Huang v Muse Beauty Salon Waterloo Pty Ltd

Background facts

1. As stated above, most of the facts in this case are strongly disputed. On many issues, there are diametrically opposed versions, particularly of relevant meetings and conversations. The proper meaning and relevance of many documents, including WeChat exchanges, are also disputed. However, on the affidavit evidence and the documentary evidence, some background facts may be stated. Unless indicated to the contrary, what follow are the court's general findings of fact in the matter.
2. In early 2015, Ms Xie and Ms Bai who were friends and who came to Australia from China to study at universities in Sydney, opened a beauty studio in Zetland in Sydney. Both had undertaken short beautician courses in China but had no equivalent formal qualifications in Australia.
3. Ms Huang and her husband had an online business importing South Korean made beauty products for customers in Australia. Mr Nam, Ms Huang's husband, was also an accountant.
4. The evidence establishes that Ms Xie ordered beauty products from Ms Huang who was one of her suppliers for both personal and probably commercial use. It is claimed by Ms Xie that Ms Huang delivered the products to the Zetland studio and later to the Muse City store. Ms Huang states that the products were delivered by her husband, Mr Nam, but not to the Muse City store but only to the Zetland store. In a later affidavit, Ms Xie states that the products were delivered by either Ms Huang or Mr Nam: Exhibit A page 391 paragraph 30(c). Mr Nam said in his oral evidence that he did deliver products to Ms Xie in Pitt Street in Sydney on a few occasions. In the light of the altered evidence of Ms Xie, the oral evidence of Mr Nam and having assessed the witnesses on this issue and considered the evidence, I accept the evidence of Ms Huang and Mr Nam that the products were delivered by Mr Nam. Having regard to the evidence that the Muse City store was opened in about April 2017, and Mr Nam's oral evidence, I think it likely that Mr Nam delivered some beauty products to that store after its opening, during 2017, on several occasions.
5. On 22 November 2016, The Muse Beauty Salon Pty Ltd was registered as a company. There were at the relevant time, 100 recorded shares in the company with Ms Xie holding 51 shares and Ms Bai holding 49 shares. In April 2017, Muse City started operating a beauty salon in Pitt Street in Sydney. The store provided beautician services to clients. As stated above, Ms Huang provided Korean beauty products as one of the suppliers to Ms Xie at Muse City.
6. There was differing evidence about how Ms Xie became aware of Ms Huang and her business. It seems that they had a common friend, Ms Elaine Wang. Initially, Ms Wang had ordered beauty products from Ms Huang and then that role was taken over by Ms Xie. Ms Xie claims it was in 2015 and Ms Huang claims it was in 2016 but the difference is not significant in the proceedings.
7. There is also a difference in the evidence of Ms Huang and Ms Xie about when they had the initial conversation relating to the possibility of Ms Xie opening a new beauty salon. Ms Xie places the first conversation in August 2017 when she states that Ms Huang indicated that she wished to join Muse City to help in the shop and also raised the possibility of opening another shop in relation to which Ms Huang wished to invest and manage the shop: Exhibit A page 249, paragraph 11. Ms Huang places the first conversation on 25 November 2017. She states that she told Ms Xie that she was interested in opening a new salon herself after she attended a beauty therapy course in South Korea in early 2018: Exhibit A page 105, paragraph 10.
8. The date suggested for the initial conversation by Ms Huang is problematic. She claims the conversation occurred on 25 November 2017 but she relates that Ms Xie stated that she and Ms Bai owned Muse Beauty Salon Waterloo Pty Ltd: Exhibit A page 105, paragraph 10. However, that company was first registered as a company on 28 November 2017, three days later, with the application for registration as a proprietary company also being received on 28 November 2017: Exhibit A page 91. Accordingly, if Ms Huang's account is to be accepted, it is likely that a conversation occurred (whether in person or by way of WeChat) a little later following the registration of Muse Waterloo. I will consider further below which version of the disputed account relating to contractual negotiations is to be preferred. Ms Xie denied the contents of Ms Huang's version of the alleged 25 November 2017 conversation but did not dispute that a conversation occurred on that day: Exhibit A page 389, paragraph 17. In cross-examination, Ms Huang appeared to accept that the conversation set out in her first affidavit said to have occurred on 25 November 2017 did not occur in the terms set out but was much shorter. I consider that more likely and that detailed discussions between Ms Xie and Ms Huang did not occur until December 2017. Ms Xie also states that detailed conversations did not occur until December 2017. A WeChat exchange on 4 December 2017 between Ms Huang and Ms Xie establishes to my satisfaction that at that time Ms Huang wished to open her own shop when she returned from a trip to South Korea but Ms Xie was seeking to persuade her to join in opening "a new shop in Waterloo". The WeChat exchange suggested earlier conversations between them had occurred: Exhibit A page 119. Thus, contrary to Ms Xie's evidence (Exhibit A page 249, paragraphs 11-14), Ms Xie was seeking to persuade Ms Huang to join her in a new shop rather than Ms Huang seeking to be involved at that time.
9. Earlier, in mid-2017, Ms Cindy Liu had become a client of Muse City and attended its store for beauty treatments. She was known to Ms Bai. At about this time, Ms Xie had attended massage therapy treatments undertaken for her by a Ms Kitty Lo at another store in the city of Sydney. In due course, Ms Xie persuaded Ms Lo to commence working at the Muse City store. Ms Lo was a qualified beautician with an Australian qualification. Ms Lo also entered into contracts with Muse City, Ms Xie and Ms Bai on 29 November 2017 to be issued shares in Muse City: Exhibit 3. The precise circumstances in which these contracts were entered by Ms Lo will be considered further below.
10. In late 2017, probably between August 2017 and November 2017, Ms Qiqi Li was interested in the beauty business of Ms Bai and Ms Xie. She was interested in opening a new shop with Ms Xie and Ms Bai. I accept the evidence of Ms Xie and Ms Bai that Ms Li existed and was willing in December 2017 to pay $180,000 for 20% of the shares in the new company which became Muse Waterloo. However, it appears that she wished to be a silent investor only.
11. At about this time (late 2017), having regard to the limitations in the size of the shop at Muse City in the city of Sydney, Ms Xie and Ms Bai were looking for a suitable larger site for a new shop. I accept that Ms Bai located what she regarded as a suitable site in Waterloo. Eventually steps were taken in relation to planning for the fit-out of a shop at the site. A lease was entered into by Muse Waterloo for the Waterloo shop site on 8 December 2017: Exhibit 1. This date later became of some importance in the proceedings. The commencement date of the lease was 18 January 2018. Clearly a shop at Waterloo was proposed by Ms Xie and Ms Bai sometime prior to 8 December 2017: see Exhibit A page 119.
12. In late 2017, Ms Bai had discussions with Ms Cindy Liu in relation to the intention of Ms Bai and Ms Xie to open another beauty shop in Waterloo. At some stage, it is clear that Ms Liu showed an interest in investing in the new company. There is a difference in the evidence whether this was in December 2017 or January 2018 but the difference is not significant. In due course, Ms Liu signed agreements to purchase shares from Ms Xie and Ms Bai in both Muse City and Muse Waterloo.
13. On 9 December 2017, Ms Xie met with Ms Huang and her husband Mr Nam together with Ms Huang's small child at Zilver Restaurant in Haymarket. Initially, Ms Huang said that Ms Bai was also present at this meeting and was introduced as Ms Xie's mother. Later, Ms Huang states in an affidavit that Ms Bai was not at this meeting. Mr Nam in his oral evidence confirmed that Ms Bai was not present at the meeting. I find that Ms Bai was not at the meeting. I also think it highly unlikely that Ms Bai was introduced as Ms Xie's mother at any stage having regard to her age. However, in her oral evidence Ms Xie conceded that her actual mother was also present at the meeting and was introduced to Ms Huang and Ms Nam as her mother. This was not mentioned in Ms Xie's affidavit evidence.
14. What was discussed at the meeting is disputed. This will be considered further below. It seems to be clear that the Xie interests do not submit that any contract was entered into at this meeting.
15. On 24 December 2017, Ms Xie, Ms Bai, Ms Huang and Mr Nam met at a cafe in Chatswood to discuss the new shop to be opened by Muse Waterloo. The child of Ms Huang and Mr Nam was also present. What occurred at this meeting is strongly disputed and will be considered further below. The Huang interests claim in summary that a price for 20% of the shares of Muse Waterloo in the sum of $138,000 was agreed at this meeting subject to a due diligence and the Huang interests being happy with a contract relating to the acquisition of the shares. It is said that the sum of $138,000 was agreed following a counter-offer being made by Ms Huang to the initial share price of $180,000. The Xie interests claim no price was agreed at the meeting itself.
16. During or immediately following this meeting, Ms Huang transferred the sum of $8,000 into a Westpac bank account nominated by Ms Xie in the name of Ms Xie's mother. The description of the transfer on the receipt was "Shop 2 Deposit": Exhibit A page 64. As stated above, there is an issue between the parties as to whether the transfer of the money was a transfer of an agreed refundable deposit or was a part payment for the purchase of 20% of the shares in Muse Waterloo by Ms Huang (whether placed in her name or in the name of Mr Nam). Ms Huang states in her evidence that it was agreed that the $8,000 would be a refundable deposit depending on whether Ms Huang and Mr Nam went ahead with the transaction: Exhibit A page 56, paragraph 19. Mr Nam confirms this. Ms Bai and Ms Xie claim the transfer was eventually treated as a part payment of the purchase price of $138,000 pursuant to a binding agreement and would by agreement be used for legal fees: Exhibit A pages 250-251 paragraphs 15-19. In paragraph 5 of the Defence filed on 14 September 2018 in the proceedings commenced in the Local Court, which was later transferred to the District Court, the Xie defendants plead: "The plaintiff transferred $8,000 via electronic funds transfer to the account nominated by the second defendant and further say that $8,000 was to be paid as the first initial part payment for 20% shares of Muse as agreed". This was not changed in the Amended Defence.
17. Later, in the affidavit evidence, this sum is referred to by Ms Xie not as a part payment of the purchase price by Ms Huang but as a "deposit": Exhibit A page 250, paragraph 15; page 392, paragraph 31; page 396, paragraph 59. Whether the $8,000 transferred was a refundable deposit or a part payment pursuant to a binding agreement shall be considered further below. It appears from the Xie primary written submissions that there may in fact be no issue that the $8,000 was initially a deposit: see paragraph 11. It is claimed that it was later treated by the parties as a part payment pursuant to a concluded agreement reached over the telephone: Xie primary submissions paragraphs 9 and 12. By 9 December 2017 and 24 December 2017 (the dates of the important two meetings), the lease for the Muse Waterloo shop had already been entered into so there was no future expense relating to the lease preparation at that time: Exhibit 1. However, a draft contract needed to be prepared for the parties for consideration. There is no evidence as to the legal fees estimated to or charged to the Xie interests to prepare a draft agreement between the parties: cf the last sentence in paragraph 12 of the Xie interests' primary written submissions; Bai second affidavit Exhibit A page 670, paragraph 20 ($6,000 - this is a different figure to Ms Xie and Ms Huang).
18. As stated, what occurred at the 24 December 2017 meeting is disputed. Ms Xie claims that she had a telephone conversation with Ms Huang after the meeting in which Ms Huang made an offer of $138,000 for 20% of the shares in Muse Waterloo as well as working as the manager in the new shop to be established by Muse Waterloo and providing the beauty supplies to the new shop to be established at wholesale prices. In substance, Ms Xie and Ms Bai claim that they discussed the alternative offers of Ms Qiqi Li and Ms Huang and preferred the Huang offer as Ms Huang was willing to work in the shop as the manager and provide the supplies at wholesale prices. Ms Huang claims that there were only initial discussions as set out in her affidavits involving a payment of $138,000 for 20% of the shares in Muse Waterloo with there being no final agreement reached and Ms Huang stating that she wanted to come in to the Muse City shop to inspect the books and records of the company, its trade results and the WeChat accounts and software used at the Muse City store which was to be licenced to Muse Waterloo: see Exhibit A page 108 paragraph 14. In substance, Mr Nam supports his wife's account.
19. Between early January 2018 and 14 January 2018 Ms Huang was in South Korea to study beauty treatment techniques. I am satisfied from WeChat text records in evidence that she returned to Australia on the morning of 15 January 2018. Prior to this, I am satisfied and find that instructions were given by Ms Xie to her solicitor, Mr James Li of Sun Lawyers, to prepare an appropriate draft agreement in relation to the investment by Ms Huang (but initially in the name of Mr Nam): Exhibit A page 498 (the email refers to "some rough ideas" not agreed terms and does not refer to the price or the investor).
20. It is claimed by Ms Xie that a draft of the agreement was provided by Ms Xie to Ms Huang at a meeting between the parties in late December 2017, on 28 December 2017: 8 June 2021 affidavit paragraph 5; Exhibit A page 396, paragraphs 61-62. Having considered the submissions and the evidence, I am not satisfied that this meeting occurred as claimed by the Xie interests. There is no independent contemporary persuasive evidence to support its occurrence. The email records at Exhibit A pages 497-8 do not refer to a meeting on this date. See also Exhibit A page 144 which does not refer to a meeting. The submissions made by the Xie interests in chief at paragraphs 20-21 and in response at paragraphs 16-19 supporting such a meeting occurring are rejected.
21. I do not accept that the WeChat messages relied upon support the submission that a meeting occurred between the parties on 28 December 2017. First, there is no reference in emails or WeChat messages to such a meeting. Secondly, there is no reference in later emails or WeChat messages to the errors in the draft Agreement. It is likely these would have been noted or raised or at least mentioned if a draft agreement was provided in the form suggested on 28 December 2017: the reference to the wrong address for Mr Nam (Rosebery) and the reference to Ms Lo (clause 5.1). Thirdly, there is no correspondence expressly seeking or discussing the payment by the Huang interests of the remaining share purchase price. Fourthly, there is no correspondence between the parties relating to the issue of the shares. Fifthly, there is no evidence that the Xie interests had provided Ms Huang with a copy of the lease (Exhibit 1) or other details relating to the fitout of the Muse Waterloo store as one would expect if a binding contract had been entered into. It must be recalled that Mr Nam and Ms Huang were a young couple allegedly making a significant investment. I accept the Huang interests' primary written submissions on this issue. The WeChat messages are at the least unclear and equivocal. I think it likely that there would be express reference to a meeting in the WeChat messages or emails if such a meeting had occurred as asserted on 28 December 2017. I prefer the evidence of Ms Huang and Mr Nam on this issue. This is discussed further below. Accordingly, the next meeting between the parties occurred on 15 January 2018 when Ms Huang returned from South Korea. Prior to 15 January 2018, I find that Ms Xie and Ms Bai had not provided a draft contract for the purchase of the shares to Ms Huang and Mr Nam.
22. Ms Huang gives evidence in her affidavits that she thought the lack of contact with Ms Xie between 24 December 2017 and her return from South Korea on 15 January 2018 was potentially due to the fact that Ms Xie and Ms Bai may have been considering other offers for investment in Muse Waterloo. She confirmed this in her oral evidence. She was therefore keen to meet again with Ms Xie and they arranged the meeting for the day of her return from South Korea. The WeChat messages in evidence satisfy me that it was Ms Xie who took the initial steps to arrange the meeting. Ms Xie gives evidence that she had discussions with Ms Bai about an alternative offer of an investment from Ms Qiqi Li for $180,000 but this did not involve Ms Li working in the shop. She states that a decision was made to prefer Ms Huang because of her willingness to work in the new Muse Waterloo store as store manager and to contribute to the supply of beauty products at wholesale prices. In any event, I am satisfied that the meeting occurred at Ms Huang's home in Colebee, an outer suburb of Sydney, in the late morning and early afternoon of 15 January 2018. This was not disputed by the parties in their evidence and submissions.
23. As stated, Ms Xie claims that a draft of the share subscription and accession agreement was provided to Ms Huang well before this alleged meeting, on 28 December 2017. I have found that such a meeting did not occur. I do not regard the correspondence between Ms Xie and her solicitors referred to at Exhibit A pages 497-8 as indicating or establishing that this meeting occurred. See also the references in paragraphs 20-21 of the Xie primary written submissions. The WeChat message at Exhibit A page 144 (third block of messages, agreed to have been sent on 28 December 2017) does refer to making "the changes" but it is unclear what this is referring to. Further, if there had been a meeting on 28 December 2017 between the parties, it would seem to have been unnecessary to provide information by way of WeChat on that day - it could have been provided at the meeting itself. I find that a draft of the agreement was not provided by Ms Xie or Ms Bai to Ms Huang and Mr Nam before the meeting on 15 January 2018. I prefer the evidence of Ms Huang and Mr Nam on this issue, particularly in the light of the email and WeChat evidence which does not refer to such a meeting. I found them overall to be far more impressive witnesses on most issues, although I do not accept all of their evidence. I will discuss this further below.
24. I do accept and find that at the meeting on 15 January 2018, Ms Huang paid $60,000 in cash to Ms Xie and Ms Bai. The Xie interests claim that this was a further part payment of the $138,000 purchase price for the 20% shares in Muse Waterloo. The Huang interests claim that this payment was made as a further refundable payment to show the commitment of Ms Huang to the transaction subject to her due diligence and agreement to a written contract. Ms Xie claims that Ms Huang actually offered them the full $130,000 in cash outstanding at that time but Ms Xie decided not to accept it because she did not want to carry that amount of money in cash but was willing to accept $60,000 in cash. Ms Xie claims that Ms Huang later said that she would supply the balance of $70,000 from the sale of beauty products: Exhibit A page 400, paragraph 71. Ms Huang denies that such an offer was made and said she did not have $130,000 in cash at the time at her home.
25. There is thus a distinction between the parties' cases as to whether the $60,000 cash paid by Ms Huang on 15 January 2018 was agreed as a further payment of a refundable deposit or a part payment towards the $138,000 amount for the shares pursuant to a concluded and binding agreement. This will be considered further below.
26. The evidence shows that at 2:25pm on 15 January 2018, Ms Xie forwarded by email a copy of the draft share subscription and accession agreement to Mr Nam. Ms Xie says this was the wrong version of the agreement (it was in Mr Nam's name as opposed to Ms Huang's name) as a later draft had been received by her from her solicitor: Affidavit dated 8 June 2021 paragraph 10. Having regard to the annexures to Ms Xie' affidavit, this appears to be correct. Despite the contents of Ms Xie's 8 June 2021 affidavit, having regard to the time this draft was sent and the time of the meeting, I reject the suggestion that Ms Huang and Mr Nam had any real practical opportunity to review the agreement in detail during the meeting or before they left the house on that day to travel to Waterloo to inspect the premises. I prefer the evidence of Ms Huang and Mr Nam on this issue. Ms Huang and Mr Nam had to make preparations for their small child before they travelled by car to Waterloo. I find there was not sufficient time for them to have reviewed the agreement and accepted it as claimed by Ms Xie. Ms Xie also had a number of opportunities to provide her version of the 15 January 2018 meeting in her earlier affidavits. Her second affidavit substantially altered the version in her original affidavit: Exhibit A page 252 cf page 399, paragraph 70 and following. The third 8 June 2021 affidavit appears to me to set out a version in paragraph 11 of the meeting which has been reconstructed by Ms Xie to fit her case. If correct, she would have inserted it in earlier affidavits prepared well before her latest affidavit.
27. It appears accepted by all parties that a receipt was prepared and signed by Ms Xie and Ms Bai on 15 January 2018: see Exhibit F. There is an issue whether it was handed to Ms Huang on that day or merely left on a table in Ms Huang's residence. The receipt refers to the $60,000 in cash as follows: "Kailing Xie and Yuling Bai hereby received cash of $60,000 on 15 January 2018 as the balance payment for the Waterloo Agreement Share Subscription." There is no reference to the sum being a refundable deposit. Ms Huang's final evidence was that she did not read the receipt until later, and if she had read it on 15 January 2018, she would have asked for it to be reissued so as to refer to the payments as refundable deposits. The agreed contents of the receipt appear to be inconsistent with both parties' cases while recognising that $68,000 had been paid by Ms Huang. The translation refers to the $60,000 in cash being "the balance payment for the Waterloo Agreement Share Subscription" whereas on both cases it was not the balance payment and an additional $70,000 was to be paid, depending on whether the agreement was binding or not. See for example the Xie interests' written submissions in chief at paragraph 27.
28. In my view, it is likely the receipt was not reviewed in detail on 15 January 2018 by Ms Huang or Mr Nam but was likely reviewed sometime in the next week or so and before 28 January 2018. They did not appear to have had the time to review it carefully on 15 January 2018. However, I reject Ms Huang's evidence that she did not review it until April 2018: see paragraphs 32-39 of the Xie responsive submissions. I agree with the Xie responsive submissions that Mr Nam must have reviewed it by 29 January 2019 if not before: paragraph 36 and Exhibit A page 82. If he had reviewed it, it is likely that Ms Huang would also have reviewed it. It seems that on any view the receipt was inaccurate.
29. I accept the evidence that all parties then travelled by separate motor vehicles for an inspection of the Muse Waterloo premises. However, the premises were not available to be inspected at this time.
30. Ms Xie gives evidence in her affidavits that she instructed Muse Waterloo's accountant to register the new shares said to have been issued to Ms Huang. She states that this instruction was given well before the end of January 2018. From the date on the share document lodged with ASIC, it is unclear when the instruction was given. Why this instruction would be given by Ms Xie before the balance of $70,000 was paid by Ms Huang for the shares on Ms Xie's case, is unclear. There are aspects relating to the share lodgement form which raise issues as to its accuracy and the reliability of Ms Xie's evidence. The accountant did not give evidence in the proceedings. This matter will be considered further below.
31. Ms Xie and Ms Bai give evidence about Ms Huang being involved in reviewing pricelists and suggesting products for the Muse Waterloo store as indicating that there was a concluded agreement for Ms Huang/Mr Nam to invest in Muse Waterloo and there being part performance by her of the alleged agreement. See also paragraphs 43-44 of the Xie interests' submissions in chief. I do not accept that Ms Huang's involvement in looking at the pricelists and making suggestions establishes or supports the existence of a concluded agreement or constitutes part performance. They were sent to her. Her conduct was equally consistent with making observations and recommendations when asked for her opinions prior to deciding not to proceed with the transaction. I do not regard the evidence, including the WeChat messages on these aspects, as indicating or establishing a binding agreement. Similarly, some involvement by Ms Huang in assisting with the opening planning for the Muse Waterloo shop and in possibly using language such as "our shop", is, in my opinion, equally consistent with a desire to proceed provided a draft contract and Ms Huang's investigations proved to be satisfactory to her (see Xie submissions in chief at paragraphs 45-46).
32. There are WeChat exchanges between Ms Huang, Ms Xie and Ms Bai in relation to a business card being prepared for Ms Huang at Muse Waterloo. This is relied on by the Xie interests as being further evidence of a concluded agreement (submissions in chief paragraph 47). In my view, that evidence does not establish that and is equally consistent with continued discussions between the parties and the Xie interests wanting to obtain a concluded agreement. The evidence partly relied on by the Xie interests was WeChat messages made before Ms Huang's attendances had concluded at the Muse City shop.
33. Ms Xie states in her first affidavit that on 18 January 2018 Muse Waterloo signed a lease for the new shop in Waterloo: Exhibit A page 389, paragraph 15. That is inconsistent with Exhibit 1 which shows the lease was signed on 8 December 2017. The latter is clearly to be preferred as it is the primary document.
34. Between 17 and 25 January 2018, Ms Huang attended the Muse City shop on a number of occasions. Ms Xie claims that this was in order for at least Ms Bai to provide training to Ms Huang in relation to beauty treatment skills and techniques. Ms Xie and Ms Bai claim that Ms Bai provided Ms Huang with access to her confidential "tutorial clips" in relation to techniques and beauty treatments. Ms Huang states that she attended to review the shop's operation and customer base as an observer and to undertake due diligence. Some significant support for that version is provided by Ms Lo who was working in the shop at the time. Ms Xie gave inconsistent evidence on this issue as to what training was given by her to Ms Huang. Overall, I prefer the evidence of Ms Huang and Ms Lo on this point that the primary focus of Ms Huang was observation although it appears from WeChat exchanges, as submitted by the Xie interests, that some instruction (or even training) was given to Ms Huang by Ms Bai. Ms Lo was working in the shop at the time and would have been aware of what she herself did. Ms Xie was not often in the Muse City shop during this period.
35. Reliance was placed by the Xie interests in their submissions on a number of WeChat messages as establishing training being given by Ms Xie and particularly Ms Bai to Ms Huang to prepare her as manager for the Muse Waterloo shop: see the Xie interests submissions in chief at paragraphs 32-40. There is some force in the Xie interests' submissions that the WeChat messages establish at the least that some instruction (or perhaps even training) was given to Ms Huang, particularly by Ms Bai (see primary submissions paragraphs 33-40). Ms Huang herself admitted in her oral evidence that she was shown certain equipment. However, there is a difference between being shown equipment and techniques and being given limited instruction on the one hand and being given training pursuant to a concluded agreement to be the manager of the new shop on the other. Whilst I find that the Xie interests wanted Ms Huang to be the manager of the Muse Waterloo shop, this was a matter to be determined as part of a final agreement in the context of Ms Huang having a young child to care for. Having some instruction is not the same as having detailed training to perform an agreed role under a concluded agreement. In the end, the evidence of Ms Lo and Ms Huang establishes to my satisfaction that no detailed training as opposed to limited instruction or training was given to Ms Huang for an agreed contractual role during her time attending the Muse City shop.
36. Ms Xie also claims that at night in this period, Ms Huang went to Ms Xie's home to learn beauty treatment skills and techniques. Ms Huang denies this and points to the fact that she had a small child to care for, she did not drive at the time and her home was an extensive distance from Ms Xie's home. Ms Xie did not mention this training in her oral evidence when asked about any training she provided to Ms Huang: T49.30-.43. The matters referred to by Ms Huang in her evidence as indicating her evening attendance to be very unlikely in my view are persuasive and I reject Ms Xie's evidence that she provided any substantial training in beauty treatment skills and techniques to Ms Huang in this period, including at her home.
37. The Xie interests rely on there being a lack of any evidence of an inspection by Ms Huang or a request to see relevant documents, including financial records: written submissions in chief at paragraphs 31 and 42; oral submissions. In my view, whilst this is a matter properly to take into account, the lack of a formal request to have an inspection or contemporaneous evidence relating to an inspection is not decisive. The interaction between the parties at all times was fairly informal. There were no detailed emails between the parties setting out what was discussed or agreed at the important meetings which did occur. Most interaction appeared to be by WeChat, telephone or in person. Further, there is no evidence Ms Huang had retained a solicitor by this time for the purposes of the proposed purchase: see second Huang affidavit Exhibit A page 108, paragraph 14. In addition, the need to attend the Muse City store was allegedly referred to by Ms Huang on 24 December 2017 at the meeting on that day.
38. It is clear that Ms Huang attended the Muse City store on a number of occasions in January 2018. Her presence at the shop gave her an opportunity to observe the business and its customer attendance in the course of a day. This would have provided significant guidance to her on the customer turnover in light of what was alleged to have been said about the business. Thirdly, the fact that attendance occurred at the Muse City shop as opposed to the Muse Waterloo shop is not conclusive (Xie submissions in chief paragraph 31(a)). The Muse Waterloo shop was not yet open to customers. It could not be seen in operation. The aim of the two stores was to share customers according to Ms Huang. She claims she was told there was a large daily turnover of customers at the City store. Whilst the two businesses were separate businesses, the Muse City shop's turnover and daily customer attendance was some guidance in relation to the likely future prospects of the Muse Waterloo store - Ms Xie and Ms Bai held majority interests in both stores and there was proposed to be a sharing of the WeChat client base of the Muse City store. The lack of reference to any inspections undertaken by Ms Huang in the 29 January 2018 email from Mr Nam to Ms Xie also does not assist the Xie interests. The email is a short email and does not purport to discuss the basis of the decision not to proceed in any real detail.
39. I accept and find that during the period 17 January to 25 January 2018 Ms Huang sent WeChat messages to Ms Xie and Ms Bai expressing ideas on the Muse Waterloo proposed price menu and other aspects of the shop. I find that these are not strong pointers to their being a binding agreement between the parties. The matters are equally consistent with Ms Huang still undertaking the investigations in relation to the proposed investment at that time whilst involving herself to some degree with the shop if she decided to proceed with an investment.
40. On 28 January 2018, a meeting occurred at which Ms Huang told Ms Xie that she did not want to proceed with the acquisition of the shares in Muse Waterloo. Ms Xie states that Ms Huang said that she wanted to quit the investment in Muse Waterloo because she was pregnant and her husband did not wish her to work during her pregnancy. Ms Xie says that a refund was requested by Ms Huang. Ms Xie says that a threat was issued by Ms Huang to her if the refund did not occur. Ms Huang states in her affidavit evidence that she wished not to proceed and wished to obtain a refund because the promises made to her in relation to customer turnover and the operation and intellectual property which would be made available to Muse Waterloo were not substantiated during her observations and due diligence. I will consider this issue further below.
41. Ms Xie claims that she had a further meeting at the home of Ms Huang on that day to try and convince Mr Nam to reconsider Ms Huang continuing on reduced duties at the Muse Waterloo shop. This is rejected by both Ms Huang and Mr Nam.
42. The company searches in evidence show that on 29 January 2018 25 shares in Muse Waterloo were notified as having been registered in Ms Huang's name: Exhibit A pages 94-95. This is despite the fact that the share subscription and accession agreement contemplated a formal signed application by Mr Nam (or Ms Huang in the other draft) for the shares: Clauses 2.1 and 2.2 and Schedule 2. There is no suggestion that any such signed application for the shares was made by Mr Nam or Ms Huang. Secondly, no "duly executed share certificate showing [Mr] Nam as the holder" of the shares was provided by Ms Xie or Ms Bai: Clause 2.2(b). Thirdly, the full amount of the proposed payment had not been received before the alleged issue: Clause 2.1(b). Fourthly, in her oral evidence Ms Xie conceded that there was no directors' meeting to approve the share issue and she did not have the company share register. Fifthly, the Change to company details application indicates that it was signed by Ms Xie on 29 January 2018, the day after Ms Huang said she asked Ms Xie for a refund: Exhibit A page 94. The document suggests the date of entry of the member's name in the share register was 28 December 2017: Exhibit A page 95. However, Ms Xie agreed in evidence that she did not have the company share register. Ms Xie also accepted that the document was incorrect in recording that nothing was paid on the shares and $138,000 remained to be paid: Exhibit A page 95. On Ms Xie's case, $68,000 had been paid pursuant to a binding agreement.
43. Ms Huang submits that the date of entry in the share register indicated (Exhibit A page 95) must have been backdated and was effectively registered on 29 January 2018 by Ms Xie in order to give some force to the Xie/Bai submission that there was an existing binding agreement as at 28-29 January 2018. Ms Huang and Mr Nam say that no request was ever made by either of them for the issue of the shares as no concluded agreement had ever been entered into. It was submitted that this matter severely impacted Ms Xie's credit.
44. I set out below the reasons why I prefer the submission of the Huang interests that the share recording was ordered by Ms Xie to attempt further to support her version that there was a binding agreement when this was not the case.
45. On 29 January 2018, Mr Nam sent a formal email to Ms Xie. This email included the following: "This is to bring to your kind attention that we have make decision not to proceed with the purchase of 20% shares for Muse Beauty Salon Waterloo (ABN 32 623 116 709). We have already made the payment as per your request in advance and now would appreciate if you could arrange for the refund of the same … I'm not interested on any kind of offer at the moment. We will looking forward your arrangement before further action taken."
46. Ms Xie states that she informed Ms Huang that the money paid by her had been used on the fit out of the Muse Waterloo premises and could not be refunded. In her oral evidence, Ms Xie said the money was deposited in her WeChat bank account and used for the fit out and to buy equipment from China. There is a dispute about who stopped taking WeChat messages from the other parties which is unnecessary to be determined.
47. Ms Xie and Ms Bai claim that from February 2018 onwards they became aware that suggestions were being made by Ms Huang and others that Ms Xie had obtained $68,000 "illegally" from her. Substantial evidence was before the court of various WeChat posts making highly critical and threatening allegations in relation to Ms Xie.
48. It seems to be accepted that in around March 2018, following a number of discussions, Ms Cindy Liu decided to invest in the Muse Waterloo company. In due course, an investment was made by her in both Muse Waterloo and Muse City. Ms Liu attended the opening of the Muse Waterloo store in April 2018: Exhibit 4. In due course, a 20% share interest in Muse Waterloo was purchased by Ms Liu for $100,000 and a 20% interest in Muse City was purchased for $80,000. The contract to purchase the shares in the two companies was entered into by Ms Liu in about April 2018 with the $180,000 being paid for the shares by her also at about this time.
49. In May 2018, Ms Liu requested a cancellation of the share purchase contracts. The Xie interests claim that this request was due to the comments made which emanated from Ms Huang that Ms Xie had lied in relation to the business and taken $68,000 unlawfully. Ms Xie states that Ms Liu made threats if the investment was not refunded. Ms Huang gives evidence that she and Ms Liu did not know each other at this time. In any case, after some discussion, Ms Xie and Ms Bai decided to refund the money to Ms Lui less some amount for solicitor costs. This amount of money is sought to be recovered by the Xie interests in the action for injurious falsehood. The money was refunded to Ms Liu in May and June 2018.
50. There is some evidence from Ms Xie and Ms Bai that they found out that cash and company books were missing from the Muse City store and that Ms Kitty Lo admitted to stealing the money to assist her ill sister. Ms Lo denies that and says that she was looking after some of the money and wished to look at the books and provide them to Ms Huang to review. It is clear that Ms Lo was aware of online posts relating to Ms Xie and had contacted Ms Huang in this period. Eventually, Ms Xie happened to attend the police station to complain and found Ms Lo and Ms Huang present at the same police station in order to complain about Ms Xie and Ms Bai. No action was taken by police in relation to Ms Lo who was a shareholder of Muse City at the time.
51. As stated, there were WeChat posts at about this time which were highly critical of Ms Xie. There is a question to be determined as to who was the author of those posts.
52. The evidence shows that on 3 June 2019, Muse Waterloo sold its business to Lady M Pty Ltd for $100,000. A $25,000 commission was paid in relation to the sale of the business. There is no expert evidence as to the proper value of the business at this time or as to the reasonableness of the quantum of the commission paid.
53. Ms Huang continues to seek the refund of the $68,000 plus interest which she and Mr Nam say were refundable deposits. The Xie interests seek damages for breach of contract for loss suffered, alternatively for the repayment of the outstanding amount of $70,000, together with interest as well as damages for the tort of injurious falsehood.

Orders made in relation to evidence in the proceedings

1. On 7 June 2021, the court made the following orders: 1. The two proceedings be heard together; and 2. That evidence in one proceeding was to be evidence in the other proceeding.

Ms Huang

1. Ms Huang relied on four affidavits affirmed by her as follows: 1. Affidavit affirmed 20 March 2020; 2. Affidavit affirmed 15 May 2020; 3. Affidavit affirmed 17 May 2021; and 4. Affidavit affirmed 30 September 2021.
2. In these affidavits, Ms Huang gives a detailed account of her versions of the various meetings and replies to the affidavits of Ms Bai and Ms Xie. In substance, her evidence was that representations were made to her by at least Ms Xie in relation to the Muse City business and its profitability and turnover, the existence of intellectual property software which would be used to harvest clients for a proposed new store at Waterloo in Sydney, a sharing of profits and a discussion about Ms Huang assisting in the store. Ms Huang states that $68,000 was paid as refundable deposits in two tranches of $8,000 and $60,000 on 24 December 2017 and 15 January 2018, respectively. She also alleges that she went to the Muse City store to observe and undertake due diligence, not for training, and was not given access to the intellectual property or accounts of Muse City. In addition, she formed the view that the business was nothing as had been indicated to her. She claims that as a result of the failure to live up to the representations made to her by Ms Xie and Ms Bai, she sought a refund of her $68,000 from Ms Xie and Ms Bai which was declined.
3. In her reply affidavits she gives detailed responses to the affidavits prepared by Ms Bai and Ms Xie.

Mr Nam

1. Mr Nam provided two affidavits which were read in the proceedings: 1. Affidavit affirmed 15 May 2020; and 2. Affidavit affirmed 17 May 2021.
2. In substance, Mr Nam provides evidence confirming the versions of the meetings where he was present given by his wife, Ms Huang. He generally confirms the point that the $68,000 was sought to be recovered not because his wife was pregnant but due to their dissatisfaction with the information which had been provided in relation to the Muse City store and the alleged lack of intellectual property and software to allow customer records to be used in the Muse Waterloo store.

Ms Lo

1. Ms Huang and Mr Nam relied on and read three affidavits of Ms Yuk Yee Lo also known as Kitty Lo being: 1. Affidavit affirmed 15 May 2020; 2. Affidavit affirmed 16 May 2021; and 3. Affidavit affirmed 6 October 2021.
2. Ms Lo was a trained and qualified beautician. She had previously provided beautician services to Ms Xie at a beauty store owned by her. Ms Lo states that she was requested by Ms Xie to work in the Muse City store as a beautician and provide beautician services there. She later states that she also worked in the Muse Waterloo store.
3. Ms Lo's evidence is relevant as it confirms that in January 2018 Ms Huang attended the Muse City store on a number of occasions only to observe and was not provided with beautician training while she was there either by her or, to her observation, by Ms Bai or Ms Xie.
4. A number of agreements between Ms Lo and the Xie parties are in evidence: see Exhibit 3. Ms Lo claims that it was agreed that she was to be given shares in Muse Waterloo. She also claims that she paid $60,000 in cash to Ms Xie and Ms Bai as an investment which the latter strongly deny. There is a major credit issue as to whether she was provided a signed receipt by Ms Xie and Ms Bai for this payment: see Exhibits 2 and 8 for a receipt. She claims that when the Muse City store was shut down, she no longer had a job there.

Mr Hui

1. The Huang interests read an affidavit of Mr James Hui dated 18 October 2021. Mr Hui was the solicitor who acted for Ms Lo in her dealings with Ms Xie and Ms Bai in November 2017 in relation to the agreements executed by Ms Lo.
2. Mr Hui gave evidence that he had telephone conversations with Ms Lo and received a text message from her. He stated that his current phone had recorded on it a text message from Ms Lo sent on 29 November 2017 at 10.23am attaching a photograph of a receipt. The receipt is dated 28 November 2017 and purports to be the receipt given to Ms Lo by Ms Xie and Ms Bai for the $60,000 payment. Both the payment of $60,000 by Ms Lo and the provision of the receipt are denied by Ms Xie and Ms Bai. Mr Hui said he recalled Ms Lo asking him on 29 November 2017 whether the receipt was "sufficient proof of the payment of $60,000": paragraph 6. Mr Hui annexed the copy of the photograph of the receipt and a file note made by him on 29 November 2017 to his affidavit: paragraphs 5 and 8. This evidence is relevant to the credit of Ms Lo, Ms Xie and Ms Bai. If accepted, it makes the Xie/Bai version relating to the denial of the $60,000 payment and the provision of the receipt by Ms Xie and Ms Bai very unlikely.

Evidence of the Muse companies and Ms Xie and Ms Bai

Ms Xie

1. The Xie interests read four affidavits of Ms Xie in the proceedings: 1. Affidavit affirmed 31 March 2020; 2. Affidavit affirmed 10 June 2020; 3. Affidavit affirmed 26 May 2021; and 4. Affidavit affirmed 8 June 2021.
2. These affidavits strongly dispute the account of meetings and conversations given by Ms Huang and Mr Nam. In addition, they dispute significant aspects of the evidence of Ms Kitty Lo.
3. In relation to Ms Lo, Ms Xie states that Ms Lo never paid $60,000 to her in cash and the receipt annexed to Ms Lo's evidence has never been seen by her before. Similar evidence is given by Ms Bai.
4. In relation to Ms Liu, Ms Xie states that she sought a refund of her moneys due to the rumours which had been fostered by Ms Huang in relation to Ms Xie. It is said that Ms Liu's investment was refunded as it was clear that it was not practical for them to do business any more together.
5. Ms Xie provides in her affidavits a very different account of the factual background to Ms Huang and Mr Nam. In substance, she gives evidence that there was a concluded agreement with Ms Huang to acquire 20% of the shareholding in Muse Waterloo for the sum of $138,000 with Ms Huang to work as the store manager in the Muse Waterloo business. It is asserted that there were no representations made about the profitability of the Muse City store or any intellectual property. It is said that Ms Huang changed her mind about the investment due to her becoming aware that she was pregnant and her husband not wishing her to work. It is asserted that the interaction between the parties objectively amounted to a binding agreement with Ms Huang in relation to the purchase of 20% of the shares. It is said that the recognition of the interest of 20% in Muse Waterloo as disclosed on a company search reflected the agreement reached. It is claimed that the remaining $70,000 was to be paid by Ms Huang once she had sold beauty products from South Korea at a profit.

Ms Bai

1. The Xie interests relied on and read two affidavits of Ms Bai: 1. Affidavit affirmed 11 June 2020; and 2. Affidavit affirmed 26 May 2021.
2. Ms Bai states that she did not attend the 9 December 2017 meeting with Ms Xie and Ms Huang and Mr Nam. Otherwise, Ms Bai in substance supports the accounts of Ms Xie in her affidavits in relation to dealings with Ms Huang, Mr Nam, Ms Liu and Ms Lo.

Mr Li

1. The Xi interests read an affidavit of Mr Gen (James) Li dated 29 September 2021. Mr Li was the solicitor who acted for Ms Xie and Ms Bai and Muse City in relation to agreements which were entered into with Ms Lo in November 2017. In particular, Mr Li gives his recollection of the conference with Ms Lo and the subsequent execution of the relevant agreements on 29 November 2017. Importantly, in paragraph 14 of his affidavit, Mr Li states in relation to the receipt which is Exhibit 8 in the proceedings, that his recollection is that on 29 November 2017 he did not see the receipt nor did any of Ms Xie, Ms Bai or Ms Lo mention to him the payment of $60,000.

Oral evidence of Ms Xie

1. Ms Xie gave oral evidence over several days. All her evidence was given through a Mandarin interpreter. It was therefore in the main difficult to make an accurate assessment of Ms Xie's demeanour except through the nature and content of her answers. I take into account the length and nature of the cross-examination in considering her evidence as well as the fact that it was given through an interpreter.
2. In further evidence in chief, and in relation to paragraph 79 of her affidavit affirmed 10 June 2020, Ms Xie said that the only reason she knew that Ms Bai provided training to Ms Huang was that Ms Bai told her and this was referred to in sheets signed for work on the day and in WeChat messages: T44.
3. Ms Xie was then the subject of very detailed cross-examination in relation to her affidavit evidence. Ms Xie was asked about her English language skills. Whilst agreeing that she had learned English in China, Ms Xie said her English was poor when she arrived in Australia and even by 2014, while her reading ability was better, her listening and speaking abilities in English were not good: T48.7. She later stated that whilst her English language skills had improved since, she was not comfortable without an interpreter.
4. Ms Xie stated that after meeting Ms Bai they decided to operate a nail salon in Sydney and undertake more beautician studies in China. Ms Xie confirmed that her specialty was nail polishing and eyebrow and eye line tattooing.
5. It was put to Ms Xie that she never trained Ms Huang herself. Initially, Ms Xie gave evidence that she trained Ms Huang in sales, product marketing and managing staff but not in the technical aspects of the beauty business: T49.30-.35. Many more questions were asked of Ms Xie in cross-examination in relation to the training of Ms Huang. In the end, Ms Xie claimed that whilst Ms Huang went to the Muse City shop on 17, 18 and 24 January 2018 for training, this was with Ms Kitty Lo and Ms Bai and she was not present herself in the shop on those days when Ms Huang was given beauty training: see Exhibit A page 403 paragraph 79. No mention was made in her oral evidence of training said to have been given by Ms Xie to Ms Huang in the evenings in January 2018.
6. Ms Xie confirmed that as far as she was aware neither she nor Ms Bai had any licences to provide beauty services in Australia at the Muse City shop. However, she said they had licences to operate the business. Ms Xie confirmed that both she and to her knowledge Ms Bai were not members of any Australian body providing beauty therapy treatment and did not complete studies in Australia to achieve a Diploma of Beauty Therapy or Remedial Massage. Ms Xie confirmed that she did not make enquiries as to whether her Chinese qualifications were recognised in Australia.

Oral evidence of Ms Bai

1. Oral evidence was given by Ms Yuling Bai.
2. Ms Bai had travelled from mainland China to Macau for the purposes of giving her evidence. Her evidence was given by audio-visual link and in Mandarin. I take that into account in assessing her evidence.
3. Ms Bai gave the background to the various businesses opened by her and Ms Xie including a shop at Zetland and then the Muse City shop. She agreed that the Muse City shop was opened in early 2017 in an office suite in the city which had three rooms. Ms Bai gave evidence that she had obtained beautician qualifications in China which allowed her to undertake facials, skin testing and massage services. She accepted that she took no steps to determine whether her Chinese qualifications were accepted by professional bodies in Australia.
4. In relation to the Muse City shop, Ms Bai agreed that she and Ms Xie worked in the shop. She said that from April 2017, the shop became busy and always employed three to four people. She agreed that Ms Kitty Lo was an employee in the shop from November 2017. She asserted that Ms Lo could only provide basic services and that she and Ms Xie provided more comprehensive services at the shop including eyebrow tattooing.
5. Ms Bai denied that Ms Kitty Lo brought many clients to the Muse City business when she arrived and said that she did not have many clients.
6. Ms Bai was taken to the company search of Muse City at Exhibit A page 84. She claimed that she was a shareholder at all times of Muse City and could not explain why the company search at Exhibit A page 86 showed that she had previously been a shareholder and that Ms Xie had held all the shares from November 2016. As far as Ms Bai was concerned, nothing had happened to alter the shareholding, although she said Ms Xie was the biggest shareholder. She said she did not transfer her shares to Ms Xie as far as she was aware. Ms Bai also stated that she did not know why Ms Liu's purchase of shares in Muse City for $80,000 was not reflected in the ASIC records and said this was not her responsibility. She confirmed, however, that Ms Liu did have shares in Muse City. She said it was Ms Xie's responsibility for providing instructions to the accountant and the lawyer and she left it to her.
7. Ms Bai was asked numerous questions about the meeting on 24 December 2017. She agreed that she attended that meeting and this was the first time that she met Ms Huang. She agreed that Mr Nam may have delivered goods to the Muse City shop prior to that. She said she also realised that Ms Xie had been talking to Ms Huang in relation to the Muse Waterloo shop from around 9 December 2017 if not before, although she was not sure of the details. This evidence of Ms Bai was different to that of Ms Xie who claimed that Ms Huang had delivered the beauty products to the Muse City shop. However, Ms Bai did say that the acceptance of supplies of goods was the responsibility of Ms Xie. Ms Bai said that the records relating to the shop including financial records and supplier records were stolen by Kitty Lo. Ms Bai said that she did not give instructions to the accountant for Muse City and Muse Waterloo and could not access the bank records and this was Ms Xie's responsibility.

Oral evidence of Ms Kitty Lo

1. Oral evidence was given in the proceedings on a number of days by Ms Yuk Yee Lo, also known as Ms Kitty Lo. Ms Lo had previously worked as the manager at the Muse City shop.
2. In further evidence in chief, Ms Lo confirmed that Exhibit 2, the alleged duplicate copy of the receipt for the $60,000 stated to have been paid by her to Ms Xie and Ms Bai, was part of her business records as was Exhibit 3, the agreements relating to her obtaining a share interest in Muse City. She confirmed that her signature was on the agreements in Exhibit 3: T564.
3. In cross-examination, Ms Lo gave evidence that she arrived in Australia in 2005 and was from Hong Kong. Ms Lo stated that she studied in Australia and obtained a Diploma of Beauty Therapy from TAFE, a copy of which became Exhibit B in the proceedings: T565.44. She also stated that more recently in 2020 she had obtained a Diploma of Remedial Massage. She agreed that she studied her Diplomas in English and that she also had some English language skills. She stated that she had prepared her two affidavits in Chinese and translated them herself with the assistance of "Google Translate": T567.43.
4. Ms Lo gave evidence that as at September 2017 she was working at a shop on Level 5 in York Street in Sydney called "Face of Love". At this shop, various beauty services were provided to customers including therapeutic body massage. Ms Lo accepted that the Face of Love shop was not a large shop. Initially, she estimated the size of the shop to be about 40 square metres but later changed her estimate to 30 square metres. She said it had three massage tables. She denied that it was only a small shop of about 15 square metres with one massage table. She accepted that occasionally only one person was working in the shop. In addition, she said that she had a cabinet in the shop displaying "Dermatologica" skin care products. Ms Lo said that the shop had an ultrasound machine, a micro dermabrasion machine and a bio oxygen infusion machine. She rejected the suggestion that the bio oxygen infusion machine was not working in September 2017 and that she had no ultrasound machine at the shop in September 2017: T573.
5. Ms Lo gave evidence that she was the owner of the Face of Love shop in September 2017 having bought it from its previous owner at the end of 2015. She said she had worked at the shop for the previous owner: T574.

Oral evidence of Ms Huang

1. Extensive oral evidence was given by Ms Huang.
2. In her evidence in chief, Ms Huang was shown the documents which became Exhibits 11 and 12 in the proceedings. In relation to Exhibit 11, Ms Huang confirmed that the WeChat exchange occurred as part of a WeChat group of which Ms Xie, Ms Bai, Mr Nam and herself were members. In relation to Exhibit 12 (see also the Court Book at pages 563-564), Ms Huang said that the message was not posted by her on WeChat.
3. In further evidence in chief, Ms Huang confirmed that she was never shown a WeChat customer system for the Muse City store or a written or electronically maintained database of clients by Ms Xie or Ms Bai. She also stated that she did not see, despite asking, an electronic means by which the Muse Waterloo store could access the client records of the Muse City store. Ms Huang confirmed that the Muse Waterloo store did not have access to the client records of Muse City. Ms Huang added that she did not see any software in existence which allowed the Muse City database to be accessed by the Muse Waterloo store. Ms Huang said it was never explained to her how the asserted WeChat system client base or the alleged software worked. Ms Huang claimed that at a meeting on 20 January 2018 with Ms Xie and Ms Bai, they asserted that there were two WeChat client bases held by the City store with more than 1,000 clients on each, amounting to 3,000 clients altogether. In substance, Ms Huang stated that Ms Xie asserted that the software was not ready and the system was being completed to allow access to the City store database. Ms Huang gave evidence that the matters she raised about the WeChat client database and the software to allow access were never addressed by Ms Xie.
4. In cross-examination, Ms Huang gave evidence that she came to Australia in 2009 and had studied English, Aged Care and Beauty Therapy whilst in Australia. The Beauty Therapy course was undertaken by her in 2018 after she returned from South Korea to Australia in January 2018. She confirmed that before going to Korea in January 2018 she had not studied any beauty therapy courses, including overseas.
5. Ms Huang was asked a number of questions in relation to a business which she operated importing and selling Korean beauty products. Ms Huang confirmed that between 2015 and 2018 she operated such a business and as part of it sold a number of products to beauty salons.

Oral evidence of Mr Nam

1. Oral evidence was given in the proceedings by Mr Yew Mun Nam who is the husband of Ms Huang. Much of Mr Nam's evidence was given in English, although on some occasions he sought assistance from the interpreter. He said he had lived in Australia for about 18 years and had studied at university level in Australia.
2. Mr Nam confirmed that between 2015 and January 2018 he ran a business importing and selling Korean beauty products. He stated that he sold the products to a number of customers and users including beauty salons. He claimed that products were sold by the business not to the Muse City store but to Ms Xie: T1017.27. However, contrary to the evidence of Ms Huang, Mr Nam agreed that he had delivered products twice to an address in Pitt Street and twice in relation to products ordered by Ms Xie to an address outside a restaurant in Chinatown: T1017.31; T1022.35. In relation to deliveries to the My Like store in Zetland, Mr Nam said he had delivered orders to an address provided in Zetland but said the address for Ms Xie in Zetland was not given to him but was given to Ms Huang: T1017.43. He said deliveries when made were paid for by way of cash or bank transfer.
3. Mr Nam said that as at January 2018 he kept money at home in a safe. He said that as at 15 January 2018 he had $60,000 in cash at home in his safe but denied that he had more than that sum and, in particular, denied that as at 15 January 2018 he had $130,000 in cash at a safe in his home: T1018.28. He said the $60,000 in cash came from his parents and from savings from his work. In relation to the Korean beauty products business, Mr Nam said that he delivered the products based on the order and he and his wife discussed the products and ordered them together from Korea.
4. Mr Nam agreed that in the latter half of 2017 his wife wanted to open her own beauty salon: T1020.25. He also agreed that on 3 January 2018 his wife went to Korea to learn beauty therapy techniques. He said he did not accompany her. He denied that at this time his wife delivered beauty products as part of the Korean products business or visited customers including attending beauty salons. He agreed that his wife was the customer relationship person in the business and handled customer contacts. However, he denied that she visited customers from time to time including the Muse City shop before January 2018: T1020.39; T1021.17.

Oral evidence of Mr Hui

1. In his oral evidence in chief, Mr Hui, Ms Lo's former solicitor, confirmed that the document, being the photograph of the purple copy of the receipt dated 28 November 2017, was provided by him following being retrieved by him from his current phone: T1112.22-.27. He said the name "Kitty Face of Love", being the name on the photograph, was associated with his client Ms Kitty Lo: T1112.40.
2. In cross-examination, Mr Hui said he had known Ms Lo since 2016 or 2017. He met her in relation to her lease of her beauty salon Face of Love at 60 York Street Sydney from a company associated with him. He said that when Ms Lo terminated the lease he moved his legal practice into the office suite.
3. In relation to paragraph 6 of his affidavit affirmed 18 October 2021, Mr Hui confirmed that on 29 November 2017 Ms Lo made enquiries of him whether a receipt, a photograph of which was forwarded to him by her, was sufficient proof of the payment of $60,000. He did not recall speaking to Mr James Li, solicitor, in relation to the receipt. Mr Hui said he vaguely recalled speaking to Mr Li about the agreement on or around 29 November 2017 but could not recall the exact date. Mr Hui said he told Ms Lo that the receipt was part of the evidence but advised her to have inserted in the agreement a clause specifically referring to the payment of the $60,000 by her.

Oral evidence of Mr Li

1. Oral evidence was given by Mr Gen (James Li) who is a solicitor working for Sun Lawyers. He was the solicitor acting for Ms Xie and Ms Bai in relation to the transactions with Ms Lo in late 2017.
2. In his affidavit, Mr Li gives a different account to Ms Lo of the events of 29 November 2017. In particular, his evidence differed from Ms Lo in relation to the receipt which Ms Lo claims that Ms Bai and Ms Xi gave her for $60,000 which she said she advanced to them in cash. Mr Li said that he did not recall seeing or discussing the receipt: at [14]. He also sets out in his affidavit the circumstances of his various meetings with Ms Lo and Ms Xie and Ms Bai on 29 November 2017.
3. There is a difference in the evidence in relation to the presence of Ms Bai at the offices of Sun Lawyers on 29 November 2017 when Ms Lo was there. Mr Li gives evidence that Ms Bai attended with Ms Xie for the execution of the agreements. In her oral evidence, Ms Lo said that only Ms Xie was present.
4. Further, there is a difference in the evidence between Ms Lo and Mr Hui, the solicitor acting for Ms Lo at the time. Mr Hui states that he was sent a photograph of the receipt on 29 November 2017 by Ms Lo but he recommended to her by telephone that a clause be put in the agreement between Ms Lo and Ms Xie and Ms Bai referring to the payment. Ms Lo gave evidence that, in substance, Mr Hui advised her that the receipt said to be signed by Ms Xie and Ms Bai was adequate.
5. Ms Lo also claimed that Mr Li was present when she had "a serious argument" with Ms Xie about there being no clause in the agreements referring to the $60,000 she had paid. Mr Li denied that he was present when any argument occurred.
6. In cross-examination in relation to his affidavit, Mr Li referred to the annexures to his affidavit, including a file note which he had forwarded to Mr Hui on 29 November 2017 at 12:48pm outlining what had occurred in relation to the execution of the various agreements by Ms Lo (see pages 55-56 to Mr Li's affidavit). Mr Li said that the annexures to his affidavit were the only documents which he had to refresh his memory as he did not keep other file notes. However, in cross-examination, he stated that he did have an independent recollection of the events of the day on 29 November 2017, despite it being four years ago.

Submissions

1. Extensive written and oral submissions were made by the various parties in relation to the claims made in the proceedings.
2. The initial written submissions of the Xie interests were, in general summary, as follows: 1. In the present case, in general terms, documentary evidence is to be preferred over the recollections of witnesses, particularly where there has been an effluxion of time and where litigation has intervened. The relevant events in this case occurred three or more years before the hearing. The documentary evidence is overwhelmingly in support of the Xie interests' case: paragraph 5; 2. The evidence of the Xie interests should be accepted that prior to 24 December 2017, Ms Huang and Ms Xie had been in contact with each other on a number of occasions during which a discussion occurred about Ms Huang investing in the Waterloo shop. Ms Huang was very serious about investing in the Waterloo shop: paragraph 7; 3. Whilst $8,000 was initially paid as a deposit, later verbal discussions between Ms Huang and Ms Xie on the telephone confirmed that Ms Huang would invest $138,000 and the $8,000 which had been paid as a deposit was committed to pay for a contract to document the verbal agreement more precisely: paragraph 9. This is supported by the reduction in the price from $180,000 to $138,000 for the share interest in Muse Waterloo: paragraphs 8-11; 4. The WeChat exchanges on 24 December 2017 and soon thereafter confirm the existence of a verbal binding agreement: paragraphs 13-16; 5. There is clear objective evidence that Ms Huang performed the binding verbal agreement by attending the Muse City shop to learn beauty techniques and by becoming involved in the management of the Muse Waterloo shop: see paragraph 18; 6. There was a variation to the verbal agreement at a meeting on 28 December 2017 between the parties by which the party to the contract was changed from Mr Nam to Ms Huang. This is supported by the WeChat correspondence between the parties: paragraphs 20-21; 7. Between 28 December 2017 and 15 January 2018 there was performance by the parties of the verbal agreement, including the formation of a WeChat account, through discussions on the price list, through Ms Huang suggesting products and through other WeChat exchanges: paragraph 22; 8. The 15 January 2018 meeting strongly supports the Xie interests' case. The payment of $60,000 in cash by Mr Nam and Ms Huang was clearly a further payment of an amount owing under the verbal agreement leaving $70,000 unpaid. There was no need for a second deposit as $8,000 had already been paid. Paying half the total investment for no reason is good evidence of part performance of the verbal agreement as contended by the Xie interests. The context supports a binding agreement: paragraphs 24-25. The receipt given also did not refer to there being a deposit but made reference to "the balance payment". This should be read as referring to the payment of an outstanding amount. There is no evidence to support the Huang interests' contention that the payment of the $60,000 on 15 January 2018 was a refundable deposit except through their self-serving statements of recollection: paragraphs 26-28; 9. There is various evidence showing performance of the verbal agreement from 15 January 2018 to 29 January 2018. Contrary to Ms Huang's submissions, she did not undertake inspection or observation of the Muse City business but undertook training. There were no records of written requests to inspect Muse City documents by Ms Huang. The documentary evidence overwhelmingly supports the case that Ms Huang attended the Muse City shop to learn beauty techniques and not to inspect its operation. There is no reference in the 29 January 2018 email demanding repayment to problems with the operation of the business: paragraphs 31-47. The evidence shows that Ms Huang was involved in the operation of the Muse Waterloo shop before it was opened; 10. As a result of the failure by the Huang interests to pay the balance of $70,000 owing under the final agreement, the Xie interests suffered damage as they had to organise and pay for the additional $70,000 to open the Muse Waterloo shop themselves and they were left without a manager, which role Ms Huang was to perform. The amount of $70,000 was to be used to fit out and assist in the opening of the Waterloo salon. When the Muse Waterloo salon failed, the Xie interests had a capital loss of over $132,000 which should be payable as damages by the Huang interests. In the alternative, the Xie interests are entitled to the amount of $70,000 unpaid under the binding verbal agreement; 11. The tort of injurious falsehood is established. The Muse salons depended on clientele and bookings for profitability. The Xie interests were the victim of an online campaign to destroy their reputation and thereby destroy the Muse Waterloo salon business. The emails in evidence clearly show malice. The court should find that the Waterloo salon failed as a result of the negative commentary. The court should be comfortably satisfied that Ms Huang was behind the online campaign. Ms Huang is the most likely author of the relevant posts and has engaged in an online campaign to destroy Ms Xie's professional and business reputation. As a result of this campaign, Ms Liu requested her investment to be repaid and this was due to the online reputational damage started by Ms Huang.

Consideration

1. It is necessary to comment on, and make findings in relation to, matters of credit and the reliability of the witnesses. It is also necessary to set out the relevant legal principles and to determine the outstanding factual matters and then the causes of action pleaded in the light of the factual findings which are made. I have already made a number of factual findings above from paragraph 15 and in the course of summarising the evidence.

Credit and reliability

1. The credit and reliability of the main witnesses in this case is of central importance. The cases alleged by each party depend on oral conversations which occurred several years ago. The parties accepted this in their written submissions, although emphasis was placed on a number of alleged objective matters and relevant correspondence.
2. Both parties made detailed submissions attacking directly or indirectly the credit and reliability of the various witnesses called by the other party. The Xie interests did this in their written submissions, on the whole, indirectly, by asserting that the Xie interests' case was consistent with, or established by, correspondence, documents and the logic of events. Further submissions on credit were made orally. Submissions were made by the parties that a number of witnesses should not be believed as witnesses of truth and/or were unreliable and their evidence should not be accepted. In particular, strong credit attacks were made in relation to Ms Xie, Ms Bai, Ms Huang and Mr Nam: Huang interests' primary written submissions paragraphs 53, 55-56 and 71-73; Huang interests' responsive written submissions paragraphs 8 and 26, Xie interests' responsive submissions paragraphs 4, 12, 29 and 39-41; oral submissions. In addition, significant credit attacks were made in relation to Ms Lo by the Xie interests: responsive written submissions paragraphs 42-45; oral submissions. Each of the parties claimed that their submissions were supported by context, the logic of events and particularly the contemporaneous documents including WeChat messages. These are clearly very important matters to be taken into account by the court in assessing the evidence, particularly where the events in question occurred several years ago: see the cases cited in paragraph 5 of the Xie interests' primary submissions, paragraphs 1-3 of the Huang interests' primary submissions and paragraphs 29-31 of the judgment of the majority of the High Court in Fox v Percy (2003) 214 CLR 118; [2003] HCA 22.
3. The hearing continued for a very lengthy period. Each of the main witnesses was cross-examined over a number of days in relation to many topics and documents. The court therefore had the advantage of seeing the various witnesses give oral evidence and being tested on that evidence over an extensive period. Although affidavits were prepared and read, each of the witnesses was extensively cross-examined in relation to a large number of matters, including alleged inconsistencies between their affidavit evidence and between their affidavit evidence and their oral evidence and documents. Some of the cross-examination was somewhat repetitive. I take into account that much of the evidence was given by way of interpreters which lengthened the hearing and makes the assessment of witnesses more challenging.

Principles relating to whether a binding contract has been entered into

1. In Yangdo Pty Ltd v Equiti Group Pty Ltd [2017] NSWDC 277 I stated as follows at paragraphs [24]-[29]: "24. In Masters v Cameron [1954] HCA 72; (1954) 91 CLR 353, Dixon CJ, McTiernan and Kitto JJ stated as follows: "Where parties who have been in negotiation reach agreement upon terms of a contractual nature and also agree that the matter of their negotiation shall be dealt with by a formal contract, the case may belong to any of three cases. It may be one in which the parties have reached finality in arranging all the terms of their bargain and intend to be immediately bound to the performance of those terms, but at the same time propose to have the terms restated in a form which will be fuller or more precise but not different in effect. Or, secondly, it may be a case in which the parties have completely agreed upon all the terms of their bargain and intend no departure from or addition to that which their agreed terms express or imply, but nevertheless have made performance of one or more of the terms conditional upon the execution of a formal document. Or, thirdly, the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract." 25. In each of the first two cases referred to by the High Court, there is a binding contract. The third class is fundamentally different. There, the terms of agreement are not intended to have and therefore do not have any binding effect of their own. 26. Later cases have identified a fourth category of Masters v Cameron. However, it is clear that the categories identified in Masters v Cameron "are neither strict nor prescriptive". They are also not "exclusive nor necessarily exhaustive. Rather, they describe circumstances in which a finally binding contract may or may not have come into existence": Feldman v G&M Australia Ltd [2017] NSWCA 107 at [68] per Beazley P. 27. A useful summary of the various principles applicable to Masters v Cameron situations was set out by Beazley P in Feldman at [60]-[71]. 28. Beazley P also quoted the important passage of McHugh JA in Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 where his Honour stated at 634-635 the following: "... the decisive issue is always the intention of the parties which must be objectively ascertained from the terms of the document when read in the light of the surrounding circumstances." 29. That statement reflects the objective theory of contract which is the current law in Australia: Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 at [35]."

Principles relating to restitution, misleading or deceptive conduct and unconscionability

1. The Statement of Claim filed on 13 April 2018 in the Local Court by Ms Huang is not a clear pleading. However, it appears that there is pleaded an action in restitution for money had and received (paragraphs 17-19), an action for misleading or deceptive conduct under s 18 of the Australian Consumer Law (paragraphs 22-24), a claim in unconscionability (paragraph 25) and claims for other more specific alleged false or misleading representations.
2. The Xie interests deny the allegations and also plead a change of position defence in relation to the restitution claim.

Principles relating to restitution

1. The pleading by Ms Huang claims that the alleged deposit sums of $68,000 should be repaid by the defendants to her as money received by the defendants for the use of the plaintiff which use has failed (paragraph 19). It is pleaded that without that relief, the defendants would be unjustly enriched (paragraph 25).
2. It was accepted by the parties that the result of this cause of action, subject to the change of position defence, depended on which factual version of the relevant meetings was accepted by the court.
3. An action for money had and received is an action by the plaintiff seeking to recover moneys from the defendant on the ground that the defendant has received the money to the use of the plaintiff to whom at law the money truly belongs. As was held by the High Court in ANZ Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 at page 673, such an action lies in restitution or unjust enrichment.
4. In Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 at pages 256-257 the High Court noted an obligation on the part of a defendant to make fair and just restitution for a benefit derived at the expense of a plaintiff where there is no proper basis for the defendant to retain the payment.
5. Subject to a change of position defence, an action in restitution would be available to Ms Huang if she paid over the $68,000 on the agreed basis that it was paid as deposits which were refundable in the event that she did not proceed with the agreement to purchase the shares issued in Muse Waterloo. The High Court has accepted that the defence of change of position applies to all claims for restitution: David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 at pages 384-385 and Robinson v Robinson [2020] NSWCA 4 per Ward JA at [197]. However, the onus rests on the recipient to show that they relied on the payment of the money to their detriment and that the detriment must be "substantial" in the sense that the recipient would be in a worse position if ordered to pay restitution: David Securities Pty Ltd at page 385; Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14; (2014) 253 CLR 560 at [157].
6. Accordingly, in the present case, the Xie interests bear the onus of showing that they relied on the payment of $68,000 from Ms Huang and Mr Nam to their detriment, the detriment was substantial and they would be in a worse position if ordered to pay the restitution. The payment of the $68,000 clearly was a benefit to the Xie interests.

Misleading or deceptive conduct

1. Section 18 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) is part of the Australian Consumer Law and provides as follows: "18 Misleading or deceptive conduct (1) A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. (2) Nothing in Part 3‑1 (which is about unfair practices) limits by implication subsection (1). Note: For rules relating to representations as to the country of origin of goods, see Part 5‑3."
2. To the extent the Commonwealth Act is not applicable as it is the law of the Commonwealth, it is applied as a law of New South Wales pursuant to ss 27-28 of the Fair Trading Act 1987 (NSW). The Fair Trading Act can also apply to corporations.
3. In the present case, certain representations are relied upon by Ms Huang: see Court Book pages 106-108, paragraphs 13-14 and Court Book pages 133-134, paragraphs 31-33. Representations are a form of "conduct" for the purposes of the application of s 18 of the Australian Consumer Law.
4. The first issue is to determine what representations were made and to whom they were made. A person can contravene s 18 even if that person acts honestly. The conduct of the person making the representations must be viewed as a whole: Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592 at [38]-[39]. The issue is whether what was said amounted to misleading or deceptive conduct or conduct that was likely to mislead or deceive. The question whether the conduct is misleading or deceptive or is likely to mislead or deceive is a question of fact. The alleged conduct must be considered in the light of the relevant surrounding facts and circumstances. It is an objective question for the court to determine. The effect of any relevant statements or actions must be deduced from the whole course of conduct. Conduct is misleading or deceptive if it induces or is capable of inducing error. Conduct that objectively leads one into error is misleading: Butcher, above, at [109]-[111]. The question is how the representations, if found, would have been understood by a reasonable person in the position of the representee.
5. The plaintiff must also establish a causal link between the conduct which is complained of and the loss which is alleged. Under s 236(1) of the Australian Consumer Law, a person is entitled to damages where they have suffered loss or damage "because of" conduct which is a contravention of s 18 of the Australian Consumer Law prohibiting misleading or deceptive conduct. Although reliance is not mentioned in the section, where the conduct is directed to a person, reliance generally has to be established. Whether causation is established is determined subjectively: Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304 at [28]. However, the impugned conduct need only be a relevant cause of the loss sued upon.

Unconscionable conduct

1. The Statement of Claim also pleads or refers to alleged contraventions by the defendants of ss 20 and 21 of the Australian Consumer Law. Sections 20 and 21(1) of the Australian Consumer Law being Schedule 2 to the Competition and Consumer Act 2010 (Cth) provide as follows: "20 Unconscionable conduct within the meaning of the unwritten law (1) A person must not, in trade or commerce, engage in conduct that is unconscionable, within the meaning of the unwritten law from time to time. Note: A pecuniary penalty may be imposed for a contravention of this subsection. (2) This section does not apply to conduct that is prohibited by section 21. 21 Unconscionable conduct in connection with goods or services (1) A person must not, in trade or commerce, in connection with: (a) the supply or possible supply of goods or services to a person; or (b) the acquisition or possible acquisition of goods or services from a person; engage in conduct that is, in all the circumstances, unconscionable. (2) This section does not apply to conduct that is engaged in only because the person engaging in the conduct: (a) institutes legal proceedings in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition; or (b) refers to arbitration a dispute or claim in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition. (3) For the purpose of determining whether a person has contravened subsection (1): (a) the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and (b) the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section. (4) It is the intention of the Parliament that: (a) this section is not limited by the unwritten law relating to unconscionable conduct; and (b) this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and (c) in considering whether conduct to which a contract relates is unconscionable, a court's consideration of the contract may include consideration of: (i) the terms of the contract; and (ii) the manner in which and the extent to which the contract is carried out; and is not limited to consideration of the circumstances relating to formation of the contract."

Final factual determination on Huang claims and Xie breach of contract claims

1. There are various factors which point to whether or not the parties objectively intended their negotiations in 2017-18 to constitute a binding contract between them. There are, in addition, various factors which point to whether the moneys paid by Ms Huang were objectively intended to be refundable deposits or part payments in accordance with a concluded contract. The various factors were raised in cross-examination and many of the factors are referred to in some detail in the written submissions relied on. Relevant to the matter is the impression formed by the court of the various witnesses who gave oral evidence and the accuracy and reliability of their evidence in the light of the logic of events and contemporaneous documents or correspondence. I have already made some comments and findings on the witnesses and certain factual allegations earlier in these reasons.
2. The following points are noted: 1. The conversation said by Ms Huang to have occurred partly on 25 November 2017 is objectively unlikely to have occurred on that day. Ms Huang states that Ms Xie made a reference to Muse Beauty Salon Waterloo Pty Ltd on 25 November 2017: Exhibit A page 52, paragraph 5. However, at that time, Muse Waterloo had not been registered as a company. It was only registered on 28 November 2017. This potentially undermines the accuracy of Ms Huang's account. Ms Xie did not contest that a conversation between her and Ms Huang occurred on 25 November 2017: Exhibit A page 389, paragraph 17. A more detailed conversation, if it occurred at all, likely occurred after 28 November 2017 when the company was registered. In her oral evidence, Ms Huang agreed that paragraphs 5-9 of her first affidavit incorrectly set out conversations on 25 November 2017 and that there was only a limited WeChat exchange with Ms Xie on that day: T793.47 - T794 especially at T794.29; T796.46. Mr Nam's evidence as to what he was told by Ms Huang and when, was somewhat unclear; 2. Ms Huang asserts in her first affidavit that Ms Bai was present at the meeting on 9 December 2017 and was introduced as Ms Xie's mother: Exhibit A page 53, paragraph 10. Ms Huang later accepted that Ms Bai was not at this meeting. Mr Nam equally agreed that his affidavit was in error in suggesting this. There is no suggestion that Ms Bai is in fact Ms Xie's mother as opposed to being a business partner. She appeared relatively youthful whilst giving evidence by way of AVL. Ms Huang in her oral evidence accepted that Ms Bai was not at the 9 December 2017 meeting and thus could not have confirmed what Ms Xie said. This correction of her evidence undermines to some extent the accuracy of Ms Huang's recollection of the meeting. However, Ms Xie accepted in her oral evidence that her mother was actually at the meeting and was introduced as such to Ms Huang and Mr Nam. This was not referred to in Ms Xie's affidavit evidence: see Exhibit A page 249, paragraph 14. Why that is so is unclear; 3. It is claimed that it is unlikely that Ms Huang would have paid $60,000 over to Ms Xie and Ms Bai on 15 January 2018 unless it was a part payment under a concluded oral agreement: Xie interests submissions in chief at paragraphs 24-28. That is a very substantial sum to pay in cash and is consistent with it being a part payment pursuant to a contract. A reason for the payment was advanced by Ms Huang in her evidence (see also T858.16) and will be considered below in making a factual finding on the issue; 4. The receipt for the sum paid on 15 January 2018 refers to it being "the balance payment": Exhibit F. It does not say that it was to be a deposit or a refundable deposit: see T856. This factor was relied on heavily in the Xie interests' written submissions; 5. There were some inconsistencies between the evidence of Ms Huang and Mr Nam as to the precise sequence of events at the meeting on 15 January 2018. This is understandable having regard to the passage of time. The differences are not considered to be significant. Both appeared to the court to be attempting to give their honest recollections of the meeting; 6. Ms Huang and Mr Nam appear to suggest that the receipt given on 15 January 2018 by Ms Xie and Ms Bai was not carefully reviewed by them until late January or even early February 2018 (or possibly even later): see T1047 especially at T1047.19; T1074.6; Xie interests responsive written submissions at paragraphs 32-39. It was agreed between the parties that a copy of the receipt was attached to the email sent by Mr Nam on 29 January 2018: Court Book page 82; T1198.16. Thus Mr Nam at least must have considered the receipt by 29 January 2018. I consider that Ms Huang's evidence on this timing issue should be rejected. I consider it likely she reviewed the receipt not on 15 January 2018 before she left for the Waterloo store (she did not have sufficient time in my view), but in the week or so thereafter. The receipt was clearly important to her and likely was reviewed at least by the time she decided not to proceed with the share acquisition; 7. I have already considered above the submissions of the Xie interests relating to the alleged training given to Ms Huang, the pricelists, equipment suggestions, assistance with the proposed opening, the discussion as to business cards and the lack of a formal request to inspect the records of the Muse City store. While I take these matters into account (individually and together), I do not consider that they negate the central case of the Huang interests for the reasons given; 8. I do not consider the email correspondence or WeChat messages in evidence provide strong support for the Xie interests' case. The messages relied upon are unclear, equivocal or are open to various potential interpretations; 9. On the evidence I find that at least by 15 January 2018 the price was certain for 20% of the shares ($138,000) and the Huang contracting party was agreed (initially Mr Nam and then Ms Huang).

Determination of the plaintiff's claims in proceedings 2018/117938 in the light of the factual findings

1. For the above reasons, I find that there was objectively no binding agreement reached between the parties and that the two payments of $8,000 and $60,000 were paid by Ms Huang/Mr Nam as deposits to be fully refundable if a contract was not finally reached and entered into. I find that there was an express agreement between the parties that the payments were to be "refundable" if Ms Huang did not proceed with the transaction. I reject the submission for the Xie interests that the $60,000 payment and the receipt together objectively established a contract. The documents have to be seen in the context of the parties' discussions. Accordingly, the claim in restitution for money paid is established by the Huang interests. The retention of the $68,000 by the Xie interests is unlawful as the sum is made up of two refundable deposits and gives rise to the restitutionary entitlement in the Huang interests.
2. The two payments were made at the direction of Ms Xie and Ms Bai or were accepted by them and therefore they are both liable to repay the amounts. As they appeared to be acting also on behalf of Muse Waterloo, it is also liable.
3. My factual findings mean that as there was objectively no binding contract, the Xie interests have no action for breach of contract available.
4. In relation to the change of position defence, I find that this has not been established by the Xie interests for the following reasons: 1. the Xie interests deny any unjust enrichment and plead that they have changed their position by paying for the fit-out to the Muse Waterloo store partly with the $68,000 paid to them by Ms Huang: see paragraph 25 of Amended Defence; 2. However, I have found that the Huang interests' claim that the amounts paid were refundable deposits has been established. Accordingly, the Xie interests could not have formed the view properly that the $68,000 was theirs to spend pending the finalisation of the contract between the parties; 3. Further, the lease was entered into by Muse Waterloo on 8 December 2017: Exhibit 1. A contract to fitout was entered into on 7 December 2017: Exhibit A page 614. These commitments were made well before the meeting on 24 December 2017 with Ms Huang and Mr Nam; 4. Accordingly, Ms Xie and Ms Bai had binding agreements relating to the Muse Waterloo store well before the first important meeting with Ms Huang. The agreements carried with them the obligations to fit-out the premises as a beauty store with appropriate equipment to be acquired. These commitments were decided upon before the discussions with Ms Huang. There was thus no relevant change of position relying on anything agreed with Ms Huang and Mr Nam on 24 December 2017 or in January 2018. The Xie interests have not satisfied the onus on them that they relied on the payment to change their position as they were always obliged to fitout the premises and have the lease in any case and incur the expenses associated with that.

Injurious falsehood cause of action

1. The Xie interests bring a cause of action in the tort of injurious falsehood.
2. In Born Brands Pty Ltd v Nine Network Australia Pty Ltd [2014] NSWCA 369 Basten JA (with whom Meagher JA and Tobias AJA agreed) stated as follows at paragraphs [90]-[91]: "[90] The applicants pleaded an alternative case claiming damages for the tort of injurious falsehood. It was necessary for them to establish that the respondents had maliciously published a false statement about them, their property or business and that actual damage resulted from such publication: Palmer Bruyn & Parker Pty Ltd v Parsons [2001] HCA 69; 208 CLR 388 at [1] (Gleeson CJ). The critical element in the present case was to establish malice. The English Court of Appeal has held that the same principles apply with respect to malice in defamation and in injurious falsehood: Spring v Guardian Assurance Plc [1993] 2 All ER 273 at 288. The concept of malice in relation to defamation has been explained by the High Court in Roberts v Bass [2002] HCA 57; 212 CLR 1, where the concept was discussed in reference to a defence of qualified privilege, which is destroyed by malice. In that context, the question is whether the publisher's state of mind was actuated by an improper purpose or motive: at [76] (Gaudron, McHugh and Gummow JJ). [91] In the present case, the applicants did not rely upon actual knowledge of the falsity of any statement made about the applicants' product, but rather relied upon a failure to make proper inquiries and reckless indifference as to the truth or falsity of the allegations, amounting to wilful blindness. The trial judge dealt with the question of malice in relation to injurious falsehood in the following passage: [189] … I am not satisfied that the defendants were careless in failing to contact the plaintiffs before televising the Broadcast since I consider that the terms of the FDA warning were sufficient to apply [to] the Babywedge and the potentially fatal consequences of using such a product warranted the urgency with which the Broadcast followed the issue of the FDA warning. However, even had I considered the defendants' omission to contact the plaintiffs to request comment on the FDA warning before the Broadcast went to air to be careless, this would not have amounted to malice …."
3. In Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; [2001] HCA 69, Gummow J stated at [58] that it was for the plaintiff in injurious falsehood claims to establish falsity, malice and special damages which were burdens not imposed upon the plaintiff in the tort of defamation.

Huang interests' claims

1. The Huang interests in proceedings 2018/117938 seek the recovery of the $68,000 paid together with interest. As I have found that it was agreed by Ms Bai and Ms Xie that these moneys were refundable deposits and there was no binding contract, in my view Ms Huang is entitled to this sum against the defendants in that matter under her restitution claim. Both Ms Xie and Ms Bai were present at the 24 December 2017 and 15 January 2018 meetings when the moneys were paid over by Ms Huang on that basis. They were acting on behalf of themselves and Muse Waterloo. Interest will need to be calculated on the $68,000. In my view, it should be calculated from 7 February 2018, thus allowing a reasonable period to arrange for the repayment of the sum.
2. I have also found that the $68,000 together with any applicable interest may be recovered by Ms Huang as damages under s 236 of the Australian Consumer Law for misleading or deceptive conduct in breach of s 18 of the Australian Consumer Law.

Damages for breach of contract

1. I have found that the Xie interests and particularly Muse Waterloo are not entitled to damages for breach of contract against the Huang interests as objectively there was no concluded and binding contract reached between them or any of them.
2. In the event I am in error in relation to that issue and there was a concluded and binding agreement, then Ms Xie, Ms Bai and Muse Waterloo are entitled to damages against Ms Huang and Mr Nam for breach of contract. On the case of the Xie interests, Ms Huang was permitted to pay the balance of $70,000 after she sold beauty products purchased with that sum: Exhibit A page 400, paragraph 71. There was no evidence before me as to how long that would take. I allow three months as a reasonable period. The non-payment of the $70,000 and the refusal to continue with the agreement would amount to an anticipatory breach of contract. Interest on the $70,000 sum should be calculated from 15 April 2018.
3. A claim is also made for losses due to the failure of the Muse Waterloo business and store: Xie interests submissions in chief at paragraphs 50-51. In my view, this amount is not recoverable even if there was a breach of contract by Ms Huang/Mr Nam. First, the Xie interests were committed to the lease of Muse Waterloo and the fit-out of the store before any detailed discussions occurred with Ms Huang: Exhibit 1. Secondly, Ms Xie and Ms Bai were seeking to defray part of the cost after the decision and commitment to open the store with a fit-out. Thirdly, the evidence does not establish that any loss caused to the Xie interests by the store failure was caused by the failure of Ms Huang/Mr Nam to pay the $70,000 as opposed to any number of other causes such as the retail environment or difficulties with staff or a desire to no longer run the business or difficulties with the lease. Fourthly, it is unclear when the $70,000 was expected to be paid - it was to be paid after more Korean beauty products were sold which may take some time (see above I have allowed three months). Fifthly, there is no evidence that any delay in the opening of the store caused by a failure to pay the $70,000 resulted in the store failure. Sixthly, there was no detailed evidence, including expert evidence, relating to the value of the Muse Waterloo business when sold or how the sale price was arrived at. The commission paid on the sale, at 25%, was not established to be usual or reasonable. There are many reasons why the store could have failed: poor management, less clients in Waterloo, problems with staff, inappropriate staffing and pricing and reputational issues. In my view, there is not sufficient evidence to establish that a cause of the failure of the Waterloo business was any breach of agreement by Ms Huang and Mr Nam. This head of damage is rejected.

Damages for the tort of injurious falsehood

1. I proceed to assess damages for the tort in the event that I am in error that on the evidence the tort of injurious falsehood was not committed by Ms Huang.

The repayment to Ms Liu

1. The second and third plaintiffs, Ms Xie and Ms Bai, claim as damages the loss of $178,240 which was repaid to Ms Cindy Liu in May and June 2018: see paragraph 28 of the Further Amended Statement of Claim.
2. In my view, this is not recoverable.
3. First, Ms Huang said she did not talk to Ms Liu until November 2018, well after the money had been returned to Ms Liu by Ms Xie and Ms Bai: Exhibit A page 132, paragraph 23 and the annexures referred to. This is disputed by Ms Xie and Ms Bai: see for example Exhibit A page 415, paragraph 104. I accept the evidence of Ms Huang on this issue. There is no compelling reason to doubt it. It is consistent with Exhibit 13, the "Friend request". Ms Huang was a far more impressive witness than Ms Xie and Ms Bai and I accept her evidence on this issue. Thus Ms Huang did nothing in relation to Ms Liu to cause her to ask for her money back as she did not know her in May/June 2018.
4. Secondly, according to Ms Xie, Ms Liu requested her money back in May 2018 referring to matters told to her by Ms Huang and Ms Lo: Exhibit A pages 415-6, paragraphs 104-109. Ms Huang denies this. It seems that due to Ms Liu's request for a refund, Ms Xie and Ms Bai chose to refund her money but not refund Ms Huang. Ms Xie and Ms Bai say the refund was made due to threats from Ms Liu. However, it seems clear that the refund was made due to discussions with Ms Liu not Ms Huang. Paragraph 61 of the Xie interests' submissions in chief refers to Ms Liu "pull[ing] her investment". There is no satisfactory evidence Ms Huang was aware of the discussions between Ms Liu and Ms Xie or their contents. Nothing she did had any apparent causative effect on the decision made to refund. Ms Xie and Ms Bai could have chosen not to refund the money and defend any proceedings for it as they have done with Ms Huang.
5. It seems difficult to form the view on the evidence that there was duress of a type which was instrumental in paralysing the wills of Ms Xie and Ms Bai or in overbearing or deflecting their wills: see Barton v Armstrong [1973] 2 NSWLR 598 at 607; Braam v BBC Hardware Ltd [2020] VSCA 164 at [81]-[83]. The tort of economic duress was not relied on: ANZ Banking Group v Karam (2005) 64 NSWLR 149; [2005] NSWCA 344. Thus, Ms Xie and Ms Bai made a commercial decision to refund Ms Liu's money but not refund Ms Huang's payments. I therefore find that Ms Liu's conduct and requests caused the decision to refund not Ms Huang's actions. In addition, I find the contents of the alleged conversation in Exhibit A page 415, paragraph 104 to be very unlikely. Ms Huang did not impress me as a person likely to take the action referred to and I do not accept that the conversation occurred as stated. There is nothing in the commercial agreements entered into to support the claim: Exhibit A pages 181 and 188.

The claim for allegedly taking skin testing equipment

1. The Xie interests asserted an entitlement to damages for an item of equipment allegedly taken by Ms Huang and Mr Nam: Xie affidavit Exhibit A page 420, paragraph 115. This is not pleaded in the Further Amended Statement of Claim and it is difficult to see how it can be relied upon. It is not clear what the basis of the legal claim was. The factual assertion in Ms Xie's affidavit does not indicate what the assertion is based on and whether Ms Xie was present at the time the item was allegedly taken. In her oral evidence, Ms Xie confirmed that she was not present when the equipment was allegedly taken and she relied on what she was told by her then manager, Selina. The manager Selina did not provide any affidavit or oral evidence. Ms Huang in her oral evidence stated that she did not take the machine. There was no cogent evidence that she did take it.
2. In the Xie interests' submissions in chief, this claim was no longer pressed: paragraph 6.

Determination

1. The Huang interests have been in substance successful. I can see no reason why they should not have their costs of both proceedings. However, I will give liberty to the parties to apply for a different order.
2. For the above reasons, I make the following orders: 1. In matter 2018/00117938, judgment for the plaintiff against the defendants. 2. The parties are to bring in proposed short minutes of order within 7 days consistent with these reasons. 3. In matter 2018/00117938, the defendants are to pay the plaintiff's costs of the proceedings as agreed or assessed. 4. In matter 2018/00364820, judgment for the defendants against the plaintiffs. 5. The parties are to bring in proposed short minutes of order within 7 days consistent with these reasons. 6. In matter 2018/00364820, the plaintiffs are to pay the defendants' costs of the proceedings as agreed or assessed. 7. Liberty in both matters for the parties to apply for a costs order different to that in (3) and (6) above.

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: 11 April 2022