considers fair and reasonable persons in the position of the parties would have intended had they turned their minds to the issue. (Pettit v Pettit [1970] AC 777 at 804, 810, 816 817; Gissing v Gissing [1971] AC 886 at 900, 902, 905 909; Allen v Snyder [1977] 2 NSWLR 685 at 690, 698, 701). … [36] The intention to be established need not be that the parties have a specific share of the property. It is sufficient that they intend that the claimant should have a beneficial interest or "some form of proprietary interest". (Green v Green at 335, 336; Grant v Edwards at 654; Parianos v Melluish at [31], [39]). [37] The intention may be established in various ways. There may be an agreement between the parties as to how the property should be held. There may be express statements as to their intention. Their intention may be inferred from their conduct. The question of what acts demonstrate an agreement or common intention referable to the beneficial enjoyment of the property is one of evidence, not law. (Allen v Snyder at 691; Green v Green at 355). … [40] The plaintiff must also show that she acted to her detriment in a way referable to the agreement or intention that she have an interest in the property. (Austin v Keele (1987) 10 NSWLR 283 at 291; Grant v Edwards at 648; Carruthers v Manning [2001] NSWSC 1130 at [124]). Conduct which is insufficient to establish a common intention as to the ownership of the property may be sufficient to constitute relevant actions to the plaintiff's detriment to establish a trust if the common intention is established otherwise. Conduct may be both evidence from which an intention that the plaintiff have a beneficial interest can be inferred and the act of detrimental reliance. (Green v Green at 355; Grant v Edwards at 647, 652, 655)."
13. The evidence referred to above at [62]-[63] supports the finding that the actual intention of Guojin and Jinghong was that the latter would, quite literally, be an owner of the Property in name only and that the beneficial interest in Jinghong's half of the Property was Guojin's. The Court also finds that, referable to that common intention, Guojin acted to his detriment by transferring a half share in the Property to Jinghong. But for that common intention, Guojin would not have agreed to add Jinghong to the title of the Property by transferring the half interest to him. The transfer was neither a gift nor an absolute sale. Jinghong's defence of these proceedings represents an unconscientious denial by him as legal owner of his half interest in the Property of Guojin's rights in that half interest.
14. Given the Court's conclusions, it is not necessary to parse the arrangement to the extent of finding each of the implied preconditions advanced for Guojin as part of the common intention. However, what is clear, and the Court has no hesitation in finding, is that the arrangement was to convey only a legal interest to Jinghong to assist with his residency application and that once that was achieved it was always open Guojin to call for a reconveyance.
15. In reaching this result, I have given careful consideration to the submissions advanced for Jinghong concerning the interest claimed by Guojin in the caveat (see [39]-[41] above). There will be many cases where a defendant might successfully submit that the plaintiff's case is damned by inconsistency between a caveat that was filed well before the litigation and the interest then claimed in the litigation. However, this is not such a case. The second argument advanced for Guojin at [41] above has force and is accepted by the Court. The interest claimed in the caveat, while devoid of any mention of the agreement between the protagonists, is plainly explicable on the basis that it was an equally valid but much simpler interest to claim, especially in circumstances where Guojin's instructions from China were being conveyed in Australia to the solicitor through Manjing. Without more, the caveat's silence on the agreement between Jinghong and Guojin cannot overcome the dispositive effect of the independent evidence of Mr Dai.
16. The Court is also satisfied, on the balance of probabilities, by reference to the evidence referred to in [42]-[43] above that Jinghong received rent from tenants during the period he had exclusive use of the Property. Although there was an inconsistency in the evidence identified by Jinghong (whether payments were in cash or into a bank account) this was minor and is not of sufficient weight to displace the likelihood demonstrated by the evidence that Jinghong has received a benefit in the form of rent for which he must now account. An inquiry is warranted to determine the extent of the rental income received. It will be for the parties in the first instance to attempt to agree upon the manner in which that inquiry is to be conducted.
17. Additional claims were advanced by Guojin that Jinghong had engaged in unconscionable dealing and undue influence. As the Court has found that a common intention trust arises, there is no need to consider these alternative legal analyses of what had occurred.

Conclusion

1. The parties will be given an opportunity to consider these reasons and, if they can, to agree orders to give them effect, including as to costs and the nature of any inquiry.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 April 2022