Haiye Developments Pty Ltd v The Commercial Business Centre Pty Ltd

Supreme Court of NSW|2021-04-27|Before: Kunc J

Background

In 2002, Mr He, Mrs Li Yaner (Mr He's wife), and Chris (his son) migrated to Auckland, New Zealand from China. Mr He, Mrs Yaner and Chris became permanent residents of New Zealand shortly thereafter and remained there until 2006, at which time Mr He and Mrs Yaner returned to China. Chris remained in New Zealand and attended both high school and university, later graduating from the University of Auckland with a Bachelor of Business.
Although Chris attended both high school and university in New Zealand, and in doing so studied in English, he can only speak and understand English at a "conversational level". Chris' native language is Cantonese, although he is also fluent in Mandarin as is the case for Mr He and Mrs Yaner (although Mr He and Mrs Yaner have a very limited understanding of English).
In 2006, Chris first met Alysha and Dennis in Auckland through a mutual friend.
By 2010, Chris had returned to China. Following his return, Chris arranged to introduce his father to Alysha for her to discuss with Mr He a milk powder business opportunity that she was pursuing in China. As Mr He had no experience in marketing food products, he declined to entertain Alysha's offer to distribute milk powder in southern China.
Between 2011 and early 2015, Chris maintained a relationship with Alysha and Dennis, albeit Chris spent most of his time in Guangzhou, China. Throughout this period, Chris formed a strong relationship with both Alysha and Dennis, often referring to Alysha as his "big sister". That relationship appeared to be reciprocated by Alysha, who often referred to Chris as her "little brother". It is clear that as their relationship developed, particularly in or around 2015, Chris began to repose significant trust in Alysha and Dennis.
In early 2015, Mr He, Mrs Yaner and Chris travelled to Sydney for a holiday and spent some time with Alysha and Dennis, who were now located in Sydney. At that time, Mr He, Mrs Yaner and Chris were interested in investment opportunities that were available in Australia. They returned to China after having spent a short time in Sydney.

Wah Ming Pty Ltd's Purchase of the Landmark Property

On 20 June 2014, Wah Ming Pty Ltd ("Wah Ming") entered into a Put and Call Option Deed ("the Wah Ming Option Deed") with AFC Holdings Pty Ltd ("AFC Holdings") in respect of the property situated at 2-24 Princes Highway, Kogarah, NSW ("the Landmark Property"). The following matters are of present relevance in relation to this transaction: 1. Mah Wing obtained its option to purchase the Landmark Property for a fee of $580,000, which was to be exercised within 323 days; 2. the purchase price of the Landmark Property was $11,600,000, which amount was to include the $580,000 fee as part of the deposit if Wah Ming exercised the option. If Wah Ming did not exercise the option, the $580,000 would be forfeited; 3. the Landmark Property is adjacent to the First Kogarah Property; 4. from at least 7 May 2015, Alysha was one of two directors of Wah Ming and, through A & T Education (a company wholly owned by her), was also one of six shareholders (holding 19% of the issued shares); and 5. from at least 27 July 2015, Alysha was one of two directors and one of only two shareholders in Wah Ming, holding 50% of the issued shares in her name personally.
Wah Ming intended to develop the Landmark Property. Although the details of that development were not before the Court, it is apparent that Alysha had a substantial role in the preliminary development steps taken by Wah Ming. Mr Varvaris also appeared to be involved in the development, however, his involvement was minimal and his role in the development process is unclear.
On 8 May 2015, Wah Ming and AFC Holdings entered into a Deed Varying Option Deed ("the Option Variation Deed"), by which the parties agreed that the contract for the sale of the Landmark Property was to be dated 8 May 2015 and the completion date was extended to 31 August 2015. By the Option Variation Deed, AFC Holdings agreed to extend the completion date in consideration for Wah Ming's payment of an additional $580,000 which, together with the option fee payment under the Wah Ming Option Deed, would comprise the 10% deposit payable under the contract for sale. Wah Ming was also required to pay an additional non-refundable extension fee of $550,000. Thus, by their entry into the Wah Ming Option Deed and Option Variation Deed, Wah Ming had incurred liabilities to AFC Holdings in the amount of $1,710,000.
On 5 August 2015, Wah Ming entered into two agreements with Landmark, to one of which AFC Holdings was also a party. By the agreement between Wah Ming and Landmark, Landmark agreed to take over Wah Ming's purchase of the Landmark Property in consideration for the payment of $1,160,000 (being the deposit paid by Wah Ming to AFC Holdings) and a fee of $3,200,000 to Wah Ming. By the agreement between Wah Ming, Landmark and AFC Holdings, Wah Ming and AFC Holdings agreed to rescind the contract annexed to the Option Variation Deed.
Wah Ming thus realised a profit from the Wah Ming Option Deed and Option Variation Deed in the sum of $2,650,000 (i.e. $3,200,000 less the non-refundable fee of $550,000 paid by Wah Ming to AFC Holdings).

Chris' and Mr He's Second Trip to Sydney

On 17 June 2015, Chris and Mr He returned to Sydney to inspect a property at the Greenland Centre development in Sydney's CBD. Shortly upon their arrival, Chris made an off the plan purchase of the penthouse of the Greenland Centre.
Whilst in Sydney, Chris and Mr He spent most of their time with Alysha and Dennis, who introduced Chris and Mr He to various people including real estate agents and business partners. Chris and Mr He were introduced to these figures, it appears, both to open their eyes to the Sydney property market (and property development market) and test whether Chris and Mr He would be interested in investing in Australia. As they did so, Alysha and Dennis were quick to flaunt the various properties they asserted they owned and leased or intended to develop throughout Sydney. It is clear that not only did Alysha and Dennis seek to ingratiate themselves with Chris and Mr He; they also sought to vaunt their success in dealing with, and developing, property in Sydney.
There is, however, a peculiar feature to Alysha's and Dennis' behaviour throughout Chris' and Mr He's trip to Sydney in June 2015. Whilst on the one hand, they had no hesitation in reiterating their success in purchasing and developing property, they also made it clear that they were somewhat cash deficient. Whilst, ordinarily, it is not unusual for property developers to be cash deficient at times, the unusual circumstances of this case warrant greater attention to such detail.
While not initially interested in pursuing property development opportunities in Australia, as Alysha and Dennis chauffeured Chris and Mr He throughout Sydney, Chris and Mr He began to develop an interest in properties in Sydney. They also began to learn about property development yields, the cost associated with developing apartments in Sydney and the regulations associated with purchasing and developing properties, including the nature of, and process associated with, development applications. Having said that, Chris' and Mr He's understanding of these matters remained, at least at this stage, trivial.
Although Chris and Mr He only intended to remain in Sydney for a short period to facilitate their inspection and purchase of the penthouse of the Greenland Centre, upon Chris learning of property development opportunities that were available to him in Sydney, they decided to remain in Sydney. At this time Mr He opened two bank accounts at the Town Hall branch of HSBC. One bank account was held in Mr He's name solely ("the 439 Account"); the other was held in his and Chris' name jointly ("the 440 Account"). The funds held in both the 439 Account and the 440 Account were funds drawn from Mr He's personal bank accounts. By opening the 440 Account, it was Mr He's intention to facilitate Chris' access to funds in Australia as he was planning to reside in the Greenland Centre penthouse upon its completion.
On 19 June 2015, at a dinner with Alysha, Dennis, their business partner - to whom the parties referred throughout the proceedings as "Vicky" - and other guests, Chris and Mr He were first introduced to Mr Varvaris, with whom Alysha had a close relationship. Mr Varvaris was introduced to Chris and Mr He by Alysha. It was at this time that Chris and Mr He became aware that Mr Varvaris was a former mayor of Kogarah and a federal parliamentarian.
Several days after their initial introduction to Mr Varvaris, Alysha invited Chris and Mr He to travel to Canberra with her for her to introduce them properly to Mr Varvaris. It was intended that Alysha, Chris and Mr He would meet with Mr Varvaris, and other federal politicians including the Minister for Immigration, at Parliament House in Canberra.
On or about 24 June 2015, Chris, Mr He, Alysha and others attended Mr Varvaris' office at Parliament House. They also attended a dinner with Mr Varvaris that evening. Although Mr He was unable to speak with Mr Varvaris directly without having Alysha interpret for him, Chris was able to converse with Mr Varvaris directly.
Chris and Mr He assert that several conversations took place at this dinner and throughout their trip to Canberra more generally. Chris deposes that Mr Varvaris said the following to him at the dinner: "I have a lot of resources available to me. I have been the mayor in the Kogarah area for many years. I have many contacts that I can use to arrange developments of properties."
Mr He deposes that he had the following conversations with Alysha: Alysha: "Nick is my good friend and a very special friend." … "Nick is a man of substantial importance." … "Nick is giving a speech in the parliament today." … "Nick can help us." and [Mr He]: "If you are such good friends with Nick, why aren't you doing real estate development with him?" Alysha: "I haven't got enough money at the moment. I need to find someone who would be prepared to be my partner and put in the money before I could do that."
Chris and Mr He returned to China shortly following their trip to Canberra.

Chris' and Mr He's Third Trip to Sydney

On 29 July 2015, Chris and Mr He returned to Sydney with the intention of purchasing another apartment for them to reside in when they returned to Sydney from China (from time to time) as the Greenland Centre penthouse was, at that time, several years from completion. Much like their first visit, Chris and Mr He spent most of their time with Alysha and Dennis throughout this trip and had several meetings, most (if not all) of which were instigated by Alysha or Dennis (or both) to discuss property development opportunities. Mr He deposes that at one such meeting, Alysha said the following to him: "We should look at investing in the Southern area of Sydney. Nick used to be the mayor there and the area is under his control. We will be protected. I have limited funds at the moment because of my investment in the school. If we can do something together that would be great. My business partner, Vicky, is also able to be involved. There is a site in Rockdale we should look into developing together."
At another meeting in early August 2015, Alysha introduced Chris and Mr He to Mr Joe Owen, a real estate agent. Mr Owen was marketing a property in Rockdale which had an ostensible development potential of 60 residential units and a floor of commercial shops ("the Rockdale Property").
Several days after their introduction to him, Chris and Mr He attended the Rockdale Property with Mr Owen and Dennis. Chris, Mr He, Alysha or Dennis (or some combination of those four people) made an offer for the purchase of the Rockdale Property shortly after Chris and Mr He's inspection of it. Although the details of the offer (i.e. who made the offer, upon who's behalf it was made, how the parties were to apportion the purchase price etc.) are not in evidence, it is clear that someone, most likely Alysha, made an offer to purchase the Rockdale Property for $12,500,000. That offer was rejected.
Throughout the process of their inspection of, and subsequent offer to purchase, the Rockdale Property, Mr He, Chris and Dennis had several conversations about incorporating a company to use to purchase the Rockdale Property. Dennis later introduced Chris and Mr He to Fei Gao, who was the accountant ultimately used by Chris, Mr He and Dennis to incorporate Haiye and PPD.
On 13 August 2015, Haiye was incorporated. Chris and Dennis were appointed as directors of Haiye. Dennis was appointed as a director of Haiye because one of its directors is required to ordinarily reside in Australia: s 201A(1) of the Corporations Act 2001 (Cth) ("Corporations Act"). Although Dennis was a director of Haiye, he was not involved in the operation of that company. Principally, Chris had the day-to-day carriage of Haiye and its affairs. Of the 100 shares issued upon Haiye's incorporation, Chris held 51 shares and Mr He held 49 shares.
On 14 August 2015, Mr He purchased an apartment in St Leonards.
In the week or two after their offer on the Rockdale Property was rejected, Chris asserts that he had the following conversation with Alysha: Alysha: "Nick has a lot of contacts and influence in the Kogarah area. He can help us find good deals and properties to develop. He has found a site in Kogarah we can show you. It had better yield than Rockdale. Are you interested to inspect the site?" [Chris]: "Yes."
Mr He deposes that Alysha said the following to him in the week or two after their offer on the Rockdale Property was rejected: "Vicky and I previously bought a property. Nick introduced us to the property." … "Vicky and I only paid 10% as a deposit on that property and we earned a lot of money when we sold it just a few months after we bought it. We have made a substantial profit off it." … "Nick has now approached me about another block of land that is next door to the one that Vicky and I sold. It is a church property and the price is lower than what Vicky and I paid for the property next door." … "Nick's father is a Greek priest. The Islamic church own this new property. Nick has used his family's connections to convince the Islamic church to sell the land. It is not on the open market for sale. The Islamic church will not sell to another person who they do not know." … "You could build about 80 apartments on this church property of 1 to 3 bedrooms." … "The exact area of each unit would have to be approved by the government after considering our application and working out whether we can be allocated the number of units that we want in the space that we have." … "This church property is valued at about $9.5 million Australian dollars. Therefore, the cost of the land for each of the 80 units would be about $120,000. That is about $70,000 less than the land the [sic] Vicky and I brought [sic] before."
Alysha has accepted that she said the words attributed to her by Mr He, but for the words "Nick's father is a Greek priest".

Chris' and Mr He's First Inspection of the First Kogarah Property

On 16 August 2015, Chris and Mr He first inspected the First Kogarah Property. Chris deposes that he had the following conversation with Alysha and Mr Varvaris at that inspection: Alysha: "This piece of land is much cheaper than Rockdale. You can build more apartments on it. The cost of the land would be around $120,000 for each apartment you could build on the site. You could put about 75 units on the block. Nick's father works for the Greek church and the owner of this property is the Islamic church, so Nick can use his connections to get us a good deal and get whatever approvals are needed." Chris: "How much is the site?" [Mr Varvaris]: "The price is $9.5 million." … "In this area you can only build up to 10 storeys. All of the current projects around here are not higher than 10 storeys." and Alysha: "Vicky and I put a deposit on that property. Nick helped us. But later on, Vicky decided not to go ahead. So, we sold the land to another company called Landmark and made a little profit. Don't mention to Vicky that I brought you here to look at this property. Nick isn't happy with her and doesn't want to have any dealings with her anymore." … "Through his relationships, Nick will try and get the best profit for us. Nick is trustworthy. He used to be the mayor but he has been promoted now." … "Nick is my very good friend and I regard you, Chris, as my brother. If we buy this land, it needs internal control. You cannot tell others."
Alysha has accepted that she said the words attributed to her in the first paragraph of the first extract and all of the second extract, but for the words "[h]e used to be the mayor but he has been promoted now".
Chris also deposes that Alysha translated the following, which was said by Mr Varvaris to Chris and Mr He (which Alysha accepts she translated): Alysha: "The cost of the land per unit will be much cheaper than Rockdale." … "Nick says this land is not on the open market. Because this property is owned by the church there are religious issues. You cannot get it without his help and his father's connections through the church." … "Nick says that we will need to get approval from the council to build units on the land if we buy it." … "Nick says in this area, when apartments are more than three or four levels then they have a sea view."
Mr He also deposes to several conversations, which were either words said by Alysha on her own accord or what was said by Mr Varvaris and translated for him by Alysha. Those conversations include (the first two extracts are words said by Alysha translating what was said by Mr Varvaris; the final extract contains words alleged to have been said by Alysha on her own accord): Alysha: "Nick says you can build a maximum of 12 floors in this area, and the building across the road has 8 to 9 floors." and Alysha: "The land will cost $9.5 million." … "Nick can help us get the best terms through his connections to maximise our profits." … "I want you to rest assured, Nick is a very good friend of mine. I treat Chris as my own brother." … "The purchase of land will be processed internally within the seller and it will not be disclosed to the public market." … "Nick was the former mayor of Kogarah and he got promoted." and Alysha: "The total price of the First Kogarah Property will be $9.5 million but it need [sic] to be paid in two parts. $8.5 million will be paid to the law firm. Nick will be in charge of the other $1 million for the sellers. The sellers want the contract split up in this way."
Alysha accepts that the words attributed to her by Mr He were said by her but for the words "Nick was the former mayor of Kogarah and he got promoted".
Around the time of Chris and Mr He's first inspection of the First Kogarah Property, Alysha invited Chris and Mr He to join a WeChat messaging group with her, Dennis and Mr Varvaris ("the Group WeChat"), which invitation they accepted. Ms Yaner was also initially a member of the Group WeChat, however, she left the group in about August 2016.
In the Group WeChat, Mr Varvaris was often referred to (primarily by Alysha) as "the classmate" or "the schoolmate".
Several other WeChat threads were also created and used to converse including the following: 1. a private WeChat thread between Alysha and Chris ("the Alysha WeChat"); 2. a private WeChat thread between Dennis and Chris ("the Dennis WeChat"); and 3. a private WeChat thread between Mr Varvaris and Chris ("the Mr Varvaris WeChat").
These WeChat threads became the primary means through which Chris and Mr He would converse with Alysha, Dennis and Mr Varvaris, other than in person. Importantly, because the WeChat software has a translation function, Mr He was able to translate the messages sent in English into Cantonese and reply to those messages in Cantonese, which could similarly be translated into English by Mr Varvaris and the other English-speaking members of the Group WeChat.

Chris' and Mr He's Second Inspection of the First Kogarah Property and Meeting at the Pymble Property

On 17 August 2015, Chris and Mr He attended the First Kogarah Property for a second time, albeit on this occasion with Dennis. Chris and Mr He depose to several conversations they had with Dennis on this occasion. Chris deposes that he had the following conversation with Dennis: Dennis: "Nick has helped Alysha and Vicky to purchase properties in the past. They have turned around the properties for good profit." … "Land in Kogarah is cheaper than other places in Sydney, especially when you have Nick's help. Alysha and I have bought up a lot of apartments as investments in Kogarah. We have also been investing our money in Alysha's language school. So, we have extended ourselves in terms of spending." "For that reason, I know we said we'd go 50/50 when we were talking about buying the Rockdale property, but because Vicky won't be involved this time, Alysha and I have a cash flow problem. If we buy this property in Kogarah, would you be prepared to proceed on a 65/35 basis?" Chris: "We will have to think about it. Let's talk about it when Alysha is with us." Dennis: "If you don't have plans tonight, why don't you and your father come over and we can all talk about it."
Mr He deposes that Dennis said the following: Dennis: "This land is available to build about 80 units." … "It is cheaper than the unit price of the land that Joe Owen introduced to us at Rockdale for $12.5 million." … "I would like to hold 35% of the interest in this land and you could hold 65% but we will need to discuss it with Alysha." … "I certainly wish to hold more of an interest in it but I just bought some properties and the school needs investments. I do not have too much money in hand."
Later that day, Chris and Mr He attended Alysha's and Dennis' residential property in Pymble ("the Pymble Property"). Chris deposes that he, Mr He, Alysha and Dennis had several conversations about their potential purchase of the First Kogarah Property, including the following: Dennis: "Alysha, I have mentioned to Chris and brother Hai that we don't have enough cash flow to buy the [First Kogarah Property] on a 50/50 basis, and that we want to proceed on a 65/35 basis." Alysha: "I disagree. We can't afford 35%. It should be a 75/25 split. But, if our cash flow improves, we can adjust things so that we pay more to Chris and brother Hai to bring our contribution up to 40% of the deposit, together with some interest and then 40% of the balance of the purchase price." [Mr He]: "We agree with doing it that way." Dennis: "OK, well we should register a company tomorrow that we can use to purchase the property."
Both Alysha and Dennis have accepted that the conversation as set out by Chris accurately reflects the conversation had that evening. Mr He also deposes to a similar conversation, the effect of which is similarly accepted as having been said by Alysha and Dennis.
Later that evening, Chris received a copy of the contract for the sale of the First Kogarah Property, which was sent to him by Alysha. Chris did not read the contract but forwarded it to his solicitor, Mr Eddy Vay of Longton Legal (also known as Mr Eddy Wei).
Shortly following 17 August 2015, Chris met with Alysha and Mr Varvaris to discuss further PPD's purchase of the First Kogarah Property. Chris deposes that the following conversation took place: Alysha: "Nick will help us get approval for the development application to build a certain number of units on the Kogarah property." [Mr Varvaris]: "Once you have built and sold the units, I will get a commission from the sale. My commission will depend on the number of units that you can get approval to build." Chris: "Can you tell me again how much is the price for the property?" [Mr Varvaris]: "$9.5 million, which is made up of two amounts, $8.5 million plus $1 million. I will explain that to you later."
On 19 August 2015, Chris, Mr He and Dennis incorporated PPD. Chris and Dennis were appointed as directors of PPD.

24 August 2015 Meeting

On 24 August 2015, Chris, Mr He and Dennis attended a meeting at Mr Varvaris' office in Kogarah to discuss PPD's purchase of the First Kogarah Property. Chris deposes that he was handed a document by Mr Varvaris which Mr Varvaris asserted was the contract for PPD's purchase of the First Kogarah Property. Chris also deposes that the following was said by Mr Varvaris at this meeting, which was translated to him and Mr He by Dennis: [Mr Varvaris]: "The cost of the [First Kogarah Property] is $9.5 million. That cost is going to be split. We are going to have two contracts. $8.5 million plus 10% GST is going to be paid to the Church. We will then have a supplementary contract for the balance of $1 million plus GST." … "The church has asked for the money to be split like that otherwise they won't sell. The supplementary contract is to help me to deal with VIP people in the church to get them to sell the property to you." … "You don't need to worry about anything else." … "You need to get the money ready for the purchase."
Chris also deposes that he had the following exchange with Mr Varvaris at this meeting: Chris: "We should use our solicitor, Eddy Vay at Longton Legal to do the property transaction." [Mr Varvaris]: "No, I have another firm that I will organise because they will be able to deal with the vendor's lawyer."
By his affidavit, Dennis has accepted that Chris' account of these conversations is an accurate record of what was said at the 24 August 2015 meeting.
Mr Varvaris did not disclose who he intended to engage to act on PPD's behalf for the purpose of its purchase of the First Kogarah Property. Chris and Mr He later learned that Blackstone Waterhouse Lawyers had been engaged by Mr Varvaris.
Chris also deposes that it was at about the time of the 24 August 2015 meeting that Alysha said to him: Alysha: "You will need to get two cheques for the primary and supplementary contract. You can give the cheque for the supplementary contract to Nick."
By her affidavit, Alysha has accepted that she said these words to Chris.
At the conclusion of their meeting, Chris signed the document handed to him by Mr Varvaris. Chris did not keep a copy of that document and cannot recall what the document was. As it turned out, the document signed by Chris was not the contract for the sale of the First Kogarah Property, but was likely to have been an Option Deed entered into by PPD and Al-Jaafaria Society Incorporated ("Al-Jaafaria"), the vendor of the First Kogarah Property.
The meeting held at Mr Varvaris' office on 24 August 2015 was the first time that a "supplementary contract" was mentioned, albeit a split in the purchase price was discussed at Chris' and Mr He's first inspection of the First Kogarah Property. For the balance of these reasons, I shall refer to the "supplementary contract" as exactly that.
On 25 August 2015, Chris and Dennis opened a bank account in PPD's name with the Commonwealth Bank of Australia at the World Square branch ("the CBA Account"). Chris and Dennis were co-signatories on the account. Shortly after the CBA Account was opened, Chris had the following conversation with Dennis (which Dennis has accepted to be an accurate record of the conversation): Chris: "Should we use the CBA account to pay the deposit and purchase price for the Kogarah property?" Dennis: "No, just pay the money directly from your personal account. It will be faster and more efficient."
Later that afternoon, Chris and Mr He attended the Pymble Property for dinner and to further discuss PPD's purchase of the First Kogarah Property. Mr Varvaris arrived at approximately 9:30pm that evening. Chris deposes that upon Mr Varvaris' arrival, he had the following conversation with Dennis: Chris: "Dennis, are you sure we can build 75 apartments on the block? After it settles, how long will it take us to get the development application approval for the construction?" Dennis: "It can take six months, but don't worry about it, Nick will look after it for us."

Payment of the Deposit Under the Primary Contract and the Supplementary Contract

At 9:49am on 26 August 2015, Alysha sent the following message to the Group WeChat: Alysha: The schoolmate said that all shareholders of the vendor have passed it. No problems now, just wait for the documents. If you need to leave tomorrow, it's OK to send emails and sign your names.
By this message, the Court finds Alysha was relaying a message from Mr Varvaris that Al-Jaafaria had accepted PPD's offer to purchase the First Kogarah Property.
At 2:46pm on 26 August 2015, Alysha sent the following message to the Group WeChat: Alysha: CHRIS APOSTOLAKOS SOLICITOR LAW PRACTICE TRUST ACCOUNT.
By this message, the Court finds Alysha was intending to convey the account to which Haiye's cheque was to be drawn for Haiye's share (i.e. 75%) of the deposit for the Supplementary Contract in the amount of $75,000.
Upon receiving this message, Chris and Mr He attended the HSBC branch in the Sydney CBD and obtained two bank cheques. The first bank cheque was drawn in favour of the Chris Apostolakos Solicitor Law Practice Trust Account for the sum of $75,000, being Haiye's share of the 10% deposit payable by PPD pursuant to the Supplementary Contract ("the Supplementary Contract Deposit Cheque"). The Supplementary Contract Deposit Cheque was deposited into the Chris Apostolakos Solicitor Law Practice Trust Account on 13 November 2015.
The second bank cheque was drawn in favour of the trust account of Longton Legal for the sum of $701,250, being Haiye's 75% share of the 10% deposit payable by PPD under the contract for the sale of the First Kogarah Property ("the Primary Contract Deposit Cheque"). Mr He used his personal funds to purchase both the Supplementary Contract Deposit Cheque and the Primary Contract Deposit Cheque.
The funds transferred by the Supplementary Contract Deposit Cheque were, unbeknownst to the Plaintiffs, later disbursed as follows: 1. on 18 November 2015, the sum of $25,000 was paid to CBC; and 2. on 19 November 2015, $50,000 was paid to A & T Education.
Later that evening, Chris and Mr He attended a Liberal Party fundraising dinner at the Waitan Restaurant in Haymarket. Whilst at the event, Chris handed Mr Varvaris the Supplementary Contract Deposit Cheque. Chris deposes that he had the following conversation with Mr Varvaris: Chris: "Here is the cheque for the deposit for the Supplementary Contract." [Mr Varvaris]: "Thanks." Chris: "Can you please give us a copy of the Contract for Sale and have the Supplementary Contract prepared as soon as possible and then give us a copy of that too?" [Mr Varvaris]: "I will."
On 27 August 2015, Chris and Mr He returned to China.
On 8 September 2015, Alysha sent a message to Chris on the Alysha WeChat which contained a text message from Mr Varvaris to Alysha. That message read: Hi mate, we've been arguing with their lawyers over a Put and Call finally got their lawyers to agree yesterday, we are drafting the Put and Call, pushing to exchange this week. Response Good news
On 13 and 14 September 2015, Chris and Alysha exchanged further messages via the Group WeChat regarding PPD's purchase of the First Kogarah Property. Chris says that as a result of those communications, he instructed Mr Vay to draw a cheque on Longton Legal's trust account for $701,250 in favour of Al-Jaafaria, in satisfaction of Haiye's 75% share of the 10% deposit under the contract for sale of the First Kogarah Property.
On 17 September 2015, PPD and Al-Jaafaria exchanged counterpart Deed of Put and Call Options ("the First Kogarah Property Option Deed"). Chris was of the mistaken belief, at the time, that the contract for the sale of the First Kogarah Property was exchanged on this date.
The First Kogarah Property Option Deed contained the following salient terms: 2.1 Call Option In consideration of the payment by the Buyer to the Owner of the Call Option Fee, the Owner grants to the Buyer a call option to purchase the Property on and subject to the terms and conditions contained in this Deed and the Contract. … 2.3 Buyer's Warranty as to Structural Matters (a) The Buyer warrants to the Owner that at the time of entering into this Deed, the buyer: (i) intends to substantially redevelop the Property including demolishing all existing improvements, buildings and structures on the land… … Reference Schedule [The reference schedule at the end of the Option Deed provides as follows:] … 3. Call Option Start Date - 4 calendar months after the date of this Deed. 4. Call Option End Date - 5 calendar months after the date of this Deed.

Chris' and Mr He's Fourth Trip to Sydney and Introduction to Candalepas Associates

On 6 October 2015, Chris and Mr He returned to Sydney for Chris and Mr He to further progress PPD's purchase and development of the First Kogarah Property and to attend to establishing the Golden Sands Chinese Restaurant in Hurstville with Mr Varvaris, Alysha and Dennis. The Golden Sands Chinese Restaurant was a further, separate, joint business endeavour entered into by Chris, Mr He, Mr Varvaris, Alysha and Dennis.
Chris deposes that shortly following his arrival in Sydney, he had a conversation with Mr Varvaris, in which Mr Varvaris said the following to him: "I know a good firm of architects called Candalepas Associates. They will help us design the apartments to be built on the Kogarah property."
On 10 October 2015, Chris, Mr He, Mr Varvaris and Dennis attended an introductory meeting with a man named Angelo from Candalepas Associates. Chris deposes to having the following conversation with Mr Varvaris at this meeting: Chris: "How will our apartments be designed?" [Mr Varvaris]: "Drawings will be done. We want your apartments to be a well-known landmark in Kogarah."
On 11 October 2015, Chris, Alysha and Dennis exchanged several messages on the Group WeChat and arranged to have lunch in the city the following day. In those messages, Chris requested that Dennis bring copies of the contract for the sale of the First Kogarah Property to their meeting. Although Chris requested copies of the contract for the sale of the First Kogarah Property, he asserts that he intended to request the documents relating to both the Primary Contract and the Supplementary Contract.
On 12 October 2015, Chris, Mr He, Alysha and Dennis met, at which time Dennis handed Chris a document that was dated 17 September 2015, although Chris cannot now recall what that document was. The document was, in all likelihood, the First Kogarah Property Option Deed.
Neither Chris, nor Mr He, has ever received a copy of the Supplementary Contract (assuming there was such a document).
On 14 October 2015, Chris, Mr He and Alysha discussed the potential profitability of PPD's proposed development of the First Kogarah Property, inter alia, via the Group WeChat. That exchange included: Mr He: One-bedroom 58 apartments x 700,000 = (40.6 million), two-bedrooms 37 apartments x 900,000 = (33 million), three-bedroom 9 apartments x .1 million = (9.9 million). Total 83.5 million …… Theoretically, 106 apartments x 300,000 building cost = (31.8 million + 22.18 million land cost + tax 2.22 million = 56 million costs). That is 83.5 million - 56.2 million = 27.3 million x 0.7 = 19.11 million gross profit, then less bank interest about 3 million. Actual profit is around 16 million. (Calculated on two-year plan). Alysha: Add another 20 apartments. Chris: 20 apartments, one-bedroom? Two-bedroom? Alysha: We'll find out on Friday Alysha: The schoolmate said we would talk about it when we meet
On 15 October 2015, Chris, Mr He, Alysha and Mr Varvaris met in person to discuss PPD's proposed development of the First Kogarah Property. Chris asserts that although he cannot recall the discussion had on that occasion, nothing was said to change his understanding that: 1. 80 units could be built on the First Kogarah Property; and 2. the purchase price of the First Kogarah Property would be $9,500,000 in total, to be paid in two transactions under the Primary Contract and the Supplementary Contract.
On 26 October 2015, Chris and Dennis were appointed as directors of Golden Sands Hospitality Pty Ltd ("Golden Sands Hospitality") (formerly Risun Solar Energy Pty Ltd), which operates the Golden Sands Chinese restaurant in Hurstville. At that time, Chris and Dennis personally held 40 and 60 of the 100 issued shares respectively, although the shares were not beneficially owned by either Chris or Dennis. Chris asserts he was advised by Dennis and Mr Varvaris at around the time of their appointment as directors that Dennis held 30% of the company's shares for Mr Varvaris.
On 9 and 10 November 2015, Alysha and Angelo Candalepas (referred to in [95] above) exchanged several emails. Of present relevance is the email from Alysha to Mr Candalepas on 10 November 2015: It was my pleasure to have coffee with you, and I would like to invite you to try the best Chinese restaurant in Australia - Waitan. … Again, it was my pleasure to work with you. I am confident that we will have a very successful partnership.
On 17 November 2015, Alysha and Mr Candalepas exchanged further emails about the progress of PPD's development of the First Kogarah Property.
In late 2015, Mr He returned to China.
On 19 December 2015, Chris, Mr He and Alysha exchanged messages on the Group WeChat in which they were discussing Chris and Mr He's business visa application. Alysha appears to have been assisting Chris and Mr He obtain a business visa. That exchange includes the following messages: Mr He: @ Alysha Please fill in the inviting company! Let's get the employment certificate done right now, OK? Thanks Alysha: I've sent the invitation letter to Zone. Alysha: The inviting company is Citywide Property Group. Chris: OK. Mr He: May I have the full name of the inviting company? Please send it to us? [sic] Chris: @Haihai Citywide Property Group Alysha: Yes
The "inviting company" referred to in this exchange was a company associated with Mr Varvaris (it appears that Mr Varvaris may have held shares in Citywide Property Group through a corporate shareholder). That company was supporting Chris and Mr He with their business visa application, which was obtained in early January 2016, by which time Chris had also returned to China. I deal with this further in [571] below.

Preliminary Discussions About Purchasing the Landmark Property

Chris deposes to having a conversation with Alysha and Mr Varvaris in about late 2015 or early 2016, in which he says Mr Varvaris said the following: "Because the [First Kogarah Property] is not square, you could buy part of the land next door so you can design a better entrance for a carpark and have room to build more units on the [First Kogarah Property]."
On 28 January 2016, Alysha sent the following messages to the Group WeChat: "@Haihai @Chris @denniskeikwok I remind everyone that our land will be settled on the 17th of February" and "My classmate will confirm the price ceded by the neighbour next Friday. Generally speaking, everything goes smoothly."
By reason of the first message, Chris and Mr He say they understood that PPD's purchase of the First Kogarah Property would settle on 17 February 2016. Accordingly, they made arrangements to return to Sydney in mid-February 2016. By the second message, Chris asserts he understood Alysha to be referring to the property referred to in his discussion with Alysha and Mr Varvaris in late 2015 or early 2016 (see [107] above).
On 1 February 2016, Chris, Alysha, Dennis and Mr Varvaris exchanged the following messages via the Group WeChat: Mr Varvaris: I have had some positive discussions with our neighbours and it seems like they will sell us some additional land so that we can increase our yield on site as well as enable us to build a workable carpark Mr Varvaris: This should increase our yield from 80 to approx [sic] 100-110 units Alysha: Great [smiling emoji] Dennis: [Thumbs up and love heart emoji] Chris: Appxo [sic] how many sizes sell for us and how much? … Chris: Thanks Nick Dennis: $? Mr Varvaris: Trying to negotiate price down as low as possible Mr Varvaris: Usual price is around 200-250 per site Alysha: [2 x Thumbs up emojis] Mr Varvaris: But should be able to do much better than that Dennis: But I think you can do better, may be half Mr Varvaris: Will try my best Alysha: [Smiling emoji] Alysha: We trust you @Nick Mr Varvaris: At present everything is moving along smoothly and quickly Alysha: Waiting for your good news @Nick Mr Varvaris: Need to proceed as quick as possible before they start questioning their decisions Dennis: $200/unit? Mr Varvaris: That is da [sic] approved value Mr Varvaris: Are we capable to finalise offer if they accept Mr Varvaris: Want to have it settle before da [sic] is lodged and they could change their mind Chris: 180-200 Mr Varvaris: I think so … Alysha: You mean 200000 per site ?@Nick [sic] Dennis: Can we just give a total price not per site Mr Varvaris: Yes for each unit increase in yield Mr Varvaris: We can try Alysha: Please try your best .@Nick [sic] Mr Varvaris: Will try and negotiate down in exchange for assistance on their site Chris: end of February we will come back Sydney Alysha: I think The [sic] settlement is 17 of February ? [sic] Chris: Yes Mr Varvaris: Need to confirm Mr Varvaris: 10.45 million Alysha: 9.5 million Chris: Include tax Alysha: Approx [sic] Chris: Yes
On 2 February 2016, Alysha and Mr Varvaris exchanged the following further messages on the Group WeChat: Alysha: @Nick Please find out the purchase price for the next door asap ? I need 2 weeks time to organize the funds . [sic] Thanks. Alysha: [Fist in palm emoji] … Mr Varvaris: Will have an answer on price asap
On 11 February 2016, Dennis received an email from Blackstone Waterhouse Lawyers reminding him that the last day for PPD to exercise its option under the First Kogarah Property Option Deed was 16 February 2016. Dennis responded to that email later that evening stating: Thank you for your email. Please let me know what is the settlement date that I can prepare the funds for settle . [sic]
Blackstone Waterhouse Lawyers responded to Dennis' email later that evening, advising Dennis of the steps required for PPD to exercise its option and complete its purchase of the First Kogarah Property, including indicating the amounts payable by PPD upon its purchase of the First Kogarah Property. Chris was not copied into this correspondence, nor was Mr He.
On 16 February 2016, Chris, Mr He, Alysha and Mr Varvaris exchanged the following messages on the Group WeChat: Alysha: There are pleasant surprises tonight! @ Chris @ Haihai … Chris: Great … Alysha: [attach document titled Notice of Exercise of Option.pdf] Alysha: [attach document titled Contract Signing Pages.pdf] Alysha: @Nick Alysha: Chris and Dennis need sign this documents? [sic] Alysha: @Nick … Alysha: @Nick reply this [sic] matter when you [sic] free Mr Varvaris: Yes documents needs [sic] to be signed so option is exercised … Alysha: The documents need send [sic] to them today?

16 February 2016 Meeting

Later that evening, Chris, Mr He and Mrs Yaner met with Alysha, Dennis and Mr Varvaris at the Lotus Restaurant. Chris asserts that the following took place at the dinner: 1. Chris, Mr He, Alysha, Dennis and Mr Varvaris discussed PPD's purchase and subsequent development of the First Kogarah Property. Chris deposes that the following conversation took place at the dinner, whilst he was inspecting architectural design drawings prepared by Candalepas Associates, which had been handed to him by Mr Varvaris: Alysha: "Nick has some good news for us today." [Mr Varvaris]: "With my help and effort, we will easily get the development application for the building of the 75 apartments." 1. The architectural design drawings were for a development of both the First Kogarah Property and the Landmark Property. 2. Mr Varvaris then handed a single piece of paper to Dennis and said: "This is the confirmation of the purchase of the First Kogarah Property. You need to sign it so that you are confirmed to buy it." 1. Dennis signed the piece of paper and handed it to Chris, which he then also signed, although he cannot recall what he signed and did not keep a record of it. 2. After Chris signed the piece of paper, he had the following conversation with Mr Varvaris: [Mr Varvaris]: "We need to use the PPD name to purchase the neighbouring property. If we do that, we can increase the number of apartments we build from 75 to an additional 60 units." … "If you purchase the land next door it will improve the access to the [First Kogarah Property]." … "The cost of the property next door is $7.2 million." [Chris]: "How is that calculated?" [Mr Varvaris]: "You can put an additional 60 units on the block. The cost of the land for each unit will be $120,000. That works out to be $7.2 million." … "I will handle the negotiations with the neighbour, Landmark. Landmark also wants to build units on its property. I can control Landmark. If Landmark doesn't agree to sell the land to you, I have the ability to limit the number of units that Landmark can build on its own block." … [Chris]: "I'd like first to settle the purchase of the first property. We will need to calculate how much it will all cost if we buy the second property later." 1. Although Chris cannot recall whether he first became aware that the vendor of the Landmark Property was Landmark at or after this dinner, he maintains that Alysha said the following to him: "In 2014, [my business partner] Vicky and I put a deposit on the land next door to the First Kogarah Property but we did not have the money to complete the purchase so we transferred the land to Landmark. Landmark now own[s] [the Landmark Property]." 1. Given the contents of the discussion had at the dinner, Chris says he assumed that the commission that would be paid to Mr Varvaris would increase commensurate with the additional yield of units, although the parties did not have a discussion about that at the dinner or thereafter. 2. Chris' evidence is that as a result of what was said at the dinner, he believed that: 1. Mr Varvaris had negotiated a purchase price of $7,200,000 for the Landmark Property on behalf of him, Mr He, Alysha and Dennis; 2. purchasing the Landmark Property would enable PPD to improve access to the First Kogarah Property and build an additional 60 units on the land, and the price of $7.2 million had been calculated on that basis; 3. if Landmark refused to sell the Landmark Property, Mr Varvaris would be able to control the number of units that Landmark could build upon its land; and 4. Mr Varvaris would handle the negotiations with Landmark.
Mr He deposes that the following took place at the dinner at the Lotus Restaurant: 1. Mr Varvaris showed Chris, Alysha and Dennis several drawings and documents. Mr He did not inspect the drawings or documents. 2. Alysha translated the following words said by Mr Varvaris: "We can pay our neighbour money so that we can increase the number of units we can build on our property." … "We would have to pay about $150,000 per unit." … "We could acquire about 60 more units." 1. Mr He's response was: "If we cannot buy the underlying land then I'm not interested." 1. After the group finished eating dinner, Mr He had the following discussion with Alysha: Alysha: "The neighbours [of the First Kogarah Property] want to develop but they can only do that with Nick's help. They are going to use a company to prepare a development application, and to do the design for the building. If we develop with them as one, we can increase the number of units we can build on [the First Kogarah Property]. We would need to pay our neighbours $7.2 million." … "If we develop with our neighbour together, the bottom floor of the building could be used for commercial shops. We could also use a number of floors of the buildings as serviced apartments. Dennis and I have friends who run serviced apartments and they would be interested in leasing the flo[o]rs on a long-term basis. We could get rental income from doing that." Mr He: "No way. How can it be that if we pay them $7.2 million we can build more units? Will they sell us the land for $7.2 million?" Alysha: "No. It is only to develop the site. But if you pay it you will get more units than if you don't pay the money to our neighbours." Mr He: "I've told you. Unless I am getting the land I am not interested."
Ms Yaner asserts that the following took place at the dinner: 1. She was introduced to Mr Varvaris by Alysha, although she did not have a conversation with Mr Varvaris. As Alysha introduced Mr Varvaris, she said the following to Ms Yaner: "Sister Yan, this is Nick. He is my very good friend." 1. Although Ms Yaner did not engage in the discussions had by Chris, Mr He, Alysha, Dennis and Mr Varvaris, she saw the group have a discussion at a side table, on which was a booklet of documents. She assumed the discussion was about the "property project". 2. Ms Yaner saw Chris write something on the documents. 3. While Ms Yaner was sitting alone at the table, Alysha approached her and said: ""We are good business partners. Don't worry Sister Yan, we will look after Jianzong. He is like a brother to us." … "Just relax Sister Yan, everything will be okay. We are buying land and doing construction. It will be a good project."

Events of Late February 2016 and Early March 2016 - Purchase of the First Kogarah Property and Further Discussions Regarding Purchasing the Second Kogarah Property

Contrary to Chris' and Mr He's views as set out at [109] above, the First Kogarah Property did not settle on 17 February 2016. PPD did, however, exercise its option under the First Kogarah Property Option Deed on that date.
On 20 February 2016, Chris, Mr He and Alysha attended a meeting at Mr Varvaris' office. Chris asserts that he cannot recall the details of what was said at the meeting, however, he does recall that the meeting was about: 1. the area of the land that PPD could purchase from Landmark; 2. the cost of purchasing the land; and 3. the number of units PPD could build on the First Kogarah Property, if combined with the Landmark Property.
Chris asserts that Alysha said the following to him at the end of the meeting: "Nick will tell the neighbours we want to by [sic] [area] square metres and that we will pay $7.2 million plus GST."
Mr He asserts that Alysha said the following to him throughout the meeting: "We can buy about 500 or 600 square metres of land from our neighbour." … "The cost of the land will be [$X dollars]." … "We will get a contract [for the Landmark Property]." … "We will settle on the [First Kogarah Property] on 12 March so you will need to have the money ready."
Mr He says that he left the meeting on the understanding that they could purchase land from their neighbour and that contract documents would be prepared.
On 26 February 2016, Mr He, Alysha and Dennis exchanged the following messages on the Group WeChat: Mr He: @Alysha @denniskeikwok Hello! Because the air conditioning in the house we are renting is broken, we waited for a few weeks and today a tradesperson came and said that there was something wrong with the main unit. It is estimated that it will not be fixed in the shirt [sic] term (it is very hot now). We are planning to go back to China next week! If you can organise the meeting with your classmate, I also hope to get everything pending done. Thanks. Dennis: @Nick when can we get together and finalised [sic] about the restaurant and land, is urgent [sic], before next week, we have to make sure everything is decided and then they can follow our decision and start, thank you Dennis: Everything must be confirmed over the weekend Mr He: @denniskeikwok Please get ready the original documents for the first payment and make an appointment with the solicitor from Xianfeng company to make clear any subsequent work. Dennis: Time is more and more pressing. We must confirm the project Alysha: @ Nick can you arrange you [sic] time tomorrow, Mr He will go confirm and finalize by this weekend … Alysha: @Nick can you please confirm the meeting tomorrow?
On 27 February 2016, Chris, Dennis and Mr Varvaris exchanged the following messages on the Group WeChat: Chris: Monday Or [sic] Tuesday Make [sic] appointment with Kogarah Lawyer and pay balance Thursday or Friday Chris: Meeting restaurant project manager and budget details Chris: Next week 7.2M land agreement Dennis: Can you make it Nick, also when can you let us know your time to China [sic] Mr Varvaris: Will get them working on it asap [sic]
On 28 February 2016, Chris, Mr He, Alysha and Mr Varvaris exchanged the following messages on the Group WeChat: Mr He: @ denniskeikwok When is the appointment with the solicitor tomorrow. [sic] Chris: @denniskeikwok @Nick Please make appointment with lawyer, discuss payment 90% [sic] Alysha: @Nick please contact lawyer tomorrow morning Mr Varvaris: Ok will do Chris: @Alysha It was signed by brother Qi back then. Brother Qi should have the solicitor's number. Chris: I am wordless Alysha: I will make the contact tomorrow to confirm the time.
On 29 February 2016, the following messages were exchanged on the Group WeChat: Alysha: The above is the vendor's solicitor. Our solicitor is black stone Mr He: @ Alysha Then we will make an appointment with the purchaser's solicitor to meet in the afternoon to confirm the details? Do you have the telephone number of the purchaser's solicitor? Alysha: My classmate just said that the appointment had been made and he was waiting for them to confirm the time. Alysha: @Nick have you confir [sic] Alysha: Confirm the time for meeting? Alysha: My classmate will get back to me shortly Mr Varvaris: Meeting has been scheduled for 11am Wednesday morning Me He: @ Alysha It can only be done in two step! [sic] We will meet our solicitor in the afternoon to have a talk. ... Mr Varvaris: With Louisa Dillon Alysha: The meeting time is confirmed to be at 11:00am on Wednesday. Mr He: @ Alysha Will we speak to both solicitors at noon time on Wednesday? Mr He: @ Alysha It will be good if we can meet the purchaser's solicitor in the afternoon. Alysha: Purchaser's solicitor? Alysha: We are the purchaser. Alysha: The vendor's solicitor has nothing to do with us. Mr He: @Alysha Yes. We will only meet the purchaser's solicitor first. Alysha: We will meet our solicitor at 11:00am on Wednesday Alysha: My classmate has made the appointment Mr He: @Alysha Doesn't brother Qi also know the purchaser's solicitor? Mr He: @denniskeikwok have we seen the purchaser's solicitor? Alysha: We are the purchaser Mr He: Have we seen the purchaser's solicitor? Alysha: @denniskeikwok Mr He: @denniskeikwok When we made first payment for the 10% deposit, you must have seen the purchaser's solicitor? Alysha: @Nick Mr he [sic] want to meet solicitor today. Any chance ? [sic] Mr Varvaris: I have already asked they are not available as out of office at court Alysha: My classmate said the solicitor was at the court and would only be available on Wednesday Mr He: @Alysha Understand Alysha: @Nick can you forward the pre settlement [sic] letter to Mr he [sic] and Dennis? Mr Varvaris: Yes will do Alysha: @Haihai Brother Hai, my classmate wills end [sic] us the pre-settlement letter to us [sic]. I guess it will be in the afternoon … Mr He: @Nick @Alysha Our idea is that if it is convenient with the solicitors, we can ask them to settle earlier so that we can go back to China to do our business Chris: Please get the GST and land tax calculated accurately. Alysha: How much earlier? Chris: Preferable [sic] by Thursday or Friday this week … Alysha: What you meant is 7.2? or [sic] all of it? Chris: Only a few days ahead Chris: 9.5 million lot Chris: if [sic] it is quicker at 7.2 million it will be better Alysha: @Nick when do you think we can finalise the 7.2 agreement? Mr Varvaris: As soon as possible Alysha: Mr he [sic] want [sic] to everything settle [sic] (2 agreement) this Thursday before they go, possible? [sic] Mr He: We are planning to go back to China on 8th of March Alysha: @Nick Mr he [sic] night [sic] back 8th Alysha: Might
Mr He asserts that in late February or early March 2016, Alysha said the following to him: "The neighbours have agreed to sell the land to us for $7.2 million."
Mr He asserts that he was, therefrom, content to proceed with PPD's purchase of the Landmark Property because he understood that the vendors were prepared to sell the land.
On 1 March 2016, the following messages were exchanged on the Group WeChat: Dennis: 11:00am tomorrow morning. The address is in the above photo. A-Zong, brother Hai Mr He: @denniskeikwok Thanks! Mr He: @Alysha @Nick Please sign the fit-out contract as soon as possible to ensure the completion date Alysha: @Nick wen [sic] can we meet construction company and sign the contract with them? Mr Varvaris: 9.30am Friday morning Alysha: Where about? Mr Varvaris: Citywide … Chris: Solicitor's fee for the loan agreement. Thanks. I will make the payment from the company account Alysha: Has [sic] you amended the loan agreement? Alysha: If it has been amended, please send it to my classmate to have a look so that it can be signed on Friday Chris: Ok, haha, I will advise David Cao solicitor, telephone: 0402 026 840 Chris: See you Friday
On 2 March 2016, Chris, Mr He and Dennis attended the offices of Blackstone Waterhouse Lawyers and met with Anthony Jreige. Mr Vay of Longton Legal also attended the meeting in his capacity as Chris and Mr He's solicitor.
Chris says that at that meeting, Mr Jreige handed him a document entitled "Settlement Sheet" and said the following: "The settlement is scheduled to take place on 16 March. We will attend the settlement on your behalf. You just need to provide us with a cheque for the settlement amount before you leave. The final settlement amount is $8,918,000. It needs to be paid to the Blackstone Waterhouse Lawyers trust account."
As he said this, Mr Jreige wrote the words "Blackstone Waterhouse Lawyers Trust Account $8,918,000" on a piece of paper. Chris took a photo of that piece of paper, in addition to Mr Jreige's business card and the Settlement Sheet, and sent messages to the Group WeChat attaching those photographs.
According to Mr He, throughout the meeting Dennis translated what was being said by Mr Jreige, including the following: "The solicitor says the land is located at [address of First Kogarah Property]." … "The solicitor says the selling price is [amount]." … "The amount left to pay is [amount]." … "The solicitor says everything is okay and the purchase is ready to settle on 12 March. Today he just wants to check your identity."
Later that day, the following messages were exchanged on the Group WeChat: Chris: [Photograph image of Settlement Sheet] Chris: @Nick Thanks Alot. [sic] We will prepare bank cheque tomorrow. Secondly other 100-10=90, [sic] we need payment details, please send it to us Chris: @denniskeikwok Brother Qi, we will go to issue the invoice tomorrow together, and give to the law firm tomorrow together! … Chris: [Photograph image of business card] Chris: [Photograph image of File Note of Blackstone Waterhouse Lawyers with handwritten text: "Blackstone Waterhouse Lawyers Trust Account $8,918,000"] Alysha: @Nick Alysha: Need you confirm [sic] the name of the payment for 900k and chase up the 7.2 agreement with other [sic] party as soon as possible Alysha: It's urgent Alysha: @Nick
On 3 March 2016, the following messages were exchanged on the Group WeChat: Mr Varvaris: Hi guys. I will be back in town around 9.30. Everything's ready to go, where will we catch up? Chris: Good Afternoon @Nick 100-10=900k , [sic] we need payment details and tittle, [sic] please send it to us Mr Varvaris: You have not allowed for gst [sic] on that transaction Dennis: Hi guys, Nick come to my house, we are having dinner in my home, so we just wait for you Mr Varvaris: Ok no problem Chris: We need to pay 900k? Mr Varvaris: Will explain payments later tonight when we meet

3 March 2016 Meeting

Later that evening, Chris, Mr He, Alysha, Dennis and Mr Varvaris met at the Pymble Property. Chris asserts that the following took place at that meeting: 1. Chris, Mr He, Alysha, Dennis and Mr Varvaris had a conversation about the First Kogarah Property, during which Mr Varvaris said the following (which Alysha translated into Mandarin): "Let me explain the payments that need to be made on the property. You already paid $100,000 for the deposit on the [Supplementary Contract]. The remaining balance of $1,000,000 needs to be paid to Citywide Property Group Pty Limited. If you split that amount 75/25, then Chris, you will pay $750,000, and Dennis will pay $250,000. … Then there is the balance remaining under the [Primary Contract]. You have already paid the deposit of $935,000. Once you factor in stamp duty and additional costs, the final settlement amount is $8,918,000. That amount needs to be paid to the solicitors, Blackstone Waterhouse Lawyers. Chris and his father will pay 75%, which is $6,688,500 and Dennis will pay 25%, which is $2,229,500." 1. As he said this, Mr Varvaris wrote the figures and other salient information on a piece of paper, of which Mr He later took a photo. The piece of paper in Mr He's photo contains the following information: Settlement of Property Amount for Blackstone Waterhouse $8,918,000 Balance of Amount to Citywide Property Group P/L Initial Amount 1,000,000 + GST 100,000 ___________ 1,000,000 Less deposit 100,000 ___________ 1,000,000 $1,000,000 Balance due 1,000,000 Chris $750,000 Dennis $250,000 Chris $6,688,500 Dennis $2,229,500 1. Mr Varvaris did not explain why the balance of the purchase price under the Supplementary Contract was payable to Citywide Property Group. 2. Although he had heard of Citywide Property Group throughout the course of applying for a business visa, Chris asserts that he did not recall his prior dealing with that company at this meeting. 3. Once the parties had discussed the First Kogarah Property, their attention shifted towards PPD's potential purchase of the Landmark Property. Chris then had the following conversation with Mr Varvaris: [Mr Varvaris]: "The costs [sic] of the Second Kogarah Property will be $7,200,000 plus GST." … "The deposit will be 60%." Chris: "Why do we need to pay such a high deposit?" [Mr Varvaris]: "The vendor needs you to prove that you have the financial ability to purchase the property. Don't worry, it will be treated like security - the money won't be touched." … "The deposit will need to be paid to The Commercial Business Centre Pty Limited." Chris: "Why?" [Mr Varvaris]: "The seller of the property, Landmark, has a number of shareholders and the owner does not want to pay additional tax." 1. Much like the first conversation, as he said this, Mr Varvaris wrote the figures and other information on a piece of paper, of which Mr He later took a photo. The piece of paper in the second photo taken by Mr He's sets out: Purchase of Additional Parcel of Land Value of Land Purchase $7,200,000 + GST 720,000 ___________ $7,920,000 Deposit 60% upfront $4,752,000 Balance due within 3 months or upon da [sic] approval whichever is earlier $3,168,000 Upfront amount Chris $3,564,000 GST Dennis $1,188,000 $432,000 Amount at Settlement Chris $2,376,000 GST Dennis $792,000 $288,000 The Commercial Business Centre P/L 1. This was the first time that Chris was advised to pay the deposit to CBC. He had not previously heard of CBC. 2. On the basis of what was said at this meeting, he believed that: 1. Landmark would sell the Landmark Property to PPD for $7,200,000; 2. Landmark required PPD to pay a deposit of 60% of the purchase price; 3. the deposit monies would be treated as security and would not be released until settlement; and 4. Landmark required the deposit to be paid to CBC.
Mr He asserts that the following took place at the 3 March 2016 meeting: 1. Shortly after Mr Varvaris wrote on the piece of paper, Dennis showed that piece of paper to him and said the following: Dennis: "Nick says these are the amounts that still need to be paid for the First Kogarah Property." … "[Pointing to a number on the page] This is your 75% share of the amounts that need to be paid for the First Kogarah Property." … "[Pointing to a number on the page] This is what we need to pay for the neighbour's property." … "[Pointing to a number on the page] This would be your 75% share of the cost of the neighbour's property." 1. Mr He then had the following conversation with Dennis: Dennis: "We need to pay a 60% deposit to the neighbour for [the Landmark Property]. We need to pay that to The Commercial Business Centre." Mr He: "Who is The Commercial Business Centre?" Dennis: "It is a company associated with the seller, who is Landmark." Mr He: "Why does the deposit need to be 60%?" Dennis: "Nick says the seller needs wants to make sure we have the ability to pay for the parcel of land." Mr He: "I'll show them my bank account." Dennis: "No, the seller needs to see the money in their account." Mr He: "No way. I am not going to put the money straight into their account. I would prefer to put the money through a solicitor's account to make sure it is safe. Can we get a solicitor to put it through their account?"
Dennis has accepted that he said the words attributed to him by Mr He, although he asserts that in doing so, he was translating what was said at that meeting by Mr Varvaris.
Mr He also asserts that he had the following conversation with Alysha either at the 3 March 2016 meeting or shortly thereafter: Mr He: "I do not want to pay the money to our neighbour directly. I would prefer that the 60% deposit be put into a solicitor's account." Alysha: "No, we don't need to. Just trust me, Nick will make sure everything is okay. You have seen my school, you have seen Nick's office in the parliament. We are substantial people. Nick is a member of parliament. Do you think he would do the wrong thing? Just trust me."
Alysha has accepted that Mr He said the first sentence of what is attributed to him.
On 4 March 2016, the following messages were exchanged on the Group WeChat: Chris: [Photograph image of LPI document] Chris: [Photograph image of GlobalX Information Pty Ltd document] Chris: 7.2M belong to this company [sic]

4 March 2016 Meeting

Later that evening, Chris, Mr He, Dennis, Dennis' sons and Mr Varvaris attended the Century Restaurant in the Star Casino for dinner. At the dinner, Mr Varvaris handed Dennis a document, which Dennis signed without having read it. Dennis then handed the document to Chris for him to sign. Chris asserts that as he was handed the document, Dennis said the following to him: "This is the contract for the [Second Kogarah Property]. Nick has used his influence and contacts…to sell this portion of the land to us. If we can get it, it will increase the number of units we can build." … "I have signed it. You can sign it now too."
Mr He asserts that Dennis said the following to Chris as he handed the document to him: "This is the contract for the [Second Kogarah Property]. Everything has been sorted out. I have already signed it. You need to sign here."
Chris asserts that he then signed the document, which was a copy of an Option Deed for PPD's proposed purchase of part of the Landmark Property ("the Second Kogarah Property Option Deed"). Most, if not all, of the conversations until this point concerned the Landmark Property in its entirety. However, the Option Deed only contemplated part of the Landmark Property, which was the Second Kogarah Property.
Chris gave a copy of the Second Kogarah Property Option Deed to Mr Vay the next day. Shortly after providing that document to Mr Vay, Chris asserts that Mr Vay said to him: "I have looked at the document you sent me. It needs to be amended. The company number is wrong. Also, it does not refer to the address of [the Second Kogarah Property]. Also, it is not clear in the contract the size of the land that you are purchasing."
After having spoken with Mr Vay, Chris and Mr Varvaris exchanged the following messages on the Group WeChat: Chris: @Nick Good Evening please complete 7.2M option deed Monday [sic] or Tuesday, it doesn't describe land sizes and further information, Thanks. [sic] [Mr Varvaris]: Yes I know they were waiting for instructions from us before preparing contract of sale.
On 6 March 2016, Chris sent the following messages in the Group WeChat: Chris: Brother Qi, are you free tomorrow? We will write the cheque together, haha [sic] Chris: 7.2 million contract. Solicitor Wei has not replied to me yet … Chris: I estimate that solicitor Wei will reply to me tomorrow afternoon. Chris: We will give the cheque to the law firm tomorrow together so that settlement can be done as soon as possible

Events of 7 March 2016

On 7 March 2016, Chris, Mr He, Dennis and Mr Varvaris attended a meeting at Mr Varvaris' office in Kogarah. At that meeting, Dennis wrote out a cheque in the amount of $2,229,500 in favour of the Blackstone Waterhouse Lawyers trust account. Chris asserts that at the time, Dennis said the following to Chris: "Here is our cheque for the balance under the main contract. Please take it to the solicitors tomorrow for me."
Mr He asserts that he had the following conversation with Dennis at that meeting: Dennis: "Blackstone Waterhouse Lawyers have told us that we need to pay the balance of the money for the [First Kogarah Property] by 12 March 2016." Mr He: "We should both transfer our money into the PPD bank account and then transfer the money from the PPD bank account to the lawyers' bank account." Dennis: "There is no time to do that." … Dennis: "This is a piece of cake, I can arrange the money at once." … Dennis: "I won't be available on 12 March, Chris can you take the cheque to the lawyers?" … Dennis: "Nick says that through his efforts the owner of [the Second Kogarah Property] has agreed to sell some of their land to us, which is about 700 square metres." … Dennis: "The precondition, though, is that you need to immediately pay a 60% deposit to Landmark." Mr He: "Why do we need to pay that much immediately?" Dennis: "To convince the seller that you have the ability to buy the land." Mr He: "Can we pay the 60% to a law firm?" Dennis: "The seller will not agree to you making the payment to a law firm." Mr He: "I don't even know who the seller is. How can I pay them such a large amount of money? Forget it. We'd better complete the procedure for buying the [First Kogarah Property] and then talk about purchasing the [Second Kogarah Property]."
After their meeting at Mr Varvaris' office, Chris and Mr He attended the Town Hall HSBC branch to purchase two bank cheques from Mr He's funds. Mr He purchased the following bank cheques: 1. a cheque in favour of Citywide Property Group for $750,000, which represented Haiye's 75% share of the balance of the purchase price under the Supplementary Contract ("the Second Supplementary Contract Cheque"); and 2. a cheque in favour of Blackstone Waterhouse Lawyers' trust account for $6,688,500, which represented Haiye's 75% share of the balance of the purchase price under the Primary Contract.
The funds transferred pursuant to the Second Supplementary Contract Cheque were later disbursed, unbeknownst to the Plaintiffs, as follows: 1. on 11 March 2016, the sum of $720,000 was transferred by Citywide Property Group to Red Horizon (immediately prior to that transfer, Red Horizon's bank account had a balance of $54.79); 2. between 14 March 2016 and 9 August 2016, the sum of $534,500 was transferred to CBC in several transactions; and 3. on 18 March 2016, the sum of $100,000 was transferred from Red Horizon to Citywide Property Group; 4. on 6 April 2016, the sum of $50,000 was transferred by Red Horizon to Citywide Property Group; and 5. on 1 June 2016, the sum of $35,054 was transferred to Jogia Diamonds International.
The Plaintiffs allege that Alysha, Dennis, Pionnier and/or Mr Varvaris caused or directed those funds to be transferred. The Plaintiffs also allege that Alysha, Dennis, Pionnier and/or Mr Varvaris caused or directed $30,000 of the funds to be retained by Citywide Property Group and used for its own benefit. It is not necessary for the Court to make a finding about who actually arranged for the transfers to occur.
Upon receiving the two cheques from HSBC, Chris and Mr He attended Mr Varvaris' office and handed over the Second Supplementary Contract Cheque.
Chris asserts that he received a phone call from Alysha later that afternoon, during which she said the following to him: "Don't pass the cheque to Blackstone Waterhouse until we sort out the contract for the [Second Kogarah Property]."
Chris, Alysha and Mr Varvaris also exchanged the following messages on the Group WeChat later that afternoon: Chris: Brother Qi, sister, I will go to the law firm at 9:00am tomorrow and deliver the cheque, and then get the receipt Chris: @Nick Tomorrow afternoon please give me 7'2M [sic] final document Alysha: @Nick please do … Mr Varvaris: Sorry have been in council meeting Chris: If they don't want to sell 7'2 [sic] for [sic] us, do you confirm our land can be built 80 Units? [sic] Mr Varvaris: They are preparing contract now Chris: Please tell me When? [sic] Very important [Face with mouth open emoji] Chris: 7.2M Land Details [sic] Chris: Our land can be approved DA individual setting 80Units? [sic] Chris: @Nick [3 x blushing face emoji] Alysha: @Nick
On 8 March 2016, Chris and Mr He attended the offices of Blackstone Waterhouse Lawyers and handed over Haiye's and Pionnier's cheques. In doing so, Chris ignored Alysha's request as set out at [154] above.

9 March 2016 Meeting and Events Immediately Thereafter

In the evening of 9 March 2016, Chris, Mr He, Alysha, Dennis and Mr Varvaris held a meeting at the offices of Mr Varvaris' accounting firm, Varvaris & Co (which is, in fact, Citywide Financial Services Group Pty Ltd t/as Varvaris & Co) in Kogarah. The purpose of the meeting was for the parties to discuss PPD's purported purchase of the Second Kogarah Property. Chris asserts that the following took place at this meeting: 1. Chris, Mr He and Mr Varvaris had the following conversation: [Mr Varvaris]: "If you don't buy the [Second Kogarah Property] then you won't be able to develop the [First Kogarah Property.]" … [Mr Varvaris]: "If you want to secure the [Second Kogarah Property] you need to pay a 60% deposit to show the vendor that you have the financial capacity to complete the contract." … [Mr Varvaris]: "You need to pay the 60% deposit to The Commercial Business Centre." Chris: "I don't know this company, 'The Commercial Business Centre'. I don't want to pay the money to that company. I want to pay the money into a solicitor's account." Mr He: "Who is The Commercial Business Centre?!" [Mr Varvaris]: "No, you can't pay it into a solicitor's account. Landmark wants it done this way because of their shareholders' arrangements and tax arrangements." Chris: "I'm not comfortable paying the money into The Commercial Business Centre. What if we pay it into your company account instead and it can be held in that account to prove to Landmark that we have the financial ability to purchase the property?" [Mr Varvaris]: "Ok. It will go into a trust account. No-one can touch it." … Alysha: "So just relax. Nick won't touch the money." (Alysha accepts that she, Chris, Mr He and Mr Varvaris said words to the effect set out above, save for the words "I want to pay the money into a solicitor's account," which are attributed to Chris.) 1. Chris says that he did not want to pay Haiye's share of 60% of the purchase price of the Second Kogarah Property to CBC because it was a substantial sum of money (i.e. $3,564,000) and he did not know who was behind CBC, nor what role it was playing in the transaction. 2. Chris, Mr He and Alysha then had the following discussion in Mandarin, at which point Chris asserts that Mr He and Alysha began to raise their voice: Alysha: "If you don't want to buy the land from Landmark, they are prepared to buy our land from us, we can sell to them." Mr He: "Go ahead!" Alysha: "If you don't agree to pay the 60% deposit, Dennis and I won't pay our 25% share of the balance of the purchase price for the [First Kogarah Property]." … "Unless you agree to purchase the [Second Kogarah Property], we will not be able to develop the [First Kogarah Property]." Mr He: "If I had been told that, we would never have entered into the contract to buy the [First Kogarah Property]!" (Alysha accepts that she and Mr He said words to the effect set out above.) 1. At this point in the conversation, Mr Varvaris was no longer participating in it and was looking at his mobile phone, which prompted Alysha to say: Alysha: "Look, Nick is losing his patience. Without his help, this is not going to happen." (Alysha accepts that she said words to the effect set out above.) to which Mr He eventually responded: Mr He: "Ok, we will agree to pay the 60% deposit. But only if it is paid to Nick's firm and put into a trust account." (Alysha accepts that Mr He said words to the effect set out above.) 1. Chris asserts that, by this stage, he: 1. remained concerned about the transaction but did not want to jeopardise PPD's ability to develop the First Kogarah Property; 2. was concerned that Mr Varvaris would walk away from the deal if he and his father refused to purchase the Second Kogarah Property on the terms Mr Varvaris said were required by Landmark; 3. was concerned that he and his father would lose the First Kogarah Property if they did not resolve the issues with the Second Kogarah Property before their departure for China, which was scheduled for 13 March 2016; and 4. believed that the deposit monies would be paid to Mr Varvaris' trust account, to be released upon settlement.
Mr He asserts that the following took place at the 9 March 2016 meeting: 1. At the commencement of the meeting, Alysha said to Mr He: Alysha: "This is a very crucial moment now." (Alysha accepts that she said these words.) 1. Mr Varvaris then commenced speaking. Alysha translated the following for Mr He: Alysha: "Nick has just said that we have to jointly develop with our neighbours and we have to pay them $7.2 million. If we don't do that we can't develop the [First Kogarah Property] independently." … "Nick says they are prepared to sell the land to us and we need to pay the 60% deposit now to show that we have the financial ability to go ahead with this. The neighbour wants the money to be paid to The Commercial Business Centre." (Alysha accepts that she said words to the effect set out above.) 1. Mr He and Alysha then had the following discussion in Mandarin: Mr He: "What do you mean we cannot develop our land independently?" Alysha: "We can't apply for the development application alone." Mr He: "You didn't explain this to me before. If I knew we could not develop independently I would not have purchased [the First Kogarah Property]. I would not buy a piece of land I cannot develop independently. I want to be able to make my own decisions without having to worry about someone else." Alysha: "Do you want to go ahead or not? If you don't want to go ahead Landmark wants to buy [the First Kogarah Property] from us." (Alysha accepts that she and Mr He said words to the effect set out above.) 1. Mr He then hit the table with his hand and said: Mr He: "Go ahead, sell the property to whoever wants to buy it!" (Alysha accepts that Mr He said words to the effect set out above.) 1. After a brief silence, Mr He then said: Mr He: "If you tell me we cannot build residential apartments on [the First Kogarah Property] I will not go ahead. You did not explain any of this to me!" (Alysha accepts that Mr He said words to the effect set out above.) 1. Chris then left the room and Alysha, Dennis and Mr Varvaris started to communicate in English. Mr He asserts that by the time Chris returned, he believed that if he did not cooperate and agree to purchase the Second Kogarah Property on the terms set out by Mr Varvaris, then he would lose the funds he paid (through Haiye) in respect of PPD's purchase of the First Kogarah Property. 2. Upon Chris' return to the room, Mr He and Mr Varvaris had the following conversation, which was facilitated by Alysha's translation of what Mr Varvaris said: Alysha: "Nick says we need to resolve these issues." … "The neighbours have agreed to sell a proportion of their land to us. We only need to show them we have the financial ability to pay." … "The money needs to be put into the vendor's account to prove our financial ability." Mr He: "No way. I do not know the vendor. I can show my bank account records to him." Alysha: "No. Without seeing the money in their account, the vendor will not sell the land to you." Mr He: "I will put the money into a solicitor's account." Alysha: "The vendor will not agree to that." (Alysha accepts that she and Mr He said words to the effect set out above, save for the words "I will put the money into a solicitor's account," which are attributed to Mr He.) 1. Mr Varvaris then started playing with his mobile phone and did not participate in the conversation, which prompted Alysha to say: "You see? Nick is angry. He is playing with his mobile phone. You have already paid money for the [First Kogarah Property]. If Nick is not prepared to help us anymore we have just dumped our money for the [First Kogarah Property] into the water. If he doesn't want to help us anymore we will be dead. Nick does not want to put the money into a lawyer's account but we need to think of another resolution." 1. Mr He, Alysha, Dennis and Mr Varvaris (through Alysha) then had the following conversation: Alysha: "Nick says that you do not trust us. He says he is a member of parliament and he was the mayor, if you cannot trust him, he says who can you trust? It is insulting that you do not trust us." Mr He: "I trust you, Alysha. I trust what you say. Nick is a substantial politician, I trust him as well. I have suggested we pay into a lawyer's account and you have said no. What if instead I transfer the money into Nick's company, and Nick guarantees to me the funds will be secure?" Mr He: "Or otherwise I will put into Alysha's school account and Alysha guarantees that it is safe." Alysha: "Nick agrees that you can deposit the money into his account." Dennis: "Yes, you can put the money in Nick's account." Mr He: "I will only deposit the money into Nick's account for security purposes so that the seller can see we have the financial ability. You are not allowed to transfer the money from Nick's company to the seller's account." Alysha, Dennis and Mr Varvaris: "Okay" 1. The meeting then ended and, as he and Chris were leaving Mr Varvaris' office, Mr He pointed to the signage on the building and said the following to Chris: Mr He: "Chris, make sure you remember the name of Nick's office for the cheque."
Alysha asserts that, in addition to those aspects of Chris' and Mr He's recollection of the meeting with which she agrees, the following conversation took place at the meeting on 9 March 2016: Mr He: "How many units will we be able to get?" Nick: "Maximum capacity." Mr He: "We need to get exact numbers." Nick: "I'm not the Council. I can't give you exact numbers."
Alysha asserts that at this juncture in the conversation, both Mr He and Mr Varvaris were becoming increasingly angry. Alysha claims that in trying to settle Mr He and Mr Varvaris, she had the following conversation with Mr He and Mr Varvaris: Alysha: "You need to explain how much they need to pay and how much the project will increase in value." Mr He: "We are happy to pay more money but I need to know how much more profit we can make." Alysha: "I will not settle until we have the contract for next door."
On 10 March 2016, Chris asserts that he had the following telephone conversation with a representative of Blackstone Waterhouse Lawyers: Chris: "I'm calling to see whether there were any issues with the cheques I dropped off yesterday and make sure the purchase will settle on 12 March because we are leaving on that day and I want to make sure everything is OK with the cheques." BWL: "The cheque for $6.8 million has been banked. The cheque for the $2.2 million was cancelled."
Chris deposes that he then spoke with his father and said the following to him: "I have just spoken to the lawyers, our cheque has been banked but Dennis and Alysha's cheque is [sic] cancelled."
Mr He recalls a similar conversation.
Mr He asserts that he then phoned Dennis and had the following conversation with him: Mr He: "Dennis, Chris has been on the phone with the lawyers and your cheque has been rejected. Why was the cheque rejected?" Dennis: "I do not know why the cheque was rejected. I will need to ask Alysha."
Throughout the day on 10 March 2016, Chris, Alysha, Dennis and Mr Varvaris exchanged the following messages on the Group WeChat: Chris: Hi @Nick how about document? [sic] [Smiling emoji] Mr Varvaris: Will have shortly Mr Varvaris: Just trying to get more exact [sic] details for area to be sold Dennis: Good thanks Chris: Thanks Alot [sic] … Alysha: Thanks Alot [sic] Alysha: We are waiting …. Alysha: @Nick tell them we are waiting for their final contract. We will not settle until they send us contract [sic]. I emailed you the reason I cancel the Cheque [sic]. We don't need brown money from bank for settle [sic]. Money is ready. They just waste their time. Alysha: We don't need borrow [sic]. They are different. Tell them be quick. Alysha: @ Chris @Haihai@ dennlskeikwok We need to give them some pressure. I suggest we advise the solicitor to wait for our notice tomorrow about the settlement date. The cheque is ready and now it will depend on whether they can sell their land to us quicker. Chris: Yeah [sic], I will also get ready tomorrow. Mr Varvaris: Some delays today as persons [sic] son was having an operation Mr Varvaris: He just replied now Mr Varvaris: Week full of unexpected disasters Alysha: Hopefully everything will be fine tomorrow Alysha: What did they reply @Nick Mr Varvaris: They need some instruction as to size of parcel of land which I have provided based on the drawings Mr Varvaris: Will have tonight at the latest Alysha: That's good Mr Varvaris: We can either meet first thing in the morning or late tonight Mr Varvaris: But will advise when I have it Alysha: Ok Alysha: Let us see what time Alysha: @ Halhai @ Chris @ denniskeikwok We are now still waiting for the final version with the land drawing and the area ceded. Hopefully we can receive it sooner. Mr He: @Nick @Alysha Thanks for you hard work! will [sic] wait for your good news! [2 x smiling emojis]
In the evening of 10 March 2016, Chris and Dennis exchanged these messages on the Dennis WeChat: Chris: Brother Qi, I just called the law firm. They said you had cancelled the handwritten cheque. Want to provide a casher's cheque of more than 2 million, and next Wednesday, the 16th is the deadline, is it going to be a problem? We have already paid off our part. Chris: Just heard the elder sister said that she will wait for the 7.2 contract from the classmate tomorrow. Chris: On 16th the land will be delivered. Dennis: Anyway 16th will be the final date.
Early in the morning of 11 March 2016 these messages were exchanged in the Group WeChat: Mr Varvaris: Contract delivered to my home now. Mr Varvaris: I need to scan and email. Mr Varvaris: Across to you in the morning Mr Varvaris: Hopefully won't get up too late Alysha: Finally … Alysha: @Haihai @Chris @denniskeikwok The contract has been delivered to his home now. Alysha: @Nick thank you Alysha: Can you please send to our lawyer David Cao as well Chris: Love Mr Varvaris: Yes no problem Alysha: david.cao@clsolicitors.com.au Alysha: This is his email address Alysha: Thank you so much !!! [sic] … Chris: Are you going to meet your classmate today or tomorrow? Chris: We will write the cheque Alysha: I will go to see the solicitor first and then my classmate. Chris: [Photograph image screenshot of email] Alysha: I've got this ready Chris: This is the amount today on Friday, otherwise it will change again. … Dennis: I have just got my car repaired. Dennis: Then do we need to draw the cheque for the deposit for the 7.2 million? … Dennis: Has the solicitor received it? Chris: I will also draw the cheque for the deposit for the 7.2 million from my side. Chris: [Photograph image of document titled 'Purchase of Additional Parcel of Land'] Dennis: How long will he need to complete the check. Alysha: 1188000 Chris: Address and payee: VARVARIS & CO. Dennis: Received. But I cannot do it so quickly. I can only use the car close to noon time.
After having received the final message from Dennis, Chris and Mr He attended the Town Hall branch of HSBC and Mr He obtained a bank cheque for $3,564,000 in favour of Varvaris & Co using funds from the 439 Account ("the Second Kogarah Property Cheque"). That amount was intended to represent Haiye's 75% share of the deposit in respect of PPD's purchase of the Second Kogarah Property. While they were at the bank, Mr He asserts that he said to the bank manager: "I will leave the cheque with you and give my authority to [Dennis] to come and collect this cheque on my behalf because I will be in China."
Thereafter, these messages were exchanged on the Group WeChat: Chris: [Photograph image of HSBC bank cheque for $3,564,000] Dennis: So efficient Alysha: @denniskeikwok What time can you drive your car? Dennis: At about noon time .. Mr He: [Photograph image of HSBC business card] Mr He: @ denniskeikwok OK! Please go to the above bank between 2:30pm to 5:00pm to see Manager Huang and pick up the cheque! … Mr He: @ denniskeikwok Bring your driver's license to pick up the cheque Dennis: Ok Chris: [Photograph image of HSBC bank cheque for $300,000 to Golden Sands Hospitality Pty Ltd] Dennis: @ Chris You may simply make a transfer. I don't need it urgently at the moment. Dennis: Understand. I've booked the table this evening and we shall have a big celebration. Chris: The cheque has been drawn. Dennis: @Nick dinner tonight!? Dennis: [Photograph image: Google search and map] Mr Varvaris: Let me see what I can arrange Dennis: 6:30 or you let me know Mr Varvaris: Ok Dennis: [Photograph image of Westpac bank cheque for $1,188,000 payable to Varvaris & Co] Alysha: [Peace sign emoji] Mr Varvaris: Can we meet tomorrow to sign all documentation in my office around lunchtime as I have an event on tonighg [sic] Mr Varvaris: You are also invited to attend my sons [sic] birthday party tomorrow night at my house at 5.30pm Dennis: Sounds good to me Mr Varvaris: Will you dropping [sic] off the cheques today as I need to show them funds are in trust account to proceed when I meet them Dennis: I just have the 2cheque [sic], I can drop to you now, where r [sic] you Mr Varvaris: In office Dennis: On my way Chris: Happy Birthday Nick handsome Son Chris: I am not going. Haha Chris: I also come to Nick [sic] office Chris: [3 x smiling emoji] Mr Varvaris: I am heading to doctors to get another X-ray of my foot I don't how long I will be Mr Varvaris: Dennis has already dropped off the cheques and the girls have banked them Mr He: @ denniskeikwok Please ask if the funds of the cheque is [sic] available when it is convenient for you? Yesterday it was still not available. Mr Varvaris: [Photograph images of 2 x Westpac Customer Receipts for $3,564,000 and $1,188,000] Mr Varvaris: Cheques have been deposited see you all tomorrow at around 12
Both cheques were recorded as having been credited to a bank account held by Citywide Financial Services Group Pty Ltd t/as Varvaris & Co ("the Citywide Financial Services Bank Account") on 11 March 2016.

12 March 2016 Meeting and Events Immediately Thereafter, Including Settlement of the First Kogarah Property

On 12 March 2016, Chris, Mr He, Dennis and Mr Varvaris held a meeting at Mr Varvaris' office in Kogarah. Chris asserts that the following took place at that meeting: 1. Mr Varvaris handed Chris several documents and said: "Here are the documents for [the Second Kogarah Property] for you to sign." 1. The documents were in English and were not explained to Chris or Mr He. Chris asserts that he did not understand the documents, although he signed the documents, as did Dennis. 2. Although he did not keep a copy of the documents that he signed, Chris believes that the documents were a Deed of Agreement and an Option Deed, both of which pertain to the Second Kogarah Property.
Both Chris and Mr He assert that they held a meeting with Alysha, Dennis, Mr Varvaris and Mr Andrew Box of Bingemann Consulting Pty Ltd ("Bingemann") at Mr Varvaris' office in Kogarah in mid-March 2016, although neither can recall whether that meeting was the meeting held on 12 March 2016. Given that Chris and Mr He returned to China on 13 March 2016, it is more probable than not that the meeting with Mr Box was held on or before 12 March 2016. Chris asserts that the following took place at that meeting: 1. Mr Varvaris introduced Mr Box and said the following, which Dennis translated into Cantonese: "This is Andrew Box. He is a project manager who works on property development projects. Andrew and I worked together on a number of projects in the past. I've asked him to take a look at the Kogarah property and to let me know what he thinks, because I think we would do a great job managing the project and making sure that we get development approval. His company is called Bingemann Consulting. His job is to manage DA procedures with the council." 1. The group then had a brief discussion with Mr Box about PPD's proposed development of the First Kogarah Property.
Mr He asserts that the following took place at the meeting: 1. Alysha said to Mr He: "This man is Andrew Box from Bingemann. He has the qualification to help developers apply for a development application." (Alysha accepts that she said words to the effect set out above.) 1. Alysha then translated the following, which was said by Mr Varvaris: "Nick says that because he was in charge of approving development applications at the Council it is not appropriate that he lodges the application for us. People know about his involvement in the Council and it would not look appropriate for him to lodge the application for us to try and help us. Bingemann has the experience to do the lodgement for us. They have done a lot of projects in this area." (Alysha accepts that she said words to the effect set out above.)
On 14 March 2016, these events took place: 1. At 12:19pm, Dennis wrote the following message to Blackstone Waterhouse Lawyers (copying Mr Varvaris but not Chris): Just to inform you we are ready for settlement on Wednesday, 16th March, and I will drop off the bank cheque to you before 5.00pm tomorrow afternoon. 1. Ms Louisa Dillon of Blackstone Waterhouse Lawyers replied to Dennis at 2:14pm. That email states: Thank you Dennis. To confirm, the cheque should be for $2,231,762.83 payable to AlJaafaria [sic] Society. 1. Later that afternoon, Chris and Dennis exchanged these messages on the Group WeChat: Chris: @ denniskeikwok Good afternoon, brother Qi. Have you delivered the cheque today? More than 2.23 million. Chris: Or you are going tomorrow? Don't postpone it until the 16th. Thanks … Chris: @ denniskeikwok Please deal with the settlement for me. Please take photos and send to me. Dennis: That's a must. Chris: @ dennlskeikwok Are you going to the law firm tomorrow? Dennis: Yes 1. The cheque provided by Alysha and Dennis to Varvaris & Co in satisfaction of Pionnier's 25% share of the deposit of PPD's purported purchase of the Second Kogarah Property was cancelled. At the time that the cheque was recorded as having been cancelled, the Citywide Financial Services' Bank Account had a balance of $3,567,072.41. It was thus largely comprised of Haiye's 75% share of PPD's deposit for its purchase of the Second Kogarah Property ($3,564,000).
On 15 March 2016, the sum of $2,231,762.83 (which was the amount owing by Pionnier in respect of its share of PPD's purchase of the First Kogarah Property) was withdrawn from the Citywide Financial Services' Bank Account and a bank cheque was purchased for that amount in favour of Al-Jaafaria.
Later that day, these messages were exchanged on the Group WeChat: Mr He: @ denniskelkwok Hello! Have you sent the cheque to the solicitor today? Thanks Dennis: [image of Westpac bank cheque payable to Al-Jaafaria Society for the amount of $2,231,762.83] Mr He: You need to work out when the funds will be available in the account ... ! [sic] We shall avoid any unexpected problems ... … Dennis: [image of Authority to Blackstone Waterhouse Lawyers dated 15 March 2016 signed by Dennis]
On 16 March 2016: 1. settlement of the First Kogarah Property took place; 2. Al-Jaafaria issued a tax invoice to PPD for the amount of $9,350,000 (including GST); and 3. the Office of State Revenue issued a duties statement to PPD assessing duty payable in the amount of $499,760.
In the afternoon of 16 March 2016, these messages were exchanged on the Group WeChat: Dennis: @Chris @Haihai Have you received the notice from the solicitor that the settlement has gone through successfully? Dennis: @Nick all settled, it's ours now Mr He: @denniskeikwok Please check it later! Thanks! Chris: @denniskeikwok Brother Qi, I have not received the email. Mr Varvaris: Great news Mr He: @Nick what good news? Why not share to [sic] us? Dennis: @Nick all settled, it's ours now Dennis: [image screenshot of text messages. Appears to say "…is Louisa from Blackstone Waterhouse. Just confirming that settlement went through"] Chris: Thanks for your effort, brother Qi. Chris: Thanks Nick
On 22 March 2016, a transfer was made from the Citywide Financial Services Bank Account to an account held by Alysha in the amount of $400,000.
On 7 April 2016, Dennis and Chris received a letter from Blackstone Waterhouse Legal confirming that PPD's purchase of the First Kogarah Property was completed on 16 March 2016.

Dealings with and in relation to Mr Box in April-June 2016

On 18 April 2016, Mr Box sent an email to Alysha. That email included: Alysha, I appreciated meeting you the other day at Candalepas Associate offices. I am meeting with the Quest Serviced Apartments development manager tomorrow morning at 8.30am to define their requirements so we can work out how best to value add the project. If you have time this week I would like to meet up with you for a coffee and discuss the project.
On 29 April 2016, Alysha and Mr Varvaris attended a meeting with Mr Box. Chris asserts that he was not aware that the meeting had been arranged and did not attend it.
On 29 May 2016, a representative of Bingemann wrote to "Alysha c/- City Wide at Montgomery Street Kogarah NSW 2000" in relation to "Proposed Development - Princess Hwy Kogarah". The letter relevantly states: Further to meeting with yourself and Nick Varvaris on 29th April 2016, and subsequent phone calls we would like to submit this fee submission to manage, with relevant consultants, the initial planning to determine the development mix for the project in preparation for a Planning Proposal to Kogarah Council. Scope Engage a suitable planner - obtain fee submission and sign off with your approval. - See attached proposal from DMPS - Daniel McNamara. Engage the Architect [sic] - At this state we would anticipate using Candalepas Associates and will request a fee submission from Angelo for a staged process. Consultants required to enable an analysis for a preliminary discussion with the Council offices [sic], this information will also be used in the preparation of the planning proposal and DA application. … As previously submitted to you (see attached) a monthly fee of $12;000.00 [sic] plus GST will be charged for an initial 3 month period, total $36,000.00 plus GST, commencing June 2016. … if [sic] for any reason beyond the control of the Development Manager the timing for these works exceeds 3 months, the extra time will be charged at $12,000.00 per month or on a pro rata rate
Mr He asserts that in early or mid-2016, he had a conversation with Alysha during which Alysha said to him: "Landmark is developing their land as well. They are using Andrew Box to develop their land. If we both use Andrew Box and lodge the DAs at the same time, it will be cheaper. We can share the cost." (Alysha accepts that she said words to the effect set out above.)
On 1 June 2016, Mr Varvaris received a fee proposal from Mr Box: We would like to submit the following fee proposal for your consideration. Project Status Currently preliminary drawings have been developed by Candalepas Architects. Current review of inclusion of retail ground floor and possibly [sic] of serviced apartments into the development and other community benefits. Programme We have allowed to manage the delivery of the project. Currently we plan to submit a planning proposal, DA and prepare the design development to the Construction Stage. The estimated time to achieve this Development is 18 months, which will be subject to authorities and planning guidelines. Scope of Services Refer to the attached Scope of Services which incorporates development and project management services. Fee Proposal Our fees for this Scope of Services are $12,000 Month + GST based upon 18 Month [sic] service totalling $216,000 + GST $108,000 to be paid upon acceptance of the fee proposal. The remainder $108,000 + GST to be paid in 9 months - being 1 May 2017. Tax invoices will be issued with payment due in 14 days. These fees include all personnel costs and exclude third party costs and disbursements requested by you. Any disbursements will be recovered at cost. Personnel I will be the Project Manager in charge of the project. Due to the nature of the project, Caverstock Group, a mid-size development project management company with 25 years' experience will assist me in the day-to-day running of the project. Thank you for the opportunity to submit this proposal. (emphasis in original)
On 3 June 2016, Alysha received the following email from Mr Box, a copy of which was also sent to Mr Varvaris: Alysha, Please find attached fee proposal for the Project Management of the Princes Hwy Kogarah project I have included fee proposals for your consideration/approval from the Town Planner and from HillPDA [sic] who will do the economic impact assessment report required for our first meeting with council. To date we have had meetings with the Town Planner, (DMPS), [sic] Angelo Candalepas, and HillPDA [sic] We anticipate having an initial meeting with Council in 2 weeks in order to begin engagement with the council planners and formulate our strategy. I would appreciate your approval of our fee proposal and the fee proposal from the two consultants. We look forward to working with you on this project and to a successful outcome. Should you wish to discuss any of the proposals please call me on the mobile number below.
On 3 June 2016, Mr Box sent a further email to Alysha and Mr Varvaris seeking their instructions to proceed with two quotes.
On 15 June 2016, these messages were exchanged on the Group WeChat: Alysha: @Nick did you send email [sic] of the construction statement to Chris today? Alysha: We need pay the second payment to scope by end of week. They called me Alysha: Today Alysha: @Nick did you send email? Mr Varvaris: Yes I did this afternoon Alysha: Thanks Chris: Thanks Nick [emoji] Chris: @Alysha We will be back to SYD 21st June [sic]. Please arrange the meeting or dinner at night? [sic] Discuss the [sic] restaurant. Alysha: @Nick Alysha: Can you confirm you can have meeting in 21st ?thanks [sic] Mr Varvaris: At the moment I am free Alysha: Ok. We will meet 21st of Jun [sic] in your office ? [sic] @Nick Alysha: @Chris what time? Chris: 21st June Arrival Time 14:35 Alysha: @Nick what time you [sic] prefer? Mr Varvaris: Maybe around 5pm? Alysha: In your office? Mr Varvaris: Depends on if you wanted to go to dinner Alysha: OK. We meet 5pm in my college and we can go to sometime for dinner in city [sic]. How's that ? [sic] @Chris @Hai @denniskwok … Chris: @Nick please bring Kogarah land contract and 60% payment receipts [heart emoji] 21ST [sic] June Mr Varvaris: Will do
On 6 July 2016, Mr Varvaris received an email from Mr Box attaching a consultants' fee estimate. The body of the email was: Nick Can you please call me to discuss. [sic] I have been trying to get a hold of Angelo. In this situation an Architects [sic] fee would likely be 3% of construction Costs. [sic] Assuming 300 units (plus 1,000 retail) the construction cost will be over 100m. I will send you a soft copy as well.
The consultants' fee estimate attached to Mr Box's email was a spreadsheet of anticipated costs for the development, the sum total of which was $2,960,500.
On 20 July 2016, Alysha and Mr Varvaris received the following email from Mr Box: After our meeting with the council we have had to revise the consultant fee schedule. While the overall value has reduced the money to be spent at the Planning [sic] proposal stage as [sic] increased. Please review and discuss.
The excel spreadsheet attached to Mr Box's email indicated a revised fee estimate for the development of $1,598,750.
Later that morning, Alysha and Mr Varvaris received this email from Mr Box: Nick & Alysha Our team Angelo Candalepas, Daniel McNamara, (Town Planner) Adrian Hack (Economic Study), Tim Lewis (Traffic Study) and myself met with Rod Logan, Ben Iatta, Rebecca lau, [sic] from Council in the Kogarah Offices on the 13/7/16. We discussed the general principles of the original submission and the intent of our design. A discussion was held over the current DCP & LEP and the fact that the site was no longer relevant to those guidelines. I have included the minutes from Daniel which gives more detail to the discussion but in summary :- [sic] … See Attached. -Minutes of meeting 13/7/16 -Invoices from -Bingemann Consulting Pty Ltd -DMPS -Hill Pda [sic]
The invoice from Bingemann contained these salient features and information: 1. It was addressed to: Att: Alysha Liu Pionnier Property Pty Ltd Level 7, 8 Quay Street, Haymarket, NSW, 2000 1. The total amount of the invoice was $13,200 (including GST), which was for payment of two months of professional services provided by Bingemann throughout May and June 2016. 2. It was dated 15 July 2016. 3. The invoice number was "Kog 1".
The form of this invoice becomes important in understanding what happened in relation to the Fake Bingemann Invoice as set out in [235] and following.

Events Following Chris' and Mr He's Return to Sydney in June 2016

On 22 June 2016, Chris and Mr He attended a meeting at Alysha's school with Alysha and Mr Varvaris. Chris asserts that during that meeting, Mr Varvaris said the following, which was translated for Chris and Mr He by Alysha: "Nick knows the boss of Quest serviced apartments. Nick says Quest does not have a block of apartments in the Kogarah area at the moment. Nick says they would be interested in cooperation [sic] with us to buy some of the apartments that we develop, or lease them from us on a long-term basis for 20 years."
Chris asserts that as at June 2016, he did not have any experience with developing, selling or renting serviced apartments. It was for that reason, he says, that he had a conversation with his friend who was an accountant later that afternoon to discuss the viability of serviced apartments. Chris asserts that he had the following conversation with his friend: Chris: "I am developing a property in Kogarah. If I were to build serviced apartments or build apartments and lease them to a serviced apartments company, what are the benefits of that?" Jason: "The value of serviced apartments is lower than residential units. If you want to sell the units as serviced apartments it will be at a lower price than residential units. From a mortgage point of view, you cannot borrow much money from the bank to construct serviced apartments. If you use the property as serviced apartments and lease them out it is a long-term investment with low return. It is not a good deal."
On 23 June 2016, these messages were exchanged on the Group WeChat: Chris: @ Alysha @Nick May I ask if you have arranged to meet the people from the building and the restaurant? Chris: Sister, have you sent me the email yet? … Alysha: Maybe tomorrow Alysha: @Nick Chris: I understand. Serviced apartments are not permitted in DA. There must be all normal apartments in DA. We can rent them out separately or sell them to Quest to operate as serviced apartments. Chris: If there are serviced apartments in DA, and if the selling price is not high and there will be a lot of trouble. If we don't sell them but keep them for ourselves, we can only get a 70% loan in future. Chris: If there aren't serviced apartments in DA, we can sell them at normal market prices and get a Loan [sic] of 80% to 90%. Chris: @Alysha May I ask if you understand what I say? Alysha: I understand. I will discuss with my classmate tomorrow. … Chris: If there is the term [sic] of serviced apartments in DA [sic], there won't be any room for discussion. There mustn't be the term [sic] of serviced apartments in DA [sic]. Alysha: l will make clear with my classmate tomorrow. Chris: After DA is approved for normal apartments, we can sell or rent to Quest. This can be in DA [sic]. Alysha: We have to discuss with Nick Chris: Even if they are rented out, the rate will have to be 6% annually plus CPI. Alysha: @Nick reply when you see the message. We need discuss DA and Restaurant [sic] … Mr Varvaris: Tomorrow we can meet around 2pm Chris: OK Alysha: In your citywide office? Mr Varvaris: Maybe meet on site first and then back at citywide Mr Varvaris: Sorry but meeting needs to be changed to Monday as some of them cannot attend
On 6 July 2016, these messages were exchanged on the Group WeChat: Chris: Next week I have an appointment with the person recommended by Greenland Group, to familiarize with DA [sic] procedure, how about meeting together then [sic] … Alysha: Sure, our DA was not applied through formal channels. You should know that. Classmate's connection at the local council is not just one day or two days. Anyway for us, we just need to get the total figure. … Alysha: How about I make an appointment with Greenland's general manager Zhang next week? … Chris: It would be better if general manager Zhang can bring two people who are familiar, so we can get some information … Alysha: Our land is a special project, which everyone knew at the beginning. After you get some understanding, find classmate and sit down to have a talk. After-all we all look at the result when doing things. … Chris: Sister, brother Qi, can you go with me? Chris: No need for classmate to present [sic] Alysha: I don't need to go, right? The more you know, the better. Anyway, I trust the man I use, if not I won't use that person, I believe classmate can give us what we want, that's enough. Chris: It's necessary to go Alysha: You can go, it's good to learn something Alysha: I know the procedure, no need to go again. Alysha: I wasn't in real estate business before, it's okay to know a general idea. I just want to see how many sets can be approved. Simple figure. Alysha: You go ahead and study well [smiling emoji] Alysha: I just focus on returns for investment, I will work hard on my own business. … Chris: There will be a lot of procedures if Andrew is going to organize [sic] DA. Chris: Don't think that designer has done many major apartment project. [sic] Chris: We haven't even seen the contract yet, which is already quite implausible.

Chris' and Mr He's Emerging Concerns, the Deed of Agreement and Varvaris & Co's Disbursement of Funds to CBC

In about late July 2016, Chris asserts that he became concerned that he and his father had paid a large sum of money for the deposit on the Second Kogarah Property but had not received any documents recording receipt of the deposit or a contract for Bingemann's services. Chris asserts that he raised these concerns with his father, which prompted Mr He to say: "I am concerned about the contract for the [Second Kogarah Property]. We should take it to Eddy Vay and get his advice."
Mr He asserts that it was at this time that he also began to feel uncomfortable about his dealings with Alysha and Mr Varvaris for the following reasons: 1. he did not like the way that Alysha and Mr Varvaris handled PPD's purchase of the First Kogarah Property and Second Kogarah Property; 2. he did not like how he was pressured into purchasing the Second Kogarah Property; 3. he had not received a receipt for Haiye's payment of the 60% deposit for the Second Kogarah Property; 4. Alysha and Mr Varvaris were coming to him for additional funds for the Golden Sands Chinese Restaurant, but it was not clear to Mr He why those funds were needed; and 5. it was around this time that Alysha started pressuring him to pay a significant amount of money to Bingemann on an urgent basis.
Mr He asserts that it was for these reasons that he organised a meeting with Mr Vay in late July 2016. At that meeting, Mr Vay was provided with a copy of the Deed of Agreement between PPD, Landmark and CBC for PPD's proposed purchase of the Second Kogarah Property. It is unclear whether Mr Vay was also provided with a copy of the Option Deed.
Chris says that at that meeting, Mr Vay said the following: "There are some defects in this contract." … "The ASIC number of Landmark is wrong." … "Some details in the document are not clear." … "There is a problem with the section about the DA." … "There is no sunset clause. If there is no time to complete the project your deposit might drop into the water."
Chris asserts that Mr Vay also made some handwritten notes on the Deed of Agreement.
On 27 July 2016, Chris sent photographs of two pages from the Deed of Agreement that Mr Vay had marked up by hand to the Group WeChat.
Between 31 July 2016 and 3 August 2016, Chris sent these messages to the Group WeChat: Chris: @Nick Please tell lawyer email [sic] me 7'2M [sic] new contract … Chris: Property Manager. Architecture contracts is [sic] very important … Chris: @Nick please tell lawyer email [sic] me 7'2 [sic] Land [sic] contract … Chris: @Nick Please Email [sic] 7.2M full Land Contract for me [sic]
In early August 2016, Chris had the following conversation with Mr Varvaris, which was translated by Alysha: Chris: "Why do we need to involve Andrew Box?" Alysha: "Nick says that he is a friend of his. He is a good project manager and Nick trusts him. Nick has done a lot of developments with Andrew. Because Nick was the mayor of the council it is not appropriate for him to be involved in dealing with them so that is why we need to get Andrew involved. He will deal with the council." (Alysha accepts that she said words to the effect set out above)
Chris also asserts that he had the following conversation with Mr Varvaris at around the same time, which was also translated by Alysha (the final paragraph was not, Chris asserts and the Court accepts, Alysha translating what was said by Mr Varvaris): Alysha: "Nick says Bingemann already did some work for Landmark in relation to developing the [First and Second Kogarah Property]. Landmark has paid about half of Bingemann's fees. The amount we need to pay is about $895,000." … "Nick says you better pay Bingemann now so that Andrew lodges the development application. If you don't lodge it now, the council might change and I might not have the power to push things through for you." … "Landmark have already paid $1 million to Bingemann for their work." (Alysha accepts that she said words to the effect set out above)
On 4 August 2016, Mr Varvaris sent an email to Chris and Alysha, which attached an amended Deed of Agreement. The email read: Hi Chris Deed as requested. Will forward copies of agreements for Project Manager and Architect tomorrow.
The Deed of Agreement contained these clauses: Party A - Pionnier Property Development Pty Ltd Party B - Landmark Element Pty Ltd Party C - The Commercial Business Centre Pty Ltd a. Party B Agrees [sic] to sell Part [sic] of Land [sic] located at 18-24 Princes Highway, KOGARAH NSW 2217 subject to Option Deed attached. b. Party A Agrees [sic] to Pay [sic] Party C $7,200,000 + GST for the right to Purchase [sic] Land [sic] located at 18-24 Princes Highway Kogarah NSW 2217 owned by Party B. c. Party A Agrees [sic] to Pay [sic] a deposit of 60% of the total purchase price plus GST prior to the Option Deed being entered into. d. Party A Agrees [sic] to settle the land within one (1) month of approval of DA [sic] from Council for the Development [sic] of the Land [sic] for Mixed [sic] Retail/Residential [sic] Development [sic] lodged by Party A on behalf of Party A & Party B. e. This Deed of Agreement becomes null and void if Consent [sic] for DA [sic] has not been received by the 31/7/2018 [sic]. f. Settlement will not occur until Party A has fulfilled its obligations of the Deed of Agreement entered into in this agreement. g. This Deed of Agreement and Option Deed is null and void in the event that this Deed of Agreement is not adhered to. h. All parties agree that this Deed of Agreement is strictly private and confidential.
Notwithstanding the reference to an attached option deed in clause (a), an option deed was not attached to the Deed of Agreement, nor Mr Varvaris' email of 4 August 2016.
After receiving the proposed Deed of Agreement, Chris asserts that he made a telephone call to Mr Vay and said the following to him: "Eddy, I want you to deal directly with Nick and Alysha about the amendments to the Deed."
Mr He also asserts that he had the following conversation with Mr Vay: [Mr] Vay: "I have checked and [the Second Kogarah Property] has not been sub-divided yet. Nothing seems to be happening with the development of the site." Mr He: "I want to make sure the money we paid for the 60% deposit is protected. Can you talk to Nick Varvaris about it directly?"
On 7 August 2016, Alysha sent a message on the Group WeChat attaching a photograph of an invoice purporting to be from Bingemann dated 15 July 2016 in the amount of $895,125 (including GST). That invoice was what is referred to in this judgment as the Fake Bingemann Invoice. These messages were then exchanged: Alysha: Is this amount? [sic] Nick: 895,125 that is correct
The Fake Bingemann Invoice had the following features and information: 1. It was headed Bingemann Consulting Pty Ltd and addressed to: Att: Alysha Liu Pionnier Property Developments Pty Ltd Level 7, 8 Quay Street, Haymarket, NSW, 2000 1. It purported to relate to the following work: For Professional Services Kogarah Princes Highway Project Consultant Expenses as per Attachment $1,627,500.00 less 50% Adjoining Owners Share $813,750.00 Sub Total $813,750.00 GST $81,375.00 Total Due: $895,125.00 (emphasis in original) 1. Despite having referred to an attachment, there was no document attached to the Fake Bingemann Invoice or, at least, no attachment was sent to the Group WeChat. 2. It was dated 15 July 2016. 3. The invoice number was "Kog 1".
At 11:21am on 9 August 2016, Mr Varvaris sent an email to Chris and Alysha attaching the fee proposal referred to at [183] above. Chris asserts that he had not seen a copy of Bingemann's fee proposal until he received it from Mr Varvaris on 9 August 2016.
At 5:53pm on 9 August 2016, Mr Vay sent an email to Mr Varvaris and Alysha by which Mr Vay sought to "discuss details in relation to the acquisition of [the Second Kogarah Property]".
At 2:52pm on 10 August 2016, Mr Varvaris sent an amended Deed of Agreement to Chris, Alysha and Mr Vay. The amended Deed of Agreement contained these clauses: Party A - Pionnier Property Development Pty Ltd Party B - Landmark Element Pty Ltd Party C - The Commercial Business Centre Pty Ltd a. Party B Agrees [sic] to sell Part [sic] of Land [sic] located at 18-24 Princes Highway, KOGARAH NSW 2217 subject to Option Deed attached. b. Party A Agrees [sic] to Pay [sic] Party C $7,200,000 + GST for the right to Purchase [sic] Land [sic] located at 18-24 Princes Highway Kogarah NSW 2217 owned by Party B if PARTY [sic] A can develop a minimum of 130 Units [sic] in total. c. Party A Agrees [sic] to Pay [sic] Party C a reduced sum of $5,760,000 + GST for the right to Purchase [sic] Land [sic] located at 18-24 Princes Highway KOGARAH NSW 2217 owned by Party B if PARTY [sic] A can only develop a minimum of 120 and a maximum of 129 Units [sic] in total. d. Party A Agrees [sic] to Pay [sic] Party C a reduced sum of $4,320,000 + GST for the right to Purchase [sic] Land [sic] located at 18-24 Princes Highway KOGARAH NSW 2217 owned by Party B if PARTY [sic] A can only develop a minimum of 100 and a maximum of 119 Units [sic] in total. e. Party A Agrees [sic] to Pay [sic] a deposit of 60% of the total purchase price plus GST as set out in clause (b) prior to the Option Deed being entered into. f. Party A Agrees [sic] to settle the land within one (1) month of approval of DA [sic] from Council for the Development [sic] of the Land [sic] for Mixed [sic] Retail/Residential [sic] Development [sic] lodged by Party A on behalf of Party A & Party B. g. This Deed of Agreement becomes null and void if Consent [sic] for DA [sic] has not been received by the 31/12/2018 [sic]. h. Settlement will not occur until Party A has fulfilled its obligations of the Deed of Agreement entered into in this agreement. i. This Deed of Agreement and Option Deed is null and void in the event that this Deed of Agreement is not adhered to. j. All parties agree that this Deed of Agreement is strictly private and confidential.
Again, despite reference to it in clause (a), neither the amended Deed of Agreement, nor Mr Varvaris' email, attached an option deed.
After receiving Mr Varvaris' amended Deed of Agreement, Chris asserts that he had the following conversation with Mr Vay: [Mr] Vay: "The deed still has problems, but the amendments are better than nothing. I could prepare a new contract, but it would take me one to two weeks and Nick does not want me to do that." [Chris]: "Please write to Nick about your concerns with the deed. Can you also ask him to provide us with the account details and receipts from The Commercial Business Centre? He has never given us a receipt for the deposit that we paid to Varvaris & Co."
From 3:50pm on 10 August 2016, the following messages were exchanged on the Group WeChat: Alysha: @Nick who is the commercial business centre [sic] Mr Varvaris: It is an associated entity of Landmark element … Mr Varvaris: If you all have no more concern, [sic] Please [sic] organise the DA payment by Friday. Mr Varvaris: It is very urgent. We Can [sic] not delay anymore as we are looking unprofessional. Alysha: I m [sic] ok. But you need to push project manager to submit DA as soon as possible. Mr Varvaris: I can't get them to do anything without payment Mr Varvaris: It will make them loose [sic] faith in our ability to proceed to completion and follow through with their payments … Alysha: @Nick we need make [sic] sure our 60% safe [sic] if anything happen. Alysha: But I don't want to delay anymore Mr Varvaris: Obviously we need to ensure the safety of the investment Mr Varvaris: That is my responsibility to ensure all parties are looked after Alysha: @Chris…I think time is very important for us . [sic] DA can not [sic] delay Alysha: Thanks , [sic] that is all We [sic] need @Nick Alysha: @Chris … I am happy to go ahead if Nick can take the responsibility . [sic]
Later that afternoon, Chris and Alysha exchanged these messages on the Alysha WeChat: Alysha: Everything needs hurrying up anyway, because I am concerned that if it keeps on delaying, and the classmate's connections are gone, we will suffer misfortune. DA needs to be lodged. Alysha: A large sum of money has been paid. I feel like my heart being [sic] stabbed every day. Chris: I understand! Chris: If this company is closed down, what can we do? Chris: You can ask Lawyer [sic] Wei about the details. Alysha: Over 200,000 from me just for the DA. Chris: I am talking about that Commercial Business Company. Chris: We put 60% in the classmate's company at that time. … Chris: It was put in the classmate's company for safety reason. Alysha: I am asking him. Chris: What if that company misappropriates the fund? What if it's closed down? Chris: That branch company… Director [sic] seems to be different from Landmark. Further; [sic] the 60% is a deposit. As a rule, it can't be misappropriated. Alysha: Ah Zong, we do indeed need to protect ourselves when doing business, but if we keep on vacillating like this, we won't be able to do anything in the afternoon. I think the most important thing right now is to chase up DA. Alysha: We won't be safe until DA is approved. Chris: Wrong. Chris: If the contract is not properly done, the money paid for DA will just be squandered. Alysha: We were going to have it approved through an unofficial channel. Chris: The most horrible thing in the contract at that time was DA wasn't stated clearly. If DA cannot be approved. There won't be any deadline or refund. Alysha: If the classmate's guy is replaced, our land will be squandered. Compared with this I prefer it to progress faster. Chris: Of course I know that. … Chris: We paid 60% to the classmate at that time, as we felt safer that way, because we trusted the classmate.
At 5:30pm on 10 August 2016, Mr Vay sent an email to Chris, Alysha and Mr Varvaris outlining his concerns with the proposed Deed of Agreement. Various issues were raised by Mr Vay, including whether there would be an indemnity to PPD "that the deposit paid will definitely be refunded back".
Mr He deposes that he had the following conversation with Mr Vay on or about 10 August 2016: [Mr] Vay: "I have spoken to Nick Varvaris. He says the money for the deposit for the [Second Kogarah Property] has been transferred out of his account and into the account for The Commercial Business Centre." Mr He: "I never agreed to that."
Mr He deposes that after speaking with Mr Vay, he immediately called Chris and had the following conversation: Mr He: "Eddy Vay just told me all of the money for the deposit for [the Second Kogarah Property] has been transferred out of Nick's account to The Commercial Business Centre. We need to know what has happened with the money."
Chris asserts that this conversation prompted him to write to Mr Varvaris and Alysha on the Group WeChat demanding a receipt for Haiye's payment of its share of the 60% deposit of PPD's purchase of the Second Kogarah Property. In response to that demand, Mr Varvaris sent a copy of an invoice and a receipt from CBC to the Group WeChat, notwithstanding that payment had been made to Varvaris & Co and (at least the uncontradicted evidence is that) neither Chris nor Mr He permitted those funds to be transferred to CBC. These documents purported to show that the deposit moneys for the Second Kogarah Property in the amount of $4,752,000 had been paid to CBC on or about 15 March 2016.
Around the time of his receipt of the invoice and receipt, Mr He asserts that Alysha said to him: "Everything with the properties will be okay. The money is safe."
Mr He's evidence is that although he was angry and concerned that the funds for Haiye's share of PPD's 60% deposit on its purchase of the Second Kogarah Property had been disbursed to CBC against his express request, he remained of the view that the receipt offered Haiye some protection, he accepted Alysha's assurance and formed the view that Haiye's money was safe for the following additional reasons: 1. Mr Varvaris was formerly the mayor of Kogarah; 2. Mr He did not think that Mr Varvaris would do anything to harm Alysha's interests as he believed they had a close relationship; and 3. Mr He was involved in the Golden Sands Chinese Restaurant with Alysha, Dennis and Mr Varvaris so they were business partners in more than one dealing.
On 11 August 2016, these messages were exchanged on the Group WeChat: Chris: @Alysha before go [sic] to oversea [sic] business trip, please transfer AUD 200000 into restaurant account. Because we have agreed it , [sic] we must pay rental end [sic] of this month 28th Aug [sic] AUD 32000 Alysha: We will transfer when we need the funds Alysha: I know we have to pay the rent Chris: Yes it is good Alysha: @Chris He We need get the DA payment first Alysha: @Chris He You don't need to worry about the money for the restaurant, what has been said will be done. We should worry about DA's money. … Mr Varvaris: Please make payment to … Mr Varvaris: Bellagio Group Pty Ltd … Chris: What is Bellagio Group Pty Ltd? Not property manager company … Mr Varvaris: That is the company that we have been making all payments through so we can sponsor as many people as possible
On 12 August 2016, the following additional messages were exchanged on the Group WeChat: Chris: @Nick, Good morning where is the contract of Bellagio Group Pty Ltd? Thanks, I have got Property [sic] manager and Architecture [sic] contracts Alysha: Bellagio is the company which sponsored you @Chris He Mr Varvaris: Can you both have Chqs [sic] ready by 3pm today Alysha: I can. I had long discussion with Mr He last night. Everything is clearly explained. @Nick please make sure everything move [sic] on smoothly and quickly I trust you will make sure protect [sic] us. … Alysha: @Haihai @Chris He, I am going to bank now. How about yours? Chris: We will come back next week. firstly, [sic] 7'2m [sic] new contract we have not signed. Chris: Good morning, Nick said Landmark has paid 50% DA to Property [sic] manager company, could you email me bank [sic] statement? Chris: I prefer DA AUD 800000 transfer to property Manager [sic] company directly Alysha: @Chris He you just make everything delay and complicate. Call eddy [sic] van [sic]. He will explain to you. I spoke to him and his suggestion is no time to delay. … Alysha: This is not a normal case. If you want to do it in the normal way. We are going to lost [sic] everything. Zong, Brother Hai, this is not a normal business. We all know what it is at the beginning. If we continue to dispute about it and government officers are replaced, then we will have nothing left. … Chris: The new contract for the land needs to be signed! classmate, [sic] please do it, Landmark, commercial business [sic] … Chris: New contract need to sign, land mark [sic] and commercial business [sic], then email to me and Eddy Wei, thanks a lot … Alysha: @Chris He, it's not up to us. It's up to the vendor. Nick already tried very hard to convince them. I hope you understand the situation. … Chris: classmate [sic], please sent [sic] the new contract to the seller, the third party needs to sign and give it to the Lawyer, [sic] Wei. We give the cheques to him to keep. Thank you. Alysha: What cheques? Chris: In addition, who should the cheques be addressed to? I will not give them to Bellagio Chris: DA cheques… Chris: Sister, how much in total for DA? Alysha: The problem is that the Lawyer, [sic] Wei said himself, the other party might not sign the modified document. If it is modified according to the lawyer, it does not need to be submitted to DA. Alysha: Zong, next time take a notebook to write down what has been discussed. invoice [sic] has been sent several times. Chris: If the new contract is not signed and we pay DA. It will be very risky. Alysha: [Attaches a photograph of the Fake Bingemann Invoice] … Alysha: We've paid millions and now we discuss the risks of hundreds of thousands. … Chris: @Nick, please give landmark [sic] and commercial business pty ltd [sic], sign new contracts [sic], give and email it to Eddy Wei, we could pay DA 50% today immediately. Chris: The total number: 895125, 75% Chris: [Attaches a screenshot of calculator with number 671,343.75] … Mr Varvaris: Yes that figure is correct … Chris: DA Approv [sic], how many units? If less than 130 units, how to solve? [sic] If DA not Approve [sic], must to [sic] refund all 60%. If DA over time 2018/8/31, must to refund [sic]. … Mr Varvaris: Everything has all been addressed in deed [sic] of agreement. Alysha: Everything has all been addressed in deed [sic] of agreement. - [sic] everything has been addressed in deed [sic] of agreement. Mr Varvaris: Signed agreement has been emailed.
Mr Varvaris' email attaching the proposed Deed of Agreement was sent to Chris, Alysha and Mr Vay. The version of the Deed of Agreement (which was in the same terms as those set out at [218] above) attached to Mr Varvaris' email was purportedly signed on behalf of Landmark by 'T Chan'. That signature appeared above the name 'Tom Liu'. The Deed of Agreement was also purportedly executed by Christopher Michael on behalf of CBC.
Notwithstanding that the Deed of Agreement appeared to be signed by a Tom Liu (or T Chan), Landmark's sole director, Tom Chan, denies having signed the Deed of Agreement. Mr Chan also gives evidence, which was unchallenged, that the signature appearing above the name 'Tom Liu' is not his signature.
Upon receiving confirmation from Mr Varvaris that he had sent a signed version of the Deed of Agreement, Mr He asserts that he had the following telephone discussion with Mr Vay: Mr He: "Have you been given the amended contract that has been signed by the seller?" Vay: "Yes." Mr He: "Is it okay? Are all the changes we wanted agreed to?" Vay: "Yes".
The following messages were exchanged on the Group WeChat later that afternoon: Alysha: @Nick, What the [sic] name of the cheque? I am going to drop off [sic] to you now Alysha: I don't want to delay another week. … Mr Varvaris: Bingemann Consulting Pty Ltd Alysha: Project manager company Mr Varvaris: Yes Alysha: @Chris He @Haihai @denniskeikwok, we do not need to pay bellagio [sic]; we pay directly to the project manager. @Nick, when can we get the receipts? We need the receipts. … Mr Varvaris: Receipt will be issued after cheque received and cleared of course … Mr He: You call the Lawyer, [sic] Wei! After reviewing the contract, please call me! … Alysha: Brother Hai, I do not need to make a phone call. I and Brother Qi have read it and we did not have questions. You can call the Lawyer, [sic] Wei to ask him questions. … Mr Varvaris: Da [sic] fee was meant to be paid last week and it has already been delayed one week … Mr Varvaris: Just issue cheque [sic] directly to project manager so I can drop it off today Alysha: Just issue cheque directly to project manager so I can drop it off today. If we pay the project manager, we need a cheque. So it can be done today. Mr Varvaris: We are looking very stupid here and consultants will loose [sic] faith in out [sic] ability to complete project [sic] Alysha: No matter the [sic] cheque clear today or Monday. As long as tell [sic] project manager we are happy to go ahead and we don't want to delay. … Alysha: I am on the way to drop off mine … Dennis: [Attaches a photograph of cheque drawn by Dennis in favour of Bingemann in the amount of $233,781.25]

Payment of the Fake Bingemann Invoice and Further Dealings with Mr Box

In the afternoon of 12 August 2016, Chris and Mr He attended a HSBC branch and purchased a bank cheque for $671,343.75 in favour of Bingemann ("Haiye's Bingemann Invoice Cheque"). Haiye's Bingemann Invoice Cheque was purchased from Mr He's personal funds.
Later that afternoon, one of Alysha's employees collected Haiye's Bingemann Invoice Cheque from HSBC.
The bank records of Bingemann Holdings Pty Ltd record receipt of Haiye's Bingemann Invoice Cheque on 15 August 2016.
In the afternoon of 15 August 2016, Mr Varvaris sent an email to Mr Box, copied to Alysha, the subject of which was "Refund Funds". The email reads: Hi Andrew Can you please refund funds banked today as per our discussion into the following account asap so we can disburse all outstanding payments due. Account Name: A & T Education Holdings Pty Ltd BSB: XXX-XXX Account Number: XXXX-XXX Amount: $671,343.75 Please advise when processed.
On 17 August 2016, the sum of $671,378.75 was withdrawn from the account of Bingemann Holdings Pty Ltd and transferred to the account of A & T Education.
On 31 August 2016, the sum of $400,000 was transferred from the account of A & T Education to an account held by Alysha personally.
The balance of Haiye's Bingemann Invoice Cheque (i.e. $271,343.75) was, the Plaintiffs assert, used to make payments to Golden Sands Hospitality by A & T Education on behalf of Dennis as a credit to his director's loan account. The Plaintiffs submit that the following transactions comprise Dennis' use of the balance of the funds transferred by the Haiye's Bingemann Invoice Cheque: 1. on 22 August 2016, the sum of $100,000 was credited to Dennis' loan ledger with Golden Sands Hospitality; 2. on 4 September 2016, the sum of $20,000 was credited to Dennis' loan ledger with Golden Sands Hospitality; and 3. On 15 September 2016, the sum of $334,100 was credited to Dennis' loan ledger with Golden Sands Hospitality. The Plaintiffs assert that this credit comprises $151,343.75 from Haiye's Bingemann Invoice Cheque and the balance from another source.
The above transactions are recorded in a director's loan account for Dennis with Golden Sands Hospitality.
On 13 September 2016, Mr Box sent an email to Mr Varvaris attaching an invoice from Bingemann. That invoice was: 1. numbered "Kog 2"; 2. dated 10 September 2016; 3. for the total amount of $13,200 (including GST); and 4. for services provided for the months of July and August 2016.
Mr Varvaris forwarded Mr Box's email, and the attached invoice, to Alysha later that day.
On 10 October 2016, Mr Box sent an email to Mr Varvaris, to which Alysha was copied, attaching an invoice from Bingemann. That invoice was: 1. numbered "Kog 3"; 2. dated 11 October 2016; 3. for the total amount of $8,800 (including GST); and 4. for services provided for September 2016.
On 10 November 2016, Mr Box sent an email to Mr Varvaris in which he set out the amounts due and payable by PPD for consultants, including Bingemann. The total amount owing at that date was $36,880.25. Mr Varvaris forwarded that email to Alysha on 23 November 2016.
On 7 December 2016, Citywide Financial Services lodged a Form 484 with ASIC to the effect that Chris was no longer a director of PPD. The form was signed by Dennis.
On 8 December 2016, $400,644.32 was withdrawn from PPD's bank account.
Also on 8 December 2016, Citywide Financial Services lodged another Form 484 with ASIC recording Chris being reappointed as a director of PPD. That form was also signed by Dennis.
On 3 March 2017, these proceedings were commenced by Summons.
On 26 March 2017, Mr Varvaris and Mr Box sent the following emails to one another: 1. At 10:18pm, Mr Varvaris sent an attachment titled "Bingemann Consulting - Kogarah Princes Hwy v1" without a message in the body of the email. 2. At 10:21pm, Mr Box replied: How did it get to 671k [sic] 1. At 10:32, Mr Varvaris replied: The Invoice total is $895,125.00. 75% was to come from Mr He $671,434.75 25% was to come from Alyshas [sic] Husband [sic] $223,781.25 As you chose not to hold funds in your account due to personal reasons, they never handed over the $223,781.25, as you would have returned the funds anyway, and they are paying bills as you request. 1. At 10:39pm, Mr Box replied: Make sure you pay the bills so if they ask I can say they were paid.
That email chain was forwarded by Mr Varvaris to Alysha later that evening.
On 16 June 2017, Angelo Candalepas sent an email to Alysha, which included: Dear Alysha Thank you so much for the payment of $92,050. I look forward to this being finalised next week. You are always so kind when we meet and I therefore thank you for this also. Regarding the school project, I am truly keen to help with that. Perhaps rather than rushing, I can see you at 12pm on 18 July 2017 when I return from my trip. If we meet here in my office, I can then offer lunch somewhere nearby where we can complete the meeting. I will, this time, allow 2 hours so that we can have more time to discuss these important matters.
It is unclear whether the payment of $92,050 is in reference to a payment made in relation to PPD's development of the First Kogarah Property.
On 2 February 2019, Mr Box sent a letter to Alysha, which states: Attention Ms Alysha Liu, Re: 8-26 Princes Hwy, Kogarah. To Whom it may Concern [sic] To Whom it may Concern [sic] Bingemann Consulting provided Project Management Services for the above site. Please see attached: Bingemann Consulting Invoices for Project Management Services provided for the project noted above; and Schedule setting out the amounts paid to Bingemann Consulting and various other consultants that provided services in relation to that site. I confirm all of the payments listed on the attached schedule have been paid in full.
The invoices attached to Mr Box's letter are numbered "Kog 1" to "Kog 8". The invoice numbered "Kog 1" is for the sum of $13,200 (including GST). Mr Box's letter did not attach an invoice for $895,125.

Issues to be Determined by the Court

The Plaintiffs' Amended Statement of Claim ("ASOC") pleads the following causes of action: 1. that the Active Defendants and/or Mr Varvaris have engaged in misleading and deceptive conduct, both as principals and accessories, for the representations made in respect of PPD's purchase of the First Kogarah Property, the Supplementary Contract, PPD's purported purchase of the Second Kogarah Property and Haiye's payment of the Fake Bingemann Invoice; 2. that the Active Defendants and/or Mr Varvaris have committed the tort of deceit for false representations made in respect of PPD's purchase of the First Kogarah Property, the Supplementary Contract, PPD's purported purchase of the Second Kogarah Property and Haiye's payment of the Fake Bingemann Invoice; 3. a claim that the Active Defendants (or any number of the Active Defendants) and Mr Varvaris are joint tortfeasors in respect of the Active Defendants' and Mr Varvaris' commission of the tort of deceit; 4. that the Active Defendants (or any number of the Active Defendants) and Mr Varvaris have engaged in a conspiracy in relation to the Supplementary Contract, PPD's purported purchase of the Second Kogarah Property and the Fake Bingemann Invoice; 5. that the Active Defendants and/or Mr Varvaris have breached their fiduciary duties in relation to the Supplementary Contract, PPD's purported purchase of the Second Kogarah Property and the Fake Bingemann Invoice; 6. that Mr Varvaris breached his obligations to the Plaintiffs as trustee of the funds paid by (or on behalf of) Haiye for PPD's purported purchase of the Second Kogarah Property; 7. that CBC, PPD, Citywide Property Group, Citywide Financial Services, Pionnier, A & T Education and Red Horizon have received funds from, or assisted the Active Defendants and/or Mr Varvaris in, the Active Defendants' and/or Mr Varvaris' breach of fiduciary duties with the requisite knowledge of that breach; and 8. a claim for monies had and received against CBC, PPD, Citywide Property Group, Citywide Financial Services, Pionnier, A & T Education and Red Horizon in relation to the Supplementary Contract, PPD's purported purchase of the Second Kogarah Property and the Fake Bingemann Invoice.
The following three further issues also arise for consideration: 1. whether the Plaintiffs have engaged in illegal/unlawful conduct, such that the Court should refuse the grant of relief sought by the Plaintiffs; 2. whether the Plaintiffs have unclean hands, such that any relief in equity ought to be refused by the Court; and 3. whether the Plaintiffs, in fact, have any causes of action at all against the Active Defendants and, to the extent that Haiye may have one or several causes of action against the Active Defendants, whether those causes of action are, in fact, claims for reflective loss and thus, cannot succeed.
The issues set out in [258] above were not expressly pleaded in the Active Defendants' Further Amended Defence. On 6 April 2021, the Active Defendants filed a Notice of Motion by which they sought leave to amend their Further Amended Defence to raise the discretionary defences of unlawful purpose, illegality and unclean hands. The reflective loss issue, by contrast, was first raised by Mr Sirtes SC on the ninth day of the hearing. It was not, therefore, contemplated in the Active Defendants' Notice of Motion and I shall deal with it separately.

Amendment Application

On the first day of the hearing, the first matter with which the Court had to deal was the Active Defendants' Notice of Motion. After hearing the argument (which was conducted for the Active Defendants by Mr Oakes), the Court dismissed the motion. I indicated that I would give my reasons for that order as part of the Court's final reasons for judgment.

Amendment Application - How the Amendment Arose

The Active Defendants' Further Amended Defence had stood on the record since it was filed on 28 October 2019.
On 25 March 2021, I convened a pretrial directions hearing to deal with any preparatory matters that might require attention for the hearing fixed to commence on 12 April 2021. During the course of that directions hearing, Mr Sirtes SC indicated "lest there be any issue about this" that at least in relation to the equitable relief being sought by the Plaintiffs, the Active Defendants would be relying on the doctrine of unclean hands. In response to a question from me, he said that this had not been formally pleaded and that in his submission it did not have to be, but that nevertheless his clients could amend their pleading to make clear that the defence would be relied on.
Among the various directions and notations I made at the end of the pretrial directions hearing were: "7. Note that the 5th to 7th defendants have undertaken to provide particulars of their unclean hands argument to the plaintiffs by 26 March 2021. 8. Direct that if the plaintiffs are of the view that the defendants should be required to amend their defence in relation to the proposed unclean hands argument, they so notify the defendants by 29 March 2021."
My intention, which was communicated to the parties, was that if the Active Defendants were of the view that an amendment to the pleadings was required, I would deal with any amendment application when the matter was before me for the hearing of another motion on 6 April 2021.
On 26 March 2021, the Active Defendants' solicitors wrote to the Plaintiffs' solicitors providing particulars of the proposed discretionary defences.
By letter dated 29 March 2021, the Plaintiffs' solicitors responded that they objected to the equitable defences being raised without those matters having been pleaded.
When the matter came before me on 6 April 2021, the Active Defendants had not yet provided a draft amended pleading to the Plaintiffs. In those circumstances, I made directions for a motion and affidavits to be filed to enable the amendment application to be dealt with on the first day of the hearing.

Amendment Application - The Parties' Submissions

The Active Defendants' proposed amendment was to add this paragraph: "105. In answer to the Plaintiffs' claims made against the defendants, the defendants say. (a) Insofar as the Court finds that the circumstances of the proposed purchase and development of the First Kogarah Property (including the splitting of the contract to purchase the First Kogarah Property), the proposed purchase and development Second Kogarah Property [sic] and/or the Bingemann Invoice arose out of or was in the course of carrying out an improper and/or unlawful purpose, such as seeking to obtain favourable development approval, avoiding payment of stamp duty, or seeking to secure favourable treatment from persons in public office or those who worked for government institutions, then this was a common purpose shared between the parties participating in those activities, including the Plaintiffs. (b) The payments made by or on behalf of the Plaintiffs at paragraphs 41 to 44, 106 and 182 of the Amended Statement of Claim were made with knowledge and in furtherance of that improper and/or unlawful purpose. (c) In the Premises, the Court may decline to enforce the following claims made by the Plaintiffs against the Fifth, Sixth and Seventh Defendants: (i) the torts of conspiracy alleged at paragraphs 186 to 197; (ii) the torts of deceit alleged at paragraphs 205 to 218; (iii) the alleged liability as joint tortfeasors at paragraphs 221 to 224; and (iv) the allegations of moneys had and received at paragraphs 267-280. on the grounds of the Plaintiffs' unlawful conduct. (d) To the extent the Court finds that the Plaintiffs suffered any harm in respect of: (i) the alleged breaches of fiduciary duty at paragraphs 254 to 261; and / or (ii) the alleged knowing receipt or knowing assistance at paragraphs 312-314, the Plaintiffs' wrongdoing in sub-paragraphs (a) and (b) above had an immediate and necessary relation to the equitable remedies claimed by the Plaintiffs in respect of that harm. (e) In the Premises, the Court is justified in the exercise of its discretion to refuse or qualify any equitable relief that might otherwise be available to the Plaintiffs on the basis of the Plaintiffs' unclean hands."
While I was mindful that the Active Defendants bore the onus of satisfying the Court that their application should be allowed, I asked Mr Cheshire SC to address first to explain why his clients opposed the amendment.
Mr Cheshire SC began by reminding the Court of what was said in Aon Risk Services Aust Ltd v ANU (2009) 239 CLR 175; [2009] HCA 27 at [103] (citations omitted): "The fact that an explanation had been offered for the delay in raising the defence was regarded as a relevant consideration in J L Holdings. Generally speaking, where a discretion is sought to be exercised in favour of one party, and to the disadvantage of another, an explanation will be called for. The importance attached by r 21 to the factor of delay will require that, in most cases where it is present, a party should explain it. Not only will they need to show that their application is brought in good faith, but they will also need to bring the circumstances giving rise to the amendment to the court's attention, so that they may be weighed against the effects of any delay and the objectives of the Rules. There can be no doubt that an explanation was required in this case."
Mr Cheshire SC submitted that when making an application to amend pleadings at such a late stage, an explanation for any delay was essential. Among other things, it was necessary to understand whether the Active Defendants had made an earlier forensic decision not to raise the defences and were now seeking to resile from that decision.
The Active Defendants' application was supported by an affidavit of Ms Zhang, the Active Defendants' solicitor who had day-to-day carriage of the proceedings, filed on 6 April 2021. Mr Cheshire SC drew to attention that the affidavit did no more than recite the recent events that led to the application, and offered no explanation of why the issue of the equitable defences had not been raised until the directions hearing on 25 March 2021.
Mr Cheshire SC next submitted that it was no answer for the Active Defendants to say there was no prejudice to the Plaintiffs because the Active Defendants only proposed to rely on the existing evidence in support of the defences. It was also no answer for the Active Defendants to say that the defences arose from matters pleaded by the Plaintiffs. Because the defences were not pleaded, the Plaintiffs had been denied the opportunity to seek discovery, issue subpoenas and put on specific evidence to meet the case now sought to be put against them.
Most importantly, Mr Cheshire SC argued that there was nothing in the evidence filed by the Active Defendants before 25 March 2021 which might have put the Plaintiffs on notice that such defences might be raised.
Finally, it was it was contended for the Plaintiffs that the amendment included serious, unparticularised allegations in a rolled-up form. These were matters that should have been properly pleaded and particularised to enable the plaintiffs to understand the serious allegations they would have to meet.
For the Active Defendants, Mr Oakes made four points.
First, he submitted that issues of the kind raised by the proposed amendment had in fact been alive in the proceedings through the defence of CBC, Mr Varvaris, Citywide Financial Services and Red Horizon filed on 24 August 2017, which included: "262....266 The defendants deny the allegation that any funds were ever held on trust or that if they were, that the funds were held for any form of trust that the law would recognise. For the reasons set out in the concluding paragraphs of this statement of claim, the fund where paid on the facts as pleaded, were not paid for a reason or purpose that the law will recognise. Such funds if held on trust cannot be found as being held on trust for the Plaintiffs. 267…308 In answer to the monies had and received count, the defendants deny those claims and say that such payments as were made, were made by the Plaintiffs if the facts pleaded be found, to further an illegal purpose in which the Plaintiffs knew of that illegal and improper purpose. In such a case, the Plaintiffs are not entitled to bring suit or action for recovery of the monies claimed. The defendants deny any and all liability in respect of the money had and received count. 309…331 The defendants deny any liability in respect of the claim titled "Knowledge in respect of the knowing receipt and assistance count" and say that if the facts be found as are pleaded on the principal allegations within the statement of claim that the Plaintiffs by virtue of their pleadings are the one who had the full knowledge of impropriety and wrong doing in respect of the facts matters and actions as are pleaded in respect of the allegations set forth in this statement of claim. The defendants deny the paragraphs. 309…331 The defendants deny any liability in respect of the claim titled "Knowledge in respect of the knowing receipt and assistance count" and say that if the facts be found as are pleaded on the principal allegations within the statement of claim that the Plaintiffs by virtue of their pleadings are the one [sic] who had the full knowledge of impropriety and wrong doing in respect of the facts matters and actions as are pleaded in respect of the allegations set forth in this statement of claim. The defendants deny the paragraphs. 332. And in answer to all of the allegations as are set forth in the statement of claim, the Defendants say that if the facts be found as alleged by the Plaintiffs, that in substance and in fact the action upon which the Plaintiffs bring suit is an action in which, in substance and in fact, the Plaintiffs agreed with persons holding civic office, and through a series of interposed and concealed entities, and through the use of falsified documents, (and that they knew were falsified), to achieve a financial gain for themselves, to receive financial benefits and profits to which they were not and are not entitled by the entry into of agreements in relation to real property, in circumstances where they believed that they were in a position to procure for themselves, more favourable development consents. 333. Specifically, and by their pleading, the Plaintiffs plead that they entered into the transactions that are the subject of their statement of claim and the allegations that they bring in the claim, on the basis that a party to those transactions was a municipal mayor, capable of procuring for them, a development consent for more favourable than the Local Government Authority was otherwise inclined or persuaded to extend to others, because of the involvement of their mayor. Thereby, the Plaintiffs, each and all of them, were thereby seeking to take advantage of an act of abuse of public office, and of misfeasance of public office. 334. In the premises of the facts arising from the Plaintiffs' causes of action as pleaded, (and assuming the facts upon which the Plaintiffs bring action are found), the arrangements sued upon are wholly unenforceable, because: (i). the making of the agreements and arrangements as pleaded, and / or the doing of an act essential to the formation of the pleaded facts, is expressly and absolutely prohibited by the laws of these lands; (ii). the making of the agreement(s) in the terms pleaded, is absolutely prohibited; (iii). any such agreement, where found to exist on the basis of the facts pleaded is treated by the courts of these lands as being unenforceable, because it is a contract associated with or in the furtherance of illegal purposes, and that it absolutely prohibited; (iv). The action sued upon is an abuse of process, in that it seeks by action, the recovery of claims that the law does not recognize, does not permit, and does not allow."
Mr Oakes submitted that because of those matters pleaded in the other Defendants' defence, the Plaintiffs had been on notice that these were issues in the proceedings since 2017.
Second, Mr Oakes submitted that the Plaintiffs could not be prejudiced by the Active Defendants being granted leave to amend because the proposed pleading dealt with purely legal questions, which were already raised on the Plaintiffs' evidence. He drew to attention that the other Defendants' pleading (set out at [277]) was filed before the Plaintiffs filed their evidence in chief, and that the Plaintiffs did not seek further and better particulars from those Defendants at the time.
Third, insofar as it was contended that the proposed pleading was deficient in form, Mr Oakes submitted that the pleading had been further particularised in the Active Defendants' pretrial outline of submissions dated 7 April 2021, which included, for example: "Defence of illegality 27. In the alternative, and to the extent that the Court finds that the Plaintiffs' tortious claims arise out of and in the course of the Plaintiffs involving themselves in unlawful acts, such as bribery or accessory to misconduct in public office, or the statutory offence of offering a corrupt commission or award contrary to s.249B of the Crimes Act 1900 (Crimes Act), the Nominated Defendants will submit that: A7. to the extent the Plaintiffs seek to recover damages (from the Nominated Defendants) in respect of moneys that were never actually received by the Nominated Defendants; and b. having regard to the fact that the payments were made by the Plaintiffs with the intention of profiting from an unlawful act, the Court should exercise its discretion to reject the Plaintiffs' claims."
Fourth, Mr Oakes put that there was a real question about whether the defence of unclean hands had to be pleaded (relying on EDPI Pty Ltd v Rapdocs Pty Ltd [2007] NSWSC 195 at [64]-[65] per Brereton, J as his Honour then was, and Nu Line Construction Group Pty Ltd v Fowler (aka Grippaudo) [2012] NSWSC 587 at [28] per Ward J, as her Honour then was). Similarly, there were circumstances (none of which, it was accepted, had yet arisen) in which the Court could consider an unpleaded defence of illegality (relying on Trampoline Enterprises Pty Ltd v Fresh Retailing Pty Ltd [2019] VSCA 74 at [108]-[109] per Kaye, McLeish and Hargrave JJA, quoting Knowles v Fuller (1947) 48 SR (NSW) 243 ("Knowles v Fuller")). In Knowles v Fuller, Jordan CJ explained those circumstances as follows (at 245): "… it is well settled that a Court will not entertain a defence of illegality which has not been pleaded, unless (1) the transaction sued upon is ex facie illegal, or (2) the plaintiff cannot prove his case without proving also that he is claiming under an illegal transaction, or (3) exceptionally, where a fact comes to light in the course of the trial which of itself shows that the transaction sued on is illegal on grounds which nothing could cure … In the last type of case, it is important that the Court be satisfied that it has before it the whole of the facts relating to the transaction which could throw any light on its legality or illegality."
In brief response to Mr Oakes' submissions, Mr Cheshire SC made two further submissions.
First, he informed the Court that by an Amended Defence dated 12 March 2018, CBC, Mr Varvaris, Citywide Financial Services and Red Horizon had withdrawn the defences set out at [277] above, leaving only paragraph 332 of that defence in the following amended form: "And in answer to all of the allegations as are set forth in the statement of claim, the Defendants say that if the facts be found as are alleged by the Plaintiffs in this statement of claim, that in substance and in fact the action upon which the Plaintiffs bring suit is an action in which the Plaintiffs attempted to induce persons holding positions of public office to achieve a financial gain for themselves, to receive financial benefits and profits to which they were not and are not entitled by the entry into of agreements in relation to real property, and in circumstances where the Plaintiffs believed that they were in a position to procure for themselves, more favourable development consents."
Second, Mr Cheshire SC accepted that the authorities to which Mr Oakes had referred allow the defences of unclean hands and illegality to be raised in some cases without having been pleaded. That being so, he contended that rather than grant leave to amend, the appropriate course was to have an argument at the conclusion of the hearing about whether and the extent to which the defences could be raised without having been pleaded in the precise factual context as it stood at the end of the hearing.

Amendment Application - Consideration

I approached the Active Defendants' application upon the basis that it depended upon s 64(2) of the Civil Procedure Act 2005 (NSW) (the CP Act) which, subject to s 58 of the CP Act, requires that "all necessary amendments are to be made for the purpose of determining the real questions raised by or otherwise depending on the proceedings". Section 58 of the CP Act provides that in considering an amendment application, the Court is to act in accordance with the dictates of justice, which themselves invoke ss 56 and 57 (the overriding purpose and objects of case management), as well as matters listed in s 58(2)(b) to the extent the Court considers them relevant. In the present case I considered that s 58(2)(b)(ii) (timeliness of interlocutory activity) and s 58(2)(b)(vi) (degree of injustice as a consequence of any order) were relevant.
Bearing those statutory provisions in mind, there were four reasons why I dismissed the Active Defendants' motion.
First, the Active Defendants' application was brought not in a timely fashion but at the last possible moment, in a case which had been on foot for some years and had already had one final hearing date adjourned due to the COVID-19 pandemic. The absence of any explanation for this delay weighed heavily against the application being granted. Insofar as Mr Oakes faintly suggested from the bar table that the Court could infer that the Active Defendants' legal advisers had only begun turning their minds to the detail of the case in the month before the hearing, I did not accept that was a satisfactory explanation even if - assuming in the Active Defendants' favour but not deciding - it was open to be inferred in the absence of any other evidence.
Second, I accepted Mr Cheshire SC's submission that the proposed amendment contained a series of very serious allegations in rolled-up form. The proposed amendment was bad as a matter of proper pleading and could not be saved by the further exposition, such as it was, in the defendants' pretrial outline of submissions. Allegations of such seriousness, in some places tantamount to fraud and criminality, should have been fully pleaded and particularised, and it would have been contrary to the dictates of justice to permit the pleading in the form proposed.
Third, I accepted that allowing the proposed amendment at this very late stage would seriously prejudice the Plaintiffs. They would either have to ask for an adjournment (which they did not want, having already had to press for the present hearing to take place with Chris and Mr He appearing by video link from China over the objection of the Active Defendants) or meet a case without having had a proper opportunity to investigate and prepare evidence that was specifically responsive to it.
Furthermore, while I saw very little merit in the submission that the Plaintiffs should have been on notice of "these kinds of matters" being in issue by reason of the defence of the other Defendants (see [277]-[278] above), what little force there was in that submission was completely met by the defences having largely been abandoned by those Defendants in March 2018. Moreover, of those Defendants, only CBC (which is now in liquidation) continue to play any part in the proceedings, and then only to the extent that it would be heard if its interests might be affected by any final orders that the Court proposed to make.
Fourth, in weighing the respective degrees of prejudice to the parties, while allowing the amendment would seriously prejudice the Plaintiffs for the reasons I have already given, not allowing the amendment would not seriously prejudice the Defendants. This was because, for the reasons referred to at [281]-[284], it would be open to them to seek to raise the defences of illegality and unclean hands at the end of the hearing when all the relevant facts were known. I accepted Mr Cheshire SC's submission that such an argument could and should be conducted with full knowledge of the precise facts being relied upon, as they would have emerged by the end of the hearing. As Mr Cheshire SC properly acknowledged, it would be difficult for his clients to resist the Active Defendants relying upon, for example, an admission of seriously fraudulent conduct that might have emerged in the course of cross-examination of Chris or Mr He.
Although the Court dismissed the Active Defendants' Notice of Motion, submissions were made following cross-examination that the Plaintiffs have engaged in illegal conduct; namely, that the "Kogarah projects undertaken by the Plaintiffs were ex facie illegal" and further, that the purpose of the Plaintiffs' purchase of the First Kogarah Property and the payments made by Haiye pursuant to the Supplementary Contract "was to receive favourable development consents by improper means and thereby obtain improper material advantage". Counsel for the Active Defendants submit that notwithstanding that these matters have not been pleaded, they fall within the exemptions set out by Jordan CJ in Knowles v Fuller such that the Active Defendants are not precluded from raising them in defence of the Plaintiffs' claims. The Court will consider these submissions later in these reasons.

Orders Made at the Hearing

Before turning to the pleaded causes of action, it is convenient at this point to record the Court should make note of several admissions made on behalf of the Active Defendants and consequential orders made in relation to them. By the opening written submissions for the Active Defendants, the Active Defendants accepted that: a. Of the $3,564,000 paid by the Plaintiffs into the trust account of Varvaris & Co in respect of the Second Kogarah Property, $2,231,762.83 of that money was applied towards the purchase price of the First Kogarah Property. The Plaintiffs are entitled to ownership of the First Kogarah Property, subject to an allowance for the $233,750 contribution to the purchase of the First Kogarah Property made on behalf of [Pionnier]. b. In respect of two amounts of $400,000 that were ultimately transferred into bank accounts in Alysha's name, the Plaintiffs are entitled to a payment of $800,000 (which can be paid from the moneys paid into Court by Alysha in March 2017).
On the first day of the hearing, Messrs Cheshire SC and Sirtes SC indicated their preliminary joint approval of proposed short minutes of order that would give effect to the admissions made in the opening written submissions for the Active Defendants, although the form of those orders were yet to be agreed upon.
By the ninth day of the hearing, the parties had reached agreement as to the form of the orders that ought to have been made to reflect the admissions made on behalf of the Active Defendants and the following orders were made by consent: 1. The Court declares that the firth [sic] defendant holds its shares in the third defendant on trust for the first plaintiff, subject to an allowance to be determined by the Court. 2. The Court orders that the fifth defendant take all steps necessary to transfer its shares in the third defendant to the first plaintiff forthwith. 3. The Court orders that, following the transfer referred to in order 2, the monies currently held in controlled monies account 09-7943 with Westpac Banking Corporation in the name of the solicitors for the plaintiffs and the solicitors for the fifth to seventh defendants be paid to the third defendant. 4. The Court declares that the sixth defendant holds the sums of: a. $400,000 received by her on or about 22 March 2016; and b. $400,000 received by her on or about 31 August 2016, on trust for the first plaintiff. 5. The Court orders that in satisfaction of order 4, from the monies in Court and subject to order 6, the sum of $800,000 be paid out to the first plaintiff's solicitor forthwith. 6. The Court orders that from the monies referred to in order 5, the sum of $233,750, representing the allowance for which the fifth defendant contends pursuant to order 1, is to be deducted and is to remain in Court pending the determination of that allowance and further order. 7. For the avoidance of doubt, the sum to be paid out forthwith to the first plaintiff's solicitor pursuant to orders 5 and 6 is $566,250. 8. The Court orders that the parties have liberty to apply in respect of these orders. 9. Matter stood over for hearing to before Kunc J at 9.30am on Tuesday 27 April 2021.
By these orders, the Court is no longer required to consider several of the causes of action propounded by the Plaintiffs including, for example, the claim against Alysha for monies had and received.

Evidence - Credibility of Witnesses

In Maria Saravinovksa v Krste (Chris) Saravinovski; Chris Saravinovski v George Saravinovski (No 6) [2016] NSWSC 964 ("Saravinovski (No 6)") I set out a summary of the principles relevant to credit findings where there are disputed facts (at [464]-[473]): "464 First, at the forefront of the Court's approach has been the oft cited statement of McClelland CJ in Equity in Watson v Foxman (1995) 49 NSWLR 315 at 318-319: Where, in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously described as "misleading") within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) what the alleged conduct was; and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction (1995) 49 NSWLR 315 at 319 rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is "not … attained or established independently of the nature and consequence of the fact or facts to be proved" including the "seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding": Helton v Allen (1940) 63 CLR 691 at 712. 465 Second, the concept of actual persuasion was elucidated by Emmett J (as his Honour then was) in Warner v Hung, in the matter of Bellpac Pty Ltd (Receivers and Managers appointed) (In liquidation) (No 2) [2011] FCA 1123; (2011) 297 ALR 56: 48. Under s 140(2) of the Evidence Act 1995 (Cth) (the Evidence Act), the Court must, in deciding whether it is satisfied that a case has been proved to the requisite standard, take into account: ● the nature of the cause of action or defence; ● the nature of the subject matter of the proceeding; and ● the gravity of the matters alleged. When proof of any fact is required, the Court must feel an actual persuasion of the occurrence or existence of that fact before it can be found. Mere mechanical comparison of probabilities, independent of any belief in reality, cannot justify the finding of a fact. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the Court. However, reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, and the gravity of the consequences flowing from a particular finding are considerations that must affect whether the fact has been proved to the reasonable satisfaction of the Court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences (see Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 at 361-2). 466 Third, there is the statutory successor of the rule in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 in s 140 of the EA: 140 Civil proceedings: standard of proof (1) In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. (2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account: (a) the nature of the cause of action or defence, and (b) the nature of the subject-matter of the proceeding, and (c) the gravity of the matters alleged. 467 Fourth, evidence is to be preferred which is inherently probable in the circumstances or is given by a witness against their interest. 468 Fifth, evidence of independent witnesses, i.e. persons who have no reason to be partisan, may be decisive in resolving the conflicting evidence of interested parties. 469 Sixth, where a witness has been found to be lying about one thing that does not automatically mean that they are to be disbelieved about everything else. The Court is not bound to accept or reject a witness' evidence in its entirety. This approach was expressed by O'Loughlin J in Cubillo v Commonwealth of Australia (No 2) [2000] FCA 1084; (2000) 103 FCR 1: 118 Before commencing a detailed analysis of the evidence in this case, I desire, in the first instance, to make clear the approach that I have taken to the evidence of a witness where I have found some, but not all, aspects of the evidence of that witness to be unreliable. Simply because I find against a party or a witness on one issue and reject some part of the evidence of that person, it does not mean that what remains is tainted, or otherwise lacks probative force, with the consequence that I should dismiss all the evidence of that person. The principles enunciated in the cases indicate that the trial judge is entitled to believe part of the evidence given by a witness and to reject the rest. After making an assessment of the evidence, after utilising the advantage of having seen and heard all the witnesses, and after forming an impression of each, the confidence that the judge reposes in a particular witness is assessed accordingly. Where evidence has a logical probative value, a judge will rely on it; where it contains discrepancies, displays inadequacies, is tainted or otherwise lacks probative force, the judge will, in all probability reject it or, at least, not rely on it. I mention some authorities that support those propositions. … 121 A trial judge is not restricted in his or her assessment of a witness. By this I mean that if, on peripheral issues, the trial judge reaches conclusions adverse to the credibility of a party, it does not necessarily follow, consistently with such conclusions, that these must be findings adverse to that party on the issues that are central to the determination of the matter. There is no rule of law or practice that states that an adverse finding on any aspect in the evidence of a witness means that the whole of that witness' evidence must be rejected. 470 Seventh, and closely related to the preceding point, in Sangha v Baxter [2009] NSWCA 78 Basten JA (with whom Handley AJA agreed) cautioned against global credibility findings: 155 There are risks in making global findings about credibility of any particular witness. Because a witness has not told the truth with respect to a particular matter does not mean that other parts of his or her evidence are untruthful. Where possible, an assessment should be made of the reasons for the untruthfulness in order to see if other aspects of the evidence are likely to be infected by the same concern. Further, evidence may be rejected because it is apparently unreliable, possibly mistaken or deliberately untruthful or capable of being categorised in a variety of ways which are unlikely to be capable of clear delineation in some cases. 156 Further, findings of credibility are not usually findings with respect to factual issues in the case, but are rather subsidiary findings on the way to determination of issues. Like many aspects of the evidence in a trial, the evidence of a witness who is believed to have lied in a particular respect, will nevertheless be able to bear some weight and should be placed into a balance, with other material evidence, before a conclusion is reached in relation to a critical fact. The rejection of a witness in total, absent corroboration is likely to mean that, even where corroborated, little attention will be paid to the evidence of the witness and less to the possible consequences which might flow from the fact that particular evidence is shown to be truthful: see generally, King v Collins [2007] NSWCA 122 at [44]. 471 Eighth, disbelieving a witness that "X" was the case does not mean that "not X" has been proven. The Court respectfully adopts what fell from Gibbs J (as his Honour then was) in Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640 at 694 (citations omitted): The fact that a witness is disbelieved does not prove the opposite of what he asserted: Scott Fell v. Lloyd [1911] HCA 34, (1911) 13 CLR 230, at p 241 ; Hobbs v. Tinling (C.T.) & Co. Ltd. (1929) 2 KB 1, at p 21 . It has sometimes been said that where the story of a witness is disbelieved, the result is simply that there is no evidence on the subject (Jack v. Smail [1905] HCA 25, (1906) 2 CLR 684, at p 698 ; Malzy v. Eichholz (1916) 2 KB 308, at p 321 ; Ex parte Bear; Re Jones [1945] NSWStRp 50, (1945) 46 SR (NSW) 126, at p 128 ), but although this is no doubt true in many cases it is not correct as a universal proposition. 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 him; and it is no doubt for this reason that false statements by an accused person may sometimes be regarded as corroboration of other evidence given in a criminal case: Eade v. The King [1924] HCA 9, (1924) 34 CLR 153, at p 158; Tripodi v. The Queen [1961] CHA 22, (1961) 104 CLR 1. Moreover, 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: Lee v. Russell (1961) WAR 103, at p 109. 472 Ninth, for reasons set out in Saravinovski (No 5) at [76] and following, the Court gave leave for certain of Chris' affidavits to be relied upon, notwithstanding that his loss of mental capacity meant that he could not be cross-examined. The way such evidence should be treated was considered by Hallen J in Fulton v Fulton [2014] NSWSC 619: 111. However, affidavit evidence, however good, which, for whatever reason, is not subject to cross-examination when cross-examination is required, will always be discounted, as appropriate, if the affidavit is used with leave without cross-examination. The degree to which it will be discounted may depend on various factors, including the circumstances that lead to cross-examination being dispensed with, the nature of the evidence and its centrality and degree of significance to the case. The degree of discount appropriate will be judged according to all the circumstances of the case: Re O'Neil, Deceased [1972] VicRp 35, [1972] VR 327, per Anderson J, at 333 - 334; Citibank Ltd v Liu; ABN Amro Bank Ltd v Liu [2002] NSWSC 86, per Hamilton J, at [5]. 473 Tenth, the Court can only do the best it can on the evidence which it has. Some issues may need not be resolved or should not be resolved. It may be that they cannot be resolved given the nature of the evidence which the parties have adduced. This case has many similarities to the family dispute considered by Robb J in Aytul Ak-Tankiz v Ferat Ak & Ramazan Ak [2014] NSWSC 1044. Of the evidence in that case, his Honour said: 187. The principal evidence relating to these issues consisted of the uncorroborated evidence of the witnesses, or alternatively the only corroboration available was the testimony of other witnesses. The evidence distilled into the word of one witness against the word of one or more other witnesses. Most of the events relevant to the issues occurred many years ago. The evidence relevant to the issues generally consisted of a series of assertions, and counter-assertions by various witnesses. Evidence of the objective context was generally not available, so it has not been feasible to test the versions of events that were in contest by reference to the objective probabilities, based upon uncontroversial contemporary circumstances. Though the issues are not entirely irrelevant, their significance is limited, and their resolution has not been necessary for the purpose of determining the real issues in the case. Any attempt to resolve the issues by making judgments about the relative credibility of the individual witnesses on an issue-by-issue basis was likely to be based on illusory foundations."
Chris' and Mr He's credit were, at least on one view, central to the Plaintiffs' primary claims of misleading and deceptive conduct, deceit and conspiracy. Several, if not most, of the alleged misrepresentations (see [418] below) are said to have occurred orally or by the Active Defendants' and/or Mr Varvaris' failure to contradict or qualify oral representations made by each other. The parties' dealings were also, albeit not exclusively, largely conducted orally. Accordingly, on one view - certainly the view propounded by the Active Defendants - the Plaintiffs' claims may rise and fall with the credit of the two protagonists.
That view, however, does not sit comfortably with the contemporaneous WeChat records, the admissions made by Alysha and Dennis in their Affidavits (which establish that there is significant agreement between the parties as to verbal conversations) and the Active Defendants' agreement to the orders set out at [295] above, albeit that agreement was on a without admissions basis. Whilst Chris' and Mr He's credit is undeniably important to the outcome of these proceedings, even wholly adverse credit findings made against them would not necessarily be fatal to their case.

Chris

As might be expected, the Active Defendants made strong submissions to the effect that Chris was not a witness of truth, describing him as a "dreadful witness" who was "entitled and sneering". Among the examples cited by the Active Defendants were: 1. What was said to be Chris' disingenuous evidence as to his ability to speak and comprehend English; 2. His attempts to downplay his knowledge of property matters, even if it was correct that he may have been inexperienced in property development; 3. Inexplicable memory lapses; 4. Evasive answers; 5. Inconsistencies between his affidavit evidence and his oral testimony; 6. Preposterous, insofar as it was suggested that he and his father paid nearly a million dollars pursuant to the Supplementary Contract to an entity about which they knew nothing; 7. An insincere approach to giving his evidence, as was demonstrated by his mirth when it was put to him that he hoped Council officers would be able to be bribed in relation to the proposed developments.
In their submissions relating to the credit of both Chris and Mr He, the plaintiffs' counsel engaged in what might be described, with no disrespect intended, as a qualified confession and avoidance. They accepted, as was set out in their written submissions, that it was "an inescapable finding that Chris He failed to answer questions in a direct way". However, it was submitted that this was not a basis to make a global credit finding against him, but that rather the Court should conclude that Chris was attempting to give as much information as he could rather than answer the question specifically.
The plaintiffs submitted that Chris' evidence should be analysed through the lens of his privileged circumstances. He had told the Court that after graduating university he was "idling" and had no motivation to work in China. Furthermore, the Court could take comfort from the fact that there were numerous areas where the Active Defendants had agreed with Chris' evidence and that his evidence was consistent with the story told by the extensive WeChat messages. This latter matter, it was submitted, demonstrated that the Active Defendants in effect admitted that much of the evidence of Chris and his father was true. The Court was also invited to bear in mind that the plaintiffs' evidence in chief was given at the beginning of 2017 and 2018, with evidence in reply being given in 2019. Owing to one Covid related adjournment of the proceedings, their oral evidence was then being given in May 2021.
I have carefully re-read the transcript of Chris' evidence. That re-reading confirms the impression I formed and noted at the time, being that when he was giving his evidence he was an unsatisfactory witness in the sense that he did not give concise and responsive answers to many of the questions he was asked. I accept there is much force in the Active Defendants' criticisms of Chris and the Plaintiffs' concession that Chris failed to answer questions in a direct way was properly made.
However, those observations are not a complete answer to the question which the Court must now determine, being whether Chris was essentially a truthful witness. His evidence was given in Mandarin from China by video link. It was interpreted into English in the court room in Sydney. There were occasional interruptions to the signal and imperfections in sound. As the trier of fact I do not speak Mandarin and have no relevant knowledge or experience of Chinese culture. These issues of language and culture mean the Court cannot safely rely on demeanour insofar as in other contexts it might be of some assistance in assessing whether a witness appears to be telling (or trying to tell) the truth. The Court must take the evidence as it finds it and weigh it against contemporaneous material and inherent probability.
I have weighed exchanges such as the following which took place between Chris and Mr Sirtes of Senior Counsel for the active defendants (T119:32-44): "Q. In any event, can I ask you to look at page 1776? When Alicia says to you "our DA was not applied through formal channels." At no stage did you ask her what she meant by that, did you? A. INTERPRETER LUM: I didn't have that intention. The DA was applied following what Landmark had done. Landmark was leading and we were following. Q. Do you have a difficulty in attending to the very simple question I asked you, which was when she said to you "our DA was not applied through formal channels." There is no issue raised by you with her as to what she meant by that? It's a very simple question. A. INTERPRETER LUM: I didn't ask, and I had no idea either."
To similar effect was this exchange with Mr Sirtes SC and then me (T163:1-34): "Q. She said to you at 6.03pm, "We were going to have it approved through an unofficial channel", do you see that? A. INTERPRETER AU: Yes I can see it. Q. What did you understand she was talking about there, a television channel? A. INTERPRETER AU: I, I was not clear about that. HIS HONOUR Q. Are you serious in that answer sir? A. INTERPRETER AU: Yes, your Honour, I was serious in my answer, because she, Alicia [sic] was bent on chasing us to pay the, the DA money. She was very nervous about that. But from my angle I was very nervous about the second property's contracts amendment, because my money had been misappropriated, and now Alicia [sic] was chasing us to pay the DA money. But I wasn't too concerned about the DA money. Q. Are you saying to me sir that you did not understand what she meant when she wrote to you, "We were going to have it approved through an unofficial channel"? A. INTERPRETER AU: Your Honour yes I was serious in my answer because Alicia and Nick had a lot of mutual communication between themselves and both of them would have understood what they meant by that. Whereas they never explained or told me about what they were thinking. That's why I was not in the know about that. Q. But are you saying to me that you did not understand what she was saying to you when she referred to approval "through an unofficial channel"? A. INTERPRETER AU: Your Honour I really didn't understand, because when they show me the DA form, nobody explained to me what was that, neither did Bingemann nor Nick nor Alicia [sic] explain to me anything about the form in relation to the DA, and all she did was to chase me up for the $670,000 to be paid."
These are among the passages upon which the Active Defendants placed heavy reliance in support of their submission that the Court should find that Chris was not a truthful witness. However, I am unable to accept that submission. Notwithstanding potential issues of language, culture and not always perfect technology, I was left with the clear impression at the end of Chris's evidence that he was not an untruthful witness, but was rather a gullible and not particularly astute one. I am fortified in this conclusion by the fact that his evidence on critical matters is consistent with the picture that emerges from the history of the dealings between the parties as disclosed in the WeChat messages which have been set out at length above and the matters which the Active Defendants have accepted were in fact said. One answer struck me as particularly emblematic of Chris as a witness (T54:8-16): "Q. What you understood was there was a process that was involved in obtaining permission from a local council to enable you to build whatever the council has approved, correct? A. INTERPRETER AU: Well I understand that of course. Any, any building works must start the approval from the local council and we must not proceed or we must exceed the perimeters of the DA approval, we cannot build like what we wanted. But as for the DA approval process I have no, no good English and I cannot even fill in a form properly. So I, I just do not understand the approval process."
I have no doubt that the first part of Chris' answer is truthful and that he did have a basic understanding that Council approval was required for developments. However, he then goes on to attempt to minimise his understanding, including by reference to his poor English. This is consistent with something of a pattern in his evidence, which was to downplay what he understood of the process and to downplay his capacity to understand English. I make this latter observation even allowing for the fact that Chris had been in China after returning from his education in New Zealand so that he may have lost fluency. However, I very much doubt that after having gone through high school and university in English, his understanding was as bad as he tried to make out. Nevertheless, his attempt at minimising such matters struck me as naïve rather than dishonest. Furthermore, my assessment of Chris was strongly influenced by what struck me as an entirely honest assessment of him by his own father, who did not have the greatest of confidence in his son's abilities, giving evidence that, "Well, like I mentioned about my son before, put lightly, he has not done anything substantial. So when he asked to buy a property, I want to be with him to look after him" (T210:12-15).
It is also in this context of Mr He's disappointment and indulgence that I have assessed the attack made on Chris and Mr He in relation to documents prepared over the seal of Mr He's Chinese company certifying that Chris was deputy general manager of that company. The documents were prepared in support of applications for business visas for Chris and Mr He supported by Citywide Property Group in late 2015. The Active Defendants submitted that Chris' preparedness to present misleading documents to the Australian Government demonstrated that he would say anything he thought was in his interest. I accept the statements in the documents were untrue. However, the untruth - arising in the context of a disappointed and indulgent father and an indolent son - is not of a kind that bespeaks a propensity for dishonesty that would cast doubt on either man's credibility in relation to the matters central to these proceedings.
Accordingly, while there was much about Chris' evidence that was open to criticism, I am not satisfied that on essential matters he was an untruthful witness.

Mr He

The Active Defendants attacked Mr He's credibility with the same force and in similar terms to the criticisms they made of Chris. Similarly, and in my respectful view accurately, counsel for the plaintiffs accepted that Mr He "was also a witness who failed to give most of his answers in a direct way", but urged that this was not a basis to make global credit findings against him.
The Active Defendants' attack on Mr He was more generalised. They submitted that he was not really able to recall his affidavit evidence when it was put to him in cross-examination such that the Court could conclude that it was evidence that had been drafted for Mr He rather than by him. While there were certainly examples when he could not recall his affidavit evidence, I would not draw the conclusion invited by the Active Defendants.
They also attacked his oral evidence as rambling and unresponsive, and exhibiting every intention of implicating Alysha whenever he could. While Mr He's evidence did indeed exhibit similar qualities to Chris in terms of being discursive and not always responsive, my review of the transcript confirms the impression I had at the end of his evidence that while he was not a satisfactory witness, the unsatisfactory features of his evidence did not bespeak dishonesty.
As the WeChat material clearly demonstrates, for better or for worse Chris took the principal role in the relevant transactions. While Mr He was obviously an experienced businessman (although not, I accept, in property development) and as an older man had more life experience and, perhaps, common sense than his son, I accept the Plaintiffs' submission that Mr He's evidence should be understood through the lens that he was really there just to support his son. His evidence, and the language in which it was given, left me with the clear impression that Chris, as his only son, had been heavily indulged and that he (Mr He) was resigned to the fact that he would continue to indulge him.
So much emerged from what I considered to be both a telling and truthful piece of exchange (T212:41-213:17): "Q. And the situation was that Chris was your only child, and whatever Chris wanted or needed, you were content to provide that to him? A. INTERPRETER AU: Well basically you may say so, but I do have my own principles that I would express my viewpoint as well. Q. Well, it's not me saying so. Can I take you to page 243? In paragraph 108 your words were "Chris is my son. Whatever Chris needs or wants, I will provide for him." A. INTERPRETER AU: Correct. Q. And Chris had not really don't terribly much, since he had left university in terms of work, had he? A. INTERPRETER AU: Correct. Q. So, if Chris had indicated to you that he wanted to engage in some property development, you were content to assist him, weren't you? A. INTERPRETER AU: Not necessarily, because Chris would like to do a lot of various things, which was not mentioned in any documents in this Court matter. He had a lot of ideas, not every idea or not every notion that he wanted to pursue, I would 100% agree to. Q. When he said to you that he was considering looking into property development, you didn't seek to persuade him from that course, did you? Dissuade? A. INTERPRETER AU: Some ideas that he had, I would agree to, but some ideas that Chris had, I might not agree to. Q. Certainly, this was an idea that he seemed to have, that you were not disagreeing with? A. INTERPRETER AU: During the process of this idea, there were some final points that I would disagree with, but based on some things that happened prior and after and my objection did not take effect."
As with Chris' evidence, Mr He's evidence is consistent with the broader story told by the WeChat messages. Notwithstanding his inadequacies as a witness, I am satisfied that Mr He was a truthful witness.

Ms Yaner

Not much turns on Ms Yaner's evidence. The highest her evidence in chief rises is its support of Chris' and Mr He's recollection of events at the 16 February 2016 dinner. Although her credibility and alleged ignorance of Chris' and Mr He's property development endeavours in Kogarah were attacked in cross-examination, Mr Oakes' cross-examination did not diminish the force of her evidence, such as it was.

Expert Evidence

The Plaintiffs relied upon expert evidence from a town planner, Ms Clare Swan, and a valuer, Mr Anthony Alford. Neither expert was cross-examined and the assumptions underlying their respective reports were not challenged. Accordingly, I accept the evidence of both experts as it appears logical and credible.
Ms Swan's evidence was contained in a report dated 3 August 2018. In that report, Ms Swan gave evidence that between 1 August 2015 and 13 March 2016 (which was the temporal scope of her report), the Kogarah Local Environmental Plan 2012 ("Kogarah LEP") and Kogarah Development Control Plan 2013 ("Kogarah DCP") applied to both the First Kogarah Property and the Second Kogarah Property. The relevant parts of the Kogarah LEP and Kogarah DCP are the following: 1. Both the First Kogarah Property and the Second Kogarah Property were zoned as "B4 Mixed Use" under the Kogarah LEP. The objectives of that zoning included "[t]o provide opportunities for residential development, where appropriate". 2. The First Kogarah Property and the Second Kogarah Property were identified in the Kogarah DCP as forming part of the Southern Retail Precinct within the Kogarah Town Centre. The stated objectives for the Southern Retail Precinct include: "(c) Residential development is discouraged on the site. … (e) New development should be designed to minimize any impacts on neighbouring residential uses, including the loss or unreasonable impingement of significant views. … (g) Allow for building heights which provide a balance between the viability of any new retail centre and to negate any potential adverse impacts such as excessive massing, overshadowing and view loss to adjacent properties. 1. The stated development controls for the Southern Retail Precinct include: (1) Maximum number of storeys is 4. … Preferred Land Uses (7) Supermarket, speciality retail outlets, business premises, commercial premises. (8) Although residential uses are permitted in the zone, they are not encouraged in this location. In this regard, any proposed residential development is to be limited to a maximum of 100m2 in total and must be designed to operate independently of any retail/commercial development including parking and vehicular and pedestrian entries."
Having referred to these and other salient provisions within the Kogarah LEP and Kogarah DCP, Ms Swan proffered this opinion: "5. The inherent tension between the LEP permissible land use and height, and the DCP which seeks to expressly discourage residential developments creates uncertainty in relation to the assessment of any development application. It is likely that this would make Council's assessment of a DA for residential uses both fraught and difficult and that the applicant in that instance would need to rely on the EP&A Act provisions to convince either the Independent Hearing and Assessment Panel (IHAP), Sydney Planning Panel or the NSW Land and Environment Court of the merits of the proposal. The site specific DCP section discourages residential uses on site and accordingly does not currently provide a certain or logical assessment framework for residential development. Given the site specific strategic focus in the DCP for the Southern Retail precinct and the strengths of the assertions made in discouraging residential, I consider that a consent authority or the Land and Environment Court would have paid significant attention and scrutiny to the express objectives of the DCP for the Kogarah Properties and that achieving a Development Application (DA) for residential was highly unlikely. 6. In order to address the theoretical possibility that residential development was technically permitted by the LEP land use zoning, I have undertaken a theoretical apartment yield analysis… Based on a maximum FSR of 2:1 and assumptions regarding unit mix, size, and GFA efficiency, a theoretical yield of 31 apartments is achieved on the First Kogarah Property, and 21 apartments on the Second Kogarah Property… 7. Whilst theoretically possible to achieve residential based on the LEP zoning, it remains my view that seeking consent for residential uses on the property would have been fraught, difficult and highly unlikely due to the stated strategic vision for the site under the DCP, which expressly discouraged residential development. 8. The yield analysis undertaken by me demonstrates a 'theoretical apartment yield' far below the expectations depicted in the "Candalepas Plans" … for both Properties. 9. In my view, approval could not have been obtained for construction of buildings in accordance with the Candalepas Plans, under the planning controls applicable during the Relevant Period. In my experience the magnitude of variation that is proposed in the Candalepas plans would be highly unlikely to be supported by a consent authority through a standard DA pathway - being an approximate 380% variation to the 15m height control (i.e. approx. 57 metres or 17 storeys proposed in those plans) and a 250% variation to the FSR control (5:a proposed in those plans). Such variations require amendment of the planning controls."
Mr Alford's evidence was contained in a report dated 25 September 2018 and a supplementary report in relation thereto dated 8 April 2021. At the time of preparing both reports, Mr Alford had the benefit of Ms Swan's report, upon which he placed significant reliance (particularly Ms Swan's opinion vis-à-vis the likelihood of developing the First Kogarah Property and Second Kogarah Property for residential use) in forming his conclusionary opinions in respect of the value of the First Kogarah Property, the Second Kogarah Property and an amalgamated First Kogarah Property and Second Kogarah Property at various dates.
In his first report, Mr Alford expressed two primary opinions in response to questions put by the solicitors for the Plaintiffs. Those questions, and Mr Alford's responses thereto (which are in italics), were as follows: "a) What was the value of the First Kogarah Property: i) in the period between 1 August 2015 and 31 March 2016; and ii) as at the date of your report: assuming the matters set out in [Ms Swan's report] are correct, namely that it was highly unlikely that consent to a development application for residential development could be secured on that property; and even if it could be, then a maximum of 30 apartments would be permitted? I am of the opinion that given the [First Kogarah Property and the Second Kogarah Property] do not have an existing development approval and that there is a high risk in securing residential development approval, a prudent purchaser would attribute little if any value to the hypothesis that the Subject Properties had potential for residential development. They would have assessed market value 'as is', that is, taking into consideration the existing improvements and use. For clarification, in my opinion, any uplift in value gained through securing residential development approval, whether it be 30 of [sic] 140 apartments, would be 100% attributable to the professional endeavours of the party that took on the risk, holding and application costs, associated with seeking and gaining such approval. b) What was the value of the First Kogarah Property: i) in the period between 1 August 2015 and 31 March 2016; and ii) as at the date of your report: Assuming [sic] that notwithstanding the various planning instruments, consent to a development application for 75 to 80 apartments on that property was feasible, realistic and achievable from a planning perspective and that number of apartments could be built? Assuming that there was little risk in securing residential development, I am of the opinion that a prospective purchaser would have considered value based on the residential development potential of the site. That is, they would have assessed market value on a residential redevelopment basis, taking into consideration the number of units achievable. Little if any consideration would have been given to the existing improvements and use."
Mr Alford's report of 25 September 2018 also contains the following convenient summary of his opinion of the market values of the First Kogarah Property, the Second Kogarah Property and the First Kogarah Property and Second Kogarah Property as if amalgamated as at 1 August 2015, 1 February 2016, 31 March 2016 and 10 September 2018: Subject Property Valuation Scenario No. of Units Value as at 1 Aug 2015 Value as at 1 Feb 2016 Value as at 31 Mar 2016 Value as at 10 Sept 2018 First Kogarah Property a) As is $3,790,000 $3,810,000 $3,830,000 $4,180,000 b) 75 $10,540,000 $11,010,000 $11,160,000 $12,400,000 c) 80 $11,190,000 $11,680,000 $11,840,000 $13,160,000 Second Kogarah Property d) As is $2,330,000 $2,340,000 e) 60 $9,090,000 $9,220,000 Amalgamated First and Second Kogarah Properties f) As is $6,140,000 $6,170,000 g) 135 $19,100,000 $19,370,000 h) 104 $19,770,000 $20,050,000

By his supplementary report dated 8 April 2021, Mr Alford provided an update of his market valuation of the First Kogarah Property on an "as is" basis. The updated market valuation of the First Kogarah Property is $4,315,000 as at 8 April 2021.

What, if any, Inferences Should be Drawn?

Counsel for both the Plaintiffs and Active Defendants invited the Court to make adverse inferences consequential upon their respective failure to call witnesses. On the one hand, Counsel for the Active Defendants invited the Court to draw the following inferences on account of the Plaintiffs' failure to call Mr Vay: 1. his evidence would not have assisted the Plaintiffs' case; and 2. the Plaintiffs cannot corroborate: 1. their instructions in relation to the First Kogarah Property; 2. their understanding of the planning process; 3. the vendors' extensive exclusions from liability as to its development potential; 4. their reliance on the representations alleged to have been made by the Active Defendants and Mr Varvaris; 5. the advice they received in relation to the Second Kogarah Property; 6. Alysha's dealings with Mr Vay concerning the Second Kogarah Property; and 7. whether Mr Vay in fact disclosed to Mr He that Mr Varvaris had transferred the funds paid by Haiye pursuant to the Second Kogarah Property Cheque to CBC.
By contrast, Counsel for the Plaintiffs invited the Court to make general adverse inferences against each of the Active Defendants on account of the fact that their evidence was clearly relevant to the issues for determination, including, perhaps most importantly, the basis of the representations that were made.
In response to the Active Defendants' submissions concerning the Plaintiffs' failure to call Mr Vay, the Plaintiffs submitted that the Active Defendants had overstated the importance of Mr Vay, who could not give evidence as to the Plaintiffs' own personal understanding of the planning process, or their reliance on any representations. They submitted that the most that could be inferred from his not being called by the Plaintiffs was the "he could not give evidence, from his own independent recollection, of what had happened [on any relevant matter]" see Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345 at [168]-[169]; [2012] FCA 17.
I dealt with a similar submission concerning a failure to call a solicitor in Saravinovski (No 6), and identified in my judgment the relevant legal principles: "585 The Court accepts Maria and George's submission that, where the evidence of any of those witnesses might be expected to have been relevant to a particular issue, either or both of the inferences identified by Heydon, Crennan and Bell JJ as the majority in Kuhl v Zurich Financial Services [2011] HCA 11; (2011) 243 CLR 361 at 384 are available to be drawn by the Court: 63. The rule in Jones v Dunkel is that the unexplained failure by a party to call a witness may in appropriate circumstances support an inference that the uncalled evidence would not have assisted the party's case. That is particularly so where it is the party which is the uncalled witness. The failure to call a witness may also permit the court to draw, with greater confidence, any inference unfavourable to the party that failed to call the witness, if that uncalled witness appears to be in a position to cast light on whether the inference should be drawn. These principles have been extended from instances where a witness has not been called at all to instances where a witness has been called but not questioned on particular topics. Where counsel for a party has refrained from asking a witness whom that party has called particular questions on an issue, the court will be less likely to draw inferences favourable to that party from other evidence in relation to that issue. That problem did not arise here. The plaintiff's counsel did ask the plaintiff relevant questions. 586 Maria and George also criticised Chris' failure to call his solicitor, Mr Gordon Bryant. There can be no doubt that Mr Bryant was involved in all of the property and other transactions which feature in these proceedings. Mr Bryant was not the solicitor on the record for Chris in Chris' Case. However, he was the solicitor on the record for Chris in Maria's Case. He was present in Court for much of the hearing. No explanation was given for the failure to call Mr Bryant. In those circumstances, Maria and George submitted that the Court should draw an inference, in accordance with Jones v Dunkel, that Mr Bryant's testimony would not have been favourable to Chris' interests. 587 It was put on behalf of Chris that the rule in Jones v Dunkel does not apply where the witness not called is the party's solicitor. It is sufficient to note what is said in Cross on Evidence, 10th Australian edition, 2016 Lexis Nexis Butterworth, at [1215]: Fourthly, the rule in Jones v Dunkel does not apply where the witness not called is the party's solicitor, at least with the evidence which is in consequence not given is privileged and the privilege has not been waived. This is because if the solicitor gave evidence on the subject of privileged communication the privilege would be lost, and the court will not permit the destruction of the privilege by this back door. 588 With one important exception, Maria and George were unable to point to any evidence that Mr Bryant might give that would not have been the subject of privilege. Maria and George responded to Chris' argument by saying: (1) If the evidence was privileged, Chris could have waived it. (2) In paragraph 19 of Chris' statement of claim concerning the 2003 Mortgage, Chris alleged "the said sum of $1,000,000 was calculated by Gordon Bryant". It was submitted that was a waiver of privilege. 589 The Court does not accept the first answer. Implicit in it is the suggestion that an adverse inference can be drawn by reason of a party's failure to waive privilege. That is not correct: Cooper v Hobbs [2013] NSWCA 70 at [62] per McColl JA; Meagher JA and Bergin CJ in Eq agreeing."
Applying those principles, the Court concludes that there is no basis to draw an adverse inference against the Plaintiffs in relation to their failure to call Mr Vay. Whatever passed between him and the Plaintiffs was privileged and no adverse interest will be drawn by reason of their failure to waive any such privilege.
Furthermore, I should record that there was a faint reference in the Active Defendants' submissions to the possibility of the Plaintiffs having impliedly waived any privilege by reason of the representations on which they sued. However, that reference was not developed into a positive submission. If such a submission had been made, I would have rejected it. While the Plaintiffs' case was advanced on many bases, none of them put whatever may have passed between the Plaintiffs and Mr Vay in issue so as to constitute an implied waiver.
For their part, the Active Defendants by their Counsel, advanced the ambitious proposition that, notwithstanding their forensic decision not to give evidence, the Court "should be circumspect in drawing inferences against" them. Three reasons were given, which I reproduce from the Active Defendants' written submissions: "41. There are a number of reasons why the Court should be circumspect in drawing inferences against the Nominated Defendants not giving evidence for a range of reasons: a. first, bearing in mind the obvious, unarguable nature of the frank WeChat exchanges between Alysha and Chris, and the fact that they are set forth in black-and-white, there is little that Alysha could say that is not set forth in documents which, in any event, would almost invariably be given greater weight by the Court in ascertaining the true circumstances; b. secondly, in circumstances where Mr Varvaris was, on the Plaintiffs' case, the 'architect' (to quote from Mr Cheshire's oral opening) of this misadventure and, moreover, the Plaintiffs have not pursued him nor would the Nominated Defendants be more be more naturally inclined to call him, any explanation given by Alysha or Dennis, by way of explanation or exoneration, would be uncorroborated; c. thirdly, the alleged admissions in the affidavits tendered by the Plaintiffs of Alysha and Dennis confirm a number of the discussions that were recorded in the curated and sanitised affidavits prepared by the Plaintiffs. If the calibre of the Plaintiffs' affidavits is any guide, the Plaintiffs can hardly contend that the absence of responsive affidavits gives rise to adverse inferences."
Given the serious nature of the allegations made in this case, none of these reasons is persuasive to prevent the Court from drawing both the inferences referred to in Kuhl quoted in Saravinovski (No 6) above. This is not only because of the seriousness of the allegations made by the Plaintiffs against the Active Defendants. For their part, the Active Defendants have made, by submissions that often seemed to be no more than innuendo, serious allegations against the Plaintiffs to the effect that the Plaintiffs were engaged in impropriety and illegality. If it was intended that the Court accept that both the Plaintiffs and the Active Defendants were somehow together involved in such activities, it is to be expected that the Active Defendants would have gone into evidence as the repositories of first-hand knowledge supporting those serious allegations. That evidence could, if necessary, have been given with the benefit of certificates in relation to the possibility of self-incrimination.
None of the reasons advanced on behalf of the Active Defendants constitutes a sufficient explanation for their not being called. This is a case where the Court draws an inference that the absence of the Active Defendants means that their evidence would not have assisted any aspect of their case. Furthermore, insofar as the Court in these reasons draws inferences unfavourable to the Active Defendants based upon other evidence, to save repetition I record now that all such inferences have been more readily and confidently drawn by reason of the failure of the Active Defendants to give evidence on their own behalf. In expressing that position globally, I also make clear that I have not applied any such inference to fill any gaps in the Plaintiffs' evidence but only to draw inferences in respect of which evidence otherwise exists.

Pleadings

On my count there are more than 100 pleaded individual false, misleading and deceptive representations or other conduct, which span 45 pages of the Amended Statement of Claim. It being incumbent upon the Court to consider the merits of each pleaded item separately, it would not be appropriate, in my view, to summarise them (see also what was said by French CJ and Kiefel J (as her Honour then was) in Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357 at 364; [2010] HCA 31 ("Miller")). However, to avoid unnecessary repetition in these reasons, I set them out in full at [418] below, together with the Court's findings.
The pleaded false, misleading and deceptive representations and other conduct are capable of partition into categories in several ways. I shall approach the representations by grouping them by reference to the transaction to which they principally relate (i.e. the First Kogarah Property, the Supplementary Contract, the Second Kogarah Property and the Fake Bingemann Invoice).

Submissions

Counsel for the Plaintiffs advanced several general submissions in support of the Plaintiffs' misleading and deceptive conduct case. Those submissions were: 1. Many of the pleaded representations have been admitted by the Active Defendants both on the pleadings and by Alysha's and Dennis' Affidavits, albeit most of those admissions are qualified by the Active Defendants pleading or giving evidence that they were translating what was said by Mr Varvaris. The Court should reject those qualifications (save where they are self-evident or accepted by the Plaintiffs' witnesses) where the words attributed to either Alysha or Dennis are clearly not translations (see, for example, the contrast between statements that begin "Nick says", which are consistent with a translation, and assertions without that qualification, which are consistent with Alysha making those statements herself in [57] above). 2. Insofar as the Active Defendants have failed to adduce any evidence as to their belief of the reasonableness of representations made with respect to future matters, they are taken to be misleading pursuant to s 4 of sch 2 of the Competition and Consumer Act 2010 (Cth) ("ACL"). 3. On the issue of causation, it was not suggested to the Plaintiffs' witnesses that they would have proceeded with PPD's purchase of the First Kogarah Property, and the other parts of the transaction, regardless of whether they had known of its true value and the likelihood that a development application (on terms discussed by the parties) would be successful (being the relevant counterfactual). Further, the pleaded misleading and deceptive representations were, in their nature, relevant to the decisions that the Plaintiffs were making and were intended to induce them to act in the way that they did. In those circumstances, an inference of causation arises, particularly because the representations need not be the sole inducement, but only to have played a part in the decisions made by the Plaintiffs: see, e.g., Gould v Vaggelas (1984) 157 CLR 215 at 236 ; [1984] HCA 75 ("Gould v Vaggelas"); Henville v Walker (2001) 206 CLR 459; [2001] HCA 52 ("Henville v Walker") at [60]-[61], [106]-[111], [152] and [163]; Como Investments Pty Ltd (in liq) v Yenald Nominees Pty Ltd (1997) ATPR 41-550 at 43,619 (unreported, WASC). 4. That the Active Defendants are accessorily liable for the representations made by Mr Varvaris is framed in three alternative ways, namely (see the definition of "involved" in s 2(1) of the ACL): 1. that the Active Defendants aided, abetted, counselled or procured the making of the representations; 2. that the Active Defendants were directly or indirectly, knowingly concerned in or a party to the making of the representations; or 3. that the Active Defendants conspired with Mr Varvaris and each other.
Counsel for the Active Defendants also advanced the following general submissions addressing the Plaintiffs' false, misleading and deceptive conduct case: 1. The Court cannot be satisfied, on the evidence before it, that the representations were made by the Active Defendants or that the Plaintiffs relied on the representations. 2. The transaction as between Haiye and PPD was not in trade or commerce. They were pooling money to engage in a transaction with Al-Jaafaria and were thus engaging in internal dealings of corporate governance within PPD. Further, the transaction between Haiye (or Mr He) and Varvaris & Co as regards the Second Kogarah Property was the payment by a cestui que trust into a trust account, which is not conduct in trade or commerce; rather, it is a trustee-beneficiary relationship. Mr Sirtes SC also made this fleeting oral submission on the ninth day of the hearing (see T374:1-34): "Your Honour touched upon, can I say with great respect, very interesting issue yesterday when your Honour posed the question if your Honour is satisfied that there was something untoward or improper about this transaction, does that mean the transaction was in trade and commerce. I had a think about that overnight and can I say your Honour that it may well be that that is indeed the answer to a conundrum that arises if you do have a transaction which falls within the rubric of the one that we say existed here. Can I give your Honour perhaps one illustration? If as no doubt commonly occurs between members of the 12th floor and the eighth floor of our building, I go downstairs to purchase a bag or [sic] marijuana from Mr Cheshire and Mr Cheshire in fact sells me a bag of parsley then on one view one could say nothing illegal here. All that occurred was that I purchased a bag of parsley. But if one looks at the nature of what was intended to be the transaction, if I then sued Mr Cheshire on the basis that I paid far more for a bag of parsley then I should have otherwise have had if I went down the IGA in Martin Place and bought some myself. Then if I brought a TPA claim or an ACL claim on the basis that he had engaged in misleading and deceptive conduct, and this was a transaction in trade and commerce, there may be an answer to say on one view there was nothing illegal about Mr Cheshire selling me a bag of parsley. But on the other hand, would a Court seriously treat a transactions [sic] whose intention was intended to be something that was improper or illegal, was that a transaction that the ACL had within its contemplation one within trade and commerce, we would say the answer to that would be no. So if we have a transaction where there is a common design we say amongst a bunch of people where in fact what they're doing is they're buying a piece of land with the intention of deliberately attempting to obtain unlawfully a development approval to further make the kind of profit that was identified by Mr He in his WeChat, what we'll call back of the envelope calculations, we would say the ACL would not respond to that and treat that as being in trade and commerce." 1. The Court should reject the Plaintiffs' allegations of oral representations on account of Chris' and Mr He's lack of credibility. 2. The Plaintiffs' inability to recall entire conversations cannot give the Court any confidence that the conversations occurred as alleged. 3. The Active Defendants were often mere conduits of information from Mr Varvaris and did not, therefore, make any representations themselves. 4. The Plaintiffs did not rely upon any of the pleaded representations. Rather, they relied upon the fact that they could (or at least formed the view that they could) obtain a development approval improperly through unofficial channels.

The First Kogarah Property

Counsel for the Plaintiffs' submissions, specific to the First Kogarah Property, can be summarised as: 1. The Plaintiffs' evidence establishes that the following pleaded representations were made: 1. as to the representations pleaded in paragraph 19A of the ASOC, see [257] above and [418] below. The representations pleaded at 19A (and set out in [52] above) are admitted by Alysha, save that she asserts she did not say that Mr Varvaris' father was a Greek priest; 2. as to the representations pleaded in paragraph 19B of the ASOC, see [54], [56] and [57] above. Alysha also concedes that she said the words attributed to her in those paragraphs, with minor qualifications; 3. as to the representations pleaded in paragraph 19C of the ASOC, see [64] and [110] above; 4. as to the representations pleaded in paragraphs 19D-19G of the ASOC, see [54] above; 5. as to the representations pleaded in paragraphs 19H-19I of the ASOC, see [70] and [71] above. Dennis has accepted that those paragraphs accurately reflect the representations that were made at that meeting; 6. as to the representations pleaded in paragraphs 19J-19K of the ASOC, see [79] above; 7. as to the representations pleaded in paragraph 19L of the ASOC, see [100] above; 8. as to the representations pleaded in paragraphs 19M-19N of the ASOC, see [115(1)] and [115(5)] above; and 9. as to the representations pleaded in paragraphs 19O-19Q of the ASOC, see [155] above. 1. That the Active Defendants engaged in misleading and deceptive conduct is also borne out from the following evidence: 1. Dennis' direct involvement in organising the funds for PPD's purchase of the First Kogarah Property; 2. the cancellation of Pionnier's cheque for its share of the balance of the purchase price of the First Kogarah Property and the absence of evidence that a new cheque was drawn from an account owned by any of the Active Defendants; and 3. Dennis' involvement in delivering the cheque for Pionnier's share of the balance of the purchase price for the First Kogarah Property, which was drawn from the funds paid by Haiye for the deposit of the Second Kogarah Property. 1. The Plaintiffs and Active Defendants are ad idem that it was never certain as to how many units would be approved. That there was uncertainty surrounding the number of units that would be approved nevertheless demonstrates that the Active Defendants did not have a reasonable basis to make the representations that they did concerning the number of apartments that could or were to be built on the First Kogarah Property.
Counsel for the Active Defendants submissions in response can be summarised as: 1. The Court should reject the assertion that the pleaded representations have been made out for the following reasons: 1. the conceptual yield of 75 to 80 units was speculative and would only be obtained after the grant of development approval, which both Chris and Mr He acknowledged; 2. PPD's purchase of the First Kogarah Property was never based on the true market value of that property, but rather, upon the conceptual yield that could be achieved through Mr Varvaris' influence. In fact, Mr He's evidence demonstrated that he conducted his own calculations as to the value of the First Kogarah Property on the basis of its future development potential, rather than on an "as is" basis; and 3. there is no evidence to support the pleadings that the Active Defendants and/or Mr Varvaris represented that the building of 75 to 80 residential units on the First Kogarah Property was feasible, realistic and reasonably achievable from a planning perspective and that such a building was in accordance with, and in compliance with, applicable planning requirements. 1. If the Court is satisfied that the Active Defendants made statements regarding the potential development yield or the true market value of the First Kogarah Property, they were merely conduits of information from Mr Varvaris and did not, themselves, make any representations. 2. In relation to the pleadings at paragraph 19O-19Q of the ASOC: 1. the message upon which the Plaintiffs rely to make good the pleading was sent on 7 March 2016, which was after PPD had exercised its option to purchase the First Kogarah Property, such that the exchange was wholly irrelevant to PPD's purchase of the First Kogarah Property; 2. the question was asked of Mr Varvaris. The Plaintiffs are thus putting forth a case against the Active Defendants that they engaged in misleading and deceptive conduct by failing to answer a question not asked of them; and 3. in any event, the Active Defendants did not, in fact, fail to contradict or qualify Chris' message. Alysha responded to Chris' message with the prompt "@Nick" and was thereby actively seeking a response to Chris' message from Mr Varvaris. 1. Even if the Court is satisfied that any one or more of the representations were made, the evidence does not support the conclusion that the Plaintiffs relied on the representations. That the Plaintiffs relied on the representations should be rejected for the following reasons: 1. the Plaintiffs were not relying upon the pleaded representations, but rather, upon the fact that they could obtain development approval improperly through unofficial channels; 2. Mr He was readily prepared to purchase the Rockdale Property (at a purchase price of $12,500,000) in circumstances where he knew nothing about the true market value of that property. Mr He also purchased, or funded the purchase, of a penthouse apartment in Sydney's CBD without having undertaken any due diligence; nor could he, in cross-examination, recall the purchase price of that property. The Court cannot be satisfied that Mr He adopted a different approach when it came to PPD's purchase of the First Kogarah Property; 3. the Plaintiffs failed to take reasonable care in protecting their own interests. Accordingly, any representation made by the Active Defendants was not a real inducement; 4. despite his protestations and denials, Mr He had a wealth of knowledge when it came to property development, which can be gleaned from his ownership of properties in several continents and that he prepared and shared detailed calculations of the development's potential profit; 5. in conducting his own calculations of the value of the First Kogarah Property with reference to its potential development yield, Mr He relied significantly upon information disclosed to him by others - for example, real estate agents otherwise unrelated to the transactions the subject of this dispute - and in doing so, did not take into consideration the true market value of the First Kogarah Property. In fact, Mr He displayed no interest in the true market value of the First Kogarah Property in conducting his calculations; 6. there is no evidence that Alysha or Dennis had experience in valuing property; and 7. the Court should reject all evidence that Chris and Mr He relied upon any representation on account of their abject dishonesty.

The Supplementary Contract

Counsel for the Plaintiffs advanced the following submissions in support of the Plaintiffs' case that the Active Defendants have engaged in misleading or deceptive conduct in respect of the payments made by Haiye pursuant to the Supplementary Contract: 1. The Plaintiffs' evidence establishes that the following pleaded representations were made: 1. as to the representations pleaded in paragraphs 20-26 of the ASOC, see [70] above; 2. as to the representations pleaded in paragraphs 27-33 of the ASOC, see [80] and [82] above 3. as to the representations pleaded in paragraphs 34-40 of the ASOC, see [136] and [137] above. 1. The foregoing representations were false and, insofar as they were representations as to a future matter, the Active Defendants had no reasonable basis to make the representation or, at the very least, they have failed to adduce any evidence of their reasonable basis for making those representations. Perhaps equally as important, the Active Defendants knew that the representations made by them and Mr Varvaris were false, or that there was no reasonable basis upon which they were made, and yet said nothing. 2. The evidence is clear that had the Plaintiffs known the true position - namely, that they were being deceived - they would not have paid monies towards that contract.
Further submissions were advanced not only by Counsel for the Plaintiffs, but also by Counsel for the Active Defendants, on the issue of the purported illegality or impropriety of the Supplementary Contract. Those submissions, for reasons which I shall address shortly (see [429] below), are not matters properly to be considered in the Court's determination of whether the Active Defendants have engaged in misleading and deceptive conduct for the purpose of s 18(1) of the ACL. I shall nevertheless briefly summarise Counsel for the Plaintiffs' submissions on this issue insofar as it addresses the Supplementary Contract, as numerous submissions were advanced: 1. notwithstanding that the Supplementary Contract was an irregular transaction, the evidence does not support a finding that Chris and Mr He were aware that the payments made pursuant to the Supplementary Contract were for an improper or illegal purpose; 2. from the discussions had with Mr Varvaris, Chris and Mr He understood that the structure of the Primary Contract and Supplementary Contract was requested by Al-Jaafaria and that the Supplementary Contract was required to "facilitat[e] the smooth transaction" of the purchase of the First Kogarah Property; 3. that Chris and Mr He were of the view that the Supplementary Contract was legitimate is also borne out by the fact that the payments made under that contract mirrored the payments made under the Primary Contract; that is, there was a payment of a deposit and a payment of the balance of the contract, both of which temporally coincided with the payments made under the Primary Contract. 4. Chris and Mr He were also of the view that the Supplementary Contract was a bona fide, legal and legitimate contract because the monies were to be paid into a solicitor's trust account. The Court should be slow to find that a NSW solicitor's trust account was used to facilitate bribes and that such money was intermingled with other trust money; 5. it is unlikely that the parties would have communicated over WeChat about the Supplementary Contract, and the payments made pursuant thereto, if they were involved in paying bribes to a sitting member of Parliament. In fact, the parties' communications over WeChat lend support for the view that the Supplementary Contract was a separate contract rather than a gratuitous payment made to Mr Varvaris; 6. in cross-examination, Chris maintained his evidence that he asked Mr Varvaris for a copy of the Supplementary Contract; 7. Mr He understood that the Supplementary Contract was part of the overall transaction and he believed, at the time of his payment of Haiye's share of the balance of the Supplementary Contract (i.e. $750,000), that it was a "matter of time" before he was to receive the document for the Supplementary Contract; 8. even if the payments made under the Supplementary Contract were intended for a party other than Al-Jaafaria, that does not, ipso facto, render those payments an illegal bribe. The payments may have been made in satisfaction of the commission that Mr Varvaris (or another third-party) was expecting from the sale process, rather than being a bribe for a subsequent development application; 9. there is no evidence from any Local Council officers to suggest that they were approached with a view to being bribed from funds paid under the Supplementary Contract, nor have the Active Defendants given evidence as to their knowledge that bribes were offered to Local Council officers; 10. that the parties may have sought to use Mr Varvaris' contacts and influence to help the development application process, and that he expected a commission for his assistance, did not make the entry into, or payment made under, the Supplementary Contract unlawful; and 11. notwithstanding that the Active Defendants accepted to pay 25% towards the expenses of the overall property development project, they did not pay anything towards the Supplementary Contract. The Supplementary Contract was thus not designed to pay bribes, but rather, was a scheme perpetrated against the Plaintiffs by the Active Defendants and Mr Varvaris to defraud them of the monies paid pursuant thereto.
In response to the primary submissions made by Counsel for the Plaintiffs addressing the Plaintiffs' misleading and deceptive conduct case in respect of the Supplementary Contract, Counsel for the Active Defendants advanced these submissions: 1. the payments made under the Supplementary Contract were not made to an entity related with Al-Jaafaria, but rather, to Citywide Property Group. The denials made by Chris and Mr He that they had any idea who Citywide Property Group was should be rejected by the Court; and 2. by her messages at [80] and [82] above, Alysha did not make any representations; she merely passed on information from Mr Varvaris.
In response to Counsel for the Plaintiffs' submissions on the issue of the purported illegality and/or impropriety of the Supplementary Contract, Counsel for the Active Defendants primarily submitted the payments made under the Supplementary Contract were either a bribe paid to Mr Varvaris to secure his influence or for him to use as he wished; in either scenario, the Plaintiffs sought to procure favourable planning treatment of PPD's development applications.

The Second Kogarah Property

The submissions advanced by Counsel for the Plaintiffs in support of the Plaintiffs' misleading and deceptive conduct case in respect of the payments made by Haiye in purported satisfaction of the deposit for the Second Kogarah Property were primarily directed towards the Active Defendants' conduct and/or silence throughout the parties' discussions about purchasing the Second Kogarah Property. Indeed, but for the pleadings at paragraphs 77, 92, 118 and 132 of the ASOC, the Plaintiffs' misleading or deceptive case against the Active Defendants in relation to the Second Kogarah Property is directed towards their conduct and/or silence, rather than express statements. In seeking to highlight Alysha's and Dennis' suspect conduct throughout the parties' discussions, Counsel for the Plaintiffs drew the Court's attention to: 1. Notwithstanding that Alysha and Dennis purchased and later sold the Landmark Property in 2014-2015 (through Wah Ming), and realised a profit from that endeavour in the sum of $2,650,000 only 11 days prior to Chris and Mr He's first inspection of the First Kogarah Property, neither Alysha nor Dennis made more than a passing reference to having made a small profit from the sale of the Landmark Property, nor did they disclose, in any real detail, their involvement in, and the events that transpired with respect to, Wah Ming's purchase, the preliminary property development steps it undertook and later sale of the Landmark Property to Landmark. That Alysha and Dennis intentionally withheld vital information from Chris and Mr He regarding their prior involvement with the Landmark Property is further evinced by the following: 1. Alysha was significantly involved in Wah Ming's purchase of the Landmark Property and the development steps undertaken by it. Her involvement included: 1. attendance at preliminary meetings with Wah Ming's lawyers, who in turn appeared to be providing instructions to, or at the very least liaising with, architects and other people involved in the preliminary steps undertaken to prepare Wah Ming's development application for the Landmark Property; and 2. the provision of instructions to Wah Ming's lawyers, which frequently included instructions regarding development issues and the structure of the various Deeds entered into by Wah Ming (see [29] - [33] above). 1. Notwithstanding that Dennis does not appear, on the face of the documents, to have had any real involvement in the preliminary development steps undertaken by Wah Ming, nor was he an officeholder or shareholder (even indirectly) of Wah Ming, he described himself as one of four purchasers of the Landmark Property, which he, alongside the other purchasers, intended to develop. 2. Alysha and Dennis did not disclose, in any detail, their prior commercial dealings with the Landmark Property in early 2016 when the possibility of purchasing that property was first raised. Their silence throughout this period is particularly alarming in circumstances where Landmark was, as at early 2016, purportedly willing to sell the Landmark Property for $7,200,000 notwithstanding that it paid $14,800,000 to purchase that property in 2015. 3. At the dinner on 4 March 2016 (see [142]-[144] above), Dennis did not question how PPD's proposed purchase of the Second Kogarah Property (being part of the Landmark Property) compared in value to Landmark's purchase of the Landmark Property for $14,800,000 only seven months prior, nor did he question how the development could proceed with only the Second Kogarah Property because, until that point, the parties' discussions were about PPD's proposed purchase of the Landmark Property. 1. At the meeting on 3 March 2016 (see [136]-[137] above), both Alysha and Dennis sat idly by as Mr Varvaris explained the structure of the parties' transactions (i.e. PPD's purchase of the First Kogarah Property and its proposed purchase of the Landmark Property) and the amounts paid and payable by the parties, notwithstanding that Pionnier had not paid its 25% share of the Supplementary Contract. 2. On 7 March 2016, Dennis handed Chris a cheque for Pionnier's share of the balance of the purchase price of the First Kogarah Property, which was later cancelled. Alysha counselled Chris against delivering Pionnier's cheque until the parties had finalised their purchase of the Second Kogarah Property, notwithstanding that the vendors of the two properties were not related, nor had it ever been suggested, by this date, that there would be no point in proceeding with the purchase of the First Kogarah Property without the Second Kogarah Property. 3. At the meeting on 9 March 2016, Mr Varvaris explained that PPD's development of the First Kogarah Property could not proceed until the 60% deposit for the Second Kogarah Property had been paid. Alysha also represented that Pionnier would not pay its share of PPD's purchase of the First Kogarah Property if PPD did not also purchase the Second Kogarah Property. 4. On 10 March 2016, Alysha: 1. gave a different reason for cancelling the cheque than what she had previously given; and 2. represented that Pionnier's bank cheque was ready, notwithstanding that the cheques for the First Kogarah Property and the Second Kogarah Property were dated 15 and 11 March 2016 respectively. 1. On 11 March 2016, the two cheques for the Second Kogarah Property were banked, yet Pionnier's cheque was reversed on 14 March 2016. Notwithstanding that Pionnier's cheque was reversed (and that neither Alysha, nor Dennis, advised Chris and Mr He that it had been reversed), Mr Varvaris still had access to the Plaintiff's contribution of $3,564,000, which funds were used to pay Pionnier's share of the balance of PPD's purchase of the First Kogarah Property. 2. On 15 March 2016, Dennis sent a photo of Pionnier's bank cheque (which therefore did not identify its source) for the balance of its share of PPD's purchase of the First Kogarah Property. Dennis then delivered that bank cheque without disclosing that it had come from funds provided by the Plaintiffs and that therefore, the Active Defendants did not contribute 25% of the balance of the purchase price of the First Kogarah Property. 3. Alysha failed to disclose her receipt of $400,000 from Varvaris & Co, which amount comprised part of Haiye's $3,564,000 contribution towards PPD's purported purchase of the Second Kogarah Property. 4. On 10 August 2016, Mr Varvaris provided an invoice and receipt for the payments made in purported satisfaction of the deposit for PPD's purchase of the Second Kogarah Property. Those documents recorded payment of the entire 60% deposit (i.e. inclusive of Pionnier's share of the amount said to be payable by PPD) whereas only Haiye's share of that sum had, in fact, been paid. Neither Alysha, nor Dennis, sought to correct the record by informing Chris and/or Mr He that Pionnier's cheque for its share of the 60% deposit had been cancelled. 5. Throughout the parties' entire commercial relationship, neither Alysha, nor Dennis, ever advised the Plaintiffs that they had not paid anything towards: 1. the balance of the purchase price for the First Kogarah Property; nor 2. the transaction in respect of the Second Kogarah Property.
Counsel for the Plaintiffs thus submit, on the basis of the foregoing, that not only were the representations (including those made by silence) about PPD's proposed purchase of the Second Kogarah Property false, but the Active Defendants knew that to be the case. Further, because the Active Defendants have failed to adduce any evidence of the reasonableness of the representations as to future matters, those representations are taken to have been misleading.
In response thereto, Counsel for the Active Defendants advanced the following four primary submissions: 1. of the evidence that the Court can, and should, accept, the Court will discern that the Active Defendants were not, in fact, in any way involved in Mr Varvaris' fraudulent scheme, nor did they have any knowledge to implicate them in that scheme; 2. the Court should reject the assertion that Alysha and/or Dennis made any representations as regards PPD's proposed purchase of the Second Kogarah Property on account of the Plaintiff's failure to adduce sufficient, credible evidence that the representations (including those by silence) were, in fact, made; 3. even if the Court accepts that the Active Defendants made representations in relation to PPD's proposed purchase of the Second Kogarah Property, the Plaintiffs did not rely upon those representations; rather, they relied extensively upon the representations made exclusively by Mr Varvaris; and 4. in the alternative, there is a novus actus interveniens regarding the Plaintiffs reliance on representations made by the Active Defendants such that there is no causal link between the Plaintiffs' reliance on those representations and the loss or damage purportedly suffered.
I will set out Counsel for the Active Defendants' submissions in greater detail below.

Submission - the Active Defendants were not involved in Mr Varvaris' fraudulent scheme

The overarching theme of Counsel for the Active Defendants' submissions on the Plaintiffs' misleading and deceptive conduct case as regards the Second Kogarah Property transaction can be distilled, in my view, to one submission: the Active Defendants were just as duped by Mr Varvaris' fraudulent scheme as the Plaintiffs. There is no evidence, Counsel for the Active Defendants submit, to suggest that Alysha and/or Dennis had any knowledge of Mr Varvaris' plan to fabricate the entire transaction. Counsel for the Active Defendants drew the Court's attention to: 1. On the Plaintiffs' own evidence, Mr Varvaris: 1. identified the opportunity to purchase the Second Kogarah Property; 2. negotiated the purchase price of $7,200,000; 3. advised Chris, Mr He, Alysha and Dennis that he was dealing exclusively with Landmark; 4. advised Chris, Mr He, Alysha and Dennis that the First Kogarah Property could not be developed without the Second Kogarah Property; 5. advised Chris, Mr He, Alysha and Dennis that the vendor required a 60% deposit, which needed to be paid to CBC because the vendor did not want to pay additional tax; 6. was solely responsible for drafting the agreements; 7. procured the agreement ostensibly executed by Landmark; 8. had sole control of Varvaris & Co's trust account; 9. was the sole person who transferred the funds from Varvaris & Co's trust account; and 10. was the sole person who spent and distributed the funds paid by Haiye. 1. Throughout the parties' conversations via WeChat, Alysha demonstrated her understanding that the Second Kogarah Property transaction was entirely legitimate; indeed, she was angst-ridden about ensuring that it proceeded, lest she lose her investment. 2. Throughout the parties' conversations via WeChat, Mr Varvaris was the sole conveyor of information and it was not infrequent that Alysha sought clarity from Mr Varvaris regarding the price to be paid and updates generally on his negotiations with the vendor of the Second Kogarah Property. 3. Alysha counselled Chris against paying the funds in relation to the First Kogarah Property until the Second Kogarah Property had been finalised. 4. On 11 March 2016, Alysha requested that the contract for PPD's proposed purchase of the Second Kogarah Property be forwarded to a solicitor. 5. Notwithstanding that the cheque drawn by, or on behalf of, Pionnier was cancelled, paragraph 108 of the ASOC pleads that it was cancelled on Mr Varvaris' instruction. 6. In August 2016, Alysha expressed great concern to Chris, via the Alysha WeChat, about whether the Second Kogarah Property would proceed. Alysha also expressed her concern, via the Group WeChat, regarding the security of the funds paid to Varvaris & Co. 7. There is no evidence that Alysha or Dennis knew that Mr Varvaris had control over CBC or its bank accounts. In fact, in the Group WeChat, Alysha asked Mr Varvaris who CBC was (see [221] above). 8. Alysha was involved in liaising with Mr Box, incurred fees and approached the Council regarding a voluntary planning agreement concerning a development which included the Second Kogarah Property and land owned by Landmark. It is nonsensical that Alysha would go to these lengths if she knew that the Second Kogarah Property was a concoction. 9. If Alysha knew that the Second Kogarah Property was a concoction, it would have been nonsensical for her to have spoken with Mr Vay about the proposed Deed of Agreement for PPD's purchase of the Second Kogarah Property, which Mr Varvaris was negotiating (see [212], [223] and [231] above).
Counsel for the Active Defendants submit that the evidence fails to demonstrate, to the requisite standard as espoused by Briginshaw and s 140 of the Evidence Act 1995 (NSW), that Alysha and Dennis were aware of Mr Varvaris' fraudulent scheme and, absent that knowledge and involvement, the Plaintiffs' claims should be dismissed.

Submission - the evidence does not support a finding that Alysha and Dennis made any representation regarding the Second Kogarah Property

As referred to in [344] above, the vast majority of the pleaded misleading or deceptive representations against the Active Defendants pertain to the Active Defendants' alleged conduct and/or silence, rather than express statements. Insofar as the Active Defendants are said to have made representations by silence, Counsel for the Active Defendants submit that the Court cannot be satisfied, having regard to the totality of the circumstances, that Alysha and Dennis had any independent knowledge of the Second Kogarah Property transaction beyond what they knew from Mr Varvaris, nor that the Plaintiffs were aware that they had any such independent knowledge; the Active Defendants knew as much as the Plaintiffs did.
The Court should reject the Plaintiffs' claim for deception by silence on account of the case falsely perpetuating the notion that the Plaintiffs were "outside the tent" and that the Active Defendants were "inside the tent" with Mr Varvaris and had full, or even partial, knowledge of what was actually going on.
As for the positive representations made by Alysha and/or Dennis either by conduct or express statements, the Court should reject the Plaintiffs' evidence of these representations as being unreliable or, at the very least, should be circumspect in accepting it.
Counsel for the Active Defendants further submitted that should the Court accept that express statements were made by the Active Defendants, the Court should find that the statements were predominately made by Mr Varvaris or involved Alysha translating Mr Varvaris' statements.

Submission - if representations were made by the Active Defendants, they were not relied upon by the Plaintiffs

Counsel for the Active Defendants submit that even if the Court finds that the Active Defendants engaged in misleading or deceptive conduct, the Court should reject the notion that the Plaintiffs relied upon those representations in making the payment to Varvaris & Co.
Counsel for the Active Defendants drew the Court's attention to these matters in support of the submission that it was the representations made by Mr Varvaris, rather than any representation made by Alysha or Dennis, upon which the Plaintiffs relied in making the payment to Varvaris & Co: 1. The Plaintiffs understood that Mr Varvaris was handling the negotiations and communications with Landmark. Accordingly, the Plaintiffs had no reason to believe that the Active Defendants were anything but mere conduits for Mr Varvaris. 2. The Plaintiffs' primary concern was that Mr Varvaris would walk away from the development if PPD did not purchase the Second Kogarah Property on the terms relayed by Mr Varvaris. 3. Save for one representation (see paragraph 92(b) of the ASOC) each representation said to have been made by the Active Defendants (other than the representations by silence) had already been made by Mr Varvaris. 4. As regards the representation pleaded at paragraph 92(b) of the ASOC, the Plaintiffs simply did not rely upon the representation in transferring the funds to Varvaris & Co. 5. In cross-examination, Chris gave the following evidence that it was Mr Varvaris, rather than Alysha, upon whom he relied (at T84:34-39; see also T125:16-18, T128:11-20 and T130:32-43): "Q. And it was your understanding that only Nick would be the one who would be dealing with the development approval process with council, correct? A. INTERPRETER LUM: Yeah, that, we can only rely on him. For me, I don't know about the process. My dad would have no idea about the process either. Alicia might have some idea, but I don't know. She have more experience in land development, well, we could only leave it in the hands of Nick."
Counsel for the Active Defendants further submit that, in any event, the Plaintiffs were so negligent in protecting their own interests that any representations that were made by the Active Defendants were not a real inducement to the Plaintiffs transferring funds to Varvaris & Co.

Submission - there is a novus actus interveniens severing the causal chain between any reliance upon representations made by the Active Defendants and the loss suffered by the Plaintiffs

The Plaintiffs' payment of $3,564,000, on their case, was a payment made to Varvaris & Co to be held on trust for PPD's purported purchase of the Second Kogarah Property. The loss that was suffered by the Plaintiffs in respect of that payment was, Counsel for the Active Defendants submit, Mr Varvaris' breach of trust, rather than any representation made by the Active Defendants. That breach was thus either a novus actus interveniens or a distinct breach of trust for which the Active Defendants cannot be liable (noting also that the Plaintiffs have not pleaded a knowing assistance case against Alysha or Dennis). Accordingly, even if the Plaintiffs relied upon representations made by the Active Defendants, the only consequence of that reliance was that the Plaintiffs transferred money to Varvaris & Co. What happened thereafter was through no fault of the Active Defendants.

The Fake Bingemann Invoice

Counsel for the Plaintiffs' submissions in support of the Plaintiffs' misleading and deceptive conduct case in relation to the Fake Bingemann Invoice can be summarised as: 1. The Active Defendants' and Mr Varvaris' conduct ought to be considered in all the circumstances, including: 1. Alysha and Dennis had previous property development understanding and experience and were thus acutely aware of the process that Bingemann was intending to undertake with reference to the Kogarah property development; 2. Alysha and Mr Varvaris were almost exclusively liaising with Mr Box on behalf of Bingemann and were both in receipt of the fee proposals and invoices issued by Bingemann; 3. Landmark had no involvement in the development and had not engaged Bingemann; 4. prior to Haiye's payment of its share of the Fake Bingemann Invoice, Bingemann was only in the preliminary stage of its development process and the development application was not yet ready to be lodged; 5. the Fake Bingemann Invoice was not issued by Bingemann and further, Bingemann was not seeking payment of the Fake Bingemann Invoice; 6. when the Fake Bingemann Invoice was paid, Mr Box remitted those funds to A & T Education at the direction of Mr Varvaris; 7. Chris' hesitation to pay the Fake Bingemann Invoice was not "mak[ing] everything delay and complicate [sic]" (see [230] above); and 8. Pionnier did not pay its share of the Fake Bingemann Invoice. 1. The representations contained in [208] and [418] above, which Alysha did not contradict or qualify, were false, misleading or deceptive for the following reasons (see paragraphs 150-156 of the ASOC): 1. there was no explanation as to why Landmark would have paid nearly $2,000,000 for a development when it only owned one of the two properties upon which the proposed development was to proceed; 2. there had been no prior discussions or arrangement between Landmark and PPD to conduct a joint development; 3. Bingemann was only at a preliminary stage of the development process and was not in a position to lodge a development application, nor had it accrued $2,000,000 in fees owing; 4. it is unlikely that Bingemann would have done work to a value exceeding $1,600,000 in circumstances where it had only been paid, at most, half that sum (i.e. Landmark's purported half share of the Fake Bingemann Invoice) (if indeed anything at all); and 5. the representations are inconsistent with Bingemann's fee disclosure. 1. The representations made by Alysha and Mr Varvaris in [208] and [418] above, neither of which was contradicted by Alysha (as regards Mr Varvaris' representation), Dennis or Mr Varvaris (as regards Alysha's representation), were false, misleading or deceptive for the following reasons (see paragraphs 150-156 of the ASOC): 1. the Fake Bingemann Invoice bears the same features as the legitimate invoice issued by Bingemann to Alysha and Mr Varvaris on 20 July 2016 (see [194] and [215] above); 2. the Fake Bingemann Invoice had not been issued by Bingemann, nor was Bingemann seeking payment of it; 3. Bingemann had not conducted work with a value of nearly $2,000,000; 4. the Fake Bingemann Invoice referred to a "Consultant Expenses as per Attachment", which was not attached to the invoice or otherwise sent to the Group WeChat by Alysha, Dennis or Mr Varvaris; and 5. notwithstanding that the Fake Bingemann Invoice and the legitimate invoice issued by Bingemann were nearly identical but for the amount owing, neither Alysha, Dennis nor Mr Varvaris challenged the legitimacy of the Fake Bingemann Invoice. 1. The representations contained in [221], [234] and [418] above, which Alysha (as regards the representations made by Mr Varvaris), Dennis and Mr Varvaris (as regards the representations made by Alysha) did not contradict or qualify, were false, misleading or deceptive for the following reasons (see paragraphs 164-181 of the ASOC): 1. Bingemann did not issue, nor was it pressing for payment of, the Fake Bingemann Invoice; 2. the development process was only at a preliminary stage and the development application was not ready to be lodged imminently; 3. the documents that had been supplied to Alysha by Bingemann and its consultants suggested that the development process was only at a preliminary stage; 4. payment of the Fake Bingemann Invoice was not required for Bingemann to continue working; 5. consultants were not going to lose confidence in the venture if Haiye did not pay its share of the Fake Bingemann Invoice; 6. Alysha was aware that neither she, nor Dennis or Pionnier, had paid anything more than 25% of the deposit for the First Kogarah Property, thus rendering her statement "We've paid millions and now we discuss the risks of hundreds of thousands" false. 1. The obvious inference, which is only reinforced by the Active Defendants' failure to give evidence, is that the Fake Bingemann Invoice was a scheme concocted by the Active Defendants and Mr Varvaris to defraud the Plaintiffs by creating a non-existent debt, supported by a fake written invoice. 2. The representations that were with respect to a future matter are to be taken to have been misleading as the Active Defendants failed to adduce any evidence in relation to the reasonableness of those representations.
Counsel for the Active Defendants' submissions in response can be summarised as follows: 1. The Active Defendants simply did not make the representations as alleged; rather, they were just as reliant on Mr Varvaris as the Plaintiffs. For example: 1. On 7 August 2016, Alysha sent a photo of the Fake Bingemann Invoice and asked Mr Varvaris whether the sum disclosed therein was the amount owing to Bingemann (see [214] above); 2. Alysha frequently relayed her concerns with ensuring that payments to Bingemann were made on time, lest the "government officers [be] replaced" (see [230] above); and 3. Alysha sought to clarify the correct payee of the invoice with Mr Varvaris (see [234] above). 1. The evidence does not establish that the Active Defendants had any knowledge that the Fake Bingemann Invoice was illegitimate. Counsel for the Active Defendants drew the Court's attention to the following: 1. Bingemann was a contact of Mr Varvaris and Mr Varvaris was frequently the sole point of contact; 2. Bingemann was conducting work and engaging contractors for which PPD was liable; 3. having received Bingemann's consultants' fee estimates of $2,960,500 and $1,598,750 (see [190]-[192] above), Alysha had every reason to believe that Bingemann's invoice of $895,125 was legitimate; 4. it was Mr Varvaris who requested that Bingemann refund the payment made by Haiye; and 5. although Alysha received $400,000 of the funds paid to Bingemann by Haiye, there is no evidence to suggest that she was responsible for arranging the relevant transfers and she has acknowledged that that amount must be repaid. 1. Even if the Active Defendants made representations in respect of the Fake Bingemann Invoice, those representations were not relied upon by the Plaintiffs. To the contrary, the Plaintiffs relied upon representations made by Mr Varvaris: 1. Chris' evidence was that Mr Varvaris would deal with the development approval process; 2. It was Mr Varvaris who clarified the amount payable to Bingemann; and 3. It was Mr Varvaris who was putting pressure on the Plaintiffs to make the payments in satisfaction of the Fake Bingemann Invoice.

Legal Principles

The statutory basis of the Plaintiffs' misleading and deceptive conduct claim is section 18(1) of the ACL. That section provides: "A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."
The following principles are relevant to the Plaintiffs' claims pursuant to s 18(1).
First, whether the Active Defendants have engaged in misleading or deceptive conduct for the purpose of s 18 of the ACL is a question of fact, to be assessed objectively having regard to their (and Mr Varvaris') conduct and the surrounding circumstances: see, e.g., Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592 at 625-6; [2004] HCA 60 per McHugh J ("Butcher v Lachlan Elder Realty Pty Ltd"); Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at 319; [2009] HCA 25 per French CJ ("Campbell v Backoffice Investments Pty Ltd"); Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 202 per Deane and Fitzgerald JJ; Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2020) 278 FCR 450 at 459; [2020] FCAFC 130 per Wigney, O'Bryan and Jackson JJ ("ACCC v TPG Internet Pty Ltd"); Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd [2011] WASCA 76; (2011) 248 FLR 193 at 207 per McLure P ("Owston Nominees"). It would, as McHugh J said in Butcher v Lachlan Elder Realty Pty Ltd, be erroneous "to look at isolated parts of [the Active Defendant's and Mr Varvaris'] conduct", including their alleged silence, in determining whether the Active Defendants have engaged in misleading or deceptive conduct: see 625. Further, as McLure P said in Owston Nominees at 207-208: "Contextual matters can have a material impact in widening the range of conduct properly attributable to the defendant. That is, the actual conduct (in its natural and ordinary meaning) of the defendant is examined in its broader context to assess the full scope of what can properly be characterised, expressly or impliedly, as conduct of the defendant. For example, a responsive nod of the head or raised thumb implies that the defendant in effect made or confirmed the correctness of the statement to which it was responding. Contextual conduct of this nature not only connects back to the defendant but also identifies what the defendant's conduct is capable of conveying or communicating to the persons to whom the conduct is directed. Ordinarily, the term "representation" is used to capture, in words, both the defendant's contextual conduct and what it conveys or communicates to others. … Not all surrounding circumstances are relevant in the identification process. In particular, conduct cannot be attributed to the defendant unless it had actual or constructive knowledge of the circumstances that affect its content. In other words, contextual circumstances of which the defendant had no actual or constructive knowledge that alter the scope of what would otherwise be attributed to it, are irrelevant: see Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [27]. This specific proposition is but an aspect of the wider and well-established proposition that the identification of the defendant's actual conduct, the relevant surrounding circumstances and what is capable of being conveyed is to be undertaken by reference to the actual, objectively determined, circumstances. Reasonable inferences, reasonable assumptions and reasonable expectations arising from the objectively determined circumstances will be in the constructive knowledge of the parties. An objective test excludes from consideration subjective matters (knowledge, intention) not known to the parties. I leave open the question whether an objective test applies in circumstances where the only relevant conduct of the defendant is a deliberate failure to disclose."
Second, whether the Active Defendants and Mr Varvaris have "engaged in conduct" ought to be determined by reference to a finding that they (or one of them) have engaged in "an act or, at a minimum, refraining otherwise than inadvertently from doing an act": Johnson v Mackinnon [2021] NSWCA 152 at [248] per Brereton JA (with whom Macfarlan JA and Simpson AJA agreed) ("Johnson v Mackinnon"); see also Owston Nominees at 207.
Accordingly, and of importance to significant parts of the Plaintiffs' case, silence can amount to misleading or deceptive conduct: see Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31 at 32; [1992] FCA 851 per Black CJ; Miller at 368 per French CJ and Kiefel J (as her Honour then was). As the Full Court of the Federal Court said in Rafferty v Madgwicks (2012) 203 FCR 1 at 68; [2012] FCAFC 37 per Kenny, Stone and Logan JJ) ("Rafferty v Madgwicks"): "… if the circumstances of a particular case would give rise to a reasonable expectation that, if a fact existed, it would be disclosed, then the failure to disclose that fact may give rise to an inference that the fact does not exist. In this situation (ie, where there is such a reasonable expectation), a failure to disclose the existence of that fact could constitute misleading and deceptive conduct."
In Johnson v Mackinnon, Brereton JA further explained, with reference to what her Honour said in Owston Nominees at 208, that (at [253]): "… non-disclosure can, because of common assumptions or other relevant surrounding circumstances, give rise to an implied representation that the undisclosed fact did not exist. Making such an implied representation is the doing of an act within ACL, s 2(2). In this way, the satisfaction of the "reasonable expectation" test can result in the defendant doing an act".
Where silence is pleaded as having been misleading or deceptive or likely to mislead or deceive, the "focus is on whether the omission is intentional and deliberate": Owston Nominees at 204; see also Johnson v Mackinnon at [249]. However, as her Honour further explained in Owston Nominees (at 208) (see also Johnson v Mackinnon at [254]): "The need to establish a deliberate omission will only arise if the defendant's actual conduct together with all the relevant surrounding circumstances are (objectively) incapable of giving rise to the misleading or deceptive contextual conduct complained of. In that event, the circumstances in which deliberate non-disclosure may be misleading or deceptive conduct will be limited; perhaps where the defendant is aware of another's misapprehension in the type of situations where relief is available for unilateral mistake (Taylor v Johnson (1983) 151 CLR 422) or where the plaintiff's misapprehension is caused by, but is not objectively attributable to, the defendant's conduct."
Third, misleading and deceptive conduct may take a variety of forms, including where a false statement is contained in a contractual document. Whether such a statement amounts to a contravention of s 18(1) of the ACL is a matter of fact to be determined by reference to all the circumstances: Campbell v Backoffice Investments Pty Ltd at 322 per French CJ; see also Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) 42 FCR 470 at 505; [1993] FCA 265 per Lockhart and Gummow JJ.
Fourth, the Court will analyse the conduct of the Active Defendants and Mr Varvaris in relation to the Plaintiffs alone, "bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or which each may be taken to have known": Butcher v Lachlan Elder Realty Pty Ltd at 604-5 per Gleeson CJ, Hayne and Heydon JJ; Campbell v Backoffice Investments Pty Ltd at 319 per French CJ.
Fifth, the impugned conduct must have had a tendency to lead the Plaintiffs into error; that is, "to form an erroneous assumption or conclusion about some fact or matter": ACCC v TPG Internet Pty Ltd at 458; see also Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 at 198; [1982] HCA 44 per Gibbs CJ ("Parkdale"); Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at 651; [2013] HCA 54 per French CJ, Crennan, Bell and Keane JJ. The Plaintiffs need not prove that they were actually deceived or misled by the impugned conduct: Butcher v Lachlan Elder Realty Pty Ltd at 626 per McHugh J. It is nevertheless incumbent on the Plaintiffs to prove that the conduct of the Active Defendants and/or Mr Varvaris had a real or not remote chance or possibility of being likely to mislead or deceive the Plaintiffs: Butcher v Lachlan Elder Realty Pty Ltd at 626 per McHugh J, citing Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 87; [1984] FCA 180 ("Global Sportsman").
Sixth, the intention of the maker of the representation is not relevant to the question of whether conduct is misleading or deceptive or likely to mislead or deceive, save for the circumstances adverted to in [366] above: Parkdale at 197 per Gibbs CJ and at 216 per Brennan J; Hornsby Building Information Centre Pty Limited v Sydney Building Information Centre Ltd (1978) 140 CLR 216 at 228; [1978] HCA 11 per Stephen J; Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435 at 443; [2013] HCA 1 per French CJ, Crennan and Kiefel JJ (as her Honour then was) and at 466 per Hayne J ("Google v ACCC"). That being so, the Court will be more inclined to find (by inference or otherwise) that conduct is misleading or deceptive, or likely to mislead or deceive, where an intention to mislead or deceive is manifest: see S & I Publishing Pty Ltd v Australian Surf Life Saving Pty Ltd (1998) 88 FCR 354 at 362 per Hill, R D Nicholson and Emmett JJ.
Seventh, an intermediary acting as a mere conduit of information, who makes clear, in all the circumstances of the case (including where an intermediary adopts or endorses a misleading or deceptive representation), that he or she is not the source of that information and disclaims belief in its truth or falsity, will not be liable as a principal for misleading and deceptive conduct: Yorke v Lucas (1985) 158 CLR 661 at 666 per Mason ACJ (as his Honour then was), Wilson, Deane and Dawson JJ ("Yorke v Lucas"); Butcher v Lachlan Elder Realty Pty Ltd at 609 per Gleeson CJ, Hayne and Heydon JJ and 629 per McHugh J; Google v ACCC at 446 per French CJ, Crennan and Kiefel JJ (as her Honour then was) and 471 per Hayne J.
Eighth, as the High Court explained in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 ("Concrete Constructions"), conduct is in trade or commerce where the impugned conduct (at 604 per Mason CJ, Deane, Dawson and Gaudron JJ): "… is the conduct of a corporation towards persons, be they consumers or not, with whom it (or those whose interests it represents or is seeking to promote) has or may have dealings in the course of those activities or transactions which, of their nature, bear a trading or commercial character."
The phrase "in trade or commerce" does not encompass all conduct in the course of the myriad of activities which do not bear a trading or commercial character, "but which are undertaken in the course of, or as incidental to, the carrying on of an overall trading or commercial business": Concrete Constructions at 602-3. For conduct to be "in trade or commerce", it ought not be divorced from any relevant actual or potential trading or commercial relationship or dealing: Concrete Constructions at 604.
Whether conduct satisfies the criterion espoused by the High Court in Concrete Constructions will vary on the particular facts of a given dispute. It is unhelpful to attempt to list conduct that "bear[s] a trading or commercial character" or formulate a general rule against which conduct can be determined as "bear[ing] a trading or commercial character". That having been said, conduct of an inherently intra-corporate nature will not be conduct in trade or commerce: see, e.g., Aardwolf Industries LLC v Tayeh [2020] NSWCA 301 at [75] per Macfarlan JA (with whom Bell P and Leeming JA agreed); see also generally New Cap Reinsurance Corporation Ltd v Daya [2008] NSWSC 64; (2008) 216 FLR 126. Whether conduct is of an inherently intra-corporate nature will, nevertheless, depend on the facts of any given dispute.
The payment by a cestui que trust into a trust account in the furtherance of a commercial enterprise is conduct that bears a trading or commercial character. In Kowalczuk v Accom Finance Pty Ltd (2008) 77 NSWLR 205; [2008] NSWCA 343 ("Kowalczuk"), the Court of Appeal (J C Campbell JA; Hodgson and McColl JJA agreeing) considered, inter alia, the question of whether loans obtained by an individual and a company he controlled for investment with a third party (who, not unlike the present case, turned out to be a fraudster) was conduct "in trade or commerce" for the purpose of s 51AC of the Trade Practices Act 1974 (Cth) ("TPA"). Quite unlike these proceedings, in Kowalczuk, the loans were obtained for the purpose of on-lending to make a profit, but neither the individual, nor his company, were engaging in the business of investing: see 247 per Campbell JA (with whom Hodgson and McColl JJA agreed). In rejecting the assertion that the individual, or his private company, had engaged in trade or commerce, Campbell JA said (at 247): "186. … not all investment is engaged in "for the purpose of trade or commerce". In Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 603, Mason CJ, Deane J, Dawson J and Gaudron J said that the expression "in trade or commerce" in s 52 of the Trade Practices Act (Cth): "can be construed as referring only to conduct which is itself an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character." 187. Their Honours held (at 603) that the expression "in trade or commerce" refers to: "'the central conception' of trade or commerce and not to the 'immense field of activities' in which corporations may engage in the course of, or for the purposes of, carrying on some overall trading or commercial business." 188. Similarly, a transaction is entered "for the purpose of trade or commerce" when it is entered to enable some further activity, that has itself a trading or commercial character, to be engaged in. For a private individual, or a private individual's company, to make an investment is not, in my view, to enter a transaction "for the purpose of trade or commerce" when it is not itself a part of a business of investing. It is unnecessary, on the facts of the present case, to decide whether an investment made by such a person or company as part of a business of investing would have the necessary character of being entered "for the purpose of trade or commerce"."
Unlike what transpired in Kowalczuk, in these proceedings, Haiye transferred the sum of $3,564,000 to a trust account held by Varvaris & Co in the furtherance of PPD's property development endeavours in Kogarah. To describe the payment of that sum to Varvaris & Co as merely the payment by a cestui que trust into a trust account, which the Active Defendants assert is not conduct in trade or commerce, ignores the true character of the transaction and omits the fact that the payment was made in the furtherance (or so the Plaintiffs thought at the time) of a commercial endeavour. It will be apparent from this digression from the statement of legal principles applicable to the Plaintiffs' misleading and deceptive conduct case that the Court rejects the Active Defendants' submission that Haiye's payment of $3,564,000 to a trust account held by Varvaris & Co was not conduct in trade or commerce. The payment was one of several made by Haiye in the course of a commercial endeavour. That it was made in the character of a cestui que trust is not in and of itself determinative of the question whether it was in trade or commerce. The entire factual context must be taken into account.
It is also convenient at this point to deal with the Active Defendants' submission concerning the Plaintiffs being alleged to have been involved in an illegal scheme. As I have already observed, the evidence relied on by the Active Defendants is too imprecise, and in many respects does not rise above innuendo, to warrant the serious finding (on the Briginshaw standard) that Chris and Mr He were engaged in an illegal scheme, a scheme which in vague terms was alleged to involve Mr Varvaris by bribery or otherwise illegally subverting the Council planning process (as opposed, it might be thought, to making representations to the Council as a public person of influence in the community in support of the proposed development). However, even if, contrary to the Court's conclusion, there was an element of illegality, I also reject the submission that conduct cannot be in trade or commerce notwithstanding that by engaging in the conduct, a party has embarked upon, or was party to, an illegal scheme.
That the conduct was part of, or incidental to, an illegal act does not necessarily deprive it of its trading or commercial character. In this case the fundamental transaction was the purchase and development of land, which in and of itself was not illegal. In Brownbill v Kenworth Truck Sales (NSW) Pty Ltd [1982] FCA 7; (1982) 39 ALR 191 ("Brownbill"), Sheppard J considered a claim for misleading and deceptive conduct in relation to the purchase of a prime mover where it was said that the purpose for which it was to be used (and the only profitable use) was illegal because it would require the vehicle to be overloaded contrary to the roads legislation. His Honour rejected the submission that the plaintiffs were deprived of a remedy, including in relation to an allegation similar to the present case about a misrepresentation as to the value of the asset purchased (at 202-203): "In my opinion the relevant authorities are the Smith's Newspapers case and Neal v Ayers. These establish that in a case such as the present an applicant or plaintiff suing for a civil wrong - I am not yet dealing with causes of action in contract - will not be deprived of his remedy or have his damages reduced to a nominal sum, if the enterprise which he has acquired or carries on is intrinsically lawful and capable of lawful operation. He may be prevented, as was the position in the Smith's Newspapers case, from recovering such portion of his damages as depends upon the unlawful carrying on of a profession or business. But, subject to that qualification, he retains his right to remedies in respect of wrongful conduct which has adversely affected the subject matter of the contract, for example, the hotel in Neal v Ayers or the prime mover in the present case. Furthermore, I think it follows from what was decided in the Smith's Newspapers case and Neal v Ayers that, to the extent that he does in fact carry on the business lawfully and his profits are shown to have been affected adversely by the defendant's wrongful conduct, he will not lose his right to damages in respect of that head of claim. …. Then it should be mentioned that one of the claims arises out of a representation alleged to have been made by the respondent as to the value of the vehicle. It is alleged by the applicants (although denied by the respondent) that the respondent said that the vehicle would be a good investment because it was being acquired cheaply and could be expected to hold its value. In my opinion no illegal purpose for which the applicants may have acquired the vehicle could defeat a claim for damages for the alleged falsity of that representation. It was lawful for the applicants to acquire the vehicle and it was lawful for them to have it in their possession and to operate it. The purpose for which they acquired it, whether unlawful or not, is an irrelevant consideration when one comes to consider this head of claim. My conclusion so far is that the causes of action for breaches of the Trade Practices Act and for negligent misrepresentation are not taken away by reason of the illegal operation of the vehicle nor by admissions made by the first applicant that he intended to use the vehicle for the illegal carriage of grain. I am of opinion, however, that the amount of damages which the applicants may recover will be affected because they will not be permitted to recover loss of earnings if that loss has only come about as the result of their inability, due to the respondent's wrongful acts, to operate the vehicle unlawfully."
Brownbill and other authorities in relation to illegal conduct and the ACL were recently considered, albeit in obiter dicta in Li v Liu [2022] NSWCA 67 (Beech-Jones JA; Meagher and White JJA agreeing) ("Li"): "60. The question of whether some form of illegality affecting the relevant conduct inhibits or precludes recovery under s 18 of the ACL turns upon the form of illegality in question and its relationship to the action brought by the affected party. It has been held that some types of dealings, such as buying and selling stolen goods or the sale of counterfeit currency, are "ex commercium" such that they stand outside the concept of "trade" and "commerce" in s 92 of the Constitution (Cth) (Mansell v Beck (1956) 95 CLR 550, 594; Fergusson v Stevenson (1951) 84 CLR 421, 434). There is no reason why that is not applicable to the definition of "trade or commerce" in s 4(2)(a) of the Competition and Consumer Act. A misleading statement made by one participant in a conspiracy to import illegal drugs to another is not made in trade and commerce even if instruments of commerce are used to further the conspiracy. 61. Otherwise, the above cases illustrate the principle that the consequences of the illegality of some matter related to the conduct the subject of the claim under s 18 of the ACL, fall to be resolved by considering and, to the extent necessary, reconciling the ACL and the statutory provisions that create the illegality in the same or similar way that occurs with illegal contracts. In that regard, the "central policy consideration at stake … [is] the coherence of the law" (see Equuscorp at [23] and [34]; Nelson v Nelson (1995) 184 CLR 538 at 613). 62. Thus, Brownbill did not involve a transaction or area of business that was ex commercium. Instead, Sheppard J reviewed a number of cases concerning the circumstances in which illegality affected a contract including Yango Pastoral (at 201) before concluding that the action was not barred per se, although lost earnings for being unable to operate the truck unlawfully were not recoverable. One way of rationalising the outcome is that the lost opportunity to illegally carry grain in Brownbill was not in substance loss or damage for the purposes of the statutory predecessor to the ACL. Similar reasoning was applied in Overmyer. 63. In this case the making of investments and the obtaining of employment for the purpose of obtaining visas is not rendered illegal per se by the Migration Act. The making of representations about the prospects of obtaining visas is also not illegal. Instead, the method by which those things were sought to be done in this case was rendered illegal by ss 245AR and 245AS of the Migration Act. Whatever representation was made by T & S and Mr Wang to the Appellants about their prospects of obtaining visas it was certainly made in trade or commerce. This aspect of the cause of action was similar to the circumstances in Elconnex. 64. Further, unlike the loss of profits claim in Brownbill, no aspect of the damages sought, being the recovery of the investments, was predicated on anyone acting illegally. The recovery of the amounts invested does not involve any direct or indirect conferral of a benefit in return for the occurrence of a sponsorship-related event. To grant a remedy on the basis that the representation should not have been made and thus the relevant sums would not have been invested would not undermine ss 245AR or 245AS of the Migration Act."
The various representations sued on by the Plaintiffs in this case were made in trade and commerce because they related to the purchase and proposed commercial development of land. Furthermore, no aspect of the damages sought by the Plaintiffs is predicated on anyone acting illegally and there is no question of the Plaintiffs' recovery of damages giving them a benefit derived from illegal conduct. Applying the principles set out in Brownbill and Li, those matters mean that an incidental element of illegality (assumed for the purposes of this argument but not found by the Court) would not deprive the Plaintiffs of a remedy under the ACL (or any other of their claims) if they otherwise demonstrate an entitlement to it. In other words, that a party has engaged in misleading and deceptive conduct in the course of, or incidental to, a broader illegal activity or scheme, does not deprive the conduct of its misleading or deceptive character. Whether a party who benefits from an illegal activity or scheme should be able to bear fruit from their illegality by means of a claim for misleading and deceptive conduct is a separate question altogether.
The Plaintiffs also place reliance upon s 4 of the ACL, insofar as they allege that the Active Defendants have engaged in misleading and deceptive conduct with respect to future matters. That section relevantly provides: "(1) If: (a) a person makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act); and (b) the person does not have reasonable grounds for making the representation; the representation is taken, for the purposes of this Schedule, to be misleading. (2) For the purposes of applying subsection (1) in relation to a proceeding concerning a representation made with respect to a future matter by: (a) a party to the proceeding; or (b) any other person; the party or other person is taken not to have had reasonable grounds for making the representation, unless evidence is adduced to the contrary."
Section 4 of the ACL is facultative and should not be read as imposing any additional, separate or different liability to that imposed by s 18(1): Australian Competition and Consumer Commission v Woolworths Limited [2019] FCA 1039 at [90] per Mortimer J ("ACCC v Woolworths Limited"). The following legal principles thus apply in addition to, rather than in substitution for, those considered above.
First, the words "with respect to" are of the widest possible scope: Ting v Blanche [1995] FCA 781; (1993) 118 ALR 543 per Hill J, quoting Nowegijick v R (1983) 144 DLR (3d) 193 at 200 per Dickson J.
Second, as the Full Court of the Federal Court explained in Australian Competition and Consumer Commission v Woolworths Group Limited (formerly called Woolworths Limited) [2020] FCAFC 162 (at [132] per Foster, Wigney and Jackson JJ): "A representation will only be with respect to a future matter if it is in the nature of a promise, forecast, prediction or other like statement about something that will only transpire in the future - that is, a representation which is not capable of being proven to be true or false when made."
Third, a person will not have reasonable grounds "for making a representation if, at the time of making it, the representor did not have facts sufficient to induce, in the mind of a reasonable person, a basis for making the representation": Australian Competition & Consumer Commission v Dateline Imports Pty Ltd [2015] FCAFC 114 at [100] per Gilmour, McKerracher and Gleeson JJ ("ACCC v Dateline"). It is not a question of the representor's subjective belief, nor whether the representation proves, in due course, to be true: ACCC v Dateline at [99] and [101]; see also Cummings v Lewis (1993) 41 FCR 559 at 565; [1993] FCA 190 per Sheppard Neaves JJ; Global Sportsman at 88.
Fourth, by s 4(2) of the ACL, the representor bears an evidential burden of adducing evidence that they had reasonable grounds for making a representation. As will already be apparent, the Active Defendants' failure to go into evidence means that to the extent that burden has been engaged, they have failed to meet it. The representee does not bear the dispositive burden of demonstrating that the representor did not have reasonable grounds for making the representation if the representor fails to adduce such evidence. The representee does, however, bear the dispositive burden if such evidence is adduced: see North East Equity Pty Ltd v Proud Nominees Pty Ltd [2012] FCAFC 1; (2012) 285 ALR 217 at 224 per Mansfield, Greenwood and Barker JJ; see also ACCC v Woolworths Limited at [90]-[91].
The Plaintiffs also plead that the Active Defendants are accessorily liable for the representations made by each other and Mr Varvaris. They do so on the following three alternative bases: 1. that the Active Defendants aided, abetted, counselled or procured the making of the representations; 2. that the Active Defendants were directly or indirectly, knowingly concerned in or a party to the making of the representations; or 3. that the Active Defendants conspired with Mr Varvaris and each other.
The three bases upon which the Plaintiffs rely as founding their claim against the Active Defendants as accessories derive from ss 2(1), 236 and 237 of the ACL. Those sections include: "2 Definitions (1) In this Schedule: … involved: a person is involved, in a contravention of a provision of this Schedule or in conduct that constitutes such a contravention, if the person: (a) has aided, abetted, counselled or procured the contravention; or (b) has induced, whether by threats or promises or otherwise, the contravention; or (c) has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or (d) has conspired with others to effect the contravention. … 236 Actions for damages (1) If: (a) a person (the claimant) suffers loss or damage because of the conduct of another person; and (b) the conduct contravened a provision of Chapter 2 or 3; the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention. … 237 Compensation orders etc. on application by an injured person or the regulator (1) A court may: (a) on application of a person (the injured person) who has suffered, or is likely to suffer, loss or damage because of the conduct of another person that: (i) was engaged in a contravention of a provision of Chapter 2, 3 or 4; or (ii) constitutes applying or relying on, or purporting to apply or rely on, a term of a contract that has been declared under section 250 to be an unfair term; or (b) on the application of the regulator made on behalf of one or more such injured persons; make such order or orders as the court thinks appropriate against the person who engaged in the conduct, or a person involved in that conduct." (emphasis in original)
I shall return to ss 236 and 237 later in these reasons. Their present relevance extends to their inclusion of the word "involved". That is, the Court may make compensatory orders, or other orders as the Court thinks appropriate, against the principal contravener or a person involved in (i.e. an accessory to) the contravention.
For a person to have aided, abetted, counselled or procured the making of a representation, or to have been in any way, directly or indirectly, knowingly concerned in, or party to, a contravention, they must have intentionally participated in the principal contravention with knowledge of the essential elements of the misleading or deceptive conduct at the time of the alleged contravention; namely, the falsity of the representation in question or that the representor did not have reasonable grounds for making the representation: see Yorke v Lucas at 667-8, 670; see also Rafferty v Madgwicks at 62; Australian Securities and Investments Commission v Activesuper Pty Ltd (in liq) (2015) 235 FCR 181; [2015] FCA 342; (2015) 325 ALR 414 at 485 per White J ("ASIC v Activesuper"). That is so notwithstanding that knowledge of the essential elements of the misleading or deceptive conduct is not an element of the primary contravention: see Yorke v Lucas at 663 and 668.
In Yorke v Lucas, Mascon ACJ (as his Honour then was), Wilson, Deane and Dawson JJ said (at 667): "… the words used, "aided, abetted, counselled or procured", are taken from the criminal law where they are used to designate participation in a crime as a principal in the second degree or as an accessory before the fact. Both in the case of felonies where the principal offender and the secondary participant commit separate offences, and in the case of misdemeanours where no distinction is drawn between the two, a person will be guilty of the offences of aiding and abetting or counselling and procuring the commission of an offence only if he intentionally participates in it. To form the requisite intent he must have knowledge of the essential matters which go to make up the offence whether or not he knows that those matters amount to a crime."
Their Honours continued (at 669): "Notwithstanding that s. 75B operates as an adjunct to the imposition of civil liability, its derivation is to be found in the criminal law and there is nothing to support the view that the concepts which it introduces should be given a new or special meaning."
In Yorke v Lucas, the Court referred at length to its prior analysis of accessorial liability in the criminal law in Giorgianni v R (1985) 156 CLR 473; [1985] HCA 29 ("Giorgianni"); in particular, the phrase "aided, abetted, counselled or procured". At 504-5, Wilson, Deane and Dawson JJ relevantly said of that phrase: "… there is no basis upon which it can be said that where a statutory offence requires no proof of intent, it is unnecessary in order to establish secondary participation in the commission of that offence to prove actual knowledge of all the essential facts of the offence. Intent is an ingredient of the offence of aiding and abetting or counselling and procuring and knowledge of the essential facts of the principal offence is necessary before there can be intent. It is actual knowledge which is required and the law does not presume knowledge or impute it to an accused person where possession of knowledge is necessary for the formation of a criminal intent."
Their Honours continued (at 506-7): "For the purposes of many offences it may be true to say that if an act is done with foresight of its probable consequences, there is sufficient intent in law even if such intent may more properly be described as a form of recklessness. There are, however, offences in which it is not possible to speak of recklessness as constituting a sufficient intent. Attempt is one and conspiracy is another. And we think the offences of aiding and abetting and counselling and procuring are others. Those offences require intentional participation in a crime by lending assistance or encouragement. They do not, of course, require knowledge of the law and it is necessary to distinguish between knowledge of or belief in the existence of facts which constitute a criminal offence and knowledge or belief that those facts are made a criminal offence under law. The necessary intent is absent if the person alleged to be a secondary participant does not know or believe that what he is assisting or encouraging is something which goes to make up the facts which constitute the commission of the relevant criminal offence. He need not recognize the criminal offence as such, but his participation must be intentionally aimed at the commission of the acts which constitute it. It is not sufficient if his knowledge or belief extends only to the possibility or even probability that the acts which he is assisting or encouraging are such, whether he realizes it or not, as to constitute the factual ingredients of a crime. If that were sufficient, a person might be guilty of aiding, abetting, counselling or procuring an offence which formed no part of his design. Intent is required and it is an intent which must be based upon knowledge or belief of the necessary facts."
At 505, their Honours refer to the requirement of actual knowledge without qualification. By contrast, in Giorgianni, Gibbs CJ referred to the following qualification of the requirement of actual knowledge (at 482): "One qualification that must be accepted is that wilful blindness, the deliberate shutting of one's eyes to what is going on, is equivalent to knowledge."
The qualification espoused by his Honour was later reformulated by the Court in Pereira v Director of Public Prosecutions [1988] HCA 57; (1988) 82 ALR 217 ("Pereira") where Mason CJ, Deane, Dawson, Toohey and Gaudron JJ observed (at 219-20): "Even where, as with the present charges, actual knowledge is either a specified element of the offence charged or a necessary element of the guilty mind required for the offence, it may be established as a matter of inference from the circumstances surrounding the commission of the alleged offence. However, three matters should be noted. First, in such cases the question remains one of actual knowledge: Giorgianni v R (1985) 156 CLR 473 at 504-7; 58 ALR 641; He Kaw Teh (CLR at 570). It is never the case that something less than knowledge may be treated as satisfying a requirement of actual knowledge. Secondly, the question is that of the knowledge of the accused and not that which might be postulated of a hypothetical person in the position of the accused, although, of course, that may not be an irrelevant consideration. Finally, where knowledge is inferred from the circumstances surrounding the commission of the alleged offence, knowledge must be the only rational inference available. All that having been said, the fact remains that a combination of suspicious circumstances and failure to make inquiry may sustain an inference of knowledge of the actual or likely existence of the relevant matter. In a case where a jury is invited to draw such an inference, a failure to make inquiry may sometimes, as a matter of lawyer's shorthand, be referred to as wilful blindness. Where that expression is used, care should be taken to ensure that a jury is not distracted by it from a consideration of the matter in issue as a matter of fact to be proved beyond reasonable doubt."
Further reformulations of Gibbs CJ's qualification in Giorgianni have also since been espoused in the context of accessorial liability for the purposes of the Corporations Act and the ACL, amongst other legislative instruments. For example, in ASIC v Activesuper, White J said (at 256): "Proof that a person had actual knowledge of each of the essential elements making up the contravention may be derived from direct evidence but more commonly will be a matter of inference from all the circumstances found to be proved. In some cases, actual knowledge can be inferred from the combination of a defendant's knowledge of suspicious circumstances and the decision by the defendant not to make enquiries to remove those suspicions."
Likewise, in Australian Competition & Consumer Commission v IMB Group Pty Ltd [2003] FCAFC 17, Cooper, Kiefel (as her Honour then was) and Emmett JJ said (at [135]): "… before any accessorial liability will arise, it is necessary to establish the subjective element of knowledge of each of the essential elements of the contravention. That knowledge may be constructive in the sense that it may be possible to show wilful blindness in relation to the elements of a contravention. However, absent a finding of wilful blindness, it is necessary to establish actual knowledge on the part of a person to whom it is sought to sheet home accessorial liability."
What appears from these authorities in relation to the requirement of knowledge of the contravention, principally, is that accessorial liability requires actual knowledge of the essential elements of the contravention, which knowledge may be inferred from a combination of the defendant's knowledge of suspicious circumstances and their decision not to make enquiries to remove those suspicions; otherwise known as wilful blindness.
Whether a person is, in any way, directly or indirectly, knowingly concerned in, or party to, a contravention also requires a sufficient nexus or "practical connection" between the purported accessory and the principal contravention. The phrase "knowingly concerned", much like "aided, abetted, counselled or procured", is a construct derived from the criminal law. In the context of the criminal law broadly, the word "concerned" "has been read as requiring facts connecting the accused with the commission of the relevant offence": Trade Practices Commission v Australia Meat Holdings Pty Ltd [1988] FCA 338; (1988) 83 ALR 299 at 357 per Wilcox J, citing R v Goldie; Ex parte Picklum (1937) 59 CLR 254; [1937] HCA 65; Ashbury v Reid [1961] WAR 49; R v Houssain [1969] 2 QB 567; R v Kelly (1975) 24 FLR 441; R v Tannous (1987) 10 NSWLR 303 ("R v Tannous"). In Ashbury v Reid, (see also R v Nifadopoulos (1988) 36 A Crim R 137 at 140 per Kirby ACJ (as his Honour then was) (with whom Maxwell and Carruthers JJ agreed)) after having considered the word "concerned" with reference to its definition in the Oxford Dictionary, the Full Court of the Supreme Court of Western Australia relevantly said (at [51]): "The question which a Court should ask itself… is whether on the facts it can reasonably be said that the act… shown to have been done… by the defendant does in truth implicate or involve him in the offence, whether it does show a practical connection between him and the offence."
After having referred to the above quote in R v Tannous, Lee J (with whom Street CJ and Finlay J agreed) explained that the accessory need not do anything to further the contravention; rather, that "by his conduct, that is by what he said and agreed to, he did in fact become associated with and thus involved, in the relevant sense" in the contravention: see R v Tannous at [308]. Put differently, the accessory must have been implicated in the contravention: see ASIC v Activesuper at 258; see also Emwest Products Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2002) 117 FCR 588 at 596-7; [2002] FCA 61 per Kenny J.
Whether a person has conspired with others to effect a contravention of s 18(1) is somewhat distinct from the other subparagraphs of the definition of "involved". In Australian Competition and Consumer Commission v Oceana Commercial Pty Ltd [2003] FCA 1516, Kiefel J (as her Honour then was) made the following (with respect) concise observation of what is meant by "has conspired with others" in the context of s 75B(1)(d) of the TPA (which is identical to subparagraph (d) of the definition of "involved" in s 2 of the ACL) (at [259]): "A conspiracy refers to an agreement, with others, to effect [an] unlawful purpose."
That observation is consistent with the approach adopted by the High Court in cases such as Yorke v Lucas; in particular, that the phrases now found in the definition of "involved" in s 2(1) of the ACL derive from the criminal law. Although the Court was not concerned with the phrase "has conspired with others" in Yorke v Lucas, there is nothing in that judgment to suggest that the phrase "has conspired with others" connotes conspiracy in its tortious, rather than criminal law, context. It would be wholly inconsistent with the Court's decision in Yorke v Lucas (see, in particular, 669) to require a party to prove conspiracy in the context of accessorial liability for the purpose of the ACL (i.e. whether a person "has conspired with others") to the tortious standard.
That conclusion is also consistent with the express words of subparagraph (d) of the definition of "involved", when read in the context of the other subparagraphs of that definition. Quite unlike its criminal law counterpart, tortious unlawful means conspiracy requires, inter alia, execution of an agreement, either in whole or in part, to commit an unlawful act (see [510(1)] below). By contrast, in the criminal law, a person will have conspired with others if there is demonstrated "an agreement… to do an unlawful act or to do a lawful act by unlawful means": see Ahern v R (1988) 165 CLR 87 at 93 per Mason CJ, Wilson, Deane, Dawson and Toohey JJ. One's conspiracy to effect a contravention in the criminal law is thus complete upon the making of the agreement, although it is unnecessary to prove the precise date upon which the agreement was formed: R v Rogerson (1992) 174 CLR 268 at 281; [1992] HCA 25 per Brennan and Toohey JJ ("R v Rogerson"); see also Standen v Regina [2015] NSWCCA 211 at [418] per Bathurst CJ, Hoeben CJ at CL and McCallum J (as her Honour then was); see also Agius v R; Abibadra v R; Jandagi v R; Zerafa v R [2011] NSWCCA 119 at [62] per Johnson J (with whom Hall J and Tobias AJA agreed). As Brennan and Toohey JJ explained in R v Rogerson (at 281): "Although acts done in pursuance of an apparent agreement often furnish the evidentiary foundation for inferring that a criminal conspiracy was formed, those acts are not themselves elements of the offence. In that sense, it is immaterial whether an act done in pursuance of a criminal conspiracy is, in the event, unlawful, provided the act was intended to be done in circumstances which, had they eventuated, would have made the act unlawful."
It would be wholly inconsistent with the other subparagraphs of the definition of "involved" for the Court to read into subparagraph (d) of that definition an obligation to execute, in whole or in part, an agreement to commit a contravention. One's execution of a contravention would, unless the circumstances suggest otherwise, ordinarily implicate them as a principal contravener or as being involved in a contravention within subparagraphs (a) and/or (c) of the definition of "involved".
Whether a person has conspired with others to effect a contravention for the purpose of the definition of "involved" would thus require only a finding that a person has agreed with another person (for example, the principal contravener) to effect a contravention; there being no requirement for the person allegedly involved to have otherwise participated in the contravention. Once a person participates in the contravention beyond that agreement, either as a principal contravener or within the confines of subparagraphs (a) or (c) of the definition of "involve", the action against them for conspiring with others to effect the contravention merges with their liability for further participation. That is, for example, a party cannot be liable for both conspiracy to effect a contravention and also for committing the contravention that was the subject of the parties' prior agreement. It is one or the other.
Thus, insofar as any of the Active Defendants and/or Mr Varvaris are principal contraveners of s 18(1) of the ACL, or involved in such a contravention within meaning of subparagraphs (a) or (c) of the definition of "involve", they cannot also be said to be conspirators. Although this was not a matter raised by either party in the context of the Plaintiffs' section 18(1) case, that the conspiracy cause of action merges with the substantive wrong upon which the Plaintiffs rely to substantiate a separate, individual cause of action was raised by Counsel for the Active Defendants in relation to the Plaintiffs' tortious conspiracy case. It is therefore necessary for the Court to canvas briefly some additional legal principles relevant to the merger issue.
In Ward v Lewis [1955] 1 WLR 9 ("Ward v Lewis"), the Court of Appeal heard an appeal from a decision granting leave to amend a statement of claim alleging slander and conspiracy to commit slander. In allowing the appeal and striking out the paragraphs that pertained to the alleged conspiracy, Lord Denning (with whom Lord Morris agreed) relevantly said (at 11): "It is important to remember … that when a tort has been committed by two or more persons an allegation of a prior conspiracy to commit the tort adds nothing. The prior agreement merges in the tort. A party is not allowed to gain an added advantage by charging conspiracy when the agreement has become merged in the tort. It is sometimes sought, by charging conspiracy, to get an added advantage, for instance in proceedings for discovery, or by getting in evidence which would not be admissible in a straight action in tort, or to overcome substantive rules of law, such as here, the rules about republication of slanders. When the court sees attempts of that kind being made, it will discourage them by striking out the allegation of conspiracy, on the simple ground that the conspiracy adds nothing when the tort has in fact been committed."
A similar conclusion was reached by Adam J in Rubenstein v Truth & Sportsman Ltd [1960] VR 473 where, in an action predominately alleging libel yet also alleging conspiracy to commit libel, his Honour struck out paragraphs of a statement of claim alleging conspiracy to commit libel. See also Sorrell v Smith [1925] AC 700 at 716 per Lord Dunedin; Cabasi v Vila (1940) 64 CLR 130 at 142-143; [1940] HCA 41 per McTiernan J, 151 per Williams J; O'Brien v Dawson (1942) 66 CLR 18 at 27; [1942] HCA 8 per Starke J.
In Trade Practices Commission v Allied Mills Industries Pty Ltd (1980) 32 ALR 570 ("Allied Mills"), Sheppard J also reached a similar conclusion. However, unlike the foregoing cases, Allied Mills concerned several applications to strike out whole or part of a statement of claim by which the plaintiff alleged contraventions of ss 45(2) and 76(1)(f) of the TPA. Section 45(2) of the TPA prohibited a corporation making a contract or arrangement, arriving at an understanding, or giving effect to a provision of a contract, arrangement or understanding if the proposed contract, arrangement or understanding contained an exclusionary provision or had the purpose, or would have or be likely to have the effect, of substantially lessening competition. The pleadings alleging breaches of s 45 of the TPA were "that the corporate respondents made arrangements, or entered into understandings, which are in breach of that section": see Allied Mills at 571-2.
Section 76(1)(f) was in terms similar, albeit not identical, to subparagraph (d) of the definition of "involved" in s 2 of the ACL. The pleadings alleged a series of conspiracies to make the aforementioned arrangements or to enter into the understandings; that is, "the conspiracies relied upon [were] also the arrangements or understandings alleged in the other paragraphs in the statement of claim": Allied Mills at 579.
In allowing the application to strike out the pleadings that alleged conspiracy, his Honour relevantly said (at 579): "…it is not appropriate to charge, as an alternative to charging arrangements or understandings made unlawful by s 45, conspiracies which are themselves such arrangements or understandings. The paragraphs in terms do not purport to do this. They charge conspiracies to make unlawful arrangements or to enter into unlawful understandings, but the paragraphs must be read subject to the particulars which have been provided. When that is done it becomes clear that the conspiracies on the one hand and the arrangements and understandings on the other are identical. That is plainly and demonstrably a situation which the Act does not permit or provide for. Accordingly, the paragraphs charging conspiracy will be struck out."
His Honour reached the same conclusion with reference to the reasoning of Lord Denning in Ward v Lewis.
Prior to reaching that conclusion, however, his Honour referred to a submission by the first respondent that "as a matter of construction, the Act did not make unlawful a conspiracy to make an arrangement or enter into an understanding": at 577. His Honour further explained the submission as follows (at 577): "…there is difficulty in embracing the concept basic to the allegation of conspiracy made in each of the paragraphs of a conspiracy to make an arrangement or enter into an understanding. It is to be emphasized that the conspiracies charged are not conspiracies to raise or maintain the price of liquid glucose, nor are they conspiracies to exhort, incite, encourage or persuade persons to make arrangements or enter into understandings to do so. The conspiracies are said to be conspiracies to make arrangements or to enter into understanding themselves made unlawful by the Act."
Although his Honour declined to deal with the submission on account of the proceedings coming before him on a summary application to strike out a pleading, his Honour indicated a preliminary view that there was "force in the argument": see 577-8.
With great respect, his Honour's preliminary view is one with which I disagree, not least because the legislature clearly contemplated a potential separate action for conspiring to contravene s 45(2), much like the legislature has clearly contemplated a potential separate action for conspiring to effect a contravention of s 18(1) of the ACL.
I agree that an action to conspire with others to contravene a provision (the TPA formulation) or to conspire with others to effect a contravention (the ACL formulation) merges with the action for the principal contravention, where the principal contravention is alleged. Where I respectfully depart from his Honour, however, is that I am of the view that the TPA made unlawful a conspiracy (i.e. the making an agreement with others) to make an arrangement or enter into an understanding. Applied analogously to s 18(1), the ACL makes unlawful a conspiracy to engage in conduct that is misleading or deceptive or is likely to mislead or deceive, in trade or commerce. Where two parties conspire (i.e. agree) to effect a contravention of s 18(1) of the ACL, and only one party in fact contravenes s 18(1) of the ACL, only the former party will be liable for conspiring to effect a contravention. The action for conspiracy against the latter party will merge with the principal contravention. I would reach the same conclusion, and apply the same rationale, to s 45(2) of the TPA, albeit I accept that it is far more difficult conceptually to distinguish between an agreement to contravene s 45(2) and the contravention itself given the nature of the prohibited conduct.

Have Any or All of the Active Defendants and/or Mr Varvaris Engaged in Misleading or Deceptive Conduct as Principals?

I will now turn to my findings in relation to the many pleaded individual false, misleading and deceptive representations and other conduct. My findings are set out after each pleading: "Purchase of the First Kogarah Property False and/or misleading representations made in relation to the purchase of the First Kogarah Property 19A. In or about mid-August 2015, during the course of a meeting with Haiqiang He, Liu represented that: a) a building of about 80 residential units could be built on the First Kogarah Property; This representation was made. Alysha accepts the words were spoken (see [53] above). While there were contextual references in the conversation to the need for government approval, I do not consider them to qualify or render the representation speculative. I am fortified in this conclusion by the subsequent calculation in the conversation which again refers to 80 units. b) the building of 80 residential units on the First Kogarah Property was feasible, realistic and reasonably achievable from a planning perspective; This representation was made as implied in the words Alysha accepts she said and in the context of the conversation. c) the building of 80 residential units on the First Kogarah Property was in accordance with, and in compliance with, applicable planning requirements; I do not accept a representation of this precision can be implied either from the words themselves or in the context in which they were spoken. A representation to this effect is negatived by the words spoken by Alysha commencing "The exact area…". d) the true market value of the First Kogarah Property was $9.5 million. This representation was made. … 19B. In or about mid-August 2015, during the course of a meeting with Chris He, Haiqiang He, Varvaris and Liu, Varvaris and Liu represented: a) a building of about 75 residential units could be built on the First Kogarah Property; Alysha made this representation (see [54] above). b) a building of 10 storeys could be built on the First Kogarah Property; Mr Varvaris made this representation. However, in the context I am not satisfied that Alysha was doing any more than being a conduit for Mr Varvaris. c) the building of 75 residential units on the First Kogarah Property was feasible, realistic and reasonably achievable from a planning perspective; This representation was made as implied in the words Alysha accepts she said and in the context of the conversation. d) the building of 75 residential units on the First Kogarah Property was in accordance with, and in compliance with, applicable planning requirements; I do not accept a representation of this precision can be implied either from the words themselves or in the context in which they were spoken. e) the building of a 10-storey building on the First Kogarah Property was feasible, realistic and reasonably achievable from a planning perspective: While I accept Mr Varvaris said the relevant words, I do not accept this representation can be implied either from the words themselves or in the context in which they were spoken. Furthermore, in the context I am not satisfied that Alysha was doing any more than being a conduit for Mr Varvaris. f) the building of a 10-storey building on the First Kogarah Property was in accordance with, and in compliance with, applicable planning requirements; While I accept Mr Varvaris said the relevant words, I do not accept a representation of this precision can be implied either from the words themselves or in the context in which they were spoken. g) the true market value of the First Kogarah Property was $9.5 million. This representation was made by both Mr Varvaris and Alysha. For the purposes of this finding and subsequent findings to like effect, I am satisfied that the context of the discussions between the parties being about the purchase of the First Kogarah Property was such that a reference to the price or cost of the First Kogarah Property carried with it the implication that was its market value or price. … 19C. On or about 17 August 2015, during the course of a meeting with Chris He, Haiqiang He and Kwok, Kwok represented that: a) a building of about 80 residential units could be built on the First Kogarah Property; This representation was made by Dennis (see [64] above). b) the building of 80 residential units on the First Kogarah Property was feasible, realistic and reasonably achievable from a planning perspective; This representation was made as implied in the words spoken by Dennis. c) the building of 80 residential units on the First Kogarah Property was in accordance with, and in compliance with, applicable planning requirements; I do not accept a representation of this precision can be implied either from the words themselves or in the context in which they were spoken. … 19D. In or about mid-August 2015, during the course of a meeting with Chris He, Varvaris and Liu, Liu represented that: a) with Varvaris' assistance approval would be secured for the construction of residential units on the First Kogarah Property; I do not accept that this representation can be implied from what Alysha said (see [68] above). It was a representation that Mr Varvaris would assist, not as to the outcome. b) the building of a development of residential units on the First Kogarah Property was feasible, realistic and reasonably achievable from a planning perspective; I do not accept that this representation can be implied from what Alysha said. c) the building of a development of residential units on the First Kogarah Property was in accordance with, and in compliance with applicable planning requirements; I do not accept a representation of this precision can be implied either from the words themselves or in the context in which they were spoken. … 19E. Further, at the meeting referred to at paragraph 19D above, Varvaris did not contradict or qualify the [representations pleaded in paragraph 19D], and thereby represented that he was unaware of anything rendering that representation false, misleading or deceptive, and/or likely to mislead or deceive… Does not arise. 19F. Further, at the meeting referred to at paragraph 19D above, Varvaris represented that the true market value of the First Kogarah Property was $9.5 million… This representation was made by Mr Varvaris (see [68] above). … 19G. Further, at the meeting referred to at paragraph 19D above, Liu did not contradict or qualify the [representation pleaded in paragraph 19F], and thereby represented that she was unaware of anything rendering that representation false, misleading or deceptive, and/or likely to mislead or deceive... I do not accept that in the context of that conversation there could be a reasonable expectation that Alysha should disclose her knowledge of any contrary fact. … 19H. On or about 24 August 2015, during the course of a meeting with Chris He, Haiqiang He, Varvaris and Kwok, Varvaris represented that the true market value of the First Kogarah Property was $9.5 million… This representation was made by Mr Varvaris (see [70] above). … 19I. Further to paragraph 19H above, Kwok did not contradict or qualify the [representation pleaded in paragraph 19H] made by Varvaris, and thereby represented that he was unaware of anything rendering that representation false, misleading or deceptive, and/or likely to mislead or deceive… Given that Dennis was primarily acting as an interpreter at this meeting I do not accept that in the context of that conversation there could be a reasonable expectation that Dennis should disclose his knowledge of any contrary fact. … 19J. On or about 25 August 2015, during the course of a meeting with Chris He, Haiqiang He, Liu and Kwok, Kwok represented that: a) a building of about 75 residential units could be built on the First Kogarah Property; I accept this representation was implicit in Dennis' answer to Chris (see [79] above). b) the building of 75 residential units on the First Kogarah Property was feasible, realistic and reasonably achievable from a planning perspective; I accept this representation was implicit in Dennis' answer to Chris (see [79] above). c) the building of 75 residential units on the First Kogarah Property was in accordance with, and in compliance with, applicable planning requirements. I do not accept a representation of this precision can be implied either from the words themselves or in the context in which they were spoken. … 19K. Further to paragraph 19J above, Liu did not contradict or qualify the [representations pleaded in 19J], and thereby represented that she was unaware of anything rendering that representation false, misleading or deceptive, and/or likely to mislead or deceive… In the absence of evidence from Chris that Alysha did not contradict or qualify what had been said, this representation is not made out because there is insufficient evidence for the Court to conclude that Alysha even heard what Dennis said. Her presence at the dinner is not a sufficient basis to draw an inference that she heard what was said and failed to contradict even when she has not given evidence. 19L. In or about mid-October 2015, during the course of a meeting with Chris He, Haiqiang He, Varvaris and Liu, Varvaris and Liu represented that a) a building of about 80 residential units could be built on the First Kogarah Property; b) the building of 75 residential units on the First Kogarah Property was feasible, realistic and reasonably achievable from a planning perspective; c) the building of 75 residential units on the First Kogarah Property was in accordance with, and in compliance with, applicable planning requirements; d) the true market value of the First Kogarah Property was $9.5 million. Chris cannot recall the effect of this discussion. His evidence that his understanding of relevant matters did not change is not a sufficient basis for the Court to infer these representations were made even when Alysha has not given evidence. … 19M. On 16 February 2016, during the course of a meeting with Chris He, Haiqiang He, Varvaris, Liu and Kwok, Varvaris represented that: a) a building of about 75 residential units could be built on the First Kogarah Property; I accept this representation was made (see [115] above). b) the building of 75 residential units on the First Kogarah Property was feasible, realistic and reasonably achievable from a planning perspective; I accept this representation was made. c) the building of 75 residential units on the First Kogarah Property was in accordance with, and in compliance with, applicable planning requirements; I do not accept a representation of this precision can be implied either from the words themselves or in the context in which they were spoken. d) Varvaris could easily secure the approval of the construction of 75 apartments on the First Kogarah Property; and I accept this representation was made. e) with his assistance, approval would be secured for the for the [sic] construction of residential units on the First Kogarah Property. I accept this representation was made. … 19N. Further to paragraph 19M above, neither Liu nor Kwok contradicted or qualified the [representations pleaded in 19M], and each thereby represented that he or she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… I accept Chris' evidence that neither Dennis nor Alysha contradicted or qualified what Mr Varvaris had said. Given the conversations and developments that had occurred between the parties by this time, including payment of the deposit for the First Kogarah Property (including for the Supplementary Contract), I accept that in the context of that conversation there would be a reasonable expectation that Alysha and Dennis should disclose their knowledge of any contrary fact. Accordingly, I accept each of them made the representation alleged. … 19O. On 7 March 2016, Chris He sent a message on WeChat to Varvaris, Liu, Kwok and Haiqiang He, asking Varvaris to confirm that 80 residential units could be built on the First Kogarah Property. I accept this message was sent (see [155] above). … 19P. Varvaris did not contradict or qualify the message referred to at paragraph 19O above and thereby represented that he was unaware of anything rendering the information that 80 residential units could be built on the First Kogarah Property as false, misleading or deceptive and/or likely to mislead or deceive… I do not accept this representation was made. Mr Varvaris was asked a question which he did not answer. There was nothing to contradict or qualify and nothing can be implied into his failure to answer. 19Q. Further to paragraph 19P above, Liu and/or Kwok did not contradict or qualify the message referred to at paragraph 19O above and thereby represented that they were unaware of anything rendering the information that 80 residential units could be built on the First Kogarah Property as false, misleading or deceptive and/or likely to mislead or deceive… I do not accept this representation was made. The context was a question that was not addressed to them so that there would not be a reasonable expectation that Alysha and Dennis should disclose their knowledge of any contrary fact. 19R. Each of the [representations pleaded in 19A-19Q] were false, misleading or deceptive and/or likely to mislead or deceive, in that: a) The Local Government planning controls in force at the time of the purchase of the First Kogarah Property, and thereafter: (i) discouraged residential development on the First Kogarah Property; (ii) did not permit the construction of a building on the First Kogarah Property which consisted of residential units only; (iii) required that any building constructed on the First Kogarah Property be a 'mixed use' development, which included commercial, retail space; (iv) did not permit the construction of 75 to 80 residential units on the First Kogarah Property; and (v) did not permit construction of a building of more than 5 storeys on the First Kogarah Property; … Based on the expert evidence (see [319] above), the Court makes findings to this effect in relation to those representations the Court has found were made concerning the planning aspects of what could be built on the First Kogarah Property. b) As a result of the matters in sub-paragraph (a) immediately above, it was not feasible, realistic or reasonably achievable from a planning perspective to construct 75 to 80 residential units on the First Kogarah Property. Based on the expert evidence (see [322] above) the Court makes this finding. c) The true market value of the First Kogarah Property at the time it was purchased by PPD was not $9.5 million. Based on the expert evidence (see [322] above) the Court makes this finding. d) Rather, the true market value of the First Kogarah Property at the time it was purchased by PPD was less than $5.5 million. Based on the expert evidence (see [323] above) the Court makes this finding. … 19S. Further or in the alternative, the [representations pleaded in 19A to 19E and 19J to 19Q] were representations with respect to a future matter within the meaning of section 4 of the Australian Consumer Law (ACL). Those representations the Court has found were made concerning the planning aspects of what could be built on First Kogarah Property were such representations. 19T. Varvaris, Liu and Kwok did not have reasonable grounds for making the [representations pleaded in 19A to 19E and 19J to 19Q]. In the absence of evidence from the relevant Active Defendants, those Active Defendants are taken not to have had reasonable grounds for making those representations the Court has found were made concerning the planning aspects of what could be built on the First Kogarah Property. 19U. By reason of the matters pleaded in paragraph 19R above, the [representations pleaded in 19A to 19E and 19J to 19Q] are taken, for the purposes of the ACL, to be misleading. The Court so finds in relation to all of the representations found to have been made in those paragraphs. … 24 August 2015 Meeting 20. On or about 24 August 2015, in the course of a meeting with Chris He, Haiqiang He and Kwok at the offices of Varvaris & Co (24 August 2015 Meeting), Varvaris represented that: a) the vendor of the First Kogarah Property had asked or directed that the purchase of that property be effected by two separate contracts, namely: (i) a contract with the vendor of the First Kogarah Property for part of the purchase price, being the sum of $9,350,000 including GST (Primary Contract); This representation was made (see [70] above). (ii) a second contract with an unidentified party for the balance of the purchase price, being the sum of $1,100,000 including GST (Supplementary Contract); This representation was made (see [70] above). b) the vendor of the First Kogarah Property had asked or directed that payment of the purchase moneys be split in the manner provided for in the Primary and Supplementary Contracts; and/or This representation was made (see [70] above). c) the moneys to be paid pursuant to the Supplementary Contract would be used in relation to the purchase of the First Kogarah Property by PPD. This representation was made (see [70] above). … 21. Each of the [representations in paragraph 20] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) the vendor of the First Kogarah Property had not asked or directed that the transaction to purchase the First Kogarah Property be structured in the manner provided for by the Primary and Supplementary Contracts; b) the vendor of the First Kogarah Property had not asked or directed that payment of the purchase moneys for that property be split in the manner provided for by the Primary and Supplementary Contracts; c) no valid or binding agreement in the terms of the purported Supplementary Contract was to be, or was in fact, entered into by PPD or any other party in relation to the purchase of the First Kogarah Property; d) the moneys to be paid pursuant to the purported Supplementary Contract were not to be used, and were not in fact used, in relation to the purchase of the First Kogarah Property by PPD; and/or e) the moneys to be paid pursuant to the purported Supplementary Contract were to be used and/or dissipated, and were in fact used and/or dissipated, in the manner pleaded in paragraphs 49 to 55 below. The Court makes findings in accordance with (a) to (e) based upon how the funds provided in relation to the Supplementary Contract were in fact dealt with and that no Supplementary Contract has ever been produced. 22. Further or in the alternative, the [representation pleaded in 20(c)] was a representation with respect to a future matter within the meaning of section 4 of the [ACL]. The Court makes this finding based on the terms of what was said. 23. Varvaris did not have reasonable grounds for making the [representation pleaded in 20(c)]. In the absence of evidence to the contrary, the Court finds Mr Varvaris did not have reasonable grounds for making the representation. 24. By reason of the matters pleaded in paragraphs 22 and 23, the [representation pleaded in 20(c)] is taken, for the purposes of the ACL, to be misleading. Based on the Courts findings in relation to paragraphs 22 and 23, the Court makes this finding. … 25. Further, at the 24 August 2015 Meeting, Kwok did not contradict or qualify the [representations pleaded in 20], and thereby represented that he was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… I accept Chris' evidence that Dennis did not contradict or qualify what Mr Varvaris said. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that conversation there would be a reasonable expectation that Dennis should disclose his knowledge of any contrary fact. Accordingly, I accept that he made the representation alleged. 26. The [representation pleaded in 25] was false, misleading or deceptive, and/or likely to mislead or deceive, in that Kwok was aware of some or all of the matters pleaded in paragraphs 21 and 23. The Court makes findings in accordance with paragraphs 25 and 26. It does so based on Dennis' role as an active participant in the proposed transaction and the subsequent misappropriation of funds paid purportedly in relation to the Supplementary Contract including to A & T Education. 26 August 2015 WeChat Discussion 27. On or about 26 August 2015, in the course of a discussion with Chris He, Haiqiang He, Kwok and Varvaris (26 August 2015 WeChat Discussion) that was conducted using the mobile messaging application known as 'WeChat" (WeChat), Liu represented that: a) Haiye's share of the deposit payable pursuant to the Supplementary Contract was to be paid to the Chris Apostolakos Solicitor Law Practice Trust Account…: b) the Supplementary Contract had been made; and/or c) the moneys comprising Haiye's share of the deposit payable pursuant to the Supplementary Contract would be used in relation to the purchase of First Kogarah Property by PPD… These representations were made (see [82] above) expressly as to (a) and impliedly from the terms of (a) and Alysha's earlier statement commencing "The schoolmate said that all shareholders of the vendor passed it…..". … 28. Each of the [representations pleaded in 27] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) no valid or binding agreement in the terms of the purported Supplementary Contract had been, or was in fact, entered into by PPD or any other party in relation to the purchase of the First Kogarah Property; b) no deposit was in fact payable pursuant to the purported Supplementary Contract; c) the share of the deposit to be paid by Haiye pursuant to the purported Supplementary Contract was not to be used, and was not in fact used, in relation to the purchase of the First Kogarah Property by PPD; and/or d) the share of the deposit to be paid by Haiye pursuant to the purported Supplementary Contract was to be used and/or dissipated, and was in fact used and/or dissipated, in the manner pleaded in paragraph 49 below. The Court makes findings in accordance with (a) to (d) based upon how the funds provided in relation to the Supplementary Contract were in fact dealt with and that no Supplementary Contract has ever been produced. 29. Further or in the alternative, the [representation pleaded in 27(c)] was a representation with respect to a future matter within the meaning of section 4 of the ACL. The Court makes this finding. 30. Liu did not have reasonable grounds for making the [representation pleaded in 27(c)]. In the absence of evidence from Alysha to the contrary, the Court makes this finding. 31. By reason of the matters pleaded in paragraphs 29 and 30, the [representation pleaded in 27(c)] is taken, for the purposes of the ACL, to be misleading Based on the Court's findings in relation to paragraphs 29 and 30, the Court makes this finding. … 32. Further, in the course of the 26 August 2015 WeChat Discussion, neither Varvaris nor Kwok contradicted or qualified the [representations pleaded in 27], and each thereby represented that he was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… The Court accepts Chris' evidence that no one contradicted or qualified Alysha's message and finds accordingly. In relation to Dennis and Mr Varvaris, given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that conversation there would be a reasonable expectation that Dennis and Mr Varvaris should each disclose his knowledge of any contrary fact. Accordingly, I accept that each of them made the representation alleged. 33. The [representations pleaded in 32] were false, misleading or deceptive, and/or likely to mislead or deceive, in that one or both of Varvaris and/or Kwok was aware of some or all of the matters pleaded in paragraphs 28 and 30. The Court makes this finding against Dennis and Mr Varvaris based upon the role of each of them as an active participant in the proposed transaction, how the funds provided in relation to the Supplementary Contract were in fact dealt with and that no Supplementary Contract has ever been produced. 3 March 2016 Meeting 34. On or about 3 March 2016, in the course of a meeting with Chris He, Haiqiang He, Liu and Kwok at [the Pymble Property] (3 March 2016 Meeting), Varvaris represented that: a) Haiye's share of the balance of the purchase price payable pursuant to the Supplementary Contract was to be paid to [Citywide Property Group]…; b) the Supplementary Contract had been made; and/or c) the moneys comprising Haiye's share of the balance of the purchase price payable pursuant to the Supplementary Contract would be used in relation to the purchase of the First Kogarah Property by PPD… The Court finds each of these representations was expressly (as to (a)) or impliedly (as to (b) and (c)) made by reason of the words spoken by Mr Varvaris (see [136] above). … 35. Each of the [representations pleaded in 34] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) no valid or binding agreement in the terms of the purported Supplementary Contract had been, or was in fact, entered into by PPD or any other party in relation to the purchase of the First Kogarah Property; b) no purchase moneys were in fact payable pursuant to the purported Supplementary Contract; c) the share of the purchase moneys to be paid by Haiye pursuant to the purported Supplementary Contract was not to be used, and was not in fact used, in relation to the purchase of the First Kogarah Property by PPD; and/or d) the share of the purchase moneys to be paid by Haiye pursuant to the purported Supplementary Contract was to be used and/or dissipated, and was in fact used and/or dissipated, in the manner pleaded in paragraphs 50 to 55 below. The Court makes findings in accordance with (a) to (d) based upon how the funds provided in relation to the Supplementary Contract were in fact dealt with and that no Supplementary Contract has ever been produced. 36. Further or in the alternative, the [representation pleaded in 34(c)] was a representation with respect to a future matter within the meaning of section 4 of the ACL. The Court makes this finding. 37. Varvaris did not have reasonable grounds for making the [representation pleaded in 34(c)]. In the absence of evidence to the contrary, the Court makes this finding. 38. By reason of the matters pleaded in paragraphs 36 and 37, the [representation pleaded in 34(c)] is taken, for the purposes of the ACL, to be misleading. Based on the Court's findings in relation to paragraphs 36 and 37, the Court makes this finding. 39. Further, at the 3 March 2016 Meeting, neither Kwok nor Liu contradicted or qualified the [representations pleaded in 34], and each thereby represented that he or she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… The Court makes these findings in relation to both Alysha and Dennis, based on Chris' evidence that no one contradicted or qualified what Mr Varvaris said. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that conversation there would be a reasonable expectation that Dennis and Alysha should disclose his or her knowledge of any contrary fact. Accordingly, I accept that each of them made the representation alleged. 40. The [representations pleaded in 39] were false, misleading or deceptive, and/or likely to mislead or deceive, in that one or both of Kwok and/or Liu was aware of some or all of the matters pleaded in paragraphs 35 and 37. The Court makes findings in accordance with paragraph 40 in relation to both Alysha and Dennis. It does so based on their role as active participants in the proposed transaction and the subsequent misappropriation of funds paid purportedly in relation to the Supplementary Contract including to A & T Education. … Purchase of the Second Kogarah Property False and/or misleading representations made in relation to the purchase of the Second Kogarah Property 2 January 2016 - Although the Amended Statement of Claim amends the date of this to 2 January 2016, the evidence is that this WeChat discussion took place on 1 to 2 February 2016 and the Court finds accordingly. 56. On or about 2 January 2016, in the course of a discussion on WeChat with Chris He, Haiqiang He, Liu and Kwok (2 January 2016 WeChat Discussion), Varvaris represented that; a) Varvaris had had "positive discussions" with Landmark regarding the potential sale of some additional land neighbouring the First Kogarah Property; b) from those discussions, it seemed that Landmark would agree to sell the additional land to PPD…; c) Varvaris was "trying to negotiate [the] price down as low as possible"; d) Varvaris should or was likely to be able to negotiate a price "much better" than the "usual price" of $200,000 to $250,000 per site; and/or e) negotiations with Landmark were "moving along smoothly and quickly". Each of these representations was made (see [110]-[111] above). … 57. Each of the [representations pleaded in 56] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) Varvaris had not entered into any discussions or negotiations with Landmark regarding the potential sale of additional land neighbouring the First Kogarah Property; b) Landmark had not indicated to Varvaris that it would or was likely to agree to sell additional land neighbouring the First Kogarah Property to PPD; c) Varvaris was not trying to negotiate the price for the purchase from Landmark of additional land neighbouring the First Kogarah Property down as low as possible; d) Varvaris was not likely to be able to negotiate a price for the purchase from Landmark of additional land neighbouring the First Kogarah Property which was "much better" than the "usual price" of $200,000 $250,000 per site; and/or e) negotiations with Landmark regarding the potential purchase of additional land neighbouring the First Kogarah Property were not "moving along smoothly and quickly". The Court makes findings in accordance with paragraph 57 based upon Mr Chan's unchallenged evidence that Landmark had never been contacted and never had any intention of selling the Second Kogarah Property. 58. Further or in the alternative, each of the [representations pleaded in 56(b) and/or 56(d)] was a representation with respect to a future matter within the meaning of section 4 of the ACL. The Court makes this finding. 59. Varvaris did not have reasonable grounds for making the [representations pleaded in 56(b) and/or 56(d)]. In the absence of evidence to the contrary and based upon Mr Chan's unchallenged evidence, the Court makes this finding. 60. By reason of the matters pleaded in paragraphs 58 and 59, each of the [representation pleaded in 56(b)] and/or the [representation pleaded in paragraph 56(d)] is taken, for the purposes of the ACL, to be misleading. Based on the Court's findings in relation to paragraphs 58 and 59, the Court makes this finding. … 61. Further, in the course of the 2 January 2016 WeChat Discussion: a) each of Kwok and Liu expressed approval of and gratitude for the matters forming the substance of the [representations pleaded in 56]; and b) neither Kwok nor Liu contradicted or qualified the [representations pleaded in 56], and each thereby represented that he or she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… The approval and gratitude was expressed as alleged (see [110] above). The Court also makes these findings in relation to both Alysha and Dennis, based on Chris' evidence that no one contradicted or qualified what Mr Varvaris said. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that discussion there would be a reasonable expectation that Dennis and Alysha should disclose his or her knowledge of any contrary fact. Accordingly, I accept that each of them made the representation alleged. 62. The [representations pleaded in 61] were false, misleading or deceptive, and/or likely to mislead or deceive, in that one or both of Kwok and/or Liu was aware of some or all of the matters pleaded in paragraphs 57 and 59. The Court makes findings in accordance with paragraph 40 in relation to both Alysha and Dennis. It does so based on their role as active participants in the proposed transaction and the subsequent misappropriation of funds paid purportedly in relation to the Supplementary Contract including to A & T Education. 16 February 2016 Lotus Meeting 63. On or about 16 February 2016, in the course of a meeting with Chris He, Haiqiang He, Liu and Kwok at the Lotus Chinese restaurant in Sydney (16 February 2016 Lotus Meeting), Varvaris represented that: a) the cost of the Second Kogarah Property would be $7.2 million…; b) the cost of the Second Kogarah Property had been calculated on the basis that the purchase of that property would enable PPD to build around 60 additional units at an approximate value of $120,000 each; c) Varvaris would "handle the negotiations with the vendor"…; and/or d) if Landmark did not agree to sell the Second Kogarah Property to PPD, Varvaris would be able to "control" Landmark by limiting the number of units it could build on its land… … I am unable to reach a state of actual satisfaction that these representations were made. This is not because I doubt that either Chris or Mr He is doing his best to recall what occurred. Chris' account is to the effect that the Second Kogarah Property would be purchased. However, Mr He's recollection of his discussion with Alysha at this dinner meeting is that she was talking to him not about buying the Second Kogarah Property, but paying the owner $7.2 million to enable more units to be built on the First Kogarah Property. The balance of the alleged representations in relation to this meeting are therefore also not made out. 64. Each of the [representations pleaded in 63] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) Varvaris had not negotiated or agreed, or sought to negotiate or agree, any price for the Second Kogarah Property with Landmark; b) Varvaris had not commenced to negotiate, and did not intend to negotiate, the purchase of the Second Kogarah Property from Landmark; and/or c) Varvaris had no ability to control the number of units Landmark could build on its land, if it did not agree to sell the Second Kogarah Property to PPD. 65. Further or in the alternative, each of the [representations pleaded in 63(a), 63(c) and/or 63(d)] was a representation with respect to a future matter within the meaning of section 4 of the ACL. 66. Varvaris did not have reasonable grounds for making the [representations pleaded in 63(a), 63(c) and/or 63(d)]. 67. By reason of the matters pleaded in paragraphs 65 and 66, each of the [representations pleaded in 63(a), 63(c) and/or 63(d)] is taken, for the purposes of the ACL, to be misleading. … 68. Further, at the 16 February 2016 Lotus Meeting, neither Kwok nor Liu contradicted or qualified the [representations pleaded in 63], and each thereby represented that he or she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… 69 The [representations pleaded in 68] were false, misleading or deceptive, and/or likely to mislead or deceive, in that one or both of Kwok and/or Liu was aware of some or all of the matters pleaded in paragraphs 64 and 66. 3 March 2016 Meeting 70. On or about 3 March 2016, in the course of the 3 March 2016 Meeting …, Varvaris represented that: a) Landmark had agreed or was willing to sell the Second Kogarah Property to PPD; b) Landmark had agreed to a purchase price for the Second Kogarah Property of $7,920,000 (including GST); c) Landmark required a deposit of 60% of the purchase price for the Second Kogarah Property, being a total of $4,752,000; d) the deposit moneys would be treated as security and would not be accessed by any party prior to settlement of the purchase of the Second Kogarah Property…; and/or e) Landmark required the deposit to be paid to CBC. I accept that each of these representations was made (see [136]-[137] above). … 71. Each of the [representations pleaded in 70] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) Landmark had not agreed and/or was not willing to sell the Second Kogarah Property to PPD; b) Landmark had not agreed to any purchase price for the Second Kogarah Property; c) Landmark had not required a deposit of 60% of any purchase price for the Second Kogarah Property; d) Landmark had not required any deposit for the purchase of the Second Kogarah Property to be paid to CBC; e) the deposit moneys paid for the purchase of the Second Kogarah Property were not to be treated as security and not accessed by any party prior to settlement of that purchase; and/or f) the deposit moneys paid for the purchase of the Second Kogarah Property were to be used and/or dissipated, and were in fact used and/or dissipated, in the manner pleaded in paragraph 109 below. I accept each of these matters by reason of Mr Chan's unchallenged evidence that Landmark had never been contacted and never had any intention of selling the Second Kogarah Property and the events which subsequently occurred, including the misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property. 72. Further or in the alternative, the [representation pleaded in 70(d)] was a representation with respect to a future matter within the meaning of section 4 of the ACL. The Court makes this finding. 73. Varvaris did not have reasonable grounds for making the [representation pleaded in 70(d)]. In the absence of evidence to the contrary and by reference to Mr Chan's unchallenged evidence, the Court makes this finding. 74. By reason of the matters pleaded in paragraphs 72 and 73, the [representation pleaded in 70(d)] is taken, for the purposes of the ACL, to be misleading. Based on the Court's findings in relation to paragraphs 72 and 73, the Court makes this finding. … 75. Further, at the 3 March 2016 Meeting, neither Kwok nor Liu contradicted or qualified the [representations pleaded in 70], and each thereby represented that he or she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… The Court makes these findings in relation to both Alysha and Dennis, based on Chris' evidence that no one contradicted or qualified what Mr Varvaris said. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that conversation there would be a reasonable expectation that Dennis and Alysha should disclose his or her knowledge of any contrary fact. Accordingly, I accept that each of them made the representation alleged. 76. The [representations pleaded in 75] were false, misleading or deceptive, and/or likely to mislead or deceive, in that one or both of Kwok and/or Liu was aware of some or all of the matters pleaded in paragraphs 71 and 73. The Court makes findings in accordance with paragraph 76 in relation to both Alysha and Dennis. It does so based on their role as active participants in the proposed transaction, recalling that Mr Varvaris' notes made at the meeting referred to Dennis' share, and the subsequent misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property, including the payment of $400,000 thereof to Alysha and to pay Pionnier's share of the purchase price for the First Kogarah Property. 4 March 2016 Century Meeting 77. On or about 4 March 2016, in the course of a meeting with Chris He, Haiqiang He and Varvaris at the Century Chinese restaurant in Sydney (4 March 2016 Century Meeting), Kwok represented that Varvaris had "used his influence and contacts" to persuade Landmark to sell the Second Kogarah Property to PPD… I accept Dennis made this representation (see [142] above). … 78. The [representation pleaded in 77] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) Varvaris had not entered into any discussions or negotiations with Landmark regarding the potential sale of the Second Kogarah Property to PPD; and/or b) Landmark had not agreed, or been persuaded, to sell the Second Kogarah Property to PPD. I accept each of these matters by reason of Mr Chan's unchallenged evidence that Landmark had never been contacted and never had any intention of selling the Second Kogarah Property and the events which subsequently occurred, including the misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property. 79. Further, at the 4 March 2016 Century Meeting, Varvaris did not contradict or qualify the [representation pleaded in 77] and thereby represented that he was unaware of anything rendering that representation false, misleading or deceptive, and/or likely to mislead or deceive… In the absence of evidence from Chris that Mr Varvaris did not contradict or qualify what had been said, this representation is not made out because there is insufficient evidence for the Court to conclude that Mr Varvaris even heard what Dennis said. His presence at the dinner is not a sufficient basis to draw an inference that he heard what was said and failed to contradict even when he has not given evidence. 80. The [representation pleaded in 79] was false, misleading or deceptive, and/or likely to mislead or deceive, in that Varvaris was aware of some or all of the matters pleaded in paragraph 78. It follows from the Court's immediately preceding finding that this allegation is not made out. 5 March 2016 WeChat Discussion 81. On 5 March 2016, in the course of a WeChat discussion with Chris He, Haiqiang He, Kwok and Liu (5 March 2016 WeChat Discussion), Varvaris represented that: a) Landmark had been "waiting for instructions" from Varvaris and/or PPD before preparing the contract for sale of the Second Kogarah Property…; and/or b) Landmark was now preparing the contract of sale for the Second Kogarah Property to PPD. I accept that each of these representations was made (see [146] above). … 82. Each of the [representations pleaded in 81] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) Landmark had not been waiting for Varvaris to communicate to it any instructions from himself or PPD in relation to the potential sale of the Second Kogarah Property to PPD; b) Varvaris had not communicated any instructions from himself or PPD to Landmark regarding the potential sale of the Second Kogarah Property to PPD; and/or c) Landmark was not preparing a contract for sale of the Second Kogarah Property to PPD. I accept each of these matters by reason of Mr Chan's unchallenged evidence that Landmark had never been contacted and never had any intention of selling the Second Kogarah Property and by reason of the events which subsequently occurred, including the misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property. 83. Further, in the course of the 5 March 2016 WeChat Discussion, neither Kwok nor Liu contradicted or qualified the [representations pleaded in 81], and each thereby represented that he or she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… The Court makes these findings in relation to both Alysha and Dennis, based on Chris' evidence that no one contradicted or qualified what Mr Varvaris said. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that conversation there would be a reasonable expectation that Dennis and Alysha should disclose his or her knowledge of any contrary fact. Accordingly, I accept that each of them made the representation alleged. 84. The [representations pleaded in 83] were false, misleading or deceptive, and/or likely to mislead or deceive, in that one or both of Kwok and/or Liu was aware of some or all of the matters pleaded in paragraph 82. The Court makes findings in accordance with paragraph 84 in relation to both Alysha and Dennis. It does so based on their role as active participants in the proposed transaction, Mr Chan's unchallenged evidence that Landmark had never been contacted and never had any intention of selling the Second Kogarah Property and the subsequent misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property, including the payment of $400,000 thereof to Alysha and to pay Pionnier's share of the purchase price for the First Kogarah Property. 9 March 2016 Meeting 85. On or about 9 March 2016, in the course of a meeting with Chris He, Haiqiang He, Kwok and Liu at the offices of Varvaris & Co in Kogarah (9 March 2016 Meeting), Varvaris represented that: a) Landmark had agreed or was willing to sell the Second Kogarah Property to PPD; b) PPD would not be able to develop the First Kogarah Property if it did not buy the Second Kogarah Property…; c) Landmark required PPD to pay a 60% deposit to show that it had the financial capacity to complete the purchase of the Second Kogarah Property; and/or d) Landmark required the deposit moneys to be paid to CBC. I accept that each of these representations was made (see [157] above). … 86. Each of the [representations pleaded in 85] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) Landmark had not agreed and/or was not willing to sell the Second Kogarah Property to PPD; b) PPD's ability to develop the First Kogarah Property was not dependent upon it purchasing the Second Kogarah Property; c) Landmark had not required a deposit of 60% of any purchase price for the Second Kogarah Property; and/or d) Landmark had not required any deposit for the purchase of the Second Kogarah Property to be paid to CBC. I accept each of these matters by reason of Mr Chan's unchallenged evidence that Landmark had never been contacted and never had any intention of selling the Second Kogarah Property and by reason of the events which subsequently occurred, including the misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property. 87. Further or in the alternative, the [representation pleaded in 85(b)] was a representation with respect to a future matter within the meaning of section 4 of the ACL. The Court makes this finding. 88. Varvaris did not have reasonable grounds for making the [representation pleaded in 85(b)]. In the absence of evidence to the contrary and by reference to Mr Chan's unchallenged evidence, the Court makes this finding. 89. By reason of the matters pleaded in paragraphs 87 and 88, the [representation pleaded in 85(b)] is taken, for the purposes of the ACL, to be misleading. Based on the Court's findings in relation to paragraphs 87 and 88, the Court makes this finding. 90. Further, at the 9 March 2016 Meeting, neither Kwok nor Liu contradicted or qualified the [representations in 85], and each thereby represented that he or she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… The Court makes these findings in relation to both Alysha and Dennis, based on Chris' evidence that no one contradicted or qualified what Mr Varvaris said. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that conversation there would be a reasonable expectation that Dennis and Alysha should disclose his or her knowledge of any contrary fact. Accordingly, I accept that each of them made the representation alleged. 91. The [representations pleaded in 90] were false, misleading or deceptive, and/or likely to mislead or deceive, in that Kwok and/or Liu was aware of some or all of the matters pleaded in paragraphs 86 and 88. The Court makes findings in accordance with paragraph 91 in relation to both Alysha and Dennis. It does so based on their role as active participants in the proposed transaction, Mr Chan's unchallenged evidence that Landmark had never been contacted and never had any intention of selling the Second Kogarah Property and the subsequent misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property, including the payment of $400,000 thereof to Alysha and to pay Pionnier's share of the purchase price for the First Kogarah Property. 92. On or about 9 March 2016, in the course of the 9 March 2016 Meeting, Liu represented that: a) Landmark had agreed or was willing to sell the Second Kogarah Property to PPD; b) if Haiye did not want PPD to purchase the Second Kogarah Property, Landmark was prepared to buy the First Kogarah Property from PPD…; c) unless PPD purchased the Second Kogarah Property, it would not be able to develop the First Kogarah Property…; d) PPD would not be able to purchase and/or develop the First Kogarah Property and/or the Second Kogarah Property without Varvaris' assistance…; and/or e) Varvaris had been assisting PPD to purchase and/or develop the Second Kogarah Property. I accept that each of these representations was made (see [143(3)] above. … 93. Each of the [representations pleaded in 92] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) Landmark had not agreed and/or was not willing to sell the Second Kogarah Property to PPD; b) Landmark was not prepared to buy and had not expressed any interest in buying the First Kogarah Property, in the event Haiye did not want PPD to purchase the Second Kogarah Property; c) PPD's ability to develop the First Kogarah Property was not dependent upon it purchasing the Second Kogarah Property; d) PPD's ability to purchase and/or develop the First Kogarah Property and/or the Second Kogarah Property was not dependent on Varvaris' assistance; and/or e) Varvaris had not been assisting PPD to purchase and/or develop the Second Kogarah Property. I accept each of these matters by reason of Mr Chan's unchallenged evidence that Landmark had never been contacted and never had any intention of selling the Second Kogarah Property and by reason of the events which subsequently occurred, including the misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property. 94. Further or in the alternative, each of the [representations pleaded in 92(b), 92(c) and/or 92(d)] was a representation with respect to a future matter within the meaning of section 4 of the ACL. The Court makes this finding. 95. Liu did not have reasonable grounds for making the [representations pleaded in 92(b), 92(c) and/or 92(d)]. In the absence of evidence to the contrary and by reference to Mr Chan's unchallenged evidence, the Court makes this finding. 96. By reason of the matters pleaded in paragraphs 94 and 95, each of the [representations pleaded in 92(b), 92(c) and/or 92(d)] is taken, for the purposes of the ACL, to be misleading. Based on the Court's findings in relation to paragraphs 94 and 95, the Court makes this finding. … 97. Further, at the 9 March 2016 Meeting, neither Varvaris nor Kwok contradicted or qualified the [representations pleaded in 92], and each thereby represented that he was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… No finding is made in relation to Mr Varvaris because Chris gives no evidence of Mr Varvaris' silence. However, the Court makes these findings in relation to Dennis, based on Chris' evidence that Dennis did not contradict or qualify what Alysha said. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that conversation there would be a reasonable expectation that Dennis should disclose his knowledge of any contrary fact. Accordingly, I accept that he made the representation alleged. 98. The [representations pleaded in 97] were false, misleading or deceptive, and/or likely to mislead or deceive, in that Varvaris and/or Kwok was aware of some or all of the matters pleaded in paragraphs 93 and 95. No finding is made in relation to Mr Varvaris. However, the Court makes findings in accordance with paragraph 98 in relation to Dennis. It does so based on his role as an active participant in the proposed transaction, Mr Chan's unchallenged evidence that Landmark had never been contacted and never had any intention of selling the Second Kogarah Property and the subsequent misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property, including the payment of $400,000 thereof to Alysha and to pay Pionnier's share of the purchase price for the First Kogarah Property. … 101. On 11 March 2016, in the course of a discussion on WeChat with Chris He, Haiqiang He, Liu and Kwok (11 March 2016 WeChat Discussion), Varvaris represented that: a) Landmark had agreed or was willing to sell the Second Kogarah Property to PPD; b) Varvaris would be meeting personally with Landmark; and/or c) Varvaris needed to show Landmark that the deposit moneys paid by Haiye and Pionnier were in Varvaris & Co's trust account. I accept that each of these representations was made (see [167] above). … 102. Each of the [representations pleaded in 101] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) Landmark had not agreed and/or was not willing to sell the Second Kogarah Property to PPD; b) Varvaris had not arranged to meet and was not meeting personally with Landmark; and/or c) Varvaris did not need to show Landmark that the deposit moneys paid by Haiye and Pionnier were in Varvaris & Co's trust account. I accept each of these matters by reason of Mr Chan's unchallenged evidence that Landmark had never been contacted and never had any intention of selling the Second Kogarah Property and by reason of the events which subsequently occurred, including the misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property. 103. Further, in the course of the 11 March 2016 WeChat Discussion, neither Kwok nor Liu contradicted or qualified the [representations pleaded in 101], and each thereby represented that he or she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… The Court makes these findings in relation to both Alysha and Dennis, based on Chris' evidence that no one contradicted or qualified what Mr Varvaris said. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that conversation there would be a reasonable expectation that Dennis and Alysha should disclose his or her knowledge of any contrary fact. Accordingly, I accept that each of them made the representation alleged. 104. The [representations pleaded in 103] were false, misleading or deceptive, and/or likely to mislead or deceive, in that Kwok and/or Liu was aware of some or all of the matters pleaded in paragraph 102. The Court makes findings in accordance with paragraph 104 in relation to both Alysha and Dennis. It does so based on their role as active participants in the proposed transaction, Mr Chan's unchallenged evidence that Landmark had never been contacted and never had any intention of selling the Second Kogarah Property and the subsequent misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property, including the payment of $400,000 thereof to Alysha and to pay Pionnier's share of the purchase price for the First Kogarah Property. … 110. On or about 12 March 2016, at a meeting between Varvaris, Haiqiang He, Chris He and Kwok at the offices of Varvaris & Co (12 March 2016 Meeting), Varvaris provided Chris He with documents to sign for the purchase of the Second Kogarah Property, namely: a) a document titled "Deed of Agreement", the parties to which were PPD, Landmark and CBC (SKP Deed of Agreement); and b) a document titled "Option Deed", the parties to which were PPD and Landmark (SKP Option Deed). I accept this occurred. 111. By providing the said documents to Chris He for signing, Varvaris represented that Landmark had agreed or was willing to agree to sell the Second Kogarah Property to PPD on the terms contained in the documents… The Court finds this representation is to be implied from Mr Varvaris' providing the documents. 112. The [representation pleaded in 111] was false, misleading or deceptive, and/or likely to mislead or deceive, in that Landmark had not agreed and/or was not willing to agree to sell the Second Kogarah Property to PPD on the terms contained in the said documents or at all. I accept each of these matters by reason of Mr Chan's unchallenged evidence that Landmark had never been contacted and never had any intention of selling the Second Kogarah Property and by reason of the events which subsequently occurred, including the misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property. 113. Further, at the 12 March 2016 Meeting, Kwok: a) executed the SKP Deed of Agreement and/or the SKP Option Deed; and b) did not contradict or qualify the [representation pleaded in 111], and thereby represented that he was unaware of anything rendering that representation false, misleading or deceptive, and/or likely to mislead or deceive. I accept Chris' evidence that Dennis signed these documents in his presence and am fortified in this conclusion by Dennis' defence, which admits that he would have signed them "at some stage". I also accept that by signing those documents Dennis impliedly made the representation alleged. Similarly, I infer from Dennis signing the documents that he did not make the contradiction or qualification and thereby also made the representation alleged. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of the signing of the documents there would be a reasonable expectation that Dennis should disclose his knowledge of any contrary fact. 114. The [representation pleaded in 113] was false, misleading or deceptive, and/or likely to mislead or deceive, in that Kwok was aware of some or all of the matters pleaded in paragraph 112. The Court finds in accordance with paragraph 114. It does so based on his role as an active participant in the proposed transaction, Mr Chan's unchallenged evidence that Landmark had never been contacted and never had any intention of selling the Second Kogarah Property and the subsequent misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property, including the payment of $400,000 thereof to Alysha and to pay Pionnier's share of the purchase price for the First Kogarah Property. … 116. On or about 10 August 2016, Varvaris represented to the plaintiffs (via their solicitor, Eddy Vay of Longton Legal) that Varvaris & Co had transferred the deposit moneys for the Second Kogarah Property to CBC… This representation was made (see [224] above). … 117. The [representation pleaded in 116] was false, misleading or deceptive, and/or likely to mislead or deceive, in that Varvaris & Co had used and/or dissipated the deposit moneys for the Second Kogarah Property as pleaded in paragraph 109, and had not transferred those moneys to CBC. The Court makes this finding. There was no dispute that of the funds that Haiye had paid to Varvaris & Co, on or about 15 March 2016, $2,231,762.83 was paid to Al-Jaafaria in payment of Pionnier's 25% share of the purchase price of the First Kogarah Property and on or about 22 March 2016 $400,000 was paid to Alysha. 118. On or about 10 August 2016, in the course of a discussion on WeChat between Chris He, Haiqiang He, Liu and Kwok (10 August 2016 CBC WeChat Discussion), each of Varvaris and Liu further represented that CBC was "an associated entity of Landmark" … The Court finds this representation was made by Mr Varvaris (see [221] above). There is no evidence it was made by Alysha. … 119. The [representation pleaded in 118] was false, misleading or deceptive, and/or likely to mislead or deceive, in that CBC had no association or relationship with Landmark, or any director, officer or shareholder of Landmark. The Court makes this finding. The unchallenged evidence of Mr Chan makes this clear. 120. Further, in the course of the 10 August 2016 CBC WeChat Discussion, Kwok did not contradict or qualify the [representation pleaded in 118], and thereby represented that he was unaware of anything rendering that representation false, misleading or deceptive, and/or likely to mislead or deceive… The Court makes this finding, based on Chris' evidence that Dennis did not contradict or qualify what Mr Varvaris said. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that conversation there would be a reasonable expectation that Dennis should disclose his knowledge of any contrary fact. 121. The [representation pleaded in 120] was false, misleading or deceptive, and/or likely to mislead or deceive, in that Kwok was aware of some or all of the matters pleaded in paragraph 119. The Court finds in accordance with paragraph 121. It does so based on his role as an active participant in the proposed transaction, Mr Chan's unchallenged evidence that Landmark had never been contacted and never had any intention of selling the Second Kogarah Property and the subsequent misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property, including the payment of $400,000 thereof to Alysha and to pay Pionnier's share of the purchase price for the First Kogarah Property. 122. On or about 11 August 2016, in the course of a discussion on WeChat between Varvaris, Chris He, Haiqiang He, Kwok and Liu (11 August 2016 WeChat Discussion), Varvaris sent to Chris He, Haiqiang He, Liu and Kwok a document titled "Tax Invoice" and a further document titled "Receipt", which purported to show that the deposit moneys for the Second Kogarah Property in the amount of $4,752,000 had been paid to CBC on or about 15 March 2016 (Forged CBC Documents). The Court makes this finding (see [169] above). 123. By sending the Forged CBC Documents to Chris He, Haiqiang He, Liu and Kwok, Varvaris represented that: a) the Forged CBC Documents had been prepared by CBC; b) Varvaris & Co had transferred the deposit moneys in the amount of $4,752,000 to CBC on or about 15 March 2016; and/or c) CBC was holding the deposit moneys in the amount of $4,752,000 pending completion of PPD's purchase of the Second Kogarah Property from Landmark. I accept these representations (the "Varvaris Receipt Representations") were impliedly made by Mr Varvaris' conduct as alleged. 124. Each of the Varvaris Receipt Representations was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) the Forged CBC Documents had been prepared by Varvaris or Varvaris & Co, or on their behalf, and not by CBC; b) Varvaris & Co had used and/or dissipated the deposit moneys for the Second Kogarah Property as pleaded in paragraph 109, and had not transferred those moneys to CBC; and/or c) CBC was not holding the deposit moneys pending completion of PPD's purchase of the Second Kogarah Property from Landmark because it had never received those moneys. Given how the funds were in fact disbursed by Varvaris & Co ($2,231,762.83 to Al-Jaafaria in payment of Pionnier's 25% share of the purchase price of the First Kogarah Property and $400,000 to Alysha), the Court is satisfied to the Briginshaw standard that the Forged CBC Documents must have been prepared by or on behalf of Mr Varvaris. The Court finds each of these allegations to have been established, there being no suggestion that any of the funds were ever provided to CBC and taking into account the unchallenged evidence of Mr Chan. 125. Further, neither Kwok nor Liu contradicted or qualified the [representations pleaded in 123], and each thereby represented that he or she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… The Court makes these findings in relation to both Alysha and Dennis, based on Chris' evidence that no one contradicted or qualified these representations. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that discussion there would be a reasonable expectation that Dennis and Alysha should disclose his or her knowledge of any contrary fact. Accordingly, I accept that each of them made the representation alleged. 126. The [representations pleaded in 125] were false, misleading or deceptive, and/or likely to mislead or deceive, in that one or both of Kwok and/or Liu was aware of some or all of the matters pleaded in paragraph 124. The Court finds in accordance with paragraph 126. It does so based on their role as active participants in the proposed transaction, Mr Chan's unchallenged evidence that Landmark had never been contacted, never had any intention of selling the Second Kogarah Property and had no connection with CBC, and the subsequent misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property, including the payment of $400,000 thereof to Alysha and to pay Pionnier's share of the purchase price for the First Kogarah Property. 127. On 12 August 2016, in the course of a discussion on WeChat between Varvaris, Chris He, Haiqiang He, Kwok and Liu (12 August 2016 Landmark WeChat Discussion), Varvaris sent to Chris He an amended Deed of Agreement in respect of the sale of the Second Kogarah Property, which purported to have been executed by Landmark (Forged Deed). … 128. By sending the Forged Deed to Chris He, Varvaris represented that: a) Landmark had agreed to the terms set out in the Forged Deed…; and b) the Forged Deed had been signed by an authorised representative of Landmark, namely Tom Chan or Tom Liu. I accept these representations were impliedly made by Mr Varvaris' conduct as alleged. 129. Each of the [representations pleaded in 128] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) Landmark had not agreed to the terms set out in the Forged Deed, or to sell the Second Kogarah Property on any terms at all; and b) the Forged Deed had not been signed by an authorised representative of Landmark, rather the signature of Tom Chan or Tom Liu had been forged by Varvaris or someone acting on his behalf. Given Mr Chan's uncontradicted evidence of Landmark never having had any involvement or intention of selling the Landmark Property and denying his signature on the Forged Deed, these allegations have been established. 130. Further, neither Kwok nor Liu contradicted or qualified the [representations pleaded in 128], and each thereby represented that he or she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… The Court makes these findings in relation to both Alysha and Dennis, based on Chris' evidence that no one contradicted or qualified these representations. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that discussion there would be a reasonable expectation that Dennis and Alysha should disclose his or her knowledge of any contrary fact. Accordingly, I accept that each of them made the representation alleged. 131. The [representations pleaded in 130] were false, misleading or deceptive, and/or likely to mislead or deceive, in that one or both of Kwok and/or Liu was aware of some or all of the matters pleaded in paragraph 129. The Court finds in accordance with paragraph 131. It does so based on their role as active participants in the proposed transaction, Mr Chan's unchallenged evidence that Landmark had never been contacted, never had any intention of selling the Second Kogarah Property and had no connection with CBC, and the subsequent misappropriation of the funds paid by Haiye towards the purchase of the Second Kogarah Property, including the payment of $400,000 thereof to Alysha and to pay Pionnier's share of the purchase price for the First Kogarah Property. 132. Further or alternatively, in the course of the 12 August 2016 Landmark WeChat Discussion, Liu represented that Landmark had agreed to the terms set out in the Forged Deed… I accept Alysha made this representation (see [230] above). 133. The [representation pleaded in 132] was false, misleading or deceptive, and/or likely to mislead or deceive, in that Landmark had not agreed to the terms set out in the Forged Deed, or to sell the Second Kogarah Property on any terms at all. Accepting Mr Chan's unchallenged evidence, these allegations have been established. Payments made to Bingemann Consulting False and/or misleading representations made regarding Bingemann Consulting … 7 August 2016 WeChat Discussion 135. On or about 7 August 2016, in the course of a discussion on WeChat between Liu, Varvaris, Kwok, Chris He and Haiqiang He (7 August 2016 WeChat Discussion), Liu sent to Chris He, Haiqiang He and Varvaris a copy of an invoice purportedly from Bingemann in the amount of $895,125 ([Fake] Bingemann Invoice). The Courts finds this occurred (see [214] above). … 136. In sending the [Fake] Bingemann Invoice to Chris He and Haiqiang He, Liu represented that: a) the amount of the [Fake] Bingemann Invoice correctly reflected an amount of money which PPD owed to Bingemann; b) the [Fake] Bingemann Invoice had been prepared by Bingemann; and/or c) the entire amount of the [Fake] Bingemann Invoice related to professional fees for work undertaken, or to be undertaken, by Bingemann (or persons on its behalf) in connection with obtaining development approval for the proposed development of the First Kogarah Property and/or Second Kogarah Property and adjoining land… The Court accepts that by her conduct and what was set out in the [Fake] Bingemann Invoice these representations were impliedly made. … 137. Each of the [representations pleaded in 136] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) PPD did not owe to Bingemann the amount of money stated in the [Fake] Bingemann Invoice; b) the [Fake] Bingemann Invoice had not been prepared by Bingemann or any authorised representative of Bingemann; and/or c) all, or at least $400,000, of the fees the subject of the [Fake] Bingemann Invoice did not relate to professional fees for work undertaken, or to be undertaken, by Bingemann (or persons on its behalf) in connection with obtaining development approval for the proposed development of the First Kogarah Property and/or Second Kogarah Property and adjoining land. By reference to Mr Chan's unchallenged evidence, the circumstances surrounding the refund from Bingemann of the proceeds of Haiye's Bingemann Invoice Cheque and the subsequent disbursement of those funds including $400,000 to Alysha, the Court finds in accordance with each of these allegations. 138. Further, or in the alternative, the [representation pleaded in 136(c)], insofar as it concerned professional fees for work to be undertaken by Bingemann (or persons on its behalf), was a representation with respect to a future matter within the meaning of section 4 of the ACL. The Court makes this finding. 139. Liu did not have reasonable grounds for making the [representation pleaded in 136(c)]. In the absence of evidence to the contrary, the Court makes this finding. 140. By reason of the matters pleaded in paragraphs 138 and 139, the [representation pleaded in 136(c)] is taken, for the purposes of the ACL, to be misleading. Based on the Court's findings in relation to paragraphs 138 and 139, the Court makes this finding. … 141. Further, in the course of the 7 August 2016 WeChat Discussion, neither Varvaris nor Kwok contradicted or qualified the [representations pleaded in 136], and thereby represented that he was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… The Court makes these findings in relation to both Mr Varvaris and Dennis, based on Chris' evidence that no one contradicted or qualified these representations. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that discussion there would be a reasonable expectation that Varvaris and Dennis should disclose his or her knowledge of any contrary fact. Accordingly, I accept that each of them made the representation alleged. 142. The [representations pleaded in 141] were false, misleading or deceptive, and/or likely to mislead or deceive, in that Varvaris and/or Kwok was aware of some or all of the matters pleaded in paragraphs 137 and 139. The Court finds in accordance with paragraph 142. It does so based on Dennis' and Mr Varvaris' roles as active participants in the various transactions, Mr Chan's unchallenged evidence, Mr Varvaris' role in obtaining the refund of Haiye's Bingemann Invoice Cheque (his email to the effect being copied to Alysha) and the subsequent misappropriation of those funds, including the payment of $400,000 thereof to Alysha. 143. Further, in the course of the 7 August 2016 WeChat Discussion, Varvaris represented that: a) the amount of the [Fake] Bingemann Invoice correctly reflected an amount of money which PPD owed to Bingemann; b) the [Fake] Bingemann Invoice had been prepared by Bingemann; and/or c) the entire amount of the [Fake] Bingemann Invoice related to professional fees for work undertaken, or to be undertaken, by Bingemann (or persons on its behalf) in connection with obtaining development approval for the proposed development of the First Kogarah Property and/or Second Kogarah Property and adjoining land… The Court finds that by responding to Alysha "895,125 that is correct" to her question and with the Fake Bingemann Invoice attached, and in the context of what had passed between the parties about Bingemann's involvement to that point, each of these representations was impliedly made by Mr Varvaris. … 144. Each of the [representations pleaded in 143] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) PPD did not owe to Bingemann the amount of money stated in the [Fake] Bingemann Invoice; b) the [Fake] Bingemann Invoice had not been prepared by Bingemann or any authorised representative of Bingemann; and/or c) all, or at least $400,000, of the fees the subject of the [Fake] Bingemann Invoice did not relate to professional fees for work undertaken, or to be undertaken, by Bingemann (or persons on its behalf) in connection with obtaining development approval for the proposed development of the First Kogarah Property and/or Second Kogarah Property and adjoining land. By reference to Mr Chan's unchallenged evidence, the circumstances surrounding the refund from Bingemann of the proceeds of Haiye's Bingemann Invoice Cheque and the subsequent disbursement of those funds including $400,000 to Alysha, the Court finds in accordance with each of these allegations. 145. Further, or in the alternative, the [representation pleaded in 143(c)], insofar as it concerned professional fees for work to be undertaken by Bingemann (or persons on its behalf), was a representation with respect to a future matter within the meaning of section 4 of the ACL. The Court makes this finding. 146. Liu did not have reasonable grounds for making the [representation pleaded in 143(c)]. In the absence of evidence to the contrary, the Court makes this finding. 147. By reason of the matters pleaded in paragraphs 145 and 146, the [representation pleaded in 136(c)] is taken, for the purposes of the ACL, to be misleading. Based on the Court's findings in relation to paragraphs 145 and 146, the Court makes this finding. 148. Further, in the course of the 7 August 2016 WeChat Discussion, neither Kwok nor Liu contradicted or qualified [representations pleaded in 143], and thereby represented that he and/or she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… The Court makes these findings in relation to both Alysha and Dennis, based on Chris' evidence that no one contradicted or qualified these representations. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that discussion there would be a reasonable expectation that Alysha and Dennis should disclose his or her knowledge of any contrary fact. Accordingly, I accept that each of them made the representation alleged. 149. The [representations pleaded in 148] were false, misleading or deceptive, and/or likely to mislead or deceive, in that Varvaris [I assume this should be Liu] and/or Kwok was aware of some or all of the matters pleaded in paragraphs 144 and 146. The Court finds in accordance with paragraph 149 in relation to Dennis and Alysha. It does so based on Dennis' and Alysha's roles as active participants in the various transactions, Mr Chan's unchallenged evidence and Alysha being copied on Mr Varvaris' email obtaining the refund of Haiye's Bingemann Invoice Cheque and the subsequent misappropriation of those funds, including the payment of $400,000 thereof to Alysha. August 2016 Meeting 150. In about early August 2016, in the course of a meeting with Chris He and Liu, Varvaris represented that: a) Landmark had engaged Bingemann in connection with the development of the First Kogarah Property and/or Second Kogarah Property and adjoining land; b) Landmark had paid to Bingemann 50% of Bingemann's total fees for work done in connection with the development of the First Kogarah Property and/or Second Kogarah Property and adjoining land; c) PPD needed to pay Bingemann $895,125 so that Bingemann would lodge promptly an application for development approval in relation to the First Kogarah Property and/or Second Kogarah Property and adjoining land on behalf of PPD…; and/or d) if an application for development approval was not lodged promptly, the Council might change and Varvaris would no longer have the ability to push through the granting of development consent… The Court finds these representations were made (see [208] above). … 151. Each of the [representations pleaded in 150] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) Landmark had not engaged Bingemann in connection with the development of the First Kogarah Property and/or Second Kogarah Property and adjoining land; b) Landmark had not paid 50% of Bingemann's total fees for work done in connection with the development of the First Kogarah Property and/or Second Kogarah Property and adjoining land, nor paid any fees to Bingemann at all; c) even if PPD paid it $895,125, Bingemann would not lodge promptly an application for development approval in relation to the First Kogarah Property and/or Second Kogarah Property and adjoining land, given that PPD did not own the Second Kogarah Property and Landmark had no intention of selling the Second Kogarah Property to PPD; and/or d) Varvaris had no ability to facilitate the granting of development consent in favour of PPD given that PPD did not own the Second Kogarah Property and Landmark had no intention of selling the Second Kogarah Property to PPD. The Court finds in accordance with paragraph 151 based on Mr Chan's unchallenged evidence. 152. Further or in the alternative, each of the [representations pleaded in 150(c) and/or 150(d)] was a representation with respect to a future matter within the meaning of section 4 of the ACL. The Court makes this finding. 153. Varvaris did not have reasonable grounds for making the [representations pleaded in 150(c) and/or 150(d)]. Based on Mr Chan's unchallenged evidence and the absence of evidence to the contrary, the Court makes this finding. 154. By reason of the matters pleaded in paragraphs 152 and 153, the [representations pleaded in 150(c) and/or 150(d)] are taken, for the purposes of the ACL, to be misleading. Based on the Court's findings in relation to paragraphs 152 and 153, the Court makes this finding. … 155. Further, Liu did not contradict or qualify the [representations pleaded in 150], and thereby represented that she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… The Court makes these findings in relation to Alysha, based on Chris' evidence that she did not contradict or qualify these representations. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that discussion there would be a reasonable expectation that Alysha should disclose her knowledge of any contrary fact. Accordingly, I accept that Alysha made the representation alleged. 156. The [representations pleaded in 155] were false, misleading or deceptive, and/or likely to mislead or deceive, in that Liu was aware of some or all of the matters pleaded in paragraphs 151 and 153. The Court finds in accordance with paragraph 156 in relation to Alysha. It does so based on her role as an active participant in the various transactions, Mr Chan's unchallenged evidence and Alysha being copied on Mr Varvaris' email obtaining the refund of Haiye's Bingemann Invoice Cheque and the subsequent misappropriation of those funds, including the payment of $400,000 thereof to Alysha. 157. In the course of the meeting pleaded in paragraph 150, Liu represented that: a) Landmark had paid $1 million to Bingemann for work done in connection with the development of the First Kogarah Property and/or Second Kogarah Property and adjoining land; and/or b) PPD needed to pay Bingemann $895,125 in order to proceed with developing the First Kogarah Property and/or Second Kogarah Property… I accept Chris' evidence that Alysha was not translating when she said Landmark had paid Bingemann $1 million. However, insofar as she was translating any part of what Mr Varvaris was saying, I am satisfied that her involvement in the various dealings between the parties meant she was not a mere conduit, but was adopting Mr Varvaris' statements as her own in an attempt to persuade Chris and Mr He. Therefore, I find Alysha made these representations. 158. Each of the [representations pleaded in 157] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) Landmark had not paid Bingemann $1 million for work done in connection with the development of the Second Kogarah Property and adjoining land, nor paid any fees to Bingemann at all; and/or b) PPD would not be able to proceed with developing the Second Kogarah Property, regardless of whether it paid any moneys to Bingemann, given that PPD did not own the Second Kogarah Property and Landmark had no intention of selling the Second Kogarah Property to PPD. The Court finds in accordance with paragraph 158 based on Mr Chan's unchallenged evidence. 159. Further or in the alternative, the [representation pleaded in 157(b)] was a representation with respect to a future matter within the meaning of section 4 of the ACL. The Court makes this finding. 160. Liu did not have reasonable grounds for making the [representation pleaded in 157(b)]. Based on Mr Chan's unchallenged evidence and the absence of evidence to the contrary, the Court makes this finding. 161. By reason of the matters pleaded in paragraphs 159 and 160, the [representation pleaded in 157(b)] is taken, for the purposes of the ACL, to be misleading. Based on the Court's findings in relation to paragraphs 159 and 160, the Court makes this finding. … 162. Further, Varvaris did not contradict or qualify the [representations pleaded in 157], and thereby represented that he was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive… The Court makes these findings in relation to Mr Varvaris, based on Chris' evidence that he did not contradict or qualify these representations. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that discussion there would be a reasonable expectation that Mr Varvaris should disclose his knowledge of any contrary fact. Accordingly, I accept that each of them made the representation alleged. 163. The [representations pleaded in 162] were false, misleading or deceptive, and/or likely to mislead or deceive, in that Varvaris was aware of some or all of the matters pleaded in paragraphs 158 and 160. The Court finds in accordance with paragraph 163 in relation to Mr Varvaris. It does so based on his role as an active participant in the various transactions, Mr Chan's unchallenged evidence and Mr Varvaris' email obtaining the refund of Haiye's Bingemann Invoice Cheque and the subsequent misappropriation of those funds, including the payment of $400,000 thereof to Alysha. 10 and 11 August 2016 Bingemann WeChat Discussion 164. On 10 and 11 August 2016, in the course of a discussion on WeChat between Varvaris, Kwok, Chris He, Haiqiang He and Liu (10 and 11 August 2016 Bingemann WeChat Discussion), Varvaris represented that, if PPD did not pay to Bingemann immediately the amount of $895,125, Bingemann would lose faith in PPD's ability to complete the project… The Court finds this representation was made (see [221] above). … 165. The [representation pleaded in 164] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) PPD did not owe to Bingemann the amount of $895,125; and/or b) all, or at least $400,000 of the $895,125, did not relate to professional fees for work undertaken, or to be undertaken, by Bingemann (or persons on its behalf) in connection with obtaining development approval for the proposed development of the First Kogarah Property and/or Second Kogarah Property and adjoining land. The Court finds in accordance with paragraph 165 based on Mr Chan's unchallenged evidence. 166. Further or in the alternative, the [representation pleaded in 164] was a representation with respect to a future matter within the meaning of section 4 of the ACL. The Court makes this finding. 167. Varvaris did not have reasonable grounds for making the [representation pleaded in 164]. Based on Mr Chan's unchallenged evidence, the absence of evidence to the contrary and Bingemann acting on Mr Varvaris' email to refund Haiye's Bingemann Invoice Cheque, the Court makes this finding. 168. By reason of the matters pleaded in paragraphs 166 and 167, the [representation pleaded in 164] is taken, for the purposes of the ACL, to be misleading. Based on the Court's findings in relation to paragraphs 166 and 167, the Court makes this finding. … 169. Further, in the course of the 10 and 11 August 2016 Bingemann WeChat Discussion, neither Kwok nor Liu contradicted or qualified the [representation pleaded in 164], and each thereby represented that he or she was unaware of anything rendering that representation false, misleading or deceptive, and/or likely to mislead or deceive… The Court makes these findings in relation to Dennis and Alysha, based on Chris' evidence that neither of them contradicted or qualified these representations. Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that discussion there would be a reasonable expectation that Dennis and Alysha should disclose their knowledge of any contrary fact. Accordingly, I accept that each of them made the representation alleged. 170. The [representations pleaded in 169] were false, misleading or deceptive, and/or likely to mislead or deceive, in that one or both of Kwok and/or Liu was aware of some or all of the matters pleaded in paragraphs 165 and 167. The Court finds in accordance with paragraph 169 in relation to Dennis and Alysha. It does so based on their role as active participants in the various transactions, Mr Chan's unchallenged evidence and Alysha being copied on Mr Varvaris' email obtaining the refund of Haiye's Bingemann Invoice Cheque and the subsequent misappropriation of those funds, including the payment of $400,000 thereof to Alysha. 171. Further, in the course of the 10 and 11 August 2016 Bingemann WeChat Discussion, Liu represented that the fees the subject of the Bingemann Invoice comprised a debt that was properly due and payable to Bingemann… The Court finds this representation was impliedly made by Alysha to Chris from her various statements set out in 207 and 214 above, including telling Chris "we need to get the DA payment first". 172. The [representation pleaded in 171] was false, misleading or deceptive, and/or likely to mislead or deceive, in that PPD did not owe to Bingemann the fees the subject of the Bingemann Invoice. Based on Mr Chan's unchallenged evidence, the absence of evidence to the contrary and Bingemann acting on Mr Varvaris' email to refund Haiye's Bingemann Invoice Cheque , the Court makes this finding. 12 August 2016 Bingemann WeChat Discussion 173. On 12 August 2016, in the course of a discussion on WeChat between Varvaris, Chris He, Haiqiang He, Kwok and Liu (12 August 2016 Bingemann WeChat Discussion), Varvaris represented that, if PPD did not pay to Bingemann immediately the amount of $895,125, consultants engaged in relation to the development of the First Kogarah Property and/or Second Kogarah Property would lose faith in PPD's ability to complete the project… This representation was made (see [234] above). … 174. The [representation pleaded in 173] was false, misleading or deceptive, and/or likely to mislead or deceive, in that: a) PPD did not owe to Bingemann the amount of $895,125; b) no consultants had been engaged on behalf of PPD in relation to the development of the First Kogarah Property and/or Second Kogarah Property; and/or c) all, or at least $400,000, of the fees the subject of the Bingemann Invoice, did not relate to professional fees for work undertaken, or to be undertaken, by Bingemann (or persons on its behalf) in connection with obtaining development approval for the proposed development of the First Kogarah Property and/or Second Kogarah Property and adjoining land. Based on Mr Chan's unchallenged evidence, the absence of evidence to the contrary and Bingemann acting on Mr Varvaris' email to refund Haiye's Bingemann Invoice Cheque, the Court makes this finding. 175. Further or in the alternative, the [representation pleaded in 173] was a representation with respect to a future matter within the meaning of section 4 of the ACL. The Court makes this finding. 176. Varvaris did not have reasonable grounds for making the [representation pleaded in 173]. Based on Mr Chan's unchallenged evidence, the absence of evidence to the contrary and Bingemann acting on Mr Varvaris' email to refund Haiye's Bingemann Invoice Cheque , the Court makes this finding. 177. By reason of the matters pleaded in paragraphs 175 and 176, the [representation pleaded in 173] is taken, for the purposes of the ACL, to be misleading. Based on the Court's findings in relation to paragraphs 175 and 176, the Court makes this finding. … 178. Further, in the course of the 12 August 2016 Bingemann WeChat Discussion, neither Kwok nor Liu contradicted or qualified the [representation pleaded in 173], and each thereby represented that he or she was unaware of anything rendering that representation false, misleading or deceptive, and/or likely to mislead or deceive… The Court finds there was no contradiction or qualification by reference to Mr He's evidence that neither Dennis nor Alysha contradicted or qualified the representation, Alysha's insistence that the cheque be issued and Dennis attaching a photo of the cheque he had purportedly drawn to pay Bingemann (see [234] above). Given the conversations and developments that had occurred between the parties by this time, I accept that in the context of that discussion there would be a reasonable expectation that Dennis and Alysha should disclose their knowledge of any contrary fact. Accordingly, I accept that each of them made the representation alleged. 179. The [representations pleaded in 178] were false, misleading or deceptive, and/or likely to mislead or deceive, in that Kwok and/or Liu was aware of some or all of the matter pleaded in paragraphs 174 and 176. The Court finds in accordance with paragraph 179 in relation to Dennis and Alysha. It does so based on their role as active participants in the various transactions, Mr Chan's unchallenged evidence and Alysha being copied on Mr Varvaris' email obtaining the refund of Haiye's Bingemann Invoice Cheque and the subsequent misappropriation of those funds, including the payment of $400,000 thereof to Alysha. 180. Further, in the course of the 12 August 2016 Bingemann WeChat Discussion, Liu represented that the fees the subject of the Bingemann Invoice comprised a debt that was properly due and payable to Bingemann … The Court finds this representation was made by Alysha to Chris by her attaching a screen shot of the Fake Bingemann Invoice and her later statement "Just issue cheque directly to project manager…" (see [234] above). 181. The [representation pleaded in 180] was false, misleading or deceptive, and/or likely to mislead or deceive, in that PPD did not owe to Bingemann the fees the subject of the Bingemann Invoice." Based on Mr Chan's unchallenged evidence, the absence of evidence to the contrary and Bingemann acting on Mr Varvaris' email to refund Haiye's Bingemann Invoice Cheque , the Court makes this finding.

Summary of findings about the representations and other conduct

It is convenient at this point to summarise the Court's findings in relation to the various representations and other conduct set out above, interpolating some of the critical dates.
The Court has found that Alysha engaged in this misleading and deceptive conduct: 1. In or about mid-August 2015, Alysha represented to Mr He that: 1. A building of about 80 residential units could be built on the First Kogarah Property; 2. The building of 80 residential units on the First Kogarah Property was feasible, realistic and reasonably achievable from a planning perspective; and 3. The true market value of the First Kogarah Property was $9.5 million. 1. In or about mid-August 2015 Alysha represented to Chris and Mr He: 1. A building of about 75 residential units could be built on the First Kogarah Property; 2. The building of 75 residential units on the First Kogarah Property was feasible, realistic and reasonably achievable from a planning perspective; and 3. The true market value of the First Kogarah Property was $9.5 million. 1. On or about 26 August 2015 Alysha represented to Chris and Mr He that: 1. Haiye's share of the deposit payable pursuant to the Supplementary Contract was to be paid to the Chris Apostolakos Solicitor Law Practice Trust Account; 2. The Supplementary Contract had been made; and 3. The moneys comprising Haiye's share of the deposit payable pursuant to the Supplementary Contract would be used in relation to the purchase of the First Kogarah Property by PPD. The Supplementary Contract Deposit Cheque was paid on 26 August 2015. 1. By reason of her silence on or about 2 January 2016, Alysha represented that she was unaware of anything rendering any of Mr Varvaris' representations about the Second Kogarah Property pleaded in paragraph 56 of the ASOC to be false, misleading or deceptive, and/or likely to mislead or deceive. 2. On 16 February 2016 Alysha represented by her silence that she was unaware of anything that rendered Mr Varvaris' representations about the First Kogarah Property pleaded in paragraph 19M of the ASOC to be false, misleading or deceptive, and/or likely to mislead or deceive. 3. At the 3 March 2016 meeting, by her silence, Alysha represented that she was unaware of anything rendering any of Mr Varvaris' representations about the Second Kogarah Property pleaded in paragraph 70 of the ASOC to be false, misleading or deceptive, and/or likely to mislead or deceive. 4. In the course of the WeChat discussion on 5 March 2016, Alysha did not contradict or qualify any of Mr Varvaris' representations about the Second Kogarah Property pleaded in paragraph 80 of the ASOC and thereby represented by her silence that she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive. The Second Supplementary Contract Cheque was paid on 7 March 2016. 1. At the 9 March 2016 meeting, Alysha represented that: 1. Landmark agreed or was willing to sell the Second Kogarah Property to PPD; 2. If Haiye did not want PPD to purchase the Second Kogarah Property, Landmark was prepared to buy the First Kogarah Property from PPD; 3. Unless PPD purchased the Second Kogarah Property, it would not be able to develop the First Kogarah Property; 4. PPD would not be able to purchase and/or develop the First Kogarah Property and/or the Second Kogarah Property without Mr Varvaris' assistance; and 5. Mr Varvaris had been assisting PPD to purchase and/or develop the Second Kogarah Property. 1. At the meeting on 9 March 2016, Alysha did not contradict or qualify any of Mr Varvaris' representations about the Second Kogarah Property pleaded in paragraph 85 of the ASOC and thereby represented by her silence that she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive. 2. By her silence in the course of the Group WeChat discussion on 11 March 2016 in neither contradicting nor qualifying Mr Varvaris' representations about the Second Kogarah Property pleaded in paragraph 101 of the ASOC, Alysha represented that she was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive. The Second Kogarah Property Cheque was paid on 11 March 2016 1. By her silence during the meeting in early August 2016, in not contradicting or qualifying the representations made by Mr Varvaris about Bingemann pleaded in paragraph 150 of the ASOC, Alysha represented that she was unaware of anything rendering any of those representations false, misleading or deceptive and/or likely to mislead or deceive. 2. In the course of the meeting in early August 2016, Alysha represented that: 1. Landmark had paid $1,000,000 to Bingemann for work done in connection with the development of the First Kogarah Property and/or Second Kogarah Property and adjoining land; and 2. PPD needed to pay Bingemann $895,125 in order to proceed to developing the First Kogarah Property and/or Second Kogarah Property. 1. On or about 7 August 2016, Alysha represented to Chris and Mr He that: 1. The amount of the Fake Bingemann Invoice correctly reflected an amount of money which PPD owed to Bingemann; 2. The Fake Bingemann Invoice had been prepared by Bingemann; and 3. The entire amount of the Fake Bingemann Invoice related to professional fees for work undertaken, or to be undertaken, by Bingemman (or persons on its behalf) in connection with obtaining development approval for the proposed development of the First Kogarah Property and/or Second Kogarah Property and adjoining land. 1. During the course of the Group WeChat discussion on 7 August 2016, by her silence in neither contradicting or qualifying Mr Varvaris' representations about the Bingemann Invoice pleaded in paragraph 143 of the ASOC, Alysha represented that she was unaware of anything rendering any of those representations false, misleading or deceptive and/or likely to mislead or deceive. 2. In the course of the Group WeChat discussion on 10 and 11 August 2016, Alysha represented that the fees the subject of the Fake Bingemann Invoice comprised a debt that was properly due and payable to Bingemann. 3. On or about 11 August 2016, by her silence in not contradicting or qualifying the Mr Varvaris' representations about the payment of the deposit moneys for the Second Kogarah Property pleaded in paragraph 123 of the ASOC, Alysha represented that she was unaware of anything rendering those representations false, misleading or deceptive, and/or likely to mislead or deceive. 4. By her silence during the Group WeChat discussion on 11 August 2016 in not contradicting or qualifying Mr Varvaris' representation about the Fake Bingemann Invoice pleaded in paragraph 164 of the ASOC, Alysha represented to Chris and Mr He that she was unaware of anything rendering that representation false, misleading or deceptive and/or likely to mislead or deceive. 5. By her silence during the WeChat discussion on 11 August 2016 in not contradicting or qualifying Mr Varvaris' representation about the Fake Bingemann Invoice pleaded in paragraph 173 of the ASOC, Alysha represented that she was unaware of anything rendering that representation false, misleading or deceptive and/or likely to mislead or deceive. 6. In the course of the Group WeChat discussion on 12 August 2016, Alysha represented to Chris and Mr He that the fees the subject of the Fake Bingemann Invoice comprised a debt that was properly due and payable to Bingemann. 7. In the course of the Group WeChat discussion on 12 August 2016, Alysha represented to Chris and Mr He that Landmark had agreed to the terms set out in the Forged Deed. 8. By her silence on 12 August 2016 in not contradicting or qualifying Mr Varvaris' representations about the Forged Deed pleaded in paragraph 128 of the ASOC, Alysha represented to Chris that she was unaware of anything rendering those representations false, misleading or deceptive, and/or likely to mislead or deceive. Haiye's Bingemann Invoice Cheque was paid on 12 August 2016.
The Court has found that Dennis engaged in this misleading and deceptive conduct: 1. On or about 17 August 2015 Dennis represented to Chris and Mr He that: 1. A building of about 80 residential units could be built on the First Kogarah Property; and 2. The building of 80 residential units on the First Kogarah Property was feasible, realistic and reasonably achievable from a planning perspective. 1. On or about 25 August 2015 Dennis represented to Chris and Mr He that: 1. A building of about 75 residential units could be built on the First Kogarah Property; 2. The building of 75 residential units on the First Kogarah Property was feasible, realistic and reasonably achievable from a planning perspective; and 3. The true market value of the First Kogarah Property was $9.5 million. 1. On or about 16 February 2016 Dennis did not contradict or qualify any of Mr Vavaris's representations about the First Kogarah Property pleaded in paragraph 19M of the ASOC and by his silence represented that he was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive. 2. At the 24 August 2015 meeting, by his silence Dennis represented that he was unaware of anything rendering any of Mr Varvaris' representations about the First Kogarah Property pleaded in paragraph 20 of the ASOC to be false, misleading or deceptive, and/or likely to mislead or deceive. 3. By reason of his silence in relation to Alysha's representations about the Supplementary Contract pleaded in paragraph 27 of the ASOC, on or about 26 August 2015 Dennis represented that he was unaware of anything rendering any of those representations false, misleading or deceptive and/or likely to mislead or deceive. The Supplementary Contract Deposit Cheque was paid on 26 August 2015. 1. By reason of his silence on or about 2 January 2016, Dennis represented that he was unaware of anything rendering any of Mr Varvaris' Representations about the Second Kogarah Property pleaded in paragraph 56 of the ASOC to be false, misleading or deceptive, and/or likely to mislead or deceive. 2. At the 3 March 2016 meeting, by his silence, Dennis represented that he was unaware of anything rendering any of Mr Varvaris' representations about the Second Kogarah Property pleaded in paragraph 70 of the ASOC to be false, misleading or deceptive, and/or likely to mislead or deceive. 3. On or about 4 March 2016 at the Century Chinese Restaurant Dennis represented to Chris and Mr He that Mr Varvaris had "used his influence and contacts" to persuade Landmark to sell the Second Kogarah Property to PPD. 4. In the course of the Group WeChat discussion on 5 March 2016, Dennis did not contradict or qualify any of Mr Varvaris' representations about the Second Kogarah Property pleaded in paragraph 81 of the ASOC and thereby represented by his silence that he was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive. The Second Supplementary Contract Cheque was paid on 7 March 2016. 1. At the meeting on 9 March 2016, by his silence, Dennis did not contradict or qualify Mr Varvaris' representations about the Second Kogarah Property pleaded in paragraph 85 of the ASOC and thereby represented that he was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive. 2. At the meeting on 9 March 2016, by his silence in relation to Alysha's representations about the Second Kogarah Property pleaded in paragraph 92 of the ASOC, Dennis represented that he was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive. 3. By his silence in the course of the Group WeChat discussion on 11 March 2016 in neither contradicting nor qualifying Mr Varvaris' representations about the Second Kogarah Property pleaded in paragraph 101 of the ASOC, Dennis represented that he was unaware of anything rendering any of those representations false, misleading or deceptive, and/or likely to mislead or deceive. The Second Kogarah Property Cheque was paid on 11 March 2016. 1. At the meeting on 12 March 2016 Dennis, by executing the SKP Deed of Agreement and the SKP Option Deed and not contradicting the representation made by Mr Varvaris about the Second Kogarah Property pleaded in paragraph 111 of the ASOC, Dennis represented to Chris and Mr He that he was unaware of anything rendering that representation false, misleading or deceptive, and/or likely to mislead or deceive. 2. On or about 7 August 2016, by his silence in not contradicting or qualifying Alysha's representations about the Fake Bingemann Invoice pleaded in paragraph 136 of the ASOC, Dennis represented that he was unaware of anything rendering any of those representations false, misleading or deceptive and/or likely to mislead or deceive. 3. During the course of the Group WeChat discussion on 7 August 2016, by his silence in neither contradicting nor qualifying Mr Varvaris' representations about the Fake Bingemann Invoice pleaded in paragraph 143 of the ASOC, Dennis represented that he was unaware of anything rendering any of those representations false, misleading or deceptive and/or likely to mislead or deceive. 4. On or about 10 August 2016, by his silence in not contradicting or qualifying Mr Varvaris' representation about CBC pleaded in paragraph 118 of the ASOC, Dennis represented that he was unaware of anything rendering that representation false, misleading or deceptive, and/or likely to mislead or deceive. 5. On or about 11 August 2016, by his silence in not contradicting or qualifying Mr Varvaris' representations about the deposit for the Second Kogarah Property pleaded in paragraph 123 the ASOC, Dennis represented that he was unaware of anything rendering that representation false, misleading or deceptive, and/or likely to mislead or deceive. 6. By his silence during the Group WeChat discussion on 11 August 2016 in not contradicting or qualifying Mr Varvaris' representation about the Fake Bingemann Invoice pleaded in paragraph 164 of the ASOC, Dennis represented to Chris and Mr He that he was unaware of anything rendering that representation false, misleading or deceptive and/or likely to mislead or deceive. 7. By his silence during the Group WeChat discussion on 11 August 2016 in not contradicting or qualifying Mr Varvaris' representations about the Fake Bingemann Invoice pleaded in paragraph 173 of the ASOC, Dennis represented that he was unaware of anything rendering that representation false, misleading or deceptive and/or likely to mislead or deceive. 8. By his silence on 12 August 2016 in not contradicting or qualifying Mr Varvaris' representations about the Forged Deed pleaded in paragraph 128 of the ASOC, Dennis represented to Chris that he was unaware of anything rendering those representations false, misleading or deceptive, and/or likely to mislead or deceive. Haiye's Bingemann Invoice Cheque was paid on 12 August 2016.
The Court has found that Mr Varvaris engaged in this misleading and deceptive conduct: 1. In or about mid-August 2015 Mr Varvaris represented to Chris and Mr He that: 1. A building of 10 storeys could be built on the First Kogarah Property; and 2. The true market value of the First Kogarah Property was $9.5 million. 1. On or about 24 August 2015 Mr Varvaris represented to Chris and Mr He that the true market value of the First Kogarah Property was $9.5 million. 2. On or about 24 August 2015, Mr Varvaris represented to Chris and Mr He that: 1. The vendor of the First Kogarah Property had asked or directed that the purchase of the property be effected by two contracts, being a contract with the vendor of the First Kogarah Property for part of the purchase price, being the sum of $9,350,000 including GST (Primary Contract) and a second contract with an unidentified party for the balance of the purchase price of $1,100,00 including GST (Supplementary Contract); 2. The vendor of the First Kogarah Property had asked or directed that payment of the purchase moneys be split in the manner provided for in the Primary and Supplementary Contracts; and 3. The moneys to be paid pursuant to the Supplementary Contract would be used in relation to the purchase of the First Kogarah Property by PPD. 1. By reason of his silence in relation to Alysha's representations about the deposit payable under the Supplementary Contract pleaded in paragraph 27 of the ASOC, on or about 26 August 2015 Mr Varvaris represented that he was unaware of anything rendering any of those representations false, misleading or deceptive and/or likely to mislead or deceived. The Supplementary Contract Deposit Cheque was paid on 26 August 2015. 1. On or about 2 February 2016 in the course of a discussion on the Group WeChat Mr Varvaris represented to Chris and Mr He that: 1. Mr Varvaris had had "positive discussions" with Landmark regarding the potential sale of some additional land neighbouring the First Kogarah Property; 2. From those discussions, it seemed that Landmark would agree to sell the additional land to PPD; 3. Mr Varvaris was trying to negotiate the price down "as low as possible"; 4. Mr Varvaris was likely to be able to negotiate a price "much better" than the "usual price" of $200,000 to $250,000 per site; and 5. Negotiations with Landmark were "moving along smoothly and quickly". 1. On 16 February 2016, Mr Varvaris represented to Chris and Mr He that: 1. A building of about 75 residential units could be built on the First Kogarah Property; 2. The building of 75 residential units on the First Kogarah Property was feasible, realistic and reasonably achievable from a planning perspective; 3. Mr Varvaris could easily secure the approval of the construction of 75 apartments on the First Kogarah Property; and 4. With his assistance, approval could be secured for the construction of residential units on the First Kogarah Property. 1. On or about 3 March 2016, Mr Varvaris represented to Chris and Mr He that: 1. Landmark had agreed or was willing to sell the Second Kogarah Property to PPD; 2. Landmark had agreed to a purchase price for the Second Kogarah Property of $7,920,000 (including GST); 3. Landmark required a deposit of 60% of the purchase price for the Second Kogarah Property, being a total of $4,752,000; 4. Deposit moneys would be treated as security and would not be accessed by any party prior to settlement of the purchase of the Second Kogarah Property; and 5. Landmark required the deposit to be paid to CBC. 1. On 5 March 2016, in the course of the Group WeChat discussion, Mr Varvaris represented to Chris and Mr He that: 1. Landmark had been "waiting for instructions" from Varvaris and/or PPD before preparing the contract for sale of the Second Kogarah Property; and 2. Landmark was now preparing the contract of sale for the Second Kogarah Property to PPD. The Second Supplementary Contract Cheque was paid on 7 March 2016. 1. On or about 9 March 2016, Mr Varvaris represented to Chris and Mr He that: 1. Landmark had agreed or was willing to sell the Second Kogarah Property to PPD; 2. PPD would not be able to develop the First Kogarah Property if it did not buy the Second Kogarah Property; 3. Landmark required PPD to pay a 60% deposit to show that it had the financial capacity to complete the purchase of the Second Kogarah Property; and 4. Landmark required the deposit moneys to be paid to CBC. 1. On or about 11 March 2016, Mr Varvaris represented to Chris and Mr He that: 1. Landmark had agreed or was willing to sell the Second Kogarah Property to PPD; 2. Mr Varvaris would be meeting in person with Landmark; and 3. Mr Varvaris needed to show Landmark that the deposit moneys paid by Haiye and Pionnier were in Mr Varvaris' trust account. The Second Kogarah Property Cheque was paid on 11 March 2016. 1. On or about 12 March 2016, Mr Varvaris represented to Chris and Mr He that Landmark had agreed or was willing to agree to sell the Second Kogarah Property to PPD on the terms contained in the SKP Deed of Agreement and the SKP Option Deed. 2. In or about early August 2016, Mr Varvaris represented to Chris that: 1. Landmark had engaged Bingemann in connection with the development of the First Kogarah Property and/or the Second Kogarah Property and adjoining land; 2. Landmark had paid to Bingemann 50% of Bingemann's total fees for work done in connection with the development of the First Kogarah Property and/or Second Kogarah Property and adjoining land; 3. PPD needed to pay Bingemann $895,125 so that Bingemann would lodge an application for development approval in relation to the First Kogarah Property and/or Second Kogarah Property and adjoining land on behalf of PPD; and 4. If an application for development approval was not lodged promptly, the Council might change and Mr Varvaris would no longer have the ability to push through the granting of development consent. 1. In early August 2016, by his silence in not contradicting or qualifying Alysha's representations about the Fake Bingemann Invoice pleaded in paragraph 157 of the ASOC, Mr Varvaris represented to Chris that he was unaware of anything rendering any of those representations false, misleading or deceptive and/or likely to mislead or deceive. 2. By his silence on 7 August 2016 in not contradicting or qualifying Alysha's representations about the Fake Bingemann Invoice pleaded in paragraph 136 of the ASOC, Mr Varvaris represented that he was unaware of anything rendering any of those representations false, misleading or deceptive and/or likely to mislead or deceive. 3. In the course of the WeChat discussion on 7 August 2016, Mr Varvaris represented that: 1. The amount of the Fake Bingemann Invoice correctly reflected the amount of money which PPD owed to Bingemann; 2. The Fake Bingemann Invoice had been prepared by Bingemann; and 3. The entire amount of the Fake Bingemann Invoice related to professional fees undertaken, or to be undertaken by Bingemann (or persons on its behalf) in connection with obtaining development approval for the proposed development of the First Kogarah Property and/or the Second Kogarah Property and adjoining land. 1. On or about 10 August 2016, Mr Varvaris represented to Chris and Mr He through their solicitor that Varvaris & Co had transferred the deposit money for the Second Kogarah Property to CBC. 2. Also on or about 10 August 2016, Mr Varvaris represented to Chris and Mr He that CBC was "an associated entity of Landmark". 3. On 10 and 11 August 2016, Mr Varvaris represented to Chris and Mr He that if PPD did not pay to Bingemann immediately the amount of $895,125, Bingemann would lose faith in PPD's ability to complete the project. 4. On or about 11 August 2016, Mr Varvaris represented to Chris and Mr He that: 1. The forged CBC documents had been prepared by CBC; 2. Varvaris & Co had transferred the deposit moneys in the amount of $4,752,000 to CBC on or about 15 March 2016; and 3. CBC was holding the deposit moneys in the amount of $4,752,000 pending completion of PPD's purchase of the Second Kogarah Property from Landmark. 1. On 12 August 2016, Mr Varvaris represented to Chris that: 1. Landmark had agreed to the terms set out in the Forged Deed; and 2. The Forged Deed had been signed by an authorised representative of Landmark, namely Tom Chan or Tom Liu. 1. On or about 12 August 2016, Mr Varvaris represented to Chris and Mr He that if PPD did not pay to Bingemann immediately the amount of $895,125, consultants engaged in development of the First Kogarah Property and/or the Second Kogarah Property would lose faith in PPD's ability to complete the project. Haiye's Bingemann Invoice Cheque was paid on 12 August 2016.

The First Kogarah Property

In paragraphs [338] and following I sought to summarise the parties' contentions. The findings I have set out above necessarily determine most of those contentions. I will now set out the balance of my conclusions for completeness.
I accept the Plaintiffs' submissions set out in paragraphs [338(2) and (3)] above and accordingly reject the Active Defendants' submission set out in paragraphs [339(1)(a) and (c)] above.
As to the Active Defendants' submission at paragraph [339(1)(b)] above, the evidence demonstrates (and common sense suggests) that the representations concerning the true market value of the First Kogarah Property were part of the conduct which induced the Plaintiffs to acquire it. While future development potential was obviously important, the profitability of the transaction necessarily included having a view about the true market value both "as is" and developed.
The Active Defendants' submissions set out at paragraph [339(4)] above are rejected. Having regard to the Court's conclusions about Chris and Mr He as witnesses, the Court has no hesitation in finding that they relied upon the Active Defendants' representations about the market value and what could be developed on the First Kogarah Property in committing and funding Haiye to pay its share of the transaction.

The Supplementary Contract

Insofar as the Court has found misleading and deceptive conduct on the part of the Active Defendants in relation to the Supplementary Contract, the Court is well satisfied that the Plaintiffs relied on the misrepresentations and would not have paid money towards the Supplementary Contract had they known the truth, whether by the misrepresentations being corrected or the silence being broken. I have already dealt elsewhere (see paragraph [377] above and following) with the legal ramifications of any alleged illegality on the Plaintiffs' rights under the ACL (and more generally).
Throughout his oral closing submissions, Mr Sirtes SC used the terms "illegal" and "improper" somewhat interchangeably. There being, at least in my view, a fundamental difference between "illegal" and "improper", I questioned Mr Sirtes SC on the difference between those terms, if any, in his submissions. My question, and Mr Sirtes SC's response, was as follows (at T375:12-50): HIS HONOUR: Mr Sirtes you've just said something that reminds me of a question I asked you that I think, with respect, you didn't answer. You used the word improper again. How do I distinguish or what is the point of distinction between I'll say a proper transaction, an improper transaction and an illegal transaction. An assumed bribery would constitute an illegal transaction. SIRTES: I'm glad your Honour picked me on that because I don't want your Honour to think I'm using those expressions interchangeably. I'm not. Improper was intended to infect the representation case. That is to say that your Honour cannot interpret the representations as pleaded as being devoid of the overarching improper purpose. We don't need to travel to illegality in relation to impugn those representations as circumstantially having been made. Because they weren't made in those terms at all. They weren't implicitly made in those terms and when one looks at all the circumstances one will see that this was a common design. And if anything was to be achieved here, it was certainly not be achieved by reference to the application of planning principles. That's when I use the term improper. Illegal is slightly different. My learned friend has said well if we're going to attempt to bring ourselves within the concept of illegal we are going to need to embrace something that in fact is illegal and we are for ourselves would accept that to be correct. And we say we don't need to prove that of course in relation to the criminal standard. What we need to persuade your Honour is by reference to all that your Honour has seen and what we would say to be the ludicrous answers given by the plaintiff's witnesses when I gave them every single opportunity of, can I say bluntly, coming cleaning [sic] as to what happened. Because your Honour we say the WeChat messages make it perfectly plain. I will not stand here for a single second and attempt to suggest to your Honour that when Alicia [sic] wrote those things, that she was as pure as the driven snow. We say that this was a common design shared by all of them. The difference between the position adopted by Mr Cheshire and the difference adopted by my client is we are coming clean about that your Honour and they are not. They are attempting to nevertheless continue to persuade your Honour that this was all above board. And we would say that that is nonsense and your Honour should see through that without any difficulty whatsoever.
Despite that attempt at clarification, I have concluded that the Active Defendants have been unable to identify the alleged illegality or impropriety with any degree of precision, largely leaving it as a matter of speculation or innuendo: on any view well short of what sustaining such a serious finding on the Briginshaw standard would require. It is in this context that I record for completeness my acceptance of the Plaintiffs' submissions in paragraph [341] above.

The Second Kogarah Property

Although much of the Plaintiffs' case centred on misrepresentation by silence, the Court has found that Alysha did make direct misrepresentations about the Second Kogarah Property at the 9 March 2016 meeting and that on 4 March 2016 Dennis had represented to Chris and Mr He that Mr Varvaris had persuaded Landmark to sell the Second Kogarah Property to PPD. Furthermore, on any view, the fact that a large part of the Second Kogarah Property Cheque was used to pay Pionnier's share (Dennis being the director of that company) of the purchase price for the First Kogarah Property, and $400,000 was paid to Alysha are essential reasons for the Court's conclusion that Alysha and Dennis must have known that the whole story about Landmark was merely the next part of the deception of the Plaintiffs. The Court is fortified in this conclusion by the benefits Alysha (another $400,000) and (Dennis - alleged reduction in his loan account with Golden Sands) also received from the payment of the Fake Bingemann Invoice.
I next again record for completeness that I accept the Plaintiffs' submissions set out in paragraphs [344] and [345] above.
Turning to the arguments raised by the Active Defendants recorded at paragraph [346] above and following, I have already set out in the Court's findings by reference to the pleadings why the Court is satisfied the Active Defendants have engaged in misleading and deceptive conduct, including by silence when they had knowledge of the deception that was being worked. Similarly, the Court has no doubt the Plaintiffs relied on the positive misrepresentations and would not have paid the alleged deposit to purchase the Second Kogarah Property had they been told the truth or if the Active Defendants had broken their silence to share what the Court is satisfied the Active Defendants knew.
In reaching these conclusions adverse to the Active Defendants on the Briginshaw standard, I have carefully considered the arguments set out at paragraphs [348] and [349] above. However, they are overcome by the matters to which I have referred in paragraph [429] above. To the extent they might in isolation portray Alysha in particular as an innocent, I am satisfied that they were all part of the ruse in which the Court has found the Active Defendants were engaged in with Mr Varvaris.
I have dealt with at other points of these reasons why I reject the various submissions recorded at paragraphs [350] to [356] above. I have noted in particular the submission that the Plaintiffs were really relying on representations made by Mr Varvaris. In my respectful view, that is not borne out by the facts. It is plain that the Plaintiffs relied on what they were told by each of Mr Varvaris, Alysha and Dennis, each of them as active participants in the various transactions. The fact that everyone appears to have understood that Mr Varvaris would be negotiating and using his influence does not mean that the Plaintiffs did not rely on what Alysha and Dennis said. This is to ignore that the Plaintiffs were introduced to Mr Varvaris by Alysha and Dennis and that their pre-existing relationship of trust and confidence was with Alysha and Dennis.
The Court is satisfied, to the Briginshaw standard, that Alysha and Dennis were principals in the transactions and not mere intermediaries or mouthpieces for Mr Varvaris. The only exception are those few occasions which I have identified where the words used make it clear that what was happening was interpretation. However, even that was incidental to Alysha and Dennis' conduct as principals. The Plaintiffs relied on what they said as principals, that reliance was fortified by the fact that they trusted them to interpret what was being said by and to Mr Varvaris. It is also that evident trust and confidence, together with the fact that the Plaintiffs did retain Mr Vay, that is the basis of the Court's rejection that the Plaintiffs were negligent in protecting their own interests, so that there is no basis to reduce their damages under s 137B of the Competition and Consumer Act 2010 (Cth).
In assessing the Active Defendants' conduct it is also important to recall that this must be done in the surrounding circumstances of what had passed between the parties, "bearing in mind what matters of fact each knew about the other as a result of the nature of their dealings and the conversations between them, or what each may be taken to have known" (see paragraphs [362] and [368] above). There is a cumulative quality to the various representations and dealings between the parties, where each new representation or silence must be understood by what had gone before, as the Plaintiffs were drawn further into what the Court is satisfied was the scheme of Mr Varvaris and the Active Defendants. This also permits the Court to engage in a degree of hindsight in assessing earlier conduct by what the Court is satisfied occurred later. To give an obvious example, a person may climb through a window of a house for many reasons, including lawful ones, but an unlawful purpose may be inferred if shortly afterwards it is found that both the person and valuable jewellery are no longer in the house.
It is next necessary to consider the Active Defendants' argument set out at paragraph [357] above of novus actus interveniens. It can be disposed of briefly. The argument may have had force if the Active Defendants were completely ignorant of a scheme known only to Mr Varvaris. As has already been said, the Court has found they were not. In the events which happened it would be unreal and artificial to suggest that the sole consequence of the Active Defendants' false and misleading conduct was that money was placed in the Varvaris & Co trust account. The Active Defendants knew, the Court has found, that there was no transaction with Landmark such that the transfer to Varvaris & Co was a step in the misappropriation of the funds.

The Fake Bingemann Invoice

It will be apparent from the Court's findings set out with the pleading above that the Court accepts the Plaintiffs' submissions set out in paragraph [358] above.
As for the Active Defendants' submissions recorded in paragraph [359] above, the reasons I have just set out in relation to the Second Kogarah Property also explain why I do not accept that the Active Defendants were just as reliant on Mr Varvaris as the Plaintiffs or that the Active Defendants did not know that the Fake Bingemann Invoice was not real. At the risk of repetition, the Court is satisfied that the Active Defendants were "inside the tent with Mr Varvaris" and not outside of it.

Are Any One or a Number of the Active Defendants Accessorily Liable for the Misleading or Deceptive Conduct of the Other Active Defendants and/or Mr Varvaris?

While the Court is satisfied that the Active Defendants are all liable in accordance with the findings set out above, I will briefly deal with this question.
It follows from those findings that as between each of the Active Defendants and Mr Varvaris, each had knowledge of the essential facts that rendered the particular conduct misleading or deceptive. They therefore each aided and abetted the other and were directly or indirectly knowingly concerned in or a party to the contravening conduct of the others. For the reasons set out in paragraph [417] above, these findings mean that if there were any actionable conspiracy to effect the relevant contraventions, that cause of action has merged with the principal contraventions.

The Plaintiffs' measure of damages under the ACL

Before turning to the quantification of damages, there is a preliminary question as to which of the Plaintiffs is entitled to relief.
In their written closing submissions, which were received prior to the eighth day of the hearing, Counsel for the Active Defendants sought to draw to the Court's attention the fact that the Plaintiffs have "taken little care to differentiate between any of them" and that, by their own evidence, Chris and Mr He have not suffered any loss. On Chris' own evidence, he did not contribute any funds to the aforementioned transactions. He cannot, therefore, be the direct beneficiary of any relief from the Court. By Mr He's evidence, the money paid from his personal funds was paid exclusively by him on behalf of Haiye. Counsel for the Active Defendants thus submit that if any of the Plaintiffs have suffered loss, it can only be Haiye - a submission which appears to be accepted by the Plaintiffs.
The submission continues: 1. there is no evidence of where the funds used to purchase the First Kogarah Property and make the other relevant transactions came from, other than that they were obtained from either the 439 Account or 440 Account. It is not clear, however, whether the funds were obtained from another body corporate; 2. there is no evidentiary basis for the Court to conclude that the funds paid by Mr He were loaned by him to Haiye, nor whether the funds were loaned by Haiye (or Mr He) to PPD - PPD being the party that has suffered the loss. The funds certainly do not pass through either Haiye or PPD and the Court cannot draw an inference that the funds were loaned to either of those entities by Mr He; and 3. if the Court infers that the funds were loaned by Haiye to PPD, the highest Haiye's loss rises is its inability to recover a debt said to be owed to it by PPD. That amount will be the difference between PPD's indebtedness to Haiye and the value of the only remaining assets of PPD, which are the First Kogarah Property and funds held in a controlled monies account, and is, in any event, an uncrystallised future loss.
On the ninth day of the hearing, Mr Sirtes SC developed this submission with reference to what was said by the High Court in Gould v Vaggelas and the Federal Court of Australia in Hodges v Waters (No 7) (2015) 232 FCR 97; [2015] FCA 264 ("Hodges v Waters") and Morris v IMF Bentham Limited [2018] FCA 1009 ("Morris v IMF Bentham"). Having referred to these authorities, to which I shall briefly return, Mr Sirtes SC initially submitted that "not even Haiye is able to claim relief and that's because we say that … its claim is one that is a claim for reflective loss and it can't succeed": see T371:8-10. Mr Sirtes SC, correctly in my view, later abandoned that submission and focussed his attack upon the Plaintiffs' asserted evidentiary failure to prove that Haiye (or Mr He) has, in fact, suffered loss. As Mr Sirtes SC abandoned his reflective loss submission, there is no need for the Court to consider a submission in reply from Mr Cheshire SC that the Active Defendants should not be permitted to raise their reflective loss argument in closing submissions.
Before turning to Mr Sirtes SC's ultimate evidentiary submission in more detail, however, reference should be made to what was said by the High Court in Gould v Vaggelas. That case concerned a dispute not unlike the present (albeit Mr He is one step removed from the transactions): a husband and wife were induced by misrepresentations to purchase a tourist resort through a company, Gould Holdings Pty Ltd ("Gould Holdings"). The terms of Gould Holdings' purchase of the resort included a transfer of a property owned by the Goulds to the vendors and a mortgage to the vendors to secure the balance of the purchase price. Gould Holdings defaulted on the mortgage after two years of unprofitable trading and the vendors exercised their power of sale under the mortgage. The vendors also sued the Goulds as guarantors. The Goulds counterclaimed against the vendors for deceit; a claim upon which they were ultimately successful. What fell for determination by the High Court, inter alia, was the quantum of damage, if any, that may be recoverable by the Goulds as distinct from the damage suffered by Gould Holdings. In allowing the appeal, Gibbs CJ relevantly said (at 219): "It is clear that it was not right to identify the Goulds with the company, Gould Holdings Pty Ltd ("Gould Holdings"), which the Goulds formed to make the purchase, notwithstanding that they were the sole shareholders. It is of course elementary to say, as was said in Prudential Assurance Co Ltd v Newman Industries Ltd [No.2], "that A cannot, as a general rule, bring an action against B to recover damages or secure other relief on behalf of C for an injury done by B to C. C is the proper plaintiff because C is the party injured, and, therefore, the person in whom the cause of action is vested". Any loss suffered by Gould Holdings as a consequence of the fraud can be recovered only by the company itself. Even if the company had not commenced an action within the limitation period, its failure to enforce its own rights would not have enhanced the rights of the Goulds: see Prudential Assurance v Newman Industries [No.2]. However, although the Goulds cannot recover damages merely because Gould Holdings has suffered damage, and cannot recover damages which are merely a reflection of a loss suffered by the company, they may recover damages for the loss which they personally have suffered and which is separate and distinct from the loss suffered by the company. That this is so is clear in principle, but if authority is needed, the judgment in Prudential Assurance v Newman Industries provides it." (citations omitted)
Brennan J further expanded upon the reflective loss principle in some detail with reference to a hypothetical scenario. At 253-4, his Honour relevantly said: "If a defendant, D, by fraudulent misrepresentations made to a plaintiff, P, induces P to lend money to a worthless company, C, whereby the money lent is lost, D is liable for damages in deceit to P. That is clear enough where C is under D's control, and there is no difference in principle when C is not under D's control. If D's fraudulent misrepresentations induce C to part with its assets to purchase a worthless property and induce P to lend money to C in order that C may purchase the property, D is liable for damages in deceit to each of P and C. To C, whom he has induced to part with its assets in exchange for the worthless property; to P, whom he has induced to part with the money lent in exchange for a debt owed by C which C is unable to pay. The causes of action vested in P and C are distinct. D's liability arises, in one case, from his inducing C to purchase property, in the other from his inducing P to lend money to C. In one case, it is the purchase of the worthless property that causes the loss, in the other it is the lending of money to a worthless company. The distinction between the causes of action and the measure of damages is clearer if the property in the one case and the debt in the other are not worthless. Then the difference between the purchase price and the value of the property is, prima facie, the measure of C's damages, while the difference between the money lent and the value of the debt is, prima facie, the measure of P's damages. Where a plaintiff who has been fraudulently induced to part with money in exchange for something sues in deceit, he must prove that the thing is worth less than what he gave in exchange for it: Potts v Miller. And so, when P has been fraudulently induced by D to lend money to C, P bears the onus of proving that the value of the debt owed by C is worth less than the amount of money lent." (citations omitted)
The other two cases to which reference was made by Mr Sirtes SC in oral submissions (Hodges v Waters and Morris v IMF Bentham) do not expand upon these statements of Gibbs CJ and Brennan J in Gould v Vaggelas. To the extent that those cases address issues concerning one's ability (or inability) to recover losses in their capacity as a shareholder of a company or unitholder of a trust, they are not of any present relevance because: 1. Haiye is not seeking to recover losses against the Active Defendants in its capacity as a shareholder of PPD; and 2. Mr Cheshire SC has accepted (correctly in my view) that Haiye's losses are limited to the debt owed by PPD to Haiye that PPD cannot, or will not, be able to satisfy. Any relief awarded beyond the quantum of the debt owed by PPD to Haiye that PPD cannot, or will not, be able to satisfy would contravene the rule against reflective loss.
Returning to the submissions set out at [443] above, the gravamen of Counsel for the Active Defendants' submission is that there is no evidence of the nature of the transaction between Mr He and Haiye or Mr He and PPD, including whether those funds were loaned by Mr He to Haiye and then by Haiye to PPD, or by Mr He directly to PPD. Counsel for the Active Defendants' submission on this point is narrowly directed to the absence of sufficient evidence demonstrating a loan from Mr He to Haiye and then from Haiye to PPD, or from Mr He to PPD directly.
I reject Counsel for the Active Defendants' submissions for the following reasons: 1. Mr He's evidence, which was not contested by Counsel for the Active Defendants (other than a passing submission that the funds may have been obtained from some other body corporate), was that the money held in the 439 Account and 440 Account was his money. Mr He does not make reference to another body corporate funding the 439 Account or 440 Account and there is no reason to infer that a third party funded either account. I accept Mr He's evidence that the funds procured from the 439 Account and 440 Account were his personal funds. 2. Although the Plaintiffs' evidence fell short of expressly demonstrating that the funds procured from the 439 Account and 440 Account were loaned to Haiye, I infer that Haiye is indebted to Mr He, and that PPD is indebted to Haiye, in an amount commensurate to the amount paid by Mr He directly to Al-Jaafaria (via the Longton Legal and Blackstone Waterhouse Lawyers trust accounts), Varvaris & Co and Bingemann for the following reasons: 1. There is no suggestion that by using his personal funds, Mr He obtained additional equity in either Haiye or PPD. Accordingly, either Haiye or PPD are indebted to Mr He. It is immaterial whether that indebtedness is in the form of a loan or otherwise. 2. By the parties' use of Haiye and Pionnier as the corporate shareholders of Chris', Mr He's, Alysha's and Dennis' equity in PPD, they clearly intended to conduct their business through those entities. It is unlikely that Mr He would have intended to fund his and Chris' share of the project directly in circumstances where their equity in PPD was owned by them through Haiye. 3. Both Chris' and Mr He's evidence was that in obtaining the various bank cheques, Mr He did so "for Haiye's share" of the various amounts payable, or said to be payable, by PPD. That evidence was consistent, and I accept it.
I therefore conclude that of the Plaintiffs, Haiye is the only party to whom loss can be attributed.

Damages

Having established that Haiye is the plaintiff entitled to damages, including under the ACL, the Court will next consider the parties' submissions on quantification. These were the subject of further written submissions at the Court's direction after the close of oral argument.
The parties agreed that in quantifying damages, the Court had to take into account (and give the Active Defendants the benefit of) the orders made at the hearing (set out in [295] above). One unusual feature of this case which is a consequence of those orders is that Pionnier has transferred its shares in PPD to Haiye. This means that PPD is now a wholly owned subsidiary of Haiye, which is itself owned by Chris (as to 51%) and Mr He (as to 49%). In economic terms, Haiye now has the benefit of 100% of the First Kogarah Property. For the purposes of quantifying damages, the plaintiffs relied on an updated valuation of the First Kogarah Property as at 8 April 2021, which established that the undisputed value of the First Kogarah Property was $4,315,200 (a 75% interest being $3,236,400, and 25% being $1,078,800).
It is that unusual feature which is the reason why, to the extent any differentiation is necessary, the Court takes as the primary basis for its quantification of damage s 237 of the ACL, but relying on s 236 in the alternative. Those sections include: "236 Actions for damages (1) If: (a) a person (the claimant) suffers loss or damage because of the conduct of another person; and (b) the conduct contravened a provision of Chapter 2 or 3; the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention…. Division 4 - Compensation orders etc. for injured persons and orders for non‑party consumers Subdivision A - Compensation orders etc. for injured persons 237 Compensation orders etc. on application by an injured person or the regulator (1) A court may: (a) on application of a person (the injured person) who has suffered, or is likely to suffer, loss or damage because of the conduct of another person that: (i) was engaged in a contravention of a provision of Chapter 2, 3 or 4; or (ii) constitutes applying or relying on, or purporting to apply or rely on, a term of a contract that has been declared under section 250 to be an unfair term; or (b) on the application of the regulator made on behalf of one or more such injured persons; make such order or orders as the court thinks appropriate against the person who engaged in the conduct, or a person involved in that conduct. Note 1: For applications for an order or orders under this subsection, see section 242. Note 2: The orders that the court may make include all or any of the orders set out in section 243. (2) The order must be an order that the court considers will: (a) compensate the injured person, or any such injured persons, in whole or in part for the loss or damage; or (b) prevent or reduce the loss or damage suffered, or likely to be suffered, by the injured person or any such injured persons. …"
There was no dispute between the parties that in this case damages should be assessed as at the date of judgment. The Active Defendants in fact submitted that any loss of the Plaintiffs should be compensated pursuant to s 237, but relied on its discretionary nature to submit that the effect of the orders which the Court has already made meant that the justice and equity of this case was that no further liability should be visited on the Active Defendants and that Haiye's losses should otherwise be left to lie where they fall.
That submission is rejected. Putting it broadly, Haiye should be compensated insofar as the amounts that were paid out on its behalf are not equivalent to what was received and giving credit for the value of the First Kogarah Property and the other allowances now made by the Active Defendants.
Nor does the Court accept the Active Defendants' submission that what Haiye is suing for is some kind of uncrystallised future loss to the extent there may be a shortfall between sums advanced on behalf of Haiye and the assets available in PPD to repay it. That submission must fail in the face of the economic unity of ownership with PPD now being a wholly owned subsidiary of Haiye. It would be entirely artificial to say Haiye suffers no loss until it in fact seeks to recover what the Court has found should be treated as its advances made on behalf of PPD. In any event, insofar as s 237 is the jurisdictional basis for compensation, it extends in its terms to preventing or reducing loss or damage which is "likely to be suffered".
In their final submissions as to damages, the Plaintiffs divided what they submitted was Haiye's entitlement under the ACL into several components. I will consider each of these in turn. The first was: "a. Relief for the shortfall between sums advanced by the First Plaintiff and assets available in PPD to repay the First Plaintiff, in the current total amount of $2,288,439: $701,250 (Deposit for Primary Contract - 75%) $6,688,500 (Balance for Primary Contract - 75%) SUBTOTAL: $7,389,750 (LESS current value of the First Kogarah Property $4,315,000) (LESS monies in controlled monies account $786,311, to be updated at time of judgment) SUBTOTAL FOR SHORTFALL: $2,288,439 (to be updated at time of judgment)"
The Active Defendants accepted this calculation of shortfall was arithmetically correct. However, they submitted that just because there was a shortfall did not automatically lead to the conclusion that this was the correct assessment of Haiye's loss. The Active Defendants submitted that if the Court accepts that Haiye lent money to PPD, the purpose of that loan was for PPD to develop the First Kogarah Property. Any assessment of damages, it was argued, must be made in the context of development of that property and any ensuing profit which PPD could generate. It was contended that "although the expert evidence is that development approval for 80 residential units would be very unlikely, there is no evidence that [the First Kogarah Property] is not developable at all".
In support of these arguments, the Active Defendants referred to the decision of Harrison J in PPK Willoughby Ltd v Baird [2020] NSWSC 1757 ("PPK Willoughby"). That case concerned the purchase and development of land in reliance upon negligent advice. However, the development had made a profit. While his Honour accepted that the plaintiff would not have bought and developed the land if it had been properly advised, the proper measure of loss was not the difference between the amount paid for the property and its real value but by ascertaining whether the plaintiff was worse off than if it had not entered the transaction. In this case the plaintiff was better off because it had made a profit on the development.
The Court accepts the Plaintiffs' argument that PPK Willoughby is of no assistance to the Active Defendants in this case because the property in PPK Willoughby had in fact been developed and the townhouses built upon it sold. What is clear that Haiye would not have funded PPD to purchase the First Kogarah Property if Chris and Mr He had known that a development of 75 to 80 units would not be possible, which in practical terms is the effect of the Plaintiffs' expert planning evidence.
Furthermore, the Active Defendants have not sought to adduce evidence concerning the current value of the First Kogarah Property either on an "as is" basis or by reference to its realistic development potential. Nor is there any evidence about what Haiye might now cause PPD to do with the First Kogarah Property.
For these reasons, the Court accepts this aspect of the Plaintiffs' quantification of Haiye's damages.
The next aspect of the Plaintiffs' claim related to the Supplementary Contract: "b. Relief for the Supplementary Contract in the total amount of $825,000, being the amounts paid as follows: $75,000 (Deposit for Supplementary Contract - 75%) $750,000 (Balance for Supplementary Contract - 75%)"
The Active Defendants made two responses to this aspect of the Plaintiffs' claim.
First, they submitted that there was no evidence that any of the amounts paid in respect of the Supplementary Contract were received by any of the Active Defendants. They drew attention to the fact that the Plaintiffs made a claim against CBC for $559,500 said to have come from the monies paid referable to the Supplementary Contract. Second, and consequent upon that, they submitted that Haiye should not be permitted to enjoy a double recovery from CBC as well as the Active Defendants, so that any order for compensation or damages against the Active Defendants should be limited to $265,500 (being $825,000 less the $559,500 judgment against CBC).
The Court accepts this aspect of the Plaintiffs' claim. The fact that none of the money was received by any of the Active Defendants does not relieve them of liability when the Court has found that money was paid by reason of their misleading and deceptive conduct. Furthermore, in their reply submissions, the Plaintiffs make clear that they do not seek double recovery from CBC as well as the Active Defendants. In any event, as is set out in paragraphs [570] to [572] below, the Plaintiffs have not made out their claim against CBC.
The Plaintiffs' claim in relation to the funds paid for the deposit of the Second Kogarah Property was expressed as: "d. Relief for the balance of the funds paid for the deposit paid of the Second Kogarah Property being $2,142,830, calculated as follows: $3,564,000 (Deposit for Second Kogarah Property) (less 25% Market Value of the First Kogarah Property as at 8 April 2021 in amount of $1,078,800) PLUS $233,750 being the Fifth Defendant's contribution to the purchase of the First Kogarah Property (LESS $400,000 received by [Alysha], which is the subject of the Orders made 23 April 2021) (LESS $176,920 being 25% of GST refund in controlled monies account for PPD) TOTAL: $2,142,830"
The Active Defendants responded with this calculation: Event Amount Funds paid to Varvaris & Co trust account $3,564,000 Less amounts applied to purchase of First Kogarah Property, of which Plaintiffs now have effective ownership ($2,231,762.83) Less value of Pionnier's contribution to purchase of First Kogarah Property, of which Plaintiffs now have effective ownership ($233,750) Less $400,000 received by [Alysha] ($400,000) Less $176,920, being 25% of GST refund in controlled moneys account for PPD ($176,920) TOTAL $521,567.17

It will be apparent from comparing these calculations that there were two areas of difference.
First, the Active Defendants contended that because Pionnier had agreed to transfer its shares in PPD to the Plaintiffs, the Plaintiffs have received the full value of the $2,231,762.83 which was applied towards the purchase of the First Kogarah Property. The Plaintiffs responded that to treat the payment in that way did not recognise that what the funds were applied towards was to purchase a 25% interest in the First Kogarah Property, which was worth considerably less than the amount paid.
The Court accepts the Plaintiffs' argument. The first head of damages dealt with in paragraphs [458] to [463] above deals with the acquisition of the 75% interest in the First Kogarah Property. The head of damages now under consideration deals with the acquisition of the 25% interest. In my respectful view, the Plaintiffs' approach appropriately reflects that reality.
The second area of difference is that the Plaintiffs add to their damages the $233,750 which was Pionnier's contribution to the purchase of the First Kogarah Property. On the other hand, the Active Defendants submitted that by Pionnier agreeing to transfer its shares in PPD to the Plaintiffs, the Plaintiffs received the benefit of that amount which reduced (rather than increased) their loss.
I accept the principle which I take to underlie the Active Defendants' submission. The Plaintiffs, in economic terms, now have the benefit of the entire value of the First Kogarah Property. It would, in my respectful view, be a form of double compensation for them to have both the First Kogarah Property and the benefit of what Pionnier paid towards the purchase of the First Kogarah Property. That benefit should be credited back to Pionnier. The question is in what amount?
The parties were agreed that by reference to the current market value of the First Kogarah Property, the 2.5% of the purchase price contributed by Pionnier amounts to $107,875. That is the amount which should be credited back to Pionnier by reducing the amount of damages otherwise recoverable under this head from the Active Defendants by the Plaintiffs.
The effect of these conclusions is that Haiye's entitlement in respect of the funds paid for the deposit for the Second Kogarah Property should be calculated as follows: "d. Relief for the balance of the funds paid for the deposit of the Second Kogarah Property being $2,016,155, calculated as follows: $3,564,000 (Deposit for Second Kogarah Property) (less 25% Market Value of the First Kogarah Property as at 8 April 2021 in amount of $1,078,800) PLUS $107,875 being the Fifth Defendant's contribution to the purchase of the First Kogarah Property as 2.5% market value of the First Kogarah Property as 8 April 2021) (LESS $400,000 received by [Alysha], which is the subject of the Orders made 23 April 2021) (LESS $176,920 being 25% of GST refund in controlled monies account for PPD) TOTAL: $2,016,155"
The final head of relief claimed by the Plaintiffs under the ACL is the amount of $271,343.75, being the outstanding amount paid in respect of the Fake Bingemann Invoice after allowing for the repayment from Alysha of the $400,000 from that amount pursuant to the Court's orders. The Court accepts that claim is made out and there should be judgment for Haiye against the Active Defendants in that amount.
Insofar as the Plaintiffs also have a separate claim against Dennis for $270,000 of that money, I accept the Active Defendants' submission that the Court's orders should not permit double counting of the amounts recoverable by the Plaintiffs in respect of what was paid in response to the Fake Bingemann Invoice. At paragraphs [567] to [569] below I set out why the Court is satisfied that Haiye is entitled to judgment against Dennis for money had and received for funds paid to satisfy the Fake Bingemann Invoice. The Plaintiffs will be given an opportunity as part of any submissions concerning the form of final orders to address how any orders should be expressed to avoid double recovery.

Tort of Deceit

The representations upon which the Plaintiffs rely for the purpose of their misleading and deceptive conduct case are also relied upon in support of the deceit allegations. There being a significant factual overlap in the two causes of action, it is unnecessary for the Court to recite Counsels' submissions addressing the purported false, misleading and/or deceptive representations. The factual findings the Court has made in relation to the claims under the ACL apply equally to considering the tort of deceit.
It is also necessary to record that, as the case was argued, little distinction was drawn between the action under the ACL (which was clearly the prime focus of everyone's attention) and the case in deceit. With no criticism intended, it was implicit in the Plaintiffs' case that if they succeeded under the ACL they should also succeed in deceit. The Active Defendants' response was to the effect that the case in deceit should fail for the same reasons the ACL case should fail.
The only material point of distinction was what became only Haiye's claim for aggravated and exemplary damages arising from either or both the torts of deceit and conspiracy. I will consider those two issues after dealing with the torts.

Legal Principles

In Magill v Magill (2006) 226 CLR 551; [2006] HCA 51, Gummow, Kirby and Crennan JJ ("Magill v Magill") explained the elements of the tort of deceit in the following terms (at 587-8): "The modern tort of deceit will be established where a Plaintiff can show five elements: first, that the defendant made a false representation; secondly, that the defendant made the representation with the knowledge that it was false, or that the defendant was reckless or careless as to whether the representation was false or not; thirdly, that the defendant made the representation with the intention that it be relied upon by the Plaintiff; fourthly, that the Plaintiff acted in reliance on the false representation; and fifthly, that the Plaintiff suffered damage which was caused by reliance on the false representation. Generally, the elements of the tort have been found to exist in cases which concern pecuniary loss flowing from a false inducement and the need to satisfy each element has always been strictly enforced, because fraud is such a serious allegation." (citations omitted)
One may make a false representation by an express statement, conduct or non-disclosure. Mere silence, however, will not give rise to an action in deceit, save for where there exists a legal or equitable duty to disclose the truth: Magill v Magill at 567 per Gleeson CJ, quoting Bradford Third Equitable Benefit Building Society v Borders [1941] 2 All ER 205 at 211 per Viscount Maugham; see also Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458 at 475 per Gleeson CJ. Non-disclosure will, nevertheless, constitute a positive misstatement of fact where: 1. a defendant partially discloses a fact or facts and, by doing so, conveys a deceptive meaning as to what is disclosed (see Curwen v Yan Yean Land Co Limited (1891) 17 VLR 745 at 751 per Higginbotham CJ; Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563; [1995] HCA 68 ("Krakowski")); 2. a defendant fails to disclose a fact or facts that, although true at the time it was conveyed, had become false prior to the plaintiff relying upon it (see Jones v Dubbrell [1981] VR 199); and 3. a defendant, who made a representation believing it was true, fails to disclose newfound knowledge of the falsity of that representation prior to the plaintiff relying upon it (see Robertson & Moffat v Belson [1905] VLR 555).
A representation must be one of fact, albeit that may include a statement of opinion, belief or intention, as there is implied in such a representation a fact that the defendant honestly holds the opinion or belief, or honestly intends to act in the way so represented: see, e.g., Bisset v Wilkinson [1927] AC 177; Krakowski at 578 per Brennan, Deane, Gaudron and McHugh JJ.
As to the second element of the tort, as set out in the above quoted passage from Magill v Magill, in Livers v Legal Services Commissioner [2020] NSWCA 317, McCallum JA (with whom Ward CJ in Eq and White JA agreed) considered the phrase "reckless carelessness" in the context of an appeal from the Civil and Administrative Tribunal in relation to professional misconduct proceedings against a legal practitioner. Although the phrase "reckless carelessness" is not of any present relevance, her Honour's distinction and elucidation of the words "carelessness" and "recklessness", in the following passage, is (at [43]): "Carelessness suggests inadvertence while recklessness requires advertence to a risk and a decision to persevere nevertheless."
As to the fourth element of the tort, although the representation need not be the sole inducement upon which the Plaintiffs relied, the impugned representation ought to have been a materially contributing factor to the Plaintiffs' decision to act: see Henville v Walker at 480 per Gaudron J; see also Gould v Vaggelas at 236 per Wilson J.
By paragraphs 219-224 of the ASOC, the Plaintiffs also plead that the Active Defendants and Mr Varvaris are liable as joint tortfeasors for their joint direction of, participation in or party to a common design with each other in respect of the making of the representations.
Liability as a joint tortfeasor was considered by the Supreme Court in Fish & Fish Ltd v Sea Shepherd UK [2015] AC 1229, wherein Lord Sumption (albeit in dissent as to the outcome) relevantly said (at [37]; see also [55] per Lord Neuberger): "…the Defendant will be liable as a joint tortfeasor if (i) he has assisted the commission of the tort by another person, (ii) pursuant to a common design with that person, (iii) to do an act which is, or turns out to be, tortious."
For parties to be liable as joint tortfeasors, their tortious conduct ought to be in the furtherance of a common design; inadvertence to the conduct by which a commission of the tort or the common design are said to arise is insufficient to impute liability upon a purported joint tortfeasor: see The Koursk [1924] P 140 at 159-160 per Sargant LJ.
Whether a director (here, Dennis) is jointly liable for the commission of a tort by the company for which he or she holds office (here, Pionnier) ought to be answered by reference to whether there is a sufficient concurrence in the act causing damage by the director and the company: see JR Consulting & Drafting Pty Ltd v Cummings [2016] FCAFC 20 at [334] per Bennett, Greenwood and Besanko JJ ("JR Consulting"), quoting The Koursk [1924] P 140 at 159 per Sargant LJ. A director will not be personally liable as a joint tortfeasor where they are merely acting qua director: Swancom Pty Ltd v Jazz Corner Hotel Pty Ltd (No 2) [2021] FCA 328; (2021) 157 IPR 498 at 562 per O'Bryan J. As Bennett, Greenwood and Besanko JJ explained in JR Consulting (at [335], [350] and [351]): "335. … in order for a director to be regarded as a joint tortfeasor with the company of which he or she is a director, there must be concurrence in the acts of both the company and the director causing the damage rather than coincidence of roles comprised of the company as an entity doing something and a director discharging duties as a director of the company doing that thing. This may be the implicit principled source of the notion articulated in the line of authority to the effect that the director must act, engage, so as to "make" the tort of the company "his or her own", that is, a demonstrated concurrence in the acts giving rise to the civil wrong causing the damage in suit rather than a coincidence of rolls. … 350. … the director must be shown to have directed or procured the tort and the conduct must, clearly enough, go beyond causing the company to take a commercial or business course of action or directing the company's decision-making where both steps are the good faith and reasonable expression of the discharge of the duties and obligations of the director, as a director. The additional component required is a "close personal involvement" in the infringing conduct of the company and inevitably the quality or degree of that closeness will require careful examination on a case by case basis. … 351. Ultimately, the question, on the facts, is what was the conduct of the director said to go beyond the proper role of director so as to descend into the realm of "close personal involvement"?"
Also relevant to the Court's determination of whether a director is a joint tortfeasor with a company within which he or she holds office is the director's knowledge of the circumstances surrounding the commission of the tort. As Besanko J said in Keller v LED Technologies Pty Ltd (2010) 185 FCR 449 at 513; [2010] FCAFC 55 in the context of a design infringement dispute (which received approval by the Full Court in JR Consulting at [345]): "A close personal involvement in the infringing acts by the director must be shown before he or she will be held liable. The director's knowledge will be relevant. In theory, that knowledge may range from knowledge that the relevant acts are infringing acts to knowledge of an applicant's registered designs to knowledge of acts carried out by others."
It is not necessary, in my respectful opinion, for the Plaintiffs to prove that Dennis (qua director) was aware that, by engaging in certain conduct, he has committed the tort of deceit as a joint tortfeasor. What must nevertheless be demonstrated is that Dennis had knowledge of the conduct by which the tort of deceit has been commissioned and participated in the furtherance of the common design of the commission of that tort.

Have All or Any of the Active Defendants and/or Mr Varvaris Committed the Tort of Deceit?

The Court finds that each of the Active Defendants and Mr Varvaris committed the tort of deceit insofar as the Court has found each of them made misrepresentations to the Plaintiffs. That finding also extends to where there was a finding of misrepresentation by silence because in each case, in my respectful view, there was a legal obligation to disclose the truth so as not to engage in misleading and deceptive conduct under the ACL.

Are All or Any of the Active Defendants Liable as Joint Tortfeasors in Respect of the Commission of the Tort of Deceit by Any of the Other Active Defendants and/or Mr Varvaris?

Insofar as any one of the Active Defendants of Mr Varvaris has been found to have committed the tort of deceit, the Court also finds that the others are joint tortfeasors in each such act. It will be apparent from the Court's findings in relation to the Plaintiff's ACL case that the Court is satisfied that each of them had the requisite knowledge and that they were engaged in the common design of seeking to deceive the Plaintiffs in respect of the Supplementary Contract, the alleged deposit for the Second Kogarah Property and in relation to the Fake Bingemann Invoice.

Tort of Conspiracy

Conspiracy, much like fraud, is not an allegation that should lightly be made and ought to be pleaded with precision and particularity: Hughes v Western Australian Cricket Association Inc (1986) 19 FCR 10 at 54; [1986] FCA 465 per Toohey J; Australian Wool Innovation Ltd v Newkirk [2005] FCA 290 at [59] per Hely J ("Australian Wool Innovation"); Andrianakis v Uber Technologies (Ruling No 1) [2019] VSC 850 at [39] per Macaulay J; see also Uber Australia Pty Ltd v Andrianakis (2020) 61 VR 580 at [51]-[52]; [2020] VSCA 186 per Niall, Hargrave and Emerton JJA ("Uber").
Counsel for the Active Defendants submit that the Plaintiffs' pleadings of the tort of conspiracy are defective for failing to address the elements of the cause of action, to which can be added a complaint that the pleadings are inchoate and imprecise. The Court is thus, Counsel for the Active Defendants submit, prevented from finding that such an allegation of conspiracy can be substantiated, and the Plaintiffs claims must therefore fail.
The Plaintiffs pleaded causes of action for the tort of conspiracy pertain to the Active Defendants' and Mr Varvaris' purported involvement in what the ASOC terms the "Supplementary Contract Conspiracy", the "Second Kogarah Conspiracy" and the "Bingemann Invoice Conspiracy". Those pleadings are as follows: "Tort of conspiracy Supplementary Contract Conspiracy 186. In or about August 2015, each of Varvaris, Liu, Kwok and/or Pionnier wrongfully and maliciously conspired and combined amongst themselves to defraud and injure Haiye, Chris He and/or Haiqiang He, by obtaining from them, by deceit, moneys representing Haiye's share of the sums payable under the purported Supplementary Contract (Supplementary Contract Conspiracy). Particulars The Supplementary Contract Conspiracy is to be inferred from the conduct pleaded in paragraphs 19A to 40 and 49 to 55. 187. Each of Varvaris, Liu, Kwok and/or Pionnier carried out the Supplementary Contract Conspiracy by engaging in the conduct pleaded in paragraphs 20 to 40 and 49 to 55. 188. As a result of the conduct of each of Varvaris, Liu, Kwok and/or Pionnier in carrying out the Supplementary Contract Conspiracy, Haiye, Chris He and Haiqiang He have suffered loss and damage. Particulars (i) The plaintiffs repeat the matters pleaded in paragraphs 41 to 44, and 49 to 55. (ii) The plaintiffs have also suffered distress and injury to their feelings, dignity and reputations. (iii) Further particulars may be provided prior to trial. 189. Further, Haiye, Chris He and Haiqiang He are entitled to and claim against each of Varvaris, Liu, Kwok and Pionnier: a) aggravated damages; and Particulars of aggravated damages (i) The conduct of each of Varvaris, Liu, Kwok and Pionnier was high-handed, malicious, insulting and reprehensible. (ii) The conduct of each of Varvaris, Liu, Kwok and Pionnier was engaged in over an extended period of time and involved multiple, deliberate and deceitful acts and omissions. (iii) The conduct of each of Varvaris, Liu, Kwok and Pionnier was repeated in similar form in their carrying out of the Second Kogarah Property Conspiracy and the Bingemann Invoice Conspiracy, as pleaded below. (iv) Each of Varvaris, Liu, Kwok and Pionnier took advantage of the trust and confidence that Chris He and Haiqiang He and, consequently, Haiye were compelled to repose in them by virtue of the fact that English was not the first language of Chris He or Haiqiang He and neither was familiar with Australian commercial or governmental practices and procedures, including in relation to the purchase and development of real property. (v) Varvaris further took advantage of the trust and confidence in him which was engendered by the fact that he had formerly been the Mayor of Kogarah Council and was, at the relevant times, a federal Member of Parliament. (vi) Liu, Kwok and Pionnier further took advantage of the trust and confidence in them which was engendered by the long and close friendship of Liu and Kwok with Chris He. (vii) Further particulars may be provided prior to trial. b) exemplary damages. Particulars of exemplary damages (i) The conduct of each of Varvaris, Liu, Kwok and Pionnier amounted to conscious wrongdoing in contumelious disregard of the plaintiffs' rights. (ii) The plaintiffs repeat the particulars to paragraph 189(a). (iii) Varvaris, Liu, Kwok and Pionnier are each persons of substantial means. (iv) Further particulars may be provided prior to trial. Second Kogarah Property Conspiracy 190. In or about January or February 2016, each of Varvaris, Liu, Kwok and/or Pionnier wrongfully and maliciously conspired and combined amongst themselves to defraud and injure Haiye, Chris He and/or Haiqiang He, by obtaining from them, by deceit, moneys representing Haiye's share of the deposit payable under the purported contract of sale for the Second Kogarah Property (Second Kogarah Property Conspiracy). Particulars The Second Kogarah Property Conspiracy is to be inferred from the conduct pleaded in paragraphs 19A to 19Q and 56 to 133. 191. Each of Varvaris, Liu, Kwok and/or Pionnier carried out the Second Kogarah Property Conspiracy by engaging in the conduct pleaded in paragraphs 56 to 104 and 106 to 133. 192. As a result of the conduct of each of Varvaris, Liu, Kwok and/or Pionnier in carrying out the Second Kogarah Property Conspiracy, Haiye, Chris He and Haiqiang He have suffered loss and damage. Particulars (i) The plaintiffs repeat the matters pleaded in paragraphs 105 and 107 to 109. (ii) The plaintiffs have also suffered distress and injury to their feelings, dignity and reputations. (iii) Further particulars may be provided prior to trial. 193. Further, Haiye, Chris He and Haiqiang He are entitled to and claim against each of Varvaris, Liu, Kwok and Pionnier: a) aggravated damages; and Particulars of aggravated damages (i) The conduct of each of Varvaris, Liu, Kwok and Pionnier was high-handed, malicious, insulting and reprehensible. (ii) The conduct of each of Varvaris, Liu, Kwok and Pionnier was engaged in over an extended period of time and involved multiple, deliberate and deceitful acts and omissions. (iii) The conduct of each of Varvaris, Liu, Kwok and Pionnier was repeated in similar form in their carrying out of the Supplementary Contract Conspiracy, as pleaded above, and the Bingemann Invoice Conspiracy, as pleaded below. (iv) Each of Varvaris, Liu, Kwok and Pionnier took advantage of the trust and confidence that Chris He and Haiqiang He and, consequently, Haiye were compelled to repose in them by virtue of the fact that English was not the first language of Chris He or Haiqiang He and neither was familiar with Australian commercial or governmental practices and procedures, including in relation to the purchase and development of real property. (v) Varvaris further took advantage of the trust and confidence in him which was engendered by the fact that he had formerly been the Mayor of Kogarah Council and was, at the relevant times, a federal Member of Parliament. (vi) Liu, Kwok and Pionnier further took advantage of the trust and confidence in them which was engendered by the long and close friendship of Liu and Kwok with Chris He. (vii) Further particulars may be provided prior to trial. b) exemplary damages. Particulars of exemplary damages (i) The conduct of each of Varvaris, Liu, Kwok and Pionnier amounted to conscious wrongdoing in contumelious disregard of the plaintiffs' rights. (ii) The plaintiffs repeat the particulars to paragraph 193(a). (iii) Varvaris, Liu, Kwok and Pionnier are each persons of substantial means. (iv) Further particulars may be provided prior to trial. Bingemann Invoice Conspiracy 194. In or about July or August 2016, each of Varvaris, Liu, Kwok and/or Pionnier wrongfully and maliciously conspired and combined amongst themselves to defraud and injure Haiye, Chris He and/or Haiqiang He, by obtaining from them, by deceit, moneys representing Haiye's share of the fees recorded in the purported Bingemann Invoice (Bingemann Invoice Conspiracy). Particulars The Bingemann Invoice Conspiracy is to be inferred from the conduct pleaded in paragraphs 19A to 19Q, 134 to 181 and 183 to 185. 195. Each of Varvaris, Liu, Kwok and/or Pionnier carried out the Bingemann Invoice Conspiracy by engaging in the conduct pleaded in paragraphs 134 to 181 and 183 to 185. 196. As a result of the conduct of each of Varvaris, Liu, Kwok and/or Pionnier in carrying out the Bingemann Invoice Conspiracy, Haiye, Chris He and Haiqiang He have suffered loss and damage. Particulars (i) The plaintiffs repeat the matters pleaded in paragraphs 182 to 185. (ii) The plaintiffs have also suffered distress and injury to their feelings, dignity and reputations. (iii) Further particulars may be provided prior to trial. 197. Further, Haiye, Chris He and Haiqiang He are entitled to and claim against each of Varvaris, Liu, Kwok and Pionnier; a) aggravated damages; and Particulars of aggravated damages (i) The conduct of each of Varvaris, Liu, Kwok and Pionnier was high-handed, malicious, insulting and reprehensible. (ii) The conduct of each of Varvaris, Liu, Kwok and Pionnier was engaged in over an extended period of time and involved multiple, deliberate and deceitful acts and omissions. (iii) The conduct of each of Varvaris, Liu, Kwok and Pionnier was repeated in similar form in their carrying out of the Supplementary Contract Conspiracy and the Second Kogarah Property Conspiracy, as pleaded above. (iv) Each of Varvaris, Liu, Kwok and Pionnier took advantage of the trust and confidence that Chris He and Haiqiang He and, consequently, Haiye were compelled to repose in them by virtue of the fact that English was not the first language of Chris He or Haiqiang He and neither was familiar with Australian commercial or governmental practices and procedures, including in relation to the purchase and development of real property. (v) Varvaris further took advantage of the trust and confidence in him which was engendered by the fact that he had formerly been the Mayor of Kogarah Council and was, at the relevant times, a federal Member of Parliament. (vi) Liu, Kwok and Pionnier further took advantage of the trust and confidence in them which was engendered by the long and close friendship of Liu and Kwok with Chris He. (vii) Further particulars may be provided prior to trial, b) exemplary damages. Particulars of exemplary damages (i) The conduct of each of Varvaris, Liu, Kwok and Pionnier amounted to conscious wrongdoing in contumelious disregard of the plaintiffs' rights. (ii) The plaintiffs repeat the particulars to paragraph 197(a). (iii) Varvaris, Liu, Kwok and Pionnier are each persons of substantial means. (iv) Further particulars may be provided prior to trial."

Submissions

The submissions advanced for the Plaintiffs on the Plaintiffs' conspiracy case were, with respect, brief. Counsel referred the Court's attention to what was said by Stevenson J in Mackinnon as Plaintiff representative of 153 Plaintiff group members v Partnership of Larter, Jones, Miraleste Pty Ltd t/as USG Partner and Johnson, t/as "STC Sports Trading Club" (No 8) [2019] NSWSC 1658 at [44]-[45]: "44. The tort of conspiracy may take two forms. 45. These are: (1) an agreement or combination between two or more persons to commit a lawful act with the predominant purpose of injuring or damaging a plaintiff, and the act is carried out and the purpose achieved: McKernan v Fraser (1931) 46 CLR 343 (see especially the judgment of Evatt J); or (2) an agreement or combination between two or more persons to commit an unlawful act with an intention to injure a plaintiff, and the act is carried out and the intention achieved: Williams v Hursey (1959) 103 CLR 30; [1959] HCA 51 (Fullagar J at 78 with Dixon CJ and Kitto J agreeing, Taylor J at 108-109, Menzies J at 125)."
It is the second species of conspiracy upon which the Plaintiffs rely. As I understood Counsel's submissions (and the pleadings), the unlawful act which the Plaintiffs allege is the purported deceit of the Plaintiffs by the Active Defendants and Mr Varvaris. I did not understand the Plaintiffs to rely upon their s 18(1) allegations or other causes of action (see below) to substantiate the conspiracy allegations.
Counsel for the Active Defendants were staunch in their submissions opposing the Plaintiffs' conspiracy case, advancing these four submissions: 1. the pleadings contained within the ASOC that pertain to the tort of conspiracy are defective, such that the Plaintiffs' allegations of conspiracy must fail; 2. it is not open to the Plaintiffs to plead, as an alternative to a substantive cause of action already pleaded, the tort of conspiracy to commit the substantive wrong; 3. the evidence does not establish, to the requisite Briginshaw standard, an agreement or combination between the Active Defendants and/or Mr Varvaris; and 4. the evidence does not establish, again, to the requisite Briginshaw standard, that the Active Defendants had an intent to injure the Plaintiffs.
The primary gravamen of Counsel for the Active Defendants' submissions on the deficiencies in the ASOC is that the pleadings do not specify the target of the purported conspiracy. The pleadings include an all-encompassing claim that each of the Plaintiffs were the target of the conspiracy. The pleadings also fail, in Counsel for the Active Defendants' submissions, to plead any agreement or combination with the common intention of injuring any of the Plaintiffs, let alone one of them.
Counsel for the Active Defendants also take issue with the way in which the Plaintiffs have pleaded the Second Kogarah Property Conspiracy. Issue is principally taken with the words "deposit payable under the purported contract of sale for the Second Kogarah Property" because, at the time the funds were transferred to Varvaris & Co, there was no contract for sale, which is confirmed by paragraphs 110(a) and 110(b) of the ASOC (the documents referred to within those paragraphs having post-dated the transfer to Varvaris & Co).
The second submission advanced by Counsel for the Active Defendants rests on what I have canvassed in [407]-[417] above, although Counsel also drew the Court's attention the following additional passage from Weinberg J's judgment in McKellar v Container Terminal Management Services Limited [1999] FCA 1101; (1999) 165 ALR 409 at 445-6 ("McKellar"): "It is not open to a party to plead as an alternative to a substantive cause of action already pleaded the tort of conspiracy to commit that substantive wrong: Galland v Mineral Underwriters Ltd [1977] WAR 116 at 119-20 per Burt CJ (with whom Wallace J agreed): "But the question, as it seems to me, which arises upon this appeal is whether a conspiracy to commit a tort when carried into effect is actionable both as an independent tort, that is, the tort of conspiracy, as well as being actionable simply as a tort committed by a number of people acting together to that common end. In the instant case, if it be the fact that the appellant and the other defendants or some of them entered into an agreement to convert the respondent's money, and if it be the fact that the respondent's money was converted in the performance of that agreement and in the manner pleaded, has the appellant committed two actionable torts - conversion and conspiracy - or only one, and if one, which one? I know of no authority which directly supports my opinion, but it seems to me that the answer to that question should be that on those assumptions the appellant has committed one tort and that is the tort of conversion."'
The unlawful conduct upon which the Plaintiffs rely to substantiate their conspiracy allegations is that the Active Defendants and/or Mr Varvaris have committed the tort of deceit. The tort of deceit is, however, pleaded as a separate cause of action upon which the Plaintiffs rely. The Plaintiffs thus do not, Counsel for the Active Defendants submit, have a separate, actionable claim that the Active Defendants have committed the tort of conspiracy.
By the third submission, Counsel for the Active Defendants contend that there is insufficient evidence, inferential or otherwise, to establish an agreement as between all of the Active Defendants and Mr Varvaris. As to the requirement of an agreement, Counsel directed the Court's attention to what was said by Campbell J (as his Honour then was) in Fatimi Pty Ltd v Bryant & Ors [2002] NSWSC 750 (at [198]) ("Fatimi"): "In R v Churchill [1967] 2 AC 224 Viscount Dilhorne said, at 237 (concerning a case of criminal conspiracy): "… I would say that mens rea is only an essential ingredient in conspiracy insofar as there must be an intention to be a party to an agreement to do an unlawful act; that knowledge of the law on the part of the accused is immaterial and that knowledge of the facts is only material insofar as such knowledge throws a light on what was agreed … . The question is "what did they agree to do?" If what they agreed to do was, on the facts known to them, an unlawful act, they are guilty of conspiracy and cannot excuse themselves by saying that, owing to their ignorance of the law, they did not realise that such an act was a crime. If, on the facts known to them, what they agreed to do was lawful, they are not rendered artificially guilty by the existence of other facts, not known to them, giving a different and criminal quality to the act agreed upon."'
The final submission advanced by Counsel for the Active Defendants was framed in the alternative: even if the Court is satisfied that the Active Defendants and/or Mr Varvaris made an agreement, the Active Defendants did not intend to injure the Plaintiffs, although injury to the Plaintiffs may have transpired. Counsel referred to this passage from Kiefel J (as her Honour then was) and Jackson J's judgment in Dresna Pty Ltd v Misu Nominees [2004] FCAFC 169 at [12] ("Dresna FCAFC"): "The test for an action based upon a conspiracy is what was the object in the mind of those combining when they acted as they did: Crofter Hand Woven Harris Tweed Co, Ltd v Veitch [1942] AC 435 at 445. As is pointed out in WVH Rogers, Winfield and Jolowicz on Tort, 16th edn, Sweet & Maxwell, London, 2002, p 649, [18.24] ('Winfield and Jolowicz'), what is required is that they should have acted in order that, not with the result that, the plaintiff should suffer damage. And it may be observed that it was for this reason that the plaintiff failed in Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173. In that case an order had been made under the Southern Rhodesia Act 1965 making it an offence to supply oil to Southern Rhodesia. Lonrho did not continue supply through a pipeline from a port in Mozambique. It alleged that Shell and others had provided oil and that this affected the period of disuse of the pipeline. Winfield and Jolowicz point out with respect to the case (at p 652, [18.28]) that, whilst injury to Lonrho's business was foreseeable, it was not Shell's purpose to bring it about. In no sense were the acts 'aimed at' Lonrho." (emphasis added)
A distinction must be drawn between an unlawful act that results in damage to a person and an unlawful act by which injury is intended. A further distinction must also be drawn, in Counsel for the Active Defendants' submission, between ends, means and consequences. As Lord Hoffmann said in OBG Ltd v Allan [2007] UKHL 21 at [62]: "One intends to cause loss even though it is the means by which one achieved the end of enriching oneself. On the other hand, one is not liable for loss which is neither a desired end nor a means of attaining it but merely a foreseeable consequence of one's actions."
Lord Nicholls similarly observed (at [166]): "A high degree of blameworthiness is called for, because intention serves as the factor which justifies imposing liability on the Defendant for loss caused by a wrong otherwise not actionable by the Claimant against the Defendant. The Defendant's conduct in relation to the loss must be deliberate. In particular, a Defendant's foresight that his unlawful conduct may or will probably damage the Claimant cannot be equated with intention for this purpose. The Defendant must intend to injure the Claimant. This intent must be a cause of the Defendant's conduct, in the words of Cooke J in Van Camp Chocolates Ltd v Aulsebrooks Ltd [1984] 1 NZLR 354, 360."
Counsel for the Active Defendants submit that not only did the Active Defendants not harbour an intention to injure the Plaintiffs, but it is not clear why Alysha or Dennis would have such a motive in circumstances where they were such close friends with Chris. It is also unclear why the Active Defendants would have engaged in such "easily discernible… monstrously short-sighted and inexplicably stupid" conduct - criminal conduct no less - in circumstances where they owned a property with the Plaintiffs and were establishing a restaurant business with the Plaintiffs in Hurstville.

Legal Principles

The constituent elements of the tort of conspiracy to injure by unlawful means have been variously formulated: see, e.g., Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34 at 102; [1997] FCA 899 per R D Nicholson J; Australian Wool Innovation at [61]; Fatimi at [104]. They can be summarised as: 1. Two or more persons have entered into an agreement or combination to perform unlawful acts: see Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173 at 188 per Lord Diplock ("Lonrho (No 2)"); McKernan v Fraser (1931) 46 CLR 343 at 362; [1931] HCA 54 per Dixon J (with whom Rich and McTeirnan JJ agreed), 378 per Evatt J; Dresna Pty Ltd v Misu Nominees Pty Ltd [2003] FCA 1537 at [99]-[104] per Weinberg J ("Dresna FCA"); Uber at [31]. It is not necessary that the agreement be contractual (see Fatimi at [104(1)]), nor that there be evidence of an express agreement. As Hely J said in Australian Wool Innovation at [62] (see also Uber at [55]): "A court is entitled to have regard to the overt acts pleaded, and to infer from those acts that there was an express agreement to further the common object of the combination." 1. By the agreement or combination, the defendants intended to injure the plaintiff: Dresna FCAFC at [7]. It has, at least since Lonrho Ltd v Shell Petroleum Co Ltd [1981] 1 QB 358; Com LR 74 ("Lonrho"), been accepted that the intention to injure need not be the sole or predominant motive. As his Lordship said in Lonrho (at 75): "I would suggest that a conspiracy to do an unlawful act - when there is no intent to injure the plaintiff and it is not aimed or directed at him - is not actionable ... But if there is an intent to injure him then it is actionable. The intent to injure may not be the predominant motive. It may be mixed with other motives ... It is sufficient if the conspiracy is aimed or directed at the plaintiff, and it can reasonably be foreseen that it may injure him, and does in fact injure him." His Lordship's observations have since been endorsed in this country on several occasions including by the Victorian Court of Appeal in Uber, where the Court said (at [42]): "…to establish an unlawful means conspiracy, a plaintiff is required to establish that the purpose of the defendants in combining to engage in or to be complicit in the unlawful conduct included an intention to injure the plaintiff, and that the plaintiff in fact suffered injury by reason of the unlawful conduct. The defendants' intention to injure the plaintiff need not be the predominant motive for engaging in the unlawful conduct, but may be mixed with other purposes or motives - such as the pursuit of gain for the defendant or others - which may be the predominant motive." 1. Quite unlike its criminal law counterpart, the agreement or combination to injure ought to have been executed in whole or in part: see Lonrho (No 2) at 188 per Lord Diplock. 2. By their execution of the agreement or combination, the defendants have caused loss or damage to the plaintiff: see Fatimi at [104(3)], quoting Marrinan v Vibart [1963] 1 QB 234 at 238 per Salmon J.
There is, however, no need for the Court to resort to a consideration of the constituent elements of the tort of conspiracy in the context of the present dispute. That is because the Plaintiffs do not have an actionable claim for conspiracy to commit the tort of deceit in circumstances where they rely upon that substantive wrong as a separate, individual cause of action. I have already canvassed the legal principles applicable to this reasoning and will not repeat them here (see [407]-[417] above).
Should I be incorrect in my conclusion that the Plaintiffs do not have an actionable claim for conspiracy to commit the tort of deceit, I would nevertheless reject the claim as I am not satisfied on the evidence to the Briginshaw standard that the Active Defendants and/or Mr Varvaris intended to injure the Plaintiffs in the requisite sense. While injury to the Plaintiffs may have been a consequence of the Active Defendants' and/or Mr Varvaris' conduct, I am not persuaded that they had an intention to injure. In other words, while they may have set out to deceive, the Plaintiffs have not established that the Active Defendants intended to injure.

Aggravated and exemplary damages

Haiye pressed its claim for aggravated and exemplary damages arising from the torts of conspiracy and deceit. Its success in relation to the latter means that its entitlement (if any) to punitive damages must now be considered.
It was submitted for Haiye that it was entitled to claim both aggravated and exemplary damages notwithstanding that it was a corporation. Attention was drawn to the decision of Cavanagh J in Volvo Finance Australia v Waterfront Enterprises Pty Ltd (In liq) (No 2) [2020] NSWSC 262 ("Volvo Finance"). In that case, his Honour awarded the plaintiff finance company exemplary damages of $50,000 but did not, on the facts, award aggravated damages.
The difficulty for the Plaintiffs, as was correctly pointed out by the Active Defendants, is that not only did Cavanagh J not award aggravated damages in Volvo Finance, but it apparently was not put to him that aggravated damages could not be claimed by a corporate person. That aggravated damages are not available to a corporation is apparent from their purpose. This was described in the joint judgment of the High Court in Lamb v Cotogno (1987) 164 CLR 1; [1987] HCA 47 at 8 that "aggravated damages, in contrast to exemplary damages, are compensatory in nature, being awarded for injury to the plaintiff's feelings caused by insult, humiliation and the like".
Whatever other attributes may come with corporate personality conferred by statute, they do not extend to feelings. I accept the Active Defendants' submission that not only is the unavailability of aggravated damages to corporations correct as a matter of principle, but that it is also supported by a number of first instance authorities with which I respectfully agree: Hoath v Connect Internet Services Pty Ltd [2006] NSWSC 158 at [205]; Luxottica Retail Australia Pty Ltd v Grant [2009] NSWSC 126 at [39]; Dynamic Supplies Pty Ltd v Tonnex International Pty Ltd (No 3) [2014] FCA 909 at [42]; Universal Music Publishing Pty Ltd v Palmer (No 2) [2021] FCA 434 at [487].
Accordingly, the Court concludes that as a matter of law Haiye is not entitled to aggravated damages.
Turning to exemplary damages, the relevant principles appear in the judgment of the plurality of the High Court in Gray v Motor Accident Commission (1998-1999) 196 CLR 1; [1998] HCA 70 (citations omitted): "14. Because the kinds of case in which exemplary damages might be awarded are so varied, it may be doubted whether a single formula adequately describes the boundaries of the field in which they may properly be awarded. Nevertheless, the phrase adopted by Knox CJ in Whitfeld v De Lauret & Co Ltd of "conscious wrongdoing in contumelious disregard of another's rights" describes at least the greater part of the relevant field. 15. In considering whether to award exemplary damages, the first, if not the principal, focus of the enquiry is upon the wrongdoer, not upon the party who was wronged. (The reaction of the party who is wronged to high-handed or deliberate conduct may well be a reason for awarding aggravated damages in further compensation for the wrong done. But it is not ordinarily relevant to whether exemplary damages should be allowed.) The party wronged is entitled to whatever compensatory damages the law allows (including, if appropriate, aggravated damages). By hypothesis then, the party wronged will receive just compensation for the wrong that is suffered. If exemplary damages are awarded, they will be paid in addition to compensatory damages and, in that sense, will be a windfall in the hands of the party who was wronged. Nevertheless, they are awarded at the suit of that party and, although awarded to punish the wrongdoer and deter others from like conduct, they are not exacted by the State or paid to it."
The Active Defendants, correctly, did not suggest that a corporation could not recover exemplary damages or that such damages did not apply to the tort of deceit. However, two submissions were advanced as to why the Court should not exercise its discretion to grant Haiye what was described as the "windfall" of exemplary damages.
First, it was clear from the evidence that Mr Varvaris was the architect of the deception concerning the Secondary Contract, the Second Kogarah Property and the Fake Bingemann Invoice. If the Court determined that exemplary damages should be awarded, the only person against whom it would be appropriate to do so was Mr Varvaris; and
Second, even if the Court was of the view that the Plaintiffs' claim was not barred by reason of their own participation in illegal conduct, Haiye was disentitled from an award of exemplary damages because the Plaintiffs were aware of the impropriety that was to occur in relation to obtaining development approval.
The Court rejects both of these submissions for reasons which have already been articulated in other contexts. As to the first, while Mr Varvaris may have been the architect of the deceptions visited on the Plaintiffs, the Active Defendants were knowing principals in what was being done. As to the second reason, the Court has already rejected the Active Defendants' submission that the Plaintiffs were participants in, rather than victims of, what occurred.
In assessing exemplary damages, I am conscious that moderation must be exercised (see XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1983-1984) 155 CLR 448; [1985] HCA 12 per Gibbs CJ at 463). Equally, if exemplary damages are to fulfil their purpose "they must not merely irritate, they must sting": Digital Pulse Pty Ltd v Harris [2012] NSWSC 33 at [133].
Haiye's claim for exemplary damages is brought against Alysha, of the one part, and against Dennis and Pionnier, of the other part. In my respectful view, that is how this aspect of the claim should be approached. This is because it is appropriate in the circumstances of this case to ignore their separate legal personalities and to treat Dennis and Pionnier as one and the same for the purposes of assessing exemplary damages. Such a treatment reflects the practical reality of what occurred and avoids what I consider would be a risk of over-compensation if exemplary damages were to be awarded against each of the Active Defendants individually.
It is the logical consequence of the findings which the Court has made about the Active Defendants' conduct and knowledge in relation to the Supplementary Contract, the Second Kogarah Property and the Fake Bingemann Invoice that the Court is satisfied these were acts and omissions of conscious wrongdoing in contumelious disregard of the Plaintiffs' rights. The exceptional remedy of exemplary damages is therefore warranted.
What was done by the Active Defendants involved breaching the trust which Chris had obviously developed over a long period of time in Alysha and Dennis and upon which Mr He also relied. There were, as the Court has found, multiple acts of deception over a long period of time in relation to substantial sums of money. Finally, whatever may have been Mr Varvaris' responsibility, as between Alysha and Dennis, the facts demonstrate that Alysha played a larger role in leading the Plaintiffs on.
Taking into account the matters referred to in the preceding paragraph, in the exercise of its discretion the Court will order Alysha to pay Haiye exemplary damages in the sum of $35,000 and Dennis and Pionnier (jointly and severally) to pay exemplary damages in the sum of $25,000. I should also record that in reaching this conclusion I have accepted the Plaintiffs' submission that I should not take into account the various "without admissions" concessions made by the Active Defendants which led to the Court's orders referred to in paragraph [293] above. Even if I had, they would have made no difference to the exercise of discretion because they were only made for the first time through the medium of the Active Defendants' short outline of submissions served in the week before the hearing commenced. It is plain that they could and should have been made much earlier in the history of the dispute between the parties.

Breach of Fiduciary Duties

The Plaintiffs plead breach of fiduciary duties against each of Mr Varvaris, Alysha, Dennis and Pionnier. The principal pleadings upon which the Plaintiffs rely in alleging that each of Mr Varvaris, Alysha, Dennis and Pionnier owed fiduciary duties are: "The Kogarah Development JVA 17. In or about August 2015 Chris He, Haiqiang He, Haiye, Pionnier, Liu, Kwok and/or Varvaris entered into an agreement (Kogarah Development JVA) to form an unincorporated joint venture or partnership to purchase and develop the property known as 60B Gray Street and 26 Princes Highway, Kogarah, New South Wales, being the land comprised in certificate of title folio identifiers lots 1 and 2 in deposited plan 91359 and lot 1 in deposited plan 1101064 (First Kogarah Property). 18. The terms of the Kogarah Development JVA relevantly included that: (a) Haiye and Pionnier would purchase the First Kogarah Property through a corporate entity to be formed for that purpose, in which Haiye would own 75% and Pionnier would own 25% of the issued shares; (b) the purchase price for the First Kogarah Property would be $9.5 million (exclusive of GST); (c) in line with their respective shareholdings in the purchasing entity, Haiye would contribute 75% and Pionnier would contribute 25% of the purchase price and costs of developing the First Kogarah Property; (d) the First Kogarah Property would be used for the construction of residential units to be sold at a profit; (e) Varvaris would be responsible for negotiating the terms of the purchase of the First Kogarah Property with the vendor; (f) Varvaris would use his pre-existing relationship with the vendor to obtain the best possible price on the First Kogarah Property; (g) Varvaris would be responsible for dealing with the Kogarah City Council (Council) for the purposes of obtaining development approval for the proposed development upon the First Kogarah Property; (h) upon the completion of the development, Varvaris would receive a commission on the sale of each residential unit. 19. By reason of the matters pleaded in paragraphs 17 and 18, each of Chris He, Haiqiang He, Pionnier, Liu, Kwok and/or Varvaris owed fiduciary duties to each other, including duties: (a) to avoid any actual or potential conflict between, on the one hand, that party's duties and interests and, on the other hand, the interests of any other party; (b) to act at all times with complete loyalty to the other parties; and/or (c) not to misuse that party's position as a fiduciary to derive a profit or benefit at the expense of any other party."
At paragraph 99, the ASOC pleads that the Kogarah Development JVA was later varied in terms similar to those outlined in paragraph 18 of the ASOC to include the parties' purported purchase and development of the Second Kogarah Property.
Although the Plaintiffs have not sought leave to proceed against Mr Varvaris, the issue of whether he has breached any fiduciary duties he is alleged to have owed to the Plaintiffs (and likewise, whether he has committed a breach of trust) is relevant to the Court's determination of whether Pionnier and/or CBC are liable to the Plaintiffs for knowing receipt.
The primary alleged breaches of Mr Varvaris', Alysha's, Dennis' and Pionnier's fiduciary duties were that they fraudulently and dishonestly induced Haiye to: 1. pay the sum of $825,000 pursuant to the Supplementary Contract; 2. enter into the Primary Contract and pay to Al-Jaafaria the sum of $7,389,750, in circumstances where the true market value of the First Kogarah Property was less than $5.5 million; 3. pay to Varvaris & Co the sum of $3,564,000 as Haiye's share of the purported deposit for the Second Kogarah Property; and 4. pay to Bingemann the sum of $671,343.75 as Haiye's share of the fees purportedly owing under the Fake Bingemann Invoice.
The ASOC also contains allegations that Mr Varvaris, Alysha, Dennis and Pionnier fraudulently and dishonestly induced Chris and/or Mr He to provide Haiye with the funds it needed to make the various payments and thereafter misappropriated those funds or caused the funds to be misappropriated.

Submissions

Counsel for the Plaintiffs' submissions on the Plaintiffs' breach of fiduciary duties case can be summarised as: 1. the Active Defendants and Mr Varvaris owed the Plaintiffs fiduciary duties by virtue of their entry into the Kogarah Development JVA; and 2. by their fraudulent and dishonest conduct, the Active Defendants and Mr Varvaris have breached those duties.
Although neither their submissions, nor the Plaintiffs' pleadings, specify the duty that is alleged to have been breached, I infer from the ASOC that the Plaintiffs allege a breach of the no profit duty.
As for the existence of the fiduciary relationship, Counsel for the Plaintiffs' submissions were limited to the existence of that relationship with Haiye, notwithstanding that the pleadings alleged the existence of a fiduciary relationship also with Chris and Mr He. For example, in their closing written submissions, Counsel for the Plaintiffs submit: "38. The fiduciary relationship will be established where it is found that [Mr Varvaris and the Active Defendants] were acting for or on behalf of, or in the interests of the first Plaintiff, in the exercise of a power or a discretion that affected the interests of the first Plaintiff in a legal or practical sense: Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 at 96 - 97."
Presumably, Counsels' submissions are limited to the existence of a fiduciary relationship with Haiye because, as was accepted in relation to the other claims, it is Haiye, rather than Chris or Mr He, who has suffered the loss by virtue of any breach of a fiduciary relationship: namely, by misappropriating the funds it paid in satisfaction of PPD's purchase of the First Kogarah Property and also in purported satisfaction of the Supplementary Contract, the deposit for PPD's purchase of the Second Kogarah Property and the Fake Bingemann Invoice. Insofar as Haiye used Mr He's funds to make those payments, Haiye would be indebted to Mr He in a sum commensurate with the amounts paid from Mr He's accounts. This proposition has been accepted by the Court (see paragraph [451] above).
In their submissions in support of the existence of a fiduciary relationship with Haiye, Counsel referred the Court to what was said by Black J in Vanguard Financial Planners Pty Ltd & Anor v Ale & Ors [2018] NSWSC 314 ("Vanguard") (at [60]): "There are also well-known examples of fiduciary duties imposed in the context of partnership, which are largely uncontroversial on the basis that partnership is a form of mutual agency, although the partners' duties inter se can be modified by contract: for example, Birtchnell v The Equity Trustees, Executors and Agency Company Limited (1929) 42 CLR 384; Chan v Zacharia (1984) 154 CLR 178; Glandon Pty Ltd v Tilmunda Pastoral Co Pty Ltd [2008] NSWSC 218. The case law also recognises that a fiduciary duty may also arise in a "joint venture", although it also recognises that that term is more useful as a commercial than a legal description. The essential question is whether the functions and obligations undertaken by a participant in a particular venture themselves attract fiduciary duties. Even where fiduciary obligations arise in some aspects of a joint venture, a party may be free to pursue its own interests in particular respects: Noranda Australia Ltd v Lachlan Resources NL (1988) 14 NSWLR 1 at 15. In Gibson Motorsport Merchandise Pty Ltd v Forbes [2006] FCAFC 44; (2006) 149 FCR 569 at [16], Finn J (with whom Sundberg and Emmett JJ agreed) distinguished between cooperative action, including the sharing of resources or interdependent conduct, which could colloquially be described as a "joint venture", and a fiduciary duty owed in the context of a joint venture or anticipated joint venture and observed that: "Rarely, though, will there be anything fiduciary about the arrangements themselves as they will not envisage a form or forms of cooperation which is or are particularly fiduciary in character (eg the sharing of control or of profits and losses; the creation of a commonly owned vehicle to effectuate what is agreed, the assumption of similar rights and obligations etc)."'
Counsel also directed the Court's attention to the judgment of Leeming JA (with whom Bell P and Brereton JA agreed) in Pittmore Pty Ltd v Chan; Chan v Tan [2020] NSWCA 344; 104 NSWLR 62 ("Pittmore") in support of a submission directed towards dishonesty in respect of a third party's liability for inducing or procuring a breach of trust and the attendant knowledge required.
Counsels' reference to Pittmore in the context of the Plaintiffs' allegations that the Active Defendants and/or Mr Varvaris have breached their fiduciary duties was, with respect, not obviously apposite. In Pittmore, the Court of Appeal considered, inter alia, the requirement of knowledge and dishonesty in the context of a claim for procuring or inducing a breach of trust or fiduciary duties. Here, the Plaintiffs have not pleaded that any of the Active Defendants or Mr Varvaris (or any other party to the proceedings, for that matter) have induced or procured a breach of trust or fiduciary duties. Although the Plaintiffs have pleaded knowing receipt and assistance claims under the first and second limbs of Barnes v Addy (1874) LR 9 Ch App 244 ("Barnes v Addy"), such claims are distinct from a claim that one has induced or procured a breach of trust or fiduciary duties. Moreover, the Plaintiffs now do not press their knowing assistance claims, as they were only pleaded against those parties for whom the Plaintiffs do not have leave to proceed against. Thus, the extent to which Pittmore may have relevance to the present proceedings is, at best, incidental.
Counsel for the Active Defendants' submissions in response can be summarised as: 1. The Active Defendants are not fiduciaries, and thus do not owe fiduciary duties, for the following reasons: 1. the parties did not enter into an unincorporated joint venture or partnership. Although there were preliminary discussions about entering such an arrangement, the parties ultimately decided to transform that arrangement into a completely different structure: a corporate land-holding entity; 2. although a joint venture arrangement for the development of land may give rise to a fiduciary relationship, the essential question is whether the purported fiduciary expressly or impliedly undertook to subordinate his, her or its interests to the other party or the venture (see Vanguard at [61]). Neither Haiye, nor Pionnier, expressly or impliedly undertook to subordinate their interests to each other; and 3. only Haiye and Pionnier were co-contributors in the venture. Alysha and Dennis were not personally involved in the venture, and Alysha was not an officeholder or shareholder of Pionnier. Neither Alysha, nor Dennis, had any obligation to subordinate their personal interests to Chris, Mr He or Haiye. 1. Further, and in any event, the Plaintiffs have failed to establish that PPD's purchase of the First Kogarah Property or Haiye's payment under the Supplementary Contract was the result of any fraud or dishonesty on the part of the Active Defendants. Accordingly, any fiduciary duties the Active Defendants may have owed have not been breached.
Counsel for the Active Defendants also advanced submissions in the alternative that, should the Court find that fiduciary duties were owed and breached, any relief in equity ought to be refused by the Court on account of the Plaintiffs' unclean hands.

Have All or Any of the Active Defendants and/or Mr Varvaris Breached their Fiduciary Duties to the Any or All of the Plaintiffs?

The following five issues are raised on the Plaintiffs' fiduciary duty pleadings: 1. Have some or all of Chris, Mr He, Haiye, Alysha, Dennis, Pionnier and/or Mr Varvaris entered into an agreement to form an unincorporated joint venture? 2. Have some or all of Chris, Mr He, Haiye, Alysha, Dennis, Pionnier and/or Mr Varvaris entered into an agreement to form a partnership? 3. Insofar as some or all of Chris, Mr He, Haiye, Alysha, Dennis, Pionnier and/or Mr Varvaris have entered into an agreement to form an unincorporated joint venture, do they owe fiduciary obligations to one another and/or the venture? 4. Insofar as some or all of Chris, Mr He, Haiye, Alysha, Dennis, Pionnier and/or Mr Varvaris have entered into an agreement to form an unincorporated joint venture or partnership, what is the extent of their duties? 5. Have any or all of the Active Defendants and/or Mr Varvaris breached their fiduciary duties, if any?
For the following reasons, it is unnecessary for the Court to consider the third to fifth questions posed.
The terms "joint venture" and "unincorporated joint venture" do not have a settled meaning at law. In United Dominions Corp Ltd v Brian Pty Ltd (1985) 157 CLR 1; [1985] HCA; Mason (as his Honour then was), Brennan and Deane JJ said of the term "joint venture" (at 10): "The term "joint venture" is not a technical one with a settled common law meaning. As a matter of ordinary language, it connotes an association of persons for the purposes of a particular trading, commercial, mining or other financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily) contributing money, property or skill. Such a joint venture (or, under Scots' law, "adventure") will often be a partnership. The term is, however, apposite to refer to a joint undertaking or activity carried out through a medium other than a partnership: such as a company, a trust, an agency or joint ownership."
Although the law largely remains unsettled, indicia have been developed in aid of discerning the formation of a joint venture in contrast to other arrangements by which multiple parties may own property or engage a joint endeavour. In Gibson Motor Sport Merchandise Pty Ltd v Forbes [2005] FCA 749, Crennan J espoused the following "[r]ecognisable and common characteristics of joint ventures" (see [80]): "1. Participants hold proprietary interests in the assets of the joint undertaking, often, but not necessarily, as tenants-in-common: see the abovementioned article of Mr Merralls QC. 2.Participants exercise joint control of the undertaking. 3.Participants contribute to the joint undertaking, not necessarily equally; such contributions may be disparate: Canny Gabriel Jackson Advertising Pty Ltd v Volume Sales (Finance) Pty Ltd (1974) 131 CLR 321 at 327; Television Broadcasters Ltd v Ashton's Nominees Pty Ltd (No 1) (1979) 22 SASR 552. 4.Participants in the joint undertaking enjoy rights and assume obligations, which are often several, and calculated by reference to ownership of shares and/or contributions made. 5.Participants have a joint (or community of) interest in the performance of the undertaking's purpose: Cummings v Lewis (1993) 41 FCR 559 at 314/315 (per Cooper J); 6.Participants associate in the undertaking for mutual commercial gain which can be mutual profits."
Although her Honour acknowledged "that it is not appropriate to attempt to isolate which characteristics would be both necessary and sufficient for the constitution of a joint venture agreement" and that "[i]t is always a question of fact whether any particular undertaking constitutes a joint undertaking for mutual commercial gain" (at [81]), her Honour's observations are, respectfully, not without importance and weigh heavily in the Court's discernment of whether parties have entered into a joint venture arrangement.
An "unincorporated joint venture", in contradistinction to an "incorporated joint venture" is, as the express words indicate, a joint venture pursued through a medium other than a corporate structure. As Vickery J explained in Ambridge Investments Pty Ltd v Baker [2010] VSC 59 (at [32]), an unincorporated joint venture may have "the characteristics of a partnership, with a separate legal personality, or it may simply be an association which does not exist as an entity separate from the legal personality of its participants." By an incorporated joint venture, however, the participants incorporate a corporate structure and become shareholders in that structure.
In early August 2015, Chris, Mr He, Alysha and Dennis inspected and later made an offer to purchase the Rockdale Property, at which time neither Haiye, nor PPD, had been incorporated. Although neither Haiye, nor PPD, had been incorporated by the time of their offer to purchase the Rockdale Property, Chris, Mr He and Dennis had several conversations at the time of their inspection and subsequent offer to purchase the Rockdale Property about purchasing that property through a company.
Notwithstanding that Chris', Mr He's, Alysha's and Dennis' offer to purchase the Rockdale Property was ultimately unsuccessful, Chris, Mr He and Dennis subsequently decided to incorporate Haiye through which Chris and Mr He intended to purchase a property or part of a property with Alysha and Dennis (or a company controlled by either or both of them), although neither Chris, nor Mr He, were aware of the First Kogarah Property by the time of Haiye's incorporation.
By 17 August 2015, Chris and Mr He had inspected the First Kogarah Property twice and had had discussions with Dennis about their and Alysha's/Dennis' respective proposed ownership of the First Kogarah Property.
In the evening of 17 August 2015, Chris, Mr He, Alysha and Dennis had a conversation in which Dennis said: "OK, well we should register a company tomorrow that we can use to purchase the property."
Two days later, PPD was incorporated by Chris, Mr He and Dennis. Thereafter, the parties exclusively contemplated purchasing (and in fact purchased) the First Kogarah Property, conducted the development on the First Kogarah Property and entered into the other related transactions through PPD. Although payments were made by Haiye and/or Pionnier on behalf of PPD, the parties have always conducted their investment through PPD.
In my respectful view the conclusion to be drawn from the evidence is that the parties never had an intention to purchase the First Kogarah Property and enter the subsequent related transactions through an unincorporated joint venture. Even assuming that they did, that intention was nevertheless later abandoned with the parties' incorporation of PPD. As it was not a matter raised on the pleadings, I will not consider whether the parties have, by their incorporation of PPD and use of that company as a special purpose vehicle through which they conducted their Kogarah property dealings, entered into an agreement to form an incorporated joint venture.
By their incorporation of PPD and conduct of their Kogarah property endeavours through that company, the parties also have not formed a partnership. The distinction between a joint venture and a partnership may often be difficult to delineate, principally because, as Ward J (as her Honour then was) accepted in Walters v Scarborough [2011] NSWSC 1380 (at [265]), all partnerships are joint ventures but not all joint ventures are partnerships. One matter of clear distinction, however, is that "the relation between members of any company or association which is incorporated under the Corporations Act 2001 of the Commonwealth is not a Partnership within the meaning of th[e] [Partnership Act 1892 (NSW)]": see s 2(a) of the Partnership Act 1892 (NSW).
At its highest, the parties' relationship was that of shareholders in a company, and only Haiye and Pionnier could claim title to that position. As shareholders in PPD, Haiye and Pionnier have not formed a partnership arrangement. Further, as Chris, Mr He, Dennis and Alysha conducted their dealings exclusively through PPD, via Haiye and Pionnier, they too have not formed a partnership arrangement.
As the parties have neither formed an unincorporated joint venture, nor a partnership, they owe no fiduciary obligations to one another; nor do Haiye or Pionnier owe fiduciary duties to one another qua shareholders of PPD. There being no fiduciary duties owed, it is unnecessary for the Court to consider whether any or all of the Active Defendants and/or Mr Varvaris have breached fiduciary duties.
Furthermore, lest it be thought that the question is only to be answered by reference to whether there was a joint venture agreement (notwithstanding that is how it was pleaded, as I have set in paragraph [533] above), I accept the Active Defendants' submission that neither Haiye, nor Pionnier, expressly or impliedly undertook to subordinate their interests to each other or the venture. This is the essential question in determining the existence of a fiduciary relationship (see Vanguard at [61]). Haiye and Pionnier (and the natural persons who stood behind them) were co-operating for commercial advantage, but they were doing so in their own commercial interests without subordination of those interests to the others.

Breach of Trust

The Plaintiffs' plead breach of trust against Varvaris & Co only. The circumstances out of which that trust is alleged to arise is Haiye's payment of $3,564,000 to Varvaris & Co in purported satisfaction of its share of PPD's obligation to pay a 60% deposit for PPD's purported purchase of the Second Kogarah Property. As will be abundantly clear by this point in the reasons, there was no such obligation.
The Plaintiffs nevertheless plead that Varvaris & Co held those funds on trust for Haiye pending completion of the purchase of the Second Kogarah Property and that in breach of trust, Varvaris & Co misapplied the funds, including by satisfying Pionnier's obligation to pay its share of PPD's purchase of the First Kogarah Property.
Varvaris & Co has been placed into liquidation. It is unclear when Varvaris & Co was placed into liquidation, as is the manner in which it was placed into liquidation. Notwithstanding when and how Varvaris & Co was placed into liquidation, the Plaintiffs do not have leave to proceed against it pursuant to either ss 471B or 500(2) of the Corporations Act. Although referred to in the Plaintiffs' closing written submissions, it was not included in the Plaintiffs' final written submissions on damages and I have assumed is not pressed.

Knowing Receipt and Assistance

The Plaintiffs plead knowing receipt and/or assistance claims against each of PPD, Pionnier, Varvaris & Co, CBC, A & T Education, Citywide Property Group and Red Horizon pursuant to the first and second limbs of Barnes v Addy, although the Plaintiffs no longer press their claims against PPD and they do not have leave to proceed against Varvaris & Co, A & T Education, Citywide Property Group and Red Horizon. That leaves only the knowing receipt claims against Pionnier and CBC, there being no knowing assistance claim pleaded against either of those companies.
Because the Court has concluded that neither the Active Defendants, nor Mr Varvaris, owed fiduciary duties to the Plaintiffs on the Plaintiffs' pleaded case and because the pleaded breach of trust action against Varvaris & Co is also not pressed, it follows that the Plaintiffs' claims pursuant to the first limb of Barnes v Addy against Pionnier and CBC must fail.

Monies Had and Received

The Plaintiffs' monies had and received claims are put in the alternative. By their ASOC, the Plaintiffs have brought claims for monies had and received against each of Alysha, Dennis, Pionnier, PPD, Varvaris & Co, CBC, A & T Education, Citywide Property Group and Red Horizon. As the Plaintiffs do not have leave to proceed against Varvaris & Co, A & T Education, Citywide Property Group and Red Horizon, and in light of the orders set out in [295] above, the Plaintiffs do not press their monies had and received claims against Alysha, Varvaris & Co, A & T Education, Citywide Property Group and Red Horizon. I have also assumed that the claim is not pressed against PPD (now that Haiye is the sole shareholder of PPD and that, therefore, Haiye (in effect) solely owns the First Kogarah Property) nor against Pionnier.
The only specific money claims referred to in the Plaintiffs' final written submissions in respect of damages were against Dennis, CBC and Pionnier, and can be summarised as: 1. Dennis received the benefit of at least $270,000 from the moneys paid by Haiye in purported satisfaction of the Fake Bingemann Invoice by the unlawful conduct of Mr Varvaris and/or the other Active Defendants. Further, or alternatively, Dennis knew that he had received that benefit by the unlawful conduct of Mr Varvaris and/or the other Active Defendants at the time of his receipt of those funds. 2. CBC received the benefit of two sums - namely, $25,000 and $534,500 - which were paid by Haiye in purported satisfaction of its share of the Supplementary Contract by the unlawful conduct of Mr Varvaris and/or the Active Defendants. Further, or alternatively, CBC knew that it had received the benefit of those funds by the unlawful conduct of Mr Varvaris and/or the other Active Defendants at the time of its receipt of those funds.
The principles relevant to the question of whether Dennis, CBC and/or Pionnier are liable in an action for monies had and received can be distilled from the Court of Appeal's decision in Heperu Pty Ltd v Belle (2009) 76 NSWLR 230; [2009] NSWCA 252 ("Heperu") in which Allsop P (as his Honour then was), with whom Campbell JA and Handley AJA agreed, endorsed this passage from K Mason, J W Carter and G J Tolhurst, Restitution Law in Australia, (2nd ed, 2008, LexisNexis Butterworths) at [305] (at [127]) (footnotes omitted): "[305] Principle stated. A personal cause of action, deriving from the count for money had and received, is available to the owner of money, or of property that is changed into money or its equivalent, that can be traced to someone who did not take the money as or from a bona fide purchaser for value without notice of defect of title. The plaintiff's right does not turn upon proof of a tort or other wrong, although that is often the way of demonstrating the defendant's unauthorised gain. The independent restitutionary claim is one means whereby the plaintiff's property right is vindicated. Merely because the defendant has paid over the money to a third party provides no defence to the personal claim, but defences including change of position are available."
In Heperu, Allsop P also affirmed the proposition that a plaintiff must show that the recipient knew or ought to have known of their receipt and/or possession or control of the funds in question prior to it being disposed of (if at all) and that it would be unjust or inequitable for the recipient to retain the funds: see [74]; see also National Commercial Banking Corporation of Australia Ltd v Batty (1986) 160 CLR 251 at 268-9; [1986] HCA 21 per Gibbs CJ. In discerning the standard underpinning "ought to have known", his Honour referred to and accepted the following passage from Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (4th ed, 2002, LexisNexis Butterworths) at 342 [8-270]: "all matters: (a) of which he would have received notice if he had made the investigations usually made in similar transactions; and (b) of which he would have received notice had he investigated a relevant fact which has come to his notice and into which a reasonable man ought to have inquired."

Are Dennis and/or CBC Liable to the Plaintiffs for Monies Had and Received?

Turning first to the claim against Dennis, the Plaintiffs' case rested solely upon a director's loan ledger purporting to reflect Dennis' director's loan account with Golden Sands Hospitality (see [241] and [242] above) and bank statements for A & T Education evidencing corresponding transfers to those reflected in the loan ledger. The Plaintiffs assert that the balance of the funds paid by Haiye to Bingemann in purported satisfaction of the Fake Bingemann Invoice (i.e. $271,343.75) were credited to Dennis' loan account with Golden Sands.
The various primary business records to substantiate the movement of funds set out in paragraphs [239] - [241] above were in evidence. The only matter to which the Plaintiffs have not referred is that at the time the $671,378.75 was received by A & T Education, its account had an existing credit of $110,171.29. There were a number of debits to the account before the $100,000 was paid (in cash) from A & T Education to Golden Sands and applied to Dennis' loan account. There was also a $160,000 deposit which was made on the same day that the $334,100 was paid out on 15 September 2016. In my view, the rule in Clayton's Case should be applied, which I have calculated means $232,832.47 of the funds from the refund by Bingemann can be attributed to Dennis. The parties are at liberty to check this calculation and, if they wish, address on the application of the rule.
Insofar as the question of knowledge is concerned, given the Court's findings about the knowledge of the Active Defendants, the Court is satisfied that Dennis would have been aware of the source of the funds being credited to his loan account. His liability does not depend upon him being aware of the precise sum. The Court finds Dennis is liable to Haiye for monies had and received in the sum of $232,832.47 (subject to the liberty reserved to the parties in the preceding paragraph as to how that sum has been calculated).
As for the Plaintiffs' claim against CBC, it was undisputed that the sums of $25,000 and $534,500 were transferred from Red Horizon to CBC. It was also undisputed that those funds were provided by Haiye to Citywide Property Group, who thereafter transferred those funds to Red Horizon. The flow of funds from Haiye to CBC is thus undoubted.
The Plaintiffs nevertheless face the challenge of proving that CBC knew, or ought to have known, of its receipt and/or possession or control of the funds and the circumstances from which the funds derived. Although Mr Varvaris had a connection to CBC, it is unclear what that connection was. He did not (nor does he now) hold office with CBC, nor was he a shareholder in that company. The Plaintiffs nevertheless plead that CBC had the requisite knowledge by reason of the following matters, all of which require an inference of knowledge to be drawn by the Court: 1. At all material times, Christopher Michael was the sole director and shareholder of CBC. 2. Mr Michael executed the Deed of Agreement referred to at [202] above on behalf of CBC. 3. Mr Michael is, or was, a director of several entities of which Mr Varvaris is or was also a director; namely, Unified Security Group (Australia) Pty Ltd and Golden Sands Hospitality. 4. Mr Michael is, or was, a director of several entities the registered offices of which are care of Varvaris & Co; namely, WPI Group Pty Ltd, Wuhan Group Pty Ltd and Affordable Energy Suppliers Pty Ltd. 5. CBC's registered office is located at the same address as the registered office for Varvaris & Co. 6. CBC benefited from the misappropriation of the Supplementary Contract Deposit Cheque. 7. CBC benefited from the misappropriation of the Second Supplementary Contract Cheque.
The matters recited in the preceding paragraph are circumstantial. They are insufficient for the Court to reach a state of actual satisfaction on the balance of probabilities that CBC, through Mr Michael, had actual knowledge or ought to have known of the unauthorised derivation of the funds at the time of their receipt or while CBC had possession or control of those funds. The Plaintiffs' claim against CBC fails for want of proof.

Unclean Hands

As the Plaintiffs are not entitled to equitable relief, there is no need for the Court to consider the parties' submissions addressing the doctrine of unclean hands.

Conclusion

The parties will be given an opportunity to agree short minutes to give effect to these reasons, including as to costs. Subject to any special applications, costs should follow the event.

Amendments 12 September 2022 - Correction of numerical figures at [476]. 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: 12 September 2022

Trade Practices Act 1974(Cth)

office Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 Como Investments Pty Ltd (in liq) v Yenald Nominees Pty Ltd (1997) ATPR 41-550; (unreported, WASC) Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; [1990] HCA 17 Cummings v Lewis (1993) 41 FCR 559; [1993] FCA 190 Curwen v Yan Yean Land Co Limited (1891) 17 VLR 745 Demagogue Pty Ltd v Ramensky (1992) 39 FCR 31; [1992] FCA 851 Digital Pulse Pty Ltd v Harris [2012] NSWSC 33 Dresna Pty Ltd v Misu Nominees Pty Ltd [2003] FCA 1537 Dresna Pty Ltd v Misu Nominees [2004] FCAFC 169 EDPI Pty Ltd v Rapdocs Pty Ltd [2007] NSWSC 195 Dynamic Supplies Pty Ltd v Tonnex International Pty Ltd (No 3) [2014] FCA 909 Emwest Products Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2002) 117 FCR 588; [2002] FCA 61 Fatimi Pty Ltd v Bryant & Ors [2002] NSWSC 750 Fish & Fish Ltd v Sea Shepherd UK [2015] AC 1229 Gibson Motor Sport Merchandise Pty Ltd v Forbes [2005] FCA 749 Giorgianni v R (1985) 156 CLR 473; [1985] HCA 29 Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82; [1984] FCA 180 Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435; [2013] HCA 1 Gould v Vaggelas (1984) 157 CLR 215; [1984] HCA 75 Gray v Motor Accident Commission (1998-1999) 196 CLR 1; [1998] HCA 70 Henville v Walker (2001) 206 CLR 459; [2001] HCA 52 Heperu Pty Ltd v Belle (2009) 76 NSWLR 230; [2009] NSWCA 252 Hoath v Connect Internet Services Pty Ltd [2006] NSWSC 158 Hodges v Waters (No 7) (2015) 232 FCR 97; [2015] FCA 264 Hornsby Building Information Centre Pty Limited v Sydney Building Information Centre Ltd (1978) 140 CLR 216; [1978] HCA 11 Hughes v Western Australian Cricket Association Inc (1986) 19 FCR 10; [1986] FCA 465 Johnson v Mackinnon [2021] NSWCA 152 Jones v Dubbrell [1981] VR 199 JR Consulting & Drafting Pty Ltd v Cummings [2016] FCAFC 20 Keller v LED Technologies Pty Ltd (2010) 185 FCR 449; [2010] FCAFC 55 Knowles v Fuller (1947) 48 SR (NSW) 243 Kowalczuk v Accom Finance Pty Ltd (2008) 77 NSWLR 205; [2008] NSWCA 343 Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563; [1995] HCA 68 Lam v Ausintel Investments Australia Pty Ltd (1989) 97 FLR 458 Lamb v Cotogno (1987) 164 CLR 1; [1987] HCA 47 Li v Liu [2022] NSWCA 67 Livers v Legal Services Commissioner [2020] NSWCA 317 Lonrho Ltd v Shell Petroleum Co Ltd [1981] 1 QB 358; Com LR 74 Lonrho Ltd v Shell Petroleum Co Ltd (No 2) [1982] AC 173 Luxottica Retail Australia Pty Ltd v Grant [2009] NSWSC 126 at [39] Mackinnon as Plaintiff representative of 153 Plaintiff group members v Partnership of Larter, Jones, Miraleste Pty Ltd t/as USG Partner and Johnson, t/as "STC Sports Trading Club" (No 8) [2019] NSWSC 1658 Magill v Magill (2006) 226 CLR 551; [2006] HCA 51 Maria Saravinovksa v Krste (Chris) Saravinovski; Chris Saravinovski v George Saravinovski (No 6) [2016] NSWSC 964 Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34; [1999] FCA 899 Marrinan v Vibart [1963] 1 QB 234 McKellar v Container Terminal Management Services Limited [1999] FCA 1101; (1999) 165 ALR 409 McKernan v Fraser (1931) 46 CLR 343; [1931] HCA 54 Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31 Morris v IMF Bentham Limited [2018] FCA 1009 National Commercial Banking Corporation of Australia Ltd v Batty (1986) 160 CLR 251; [1986] HCA 21 New Cap Reinsurance Corporation Ltd v Daya [2008] NSWSC 64; (2008) 216 FLR 126 North East Equity Pty Ltd v Proud Nominees Pty Ltd [2012] FCAFC 1; (2012) 285 ALR 217 Nowegijick v R (1983) 144 DLR (3d) 193 Nu Line Construction Group Pty Ltd v Fowler (aka Grippaudo) [2012] NSWSC 587 O'Brien v Dawson (1942) 66 CLR 18; [1942] HCA 8 OBG Ltd v Allan [2007] UKHL 21 Owston Nominees No 2 Pty Ltd v Clambake Pty Ltd [2011] WASCA 76; (2011) 248 FLR 193 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191; [1982] HCA 44 Pereira v Director of Public Prosecutions [1988] HCA 57; (1988) 82 ALR 217 Pittmore Pty Ltd v Chan; Chan v Tan [2020] NSWCA 344; 104 NSWLR 62 PPK Willoughby Pty Ltd v Baird [2020] NSWSC 1757 R v Goldie; Ex parte Picklum (1937) 59 CLR 254; [1937] HCA 65 R v Houssain [1969] 2 QB 567 R v Kelly (1975) 24 FLR 441 R v Nifadopoulos (1988) 36 A Crim R 137 R v Rogerson (1992) 174 CLR 268; [1992] HCA 25 R v Tannous (1987) 10 NSWLR 303 Rafferty v Madgwicks (2012) 203 FCR 1; [2012] FCAFC 37 Robertson & Moffat v Belson [1905] VLR 555 Rubenstein v Truth & Sportsman Ltd [1960] VR 473 S & I Publishing Pty Ltd v Australian Surf Life Saving Pty Ltd (1998) 88 FCR 354 Sorrell v Smith [1925] AC 700 Standen v Regina [2015] NSWCCA 211 Swancom Pty Ltd v Jazz Corner Hotel Pty Ltd (No 2) [2021] FCA 328; (2021) 157 IPR 498 Taco Company of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 The Koursk [1924] P 140 Ting v Blanche [1993] FCA 781; (1993) 118 ALR 543 Trade Practices Commission v Allied Mills Industries Pty Ltd (1980) 32 ALR 570 Trade Practices Commission v Australia Meat Holdings Pty Ltd [1988] FCA 338; (1988) 83 ALR 299 Trampoline Enterprises Pty Ltd v Fresh Retailing Pty Ltd [2019] VSCA 74 Uber Australia Pty Ltd v Andrianakis (2020) 61 VR 580; [2020] VSCA 186 United Dominions Corp Ltd v Brian Pty Ltd (1985) 157 CLR 1; [1985] FCA 49 Universal Music Publishing Pty Ltd v Palmer (No 2) [2021] FCA 434 Vanguard Financial Planners Pty Ltd & Anor v Ale & Ors [2018] NSWSC 314 Volvo Finance Australia v Waterfront Enterprises Pty Ltd (In liq) (No 2) [2020] NSWSC 262 Walters v Scarborough [2011] NSWSC 1380 Ward v Lewis [1955] 1 WLR 9 XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1983-1984) 155 CLR 448; [1985] HCA 12 Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65 Texts Cited: K Mason, J W Carter and G J Tolhurst, Restitution Law in Australia, (2nd ed, 2008, LexisNexis Butterworths) Meagher, Gummow & Lehane's Equity: Doctrines and Remedies (4th ed, 2002, LexisNexis Butterworths) Category: Principal judgment Parties: Haiye Developments Pty Ltd (First Plaintiff) Jianzong He (Second Plaintiff) Haiqiang He (Third Plaintiff)

Summary

In August 2015, the First Plaintiff, Haiye Developments Pty Ltd ("Haiye"), and Fifth Defendant, Pionnier Pty Ltd ("Pionnier"), agreed to purchase and develop the property known as 60B Gray Street and 26 Princes Highway, Kogarah, NSW ("the First Kogarah Property"). Haiye and Pionnier agreed to purchase and develop the First Kogarah Property through a corporate special purpose vehicle and to that end, incorporated the Third Defendant, Pionnier Property Development Pty Ltd ("PPD"). Between the date of its incorporation and 23 April 2021, Haiye and Pionnier held 75 and 25 of the 100 issued shares in PPD respectively.
Through PPD, Haiye and Pionnier purchased the First Kogarah Property in late 2015. Settlement occurred in early 2016. Prior to PPD's purchase of it, the First Kogarah Property had built upon it a two-storey commercial building and an associated open plan car park area and garage. Haiye and, apparently, Pionnier intended to develop a residential building on the First Kogarah Property to accommodate approximately 80 units.
Both simultaneously with, and following, their purchase of the First Kogarah Property, several other transactions are said to have been entered into by Haiye, Pionnier, PPD, the other parties to these proceedings and other third parties. Those transactions (summarised in [11] below), it is alleged, are infected with misrepresentation, fraud, deceit, breach of fiduciary duties, impropriety and illegality. The Court has been required to untangle this web of transactions and determine what, if any, relief is available to the parties to whom loss can be attributed.
The facts of the underlying dispute the subject of these proceedings are complex. That is often the case when allegations of fraud are involved. The primary allegation advanced against those to whom I shall refer as the Active Defendants (see paragraph [8] below) is that by their involvement in a fraudulent enterprise, they have caused, or played a part in causing, substantial damage to the Plaintiffs. The primary architect of the fraudulent enterprise, it is alleged, is a former Federal Parliamentarian, Mr Nickolas Varvaris; the Second Defendant in these proceedings. Although Mr Varvaris' involvement in the enterprise is undeniably central to the Plaintiffs' case, the Plaintiffs have abandoned their claims against him on account of his bankruptcy subsequent to the commencement of these proceedings.
Additional claims advanced against other defendants - including PPD, Citywide Financial Services Group Pty Ltd (the Fourth Defendant) (which traded as "Varvaris & Co" and to which I will refer as such or as "Citywide Financial Services"), A & T Education Holdings Pty Ltd (the Eighth Defendant) ("A & T Education"), Citywide Property Group Pty Ltd (the Ninth Defendant) ("Citywide Property Group") and Red Horizon Travel Services Pty Ltd (the Tenth Defendant) ("Red Horizon") - have also been abandoned. Those companies have either been placed into liquidation, have had a voluntary administrator appointed or have been deregistered.
At the outset of the hearing, the Active Defendants made certain concessions on a non-admissions basis which went some way to resolving matters in favour of the Plaintiffs (set out in [293] to [295] below). The Plaintiffs - namely, Haiye and its two Chinese shareholders, Jianzong He (as to 51% of Haiye) and his father Haiqiang He (as to 49% of Haiye), the Second and Third Plaintiffs respectively - nevertheless continued to press their claims against The Commercial Business Centre Pty Ltd (the First Defendant) ("CBC"), Pionnier, Hua Liu (the Sixth Defendant) and Kei Kwok (the Seventh Defendant).
Following the commencement of these proceedings, CBC was also placed into liquidation. However, on 6 April 2021, orders were made by consent granting the Plaintiffs leave to proceed against it and its liquidator has been excused from appearing but has been granted liberty to address the Court as to the form of any final orders to be made against it (if any).
For the balance of these reasons, without intending any disrespect, I shall refer to Mr Jianzong He as "Chris", Mr Haiqiang He as "Mr He", Ms Hua Liu as "Alysha" and Mr Kei Kwok as "Dennis". Alysha and Dennis are husband and wife and, together with Pionnier, I shall refer to the three of them collectively as the "Active Defendants".
It is convenient at this point also to note three further corporate matters: 1. Chris and Dennis were directors of Haiye (although as will already be apparent, Dennis was not a shareholder, because his directorship was nominal only in order to satisfy the legal requirement for one director too be resident in Australia). 2. Dennis was the sole director and shareholder of Pionnier. He was its controlling mind. The Active Defendants did not point to any matter where an allegation was made against the Active Defendants some relevant distinction should be drawn between the positions of Dennis and Pionnier. 3. Alysha was the sole director and shareholder of A & T Education.
It should also be noted at the outset that, but for several documentary tenders, the Active Defendants did not call any evidence, although several paragraphs of affidavits affirmed by Alysha and Dennis were tendered against them by the Plaintiffs. Those paragraphs (or parts of paragraphs) were largely admissions made by Alysha or Dennis as to the accuracy of Chris' and Mr He's evidence. For reasons set out in [331] to [333] below the Court has concluded that Alysha's and Dennis' evidence would not have assisted them and, where evidence for an inference adverse to their interests otherwise exists, the Court can more easily draw that inference by reason of their failure to give evidence.
The Plaintiffs' case turned on four transactions for which Mr He funded Haiye: 1. The pro rata payment by Haiye for the purchase of the First Kogarah Property in reliance on alleged misrepresentations as to its value and development potential; 2. In connection with that purchase, the pro rata payment by Haiye of its share towards what is referred to in these reasons as the Supplementary Contract, which was said not to be a genuine contract and which payment was misappropriated to the benefit of the Active Defendants or their associates; 3. The pro rata payment by Haiye for the deposit to purchase an adjoining property (referred to below as the "Second Kogarah Property") from Landmark Element Pty Limited ("Landmark"), where it was said the transaction was not genuine and the monies were misappropriated, in part to fund Pionnier's obligation to pay 25% of PPD's purchase of the First Kogarah Property. 4. The pro rata payment by Haiye of an invoice in connection with the proposed development of the First Kogarah Property and Second Kogarah Property from Bingemann Consulting Pty Limited ("Bingemann") that was said not to be genuine, and which was misappropriated to the benefit of the Active Defendants or their associates.
To understand in overview why the Court has decided that the Plaintiffs, in particular Haiye, should substantially succeed, a reader of these reasons should bear in mind the following seven fundamental conclusions which the Court has reached.
First, much of what passed between the parties was through the medium of the messaging platform known as WeChat. The Court had many pages of transcripts of those contemporaneous and unguarded discussions, translated into English when it had been originally conducted in Chinese. It has been necessary to reproduce these at length in what follows because they, without more, tell the story generally in favour of the Plaintiffs and against the Active Defendants and Mr Varvaris.
Second, while as their own counsel acknowledged, Chris and Mr He were not in all respects ideal witnesses, the Court accepts their evidence as truthful, not least because it was consistent with the WeChat evidence. With only one relevant but explicable exception (see [418] below), their evidence is also generally corroborative of each other. One aspect of particular relevance is that wherever Chris and Mr He have given evidence that statements made by any of Alysha, Dennis or Mr Varvaris were not contradicted or qualified by either of the other two, the Court accepts that evidence.
Third, the Plaintiffs read an affidavit of Mr Tom Chan, the sole director, secretary and shareholder of Landmark. He was not required for cross-examination. The effect of his evidence was that he had never had anything to do with Pionnier or anyone connected with it in relation to a proposed sale of the Second Kogarah Property to Pionnier, and that Landmark had never had any intention of selling the Second Kogarah Property to Pionnier. He disavowed what appeared to be his signature on documents that purported to relate to such a transaction.
Relying primarily on Mr Chan's evidence (but also on matters such as to whom various funds were misappropriated), the Court is well satisfied to the Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 ("Briginshaw") standard that all the references to any proposal to purchase the Second Kogarah Property that fell from Alysha, Dennis and Mr Varvaris were a complete fabrication and were known by all of them to be such. This finding of their joint knowledge is further dealt with in [430] to [437] below.
Fourth, not least because it was propounded by Alysha, Dennis and Mr Varvaris as relating to the purchase of the Second Kogarah Property, the Court is well satisfied to the Briginshaw standard that the invoice from Bingemann which is the subject of these proceedings was fraudulent - and which is referred to in these reasons as the "Fake Bingemann Invoice" - and was known to be such by Alysha, Dennis and Mr Varvaris.
Fifth, one submission put in Alysha's defence was that on many occasions she was not herself making any representation but was merely acting as a conduit by interpreting into Chinese for the benefit of Chris (who understood conversational English) and Mr He (who did not understand English) what was being said in English by Mr Varvaris. While there are some examples of where the text and context show that Alysha was doing no more than interpreting, the Court is satisfied that is not the case on matters of substance. Taking all the evidence together, but especially the WeChat discussions, the Court has no difficulty in concluding that Alysha was present not as a mere conduit, but as a totally engaged principal in the proposed transactions. She was not an interpreter who had no stake or interest in what she was conveying. She was a principal who happened to be able to translate for Mr Varvaris and, as such, the Court finds was adopting and making her own whatever Mr Varvaris was saying and thereby adding her own voice to his attempts to persuade (and in some cases cajole) Chris and Mr He to finance Haiye's role in the various purported transactions. So much is demonstrated by her references to "we" and "us", for example, "Nick can help us get the best terms through his connections to maximise our profits" (see [57] below). The Court makes the same conclusion for the same reasons in relation to Dennis on those occasions where he was translating what Mr Varvaris said.
Sixth, the totality of the evidence makes clear that Alysha and Dennis were active participants in the various transactions together. While Alysha had the larger role, presumably because of her "big sister" relationship with Chris, the fact that Alysha and Dennis were married fortifies the Court in its conclusion that Alysha and Dennis essentially had the same knowledge about what was in fact going on. The Court draws that conclusion more easily by reason of their failure to give evidence to the contrary or at all.
Seventh, while their own Senior Counsel made clear that he was not attempting to portray Alysha and Dennis as complete innocents, his main attack on Chris and Mr He was that they were knowing (or sometimes deliberately blind in the Nelsonian sense) participants in a scheme orchestrated by Mr Varvaris. The gravamen of this submission was that Chris and Mr He were not victims of a fraud worked by Mr Varvaris, Alysha and Dennis, but rather fellow participants in a dubious (if not illegal) scheme. The Court rejects this for these reasons: 1. It is not borne out by the totality of the evidence, but especially the WeChat discussions; 2. It contains an irreconcilable tension about the position of Alysha and Dennis. The evidence - not least the apparently unprotesting receipt of misappropriated funds - does not permit of the conclusion that the Plaintiffs and Active Defendants were all Mr Varvaris' victims. Yet much of this defence would have the Court accept that Alysha and Dennis were ignorant if not completely innocent pawns in relation to Mr Varvaris' (and on this part of the defence case, the Plaintiffs') scheming. 3. The submission did not really rise above innuendo. The evidence pointed to by the Active Defendants was far from sufficient to warrant a finding against Chris and Mr He that would have to have been made to the Briginshaw standard. 4. In cases such as this, the classical test to separate victims from perpetrators is to ask "cui bono?" (to whose benefit?), or in its modern incarnation "follow the money". In relation to each of the matters complained of it was the Active Defendants and Mr Varvaris who benefited and who ended up with money that had been diverted from the purpose for which it had been advanced on behalf of Haiye. Furthermore, the fact that there is no evidence in the WeChat conversations or elsewhere of the slightest surprise (to put it mildly) or similar reaction from the Active Defendants to the substantial financial benefits received by them is fundamental to the Court's conclusion that they knew that the Plaintiffs were being deceived or "scammed" and that they (the Active Defendants) were active participants in the deception. 5. The Court more easily draws the conclusion available to it by reason of the four preceding matters because of the failure of Alysha and Dennis to give evidence.
Mr A P Cheshire SC and Ms S Jeliba of Counsel appeared for the Plaintiffs. Mr G A Sirtes SC and A L Oakes of Counsel appeared for the Active Defendants.

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