Jiang v Chen

Credibility of the Witnesses

1. The first plaintiff, Ms Jiang, gave evidence through an interpreter. That made assessing her credibility more difficult. But the Court was able to read her at times strong facial expressions in response as questions were translated to her. She showed genuine shock at the suggestion made in cross-examination that her evidence of conversations was not truthful. But most importantly, her story made sense and was consistent with the evidence of other witnesses.
2. Mr Wei Zhu, the plaintiffs' son, was a reliable witness, who gave accurate evidence. Nothing asked in cross-examination damaged his credit or required the Court to reassess or doubt the accuracy of his evidence. He seemed solicitous of his parents' interests and somewhat stunned that his parents had arranged in November 2017 to return to Shanghai without telling him. More than once the evidence suggested tension between Wei Zhu and his parents, particularly in relation to the degree of care and support that Wei Zhu had provided to them. But none of that tension was particularly evident in the courtroom, where Wei Zhu interacted quite easily, affectionately and supportively with his mother. Lun Zhu did not come to Court.
3. The defendant, Ms Chen, was at times a difficult witness to assess. But there were a number of contradictions and improbabilities in Ms Chen's story that make the Court doubt her version. It is strange on her account, for example, that Ms Jiang said to her that Wei Zhu took "all her money" but shortly afterwards Ms Jiang gave $30,000 in cash to Ms Chen. On Ms Chen's own version of events she accepted what little money the plaintiffs had left and did not seem perturbed to retain this money in her possession. Ms Chen is capable of speaking very firmly in her responses in evidence at times and she gives the impression she could be quite insistent in getting what she wanted, if and when necessary.
4. Ms Chen submitted that the challenges to her credibility were explicable due to the difficulties of translating English into Mandarin and Mandarin into English through interpreters. The Court is satisfied that the interpreters in this case were highly skilled. It was evident to the Court that they were closely attending to the Shanghai dialect of Mandarin and that they had great facility with that dialect. The Court is confident that it was well able to judge the credibility of all witnesses through the interpreters.
5. The Court heard two witnesses by audio-visual link from Shanghai. They were Mr Qi Wu and Ms Li Ying Song, who were not able to travel from Shanghai to Australia due to the ban on travel between the two countries, resulting from the coronavirus outbreak. But the audio-visual link from Shanghai was a particularly high quality transmission medium and the Court was able to make a sound assessment of their credibility, despite their giving evidence remotely.
6. Mr Wu was the Shanghai real estate agent that Wei Zhu appointed for the sale of the Shanghai property. He was a precise witness who gave evidence that adhered closely to his affidavit. It was apparent that some care had gone into the Mandarin translation of his affidavit, because he was able to affirm it well in his oral evidence. He had a good memory for the various meetings that he had with Ms Chen and Ms Jiang and the Court accepts his evidence.
7. Ms Song was an excellent witness. Although she was a long-time friend of Ms Jiang she was a person of firm memory who was able to speak quite assertively about what she did and did not remember. She vigorously affirmed all the relevant contents of her affidavit when cross-examined. Judging credibility of witnesses through interpreters can be difficult. But in the case of Ms Song the Court found it far less difficult than usual. She nodded overtly in agreement with her own affidavit evidence as it was read to her slowly in translation through the Mandarin interpreter, showing her ready assent. She had at no stage made any errors in rejecting different versions of conversations that were put to her compared with her own. She always affirmed her own version and disagreed with that of Ms Chen. The Court regards her as a reliable witness of credit.

The Plaintiffs Arrange to Return with the Defendant to Shanghai -2017 to 2018

The Plaintiffs Come to Australia`

1. Mr Wei Zhu migrated to Australia some time before his parents. Wei Zhu was married to Ms Chen until 2010, when they divorced. Since their divorce, Ms Chen has lived in their former matrimonial home in Lakemba ("the Lakemba Property"). As a result of a property settlement, Ms Chen retained the Lakemba property as sole registered proprietor.
2. After Ms Jiang and Lun Zhu retired in China, they wanted to be closer to their son. In 2010, they applied for and were granted Australian permanent resident visas and moved to Sydney in 2012. Their plan was to remain in Sydney. They were attracted by living with their son and by Australia's high quality health system.
3. After Ms Jiang and Lun Zhu arrived in Australia, they had little contact with their former daughter-in-law, Ms Chen. They would occasionally exchange greetings such as for Chinese New Year and would run into one another, but generally they had little to do with one another until the events the subject of these proceedings.
4. Ms Jiang and Lun Zhu's move to Australia did not go smoothly. After Wei Zhu divorced Ms Chen, he formed a relationship with another woman, Ms Jiayu Xu. But Ms Xu was diagnosed with cancer in 2011, shortly before Wei Zhu's parents came out to Australia. The parents moved into the son's apartment but they did not get along with Ms Xu. So Wei Zhu found his parents another property in the suburb of Waterloo ("the Waterloo property"). This put a substantial burden on Wei Zhu, who was caring for his de-facto partner from the after effects of her cancer diagnosis, and looking after the health and welfare of his parents in another apartment.
5. When Ms Jiang and Lun Zhu migrated to Australia, they left behind an apartment they owned in the Xuhui District of Shanghai ("the Shanghai Property"). Their decision to sell the Shanghai property set off the series of events that led to the contest in these proceedings.
6. In early October 2017, the family decided that Wei Zhu would return to Shanghai in order to sell the Shanghai property. Ms Jiang and Lun Zhu gave their son the certificate of title to the Shanghai property and their Chinese identity cards to facilitate its sale in Shanghai. The purpose of this trip was to free up the capital invested in the Shanghai property, so that Ms Jiang and Lun Zhu could remain in Australia. Wei Zhu engaged an agent in Shanghai, Mr Wu, to sell the Shanghai property. He signed an exclusive agency agreement on 6 November 2017 with Mr Wu to sell the Shanghai property ("the Wei Zhu Agency Agreement").
7. But a few days after Wei Zhu left Australia for Shanghai, Lun Zhu had an accident. He fell over and injured himself while out shopping for groceries. This injury, when their son was away, caused the plaintiffs to feel vulnerable in their new country. Neither of them can speak English. Although Lun Zhu was quite badly injured, Ms Jiang was afraid to take him to hospital, because she did not know how to communicate with hospital emergency staff. So she cleaned her husband's wound and took care of him at home. Ms Jiang says, and the Court accepts, that without their son's help, managing Lun Zhu's injury appeared to her to be very difficult. Interpreters are available to assist in public hospitals in New South Wales, but Ms Jiang was not aware of this.
8. This experience changed the plaintiffs' minds about where they wanted to live. They decided that they wanted to go back to Shanghai for their retirement, in part to avoid their sense of isolation and in part to avoid having to cope with English language barriers. But this decision was also based upon concern for Wei Zhu. They thought the pressure on him juggling his sick partner and their needs would be too great in the longer term and it would therefore be better for them to live in Shanghai to relieve him from that burden.
9. But Ms Jiang made clear in her evidence that she felt strongly that her son would disagree with this decision and would want them to stay in Australia. Ms Jiang genuinely believed that if she told Wei Zhu, when he was in Shanghai, that she and Lun Zhu were planning to leave Australia, and go back to Shanghai, that he would try to stop them.
10. Ms Jiang and Lun Zhu therefore had to organise to leave Australia and return to Shanghai without their son knowing of their plans. This seems at first like a strangely elaborate way to prevent their son having to look after them. But odd though it may seem, the Court accepts that this is what they actually decided to do.
11. But this left them with the task of trying to arrange in Australia passage to Shanghai, despite their language difficulties. They had few people they could turn to in Australia to assist, as they knew very few people who were bilingual in English and Mandarin, or who spoke Mandarin and were able to navigate their way comfortably in Australia. One of those was their former daughter-in-law, Ms Chen. So they turned to her for assistance. They explained their wishes to Ms Chen for her to help them. Ms Jiang, rather than Lun Zhu, took the lead in these discussions.
12. Much of what was discussed between Ms Chen, Ms Jiang and Lun Zhu is in issue. But it was understood on both sides that Wei Zhu would be kept in the dark about this whole arrangement between Ms Chen, Ms Jiang and Lun Zhu.
13. Because they had willingly agreed with Ms Chen to conceal these arrangements from their son, Ms Jiang and Lun Zhu became quite vulnerable to the demands of Ms Chen.
14. The Court generally prefers Ms Jiang's version of relevant conversations over that recounted by Ms Chen. The findings below reflect her version. Differences between the two versions start with the very first conversation, in which the arrangement was proposed.

Ms Jiang Floats a Proposal with Ms Chen - 4 November 2017

1. After exploring her other options without success, on 4 November 2017 Ms Jiang telephoned Ms Chen and explained that she and her husband wanted "to go back to China for her retirement" and Ms Jiang asked Ms Chen to "accompany us on our return to Shanghai". Ms Jiang explained that Ms Chen was "one of the few people we [know] in Sydney and we can trust you, will you do that for us?" Ms Jiang elaborated the proposal to Ms Chen: "If accompanying us to Shanghai affects your work, we will pay for your loss of wages. Will you also help us to find a nursing home in Shanghai? Once we move into the nursing home, you can go back to Sydney for work."
2. After receiving assurances that the plaintiffs would buy the flight tickets for them all, and that Ms Chen would be compensated for any loss of wages, Ms Chen agreed. She said to Ms Jiang to let her know when Ms Jiang and her husband decided to leave to go to Shanghai.
3. But according to Ms Jiang, Ms Chen also stipulated "one condition", namely that "you cannot tell your son about this". On Ms Jiang's version she was not the author of this suggestion. The Court is not convinced that in fact the idea of keeping this from Wei Zhu came from Ms Chen in the first place. That may not matter much, because Ms Jiang and her husband were willing participants in keeping this arrangement from Wei Zhu and quickly agreed to that, whoever may have initiated the idea.
4. That same night Ms Chen came over to see the plaintiffs at their Waterloo property. That evening, Ms Chen began sowing doubt in the plaintiffs' minds about whether Wei Zhu was behaving honourably towards them. She began suggesting that he was using their pension to go on overseas trips with his de-facto partner, Ms Xu, and showed them photographs of him holidaying with his partner overseas. She also sowed distrust in their minds as to whether he was indeed selling the Shanghai apartment for them, and intimated that if he did sell it, whether he was unlikely actually to account to them for the proceeds of sale. What Ms Chen said was very effective in ensuring that the plaintiffs did not disclose any of their discussions with her to Wei Zhu.

Ms Jiang Gives Money to Ms Chen - 7 and 8 November 2017

1. It was not long before the plaintiffs decided to act on the conversation with Ms Chen. Ms Jiang and Lun Zhu invited Ms Chen over to the Waterloo property on the evening of 7 November 2017 to "get money for the flight tickets". Ms Jiang gave Ms Chen $30,000 for the flights, asking her whether that "would be enough" and then Ms Chen left.
2. Although Ms Jiang and her husband had some $90,000 saved up and kept in cash at home, on this first occasion they only gave $30,000 to Ms Chen. Ms Jiang was closely questioned about her habits of storing cash. The Court accepts that she was in the habit of not using conventional banking arrangements, but instead holding her savings in cash at home, at the Waterloo property. She was quite precise about how she stored the cash and the Court accepts her evidence about it. She kept the money in the form of $100 bills in groups of 10, making bundles of $1,000. These in turn were kept in groups of 10, making bundles of $10,000. The way she counted and stored the cash allowed her to quickly ascertain how much she had.
3. The following day, 8 November 2017, Ms Chen initiated contact with Ms Jiang, telephoning her to ask, "Do you have some money to bring back to Shanghai with you?" Ms Jiang responded, "Yes, we would like to bring our savings of $60,000 with us to Shanghai for our retirement". Ms Chen explained that "you cannot bring more than $10,000 through customs" in Australia, something that Ms Jiang did not appreciate until that point.
4. So Ms Chen offered to assist. She said, "Let me handle this for you", informing her that a friend of hers, Ms Xuemei Lin, could exchange AUD with RMB easily and make the money available "in RMB in [Ms Jiang's] Chinese bank account once you arrive in Shanghai". Ms Lin was not a stranger to Ms Jiang and her husband. They had met Ms Lin when she had been Ms Chen's tenant in the Lakemba property and had delivered gifts to them from time to time.
5. Ms Chen came around to the Waterloo property that evening. Not only did Ms Jiang and her husband have the balance of the $90,000 (being the remaining $60,000) to give to Ms Chen, but they had other money as well. They had both been to Hong Kong in 2014. They still had HKD11,100 in cash left over from that trip.
6. Ms Jiang says that she gave $60,000 and the HKD11,100 both in cash to Ms Chen that evening. This evidence is strongly disputed but the Court accepts it, for reasons which will shortly be explained. After the money was handed over, Lun Zhu asked for a receipt. Ms Chen responded: "Why do you need that?! You should trust me if you want me to accompany you to Shanghai. We are family! I will not write you a receipt! If you do not trust me you can ask your son to accompany you instead!"
7. This deterred Ms Jiang and Lun Zhu from pressing further for a receipt. They were afraid that Ms Chen might change her mind and not go back to Shanghai with them.
8. Ms Chen also raised with Ms Jiang and Lun Zhu an issue about their Australian permanent resident visas having by then exceeded a five-year period since their arrival: "You have been permanently residing in Sydney since 2012 and still holding Chinese passports. If you leave Australia without a visa, you might not be able to return again."
9. Ms Chen agreed to handle this for them as well. She took the $60,000 in cash and the HKD11,100 in cash with her and left the Waterloo property.
10. Ms Chen says that she strongly advised Ms Jiang and her husband "you must tell your son" about their going to Shanghai with her. But on Ms Chen's version, both plaintiffs were insistent against her advice that Wei Zhu not be told of their plans to go back to Shanghai. It is true that Ms Jiang did not want Wei Zhu to know they were returning to Shanghai; after all, that is why they approached Ms Chen. But if Ms Chen had been strongly advising the plaintiffs that they should tell their son of the forthcoming trip, she could of course easily have told him directly, because he was back in Australia before they all left to Shanghai. That would have involved breaching the understanding she had with the plaintiffs, but if she really was insistent on Wei Zhu being told it was a solution that was readily available to her. But she did not do so, which rather suggests that she was willingly not reluctantly complicit in concealing the whole scheme from Wei Zhu.
11. Ms Chen challenged the plaintiffs' case on the basis that they did not have anything like $90,000 of physical Australian currency available to give to her. But that contention is belied by records of the cross-border movement of physical currency obtained under the Freedom of Information Act 1982 (Cth). The records that are available show that Wei Zhu brought into Australia a total of $102,000 on several occasions between October 2014 and March 2017. Wei Zhu says he brought the cash into Australia and gave it to his parents. And Ms Jiang confirms that he did and that it was their money that he gave to them.
12. The Court accepts Ms Jiang's evidence that Wei Zhu would periodically return to China to collect her and her husband's Chinese pension which was paid in RMB. There he would convert it into Australian currency and bring it back to Australia in cash. The Court accepts that Wei Zhu gave this money to his parents and that it was subsequently kept at their Waterloo property.
13. Wei Zhu also gave other money to his parents which they kept at the Waterloo property. The Court accepts that they were distrustful of banking institutions and preferred to keep their money in cash at home. Wei Zhu would withdraw cash out of their bank accounts, when the bank balance exceeded $1,000 and give it to them.
14. Ms Chen criticises the plaintiffs' failure to adduce more contemporaneous records that would establish that the plaintiffs did accumulate the cash of over $102,000 that they claim. Her criticism is that the plaintiffs have not produced in evidence their Chinese government pension fund records, their Chinese bank statements or any foreign currency exchange receipts showing the conversion of their Chinese pensions into Australian currency.
15. It is true that these documents have not been produced. Ms Jiang says that she threw out the foreign currency exchange receipts showing the conversion of her Chinese pension from RMB into Australian dollars and the Court accepts that explanation. And there is little need for the plaintiffs to produce the Chinese pension fund records or the Chinese bank statements because the end product of those transactions was the cross-border movement of physical currency which the plaintiffs have confirmed with forms, which justify the transfer of substantial amounts of cash into Australia.
16. But Ms Chen in turn criticises these forms as not being contemporaneous with the transaction in question on 8 November 2017. But the Court would not expect them to be contemporaneous. The transfer of cash on cross-border declarations on several occasions in October 2014, June 2015 and March 2017 is fully consistent with the plaintiffs' story that they had accumulated pension monies which were then converted into Australian dollars and brought into Australia by Wei Zhu.
17. Ms Chen also points out that the incoming passenger cards show that Wei Zhu passed through Australian customs some thirty-eight times since 2 February 2010 and on 10 occasions he had more than $10,000 in Australian currency. The plaintiffs' case is criticised on the basis that Wei Zhu did not adduce all the cross-border forms associated with this travel and that he only selected three to tender. But this is no basis to reject Wei Zhu's evidence. He has apparently selected three forms because they constitute the particular transactions that related to his parents' money. Although Wei Zhu declared to immigration authorities that when he returned to Australia he did so with money on his own behalf, it can be accepted that he may not have filled out the form correctly but his fundamental story is coherent despite this. Wei Zhu said he completed the cross-border form incorrectly on instructions from a customs official. The Court is at least prepared to accept that he was confused about the form.
18. Ms Chen's contention that they did not have $90,000 to give to her fails.
19. Ms Chen gave a quite different version of the request that Ms Jiang made of her. It is to be remembered that Ms Chen had virtually no contact with her former parents-in-law between her divorce with Wei Zhu in 2003 and their arrival in Australia in 2012. And even between 2012 and 2017 she had seldom seen them. But in her version of Ms Jiang's request, she has Ms Jiang saying to her, "I have $30,000 in cash. I am scared [Wei Zhu] will steal my money when he returns to Australia from Shanghai on 9 November. Could you please take this money?" It is inherently unlikely that Ms Jiang would confide in a former daughter-in-law, who she had rarely seen since divorcing her son, that she was scared that her son "might steal my money". The Court does not accept that this, or anything like it, was said.
20. But the next part of the conversation given in Ms Chen's version is even more improbable. Ms Chen has Ms Jiang saying to her: "Zhu and I also want to compensate you for the suffering Wei [Zhu] has caused you. We think you should become our goddaughter. We also want to give you a one quarter interest in our Shanghai home. You could also hold onto an additional one quarter interest in our Shanghai home that we left for Wei. We want you to transfer it to him only if he separates with Jia Yu in the future".
21. It is quite improbable that Ms Jiang was spontaneously offering to gift between a quarter and half of the Shanghai property to Ms Jiang. It can be accepted that the plaintiffs were not entirely happy with Wei Zhu's relationship with Ms Xu. But the Court does not accept that the plaintiffs thought that Wei Zhu had treated Ms Chen so badly as would warrant them making a gift of this order to her. The Court does not accept this was said, although interestingly it does reveal Ms Chen's overall motivation. Once the plaintiffs made the request for her assistance to go back to Shanghai, in the Court's view, Ms Chen started to conceive of the idea of acquiring a share in the plaintiffs' Shanghai property because she thought that Wei Zhu had treated her badly and that she was entitled to it. But the Court does not accept that was the plaintiffs' view.
22. Ms Chen raised an apparent inconsistency in Ms Jiang's account. Ms Chen submits that it is odd that at the conversation on 7 November 2017 that Ms Jiang did not insist upon a receipt. But on Ms Jiang's account of the conversation on 8 November 2017, she did ask for a receipt and Ms Chen refused. But Ms Jiang's explanation of the differences between the two occasions was satisfactory. She explained that the $30,000 would be expended upon buying tickets and other costs relating to their journey but in contrast the $60,000 was a much larger amount which had been accumulated over 10 years and was not intended to be expended immediately. Although both amounts were accumulated from Ms Jiang's savings, in her mind the $30,000 was going to be expended and she did not need a receipt whereas the $60,000 was going to be returned to her and that is why she asked for the receipt. The Court accepts that this was Ms Jiang's reasoning for distinguishing the need for her to ask for a receipt from Ms Chen on each occasion.

Wei Zhu Returns and His Parents Prepare to Leave - 9 to 22 November 2017

1. Wei Zhu returned to Sydney on 9 November 2017. About the same time Ms Jiang and Lun Zhu arranged for Ms Chen to come around to the Waterloo property and in preparation for the trip to Shanghai, to start to remove their belongings in stages. This was done slowly between 9 and 14 November 2017, so that Wei Zhu was less likely to notice the removal. He did visit his parents during this period and was taken in by appearances: he did not notice that his parents' belongings were slowly disappearing.
2. Ms Jiang and Lun Zhu continued this pretence with Wei Zhu. They believed that if he found out he would try and stop them returning and Ms Chen had made it a condition of her cooperation that Wei Zhu not be told. It is surprising that the smokescreen that Ms Jiang and Lun Zhu created was so successful. Ms Jiang and Lun Zhu got to Sydney International Airport on 1 December 2017 and boarded a plane to Shanghai without Wei Zhu finding out.
3. But before that, Ms Chen accounted to Ms Jiang and Lun Zhu for the airfares she had purchased and she reported on what had happened about their visas. On or about 22 November 2017, Ms Chen explained to Ms Jiang on the telephone that Ms Lin had applied for them online for a five-year visa as Australian permanent residents.
4. She also explained that Ms Lin had purchased online flight tickets for them back to Shanghai. Ms Chen explained that she purchased two single business class airfares at $4,500 each and an economy class airfare for herself at $2,000. Ms Chen did not provide any receipts or transaction records for these flight ticket purchases. Ms Jiang says, and the Court accepts, that she was afraid to ask Ms Chen for receipts, no doubt expecting that she would receive the same kind of response that she had for the request for a receipt for the $60,000 in cash that she had given Ms Chen.

Ms Jiang and Lun Zhu leave Sydney for Shanghai - 1 December 2017

1. Ms Lin collected Ms Jiang and Lun Zhu and took them to the international terminal at Sydney Airport on 1 December 2017. On arrival at the airport, Ms Chen explained that all their belongings had been packed into her luggage and Ms Lin's luggage.
2. Before they passed through border security, Ms Chen gave $18,000 ($9,000 each) back to them, explaining "I thought you would need RMB in Shanghai, so I exchanged $1,000 at a currency exchange stall in Campsie". This $18,000 represented the remainder of the $30,000, of which $11,100 had apparently been spent on their airfares plus $1,000 exchanged into RMB. This transfer of funds to them at this point also meant that they could then each carry less than $10,000 out of Australia rather than have Ms Chen breach currency export rules, were the $18,000 to be left in her possession.
3. What Ms Chen told them and what she was doing, all seemed to Ms Jiang and Lun Zhu to be in accordance with what they had been told. When Ms Jiang and Lun Zhu were boarding the aircraft, they were prompted to ask Ms Chen whether Ms Lin had transferred the $60,000 and the HKD11,100 to China for them. Ms Chen assured them, "Yes she did. Do not worry about it." Ms Chen promised them that the money would be transferred to them, when they arrived in Shanghai.
4. But soon after this conversation Ms Jiang noticed a change in the tone and direction of Ms Chen's conversation. Ms Chen started to complain about Wei Zhu's conduct at the time of their marriage settlement when they divorced in 2010. Ms Chen and Wei Zhu had owned a property in Shanghai at the time of their divorce. On the way to Shanghai, Ms Chen started to say that at the time of their divorce Wei Zhu had made a bad mistake in selling this Shanghai property. Ms Chen contended that Wei Zhu's decision to sell the property at that time had led to her suffering considerable losses, because the market value of Ms Chen's and Wei Zhu's Shanghai property had since become worth much more than it was then. Ms Chen complained that had the sale of the Shanghai property not taken place then, "I would be a multimillionaire now!" She sought compensation from the plaintiff saying, "you should pay for what your son did!"
5. Ms Jiang's account of these conversations was strongly contested. But the Court accepts her evidence, in part because she is preferred as a witness, but in part also because Ms Chen agreed that she was disgruntled about the early sale of her and Wei Zhu's Shanghai property during their divorce. It is therefore probable in the Court's view that she said something like this.
6. Ms Jiang and Lun Zhu asked Ms Chen, "What do you want?" Ms Chen offered them a solution. She said: "Let me sell your Shanghai property on your behalf instead of your son. You do not need the property after you move to a nursing home. Then give me one fourth of the sale price as compensation for my losses for these years."
7. Ms Jiang and Lun Zhu were in a very weak position to refuse Ms Chen's request. She had their $60,000. She had their HKD11,100. They were cut off from their son, who did not know where they were. Ms Chen was taking them back to China where they wanted to go. Ms Jiang did not want to say "yes", to what she regarded as Ms Chen's unreasonable request. But she was in no position to say "no". In this delicate position, she resorted to diplomacy and said, "Let's talk about this later".

The Plaintiffs Arrive in Shanghai and Ms Chen Takes Control - Early December 2017

1. Once Ms Jiang and Lun Zhu arrived in Shanghai, strange things began to happen. Ms Chen did not take them to the Shanghai property but to a hotel. Some $6,000 of the money given to them in cash had gone missing from their baggage. Ms Chen persuaded them to change the locks on the Shanghai property. Then she kept the key and did not give it to them. Ms Chen was distancing them from control of their own apartment, the Shanghai property.
2. Ms Chen did not follow through with trying to find them a nursing home. Ms Chen then cemented their separation from their son, Wei Zhu, who was still back in Australia. She took away their international roaming SIM cards that had been given to them by Wei Zhu and had them purchase new mobile phones with SIM cards under Ms Chen's name. These phones worked on the limited basis that Ms Jiang and Lun Zhu could only ring out to Ms Chen.
3. Ms Chen then took control of Ms Jiang's and Lun Zhu's identity papers and legal papers. She took them to a police station in Shanghai, where they were forced to declare that their Chinese household registration (hukou) and Chinese ID cards had been lost. They applied for and were issued with new cards. Ms Chen then took possession of their passports.
4. Ms Chen also took them to the real estate registration centre in Shanghai and had them allege that they had lost their certificate of title for the Shanghai property. Ms Chen made herself the point of contact for the new certificate of title.
5. Ms Chen gave a very inconsistent account of her visit with the plaintiffs to the real estate centre in Shanghai. Ms Chen resisted the idea that she had suggested to the plaintiffs that they claim at the office that the certificate of title was lost and they needed another one reissued. That idea was plainly false: Wei Zhu had the certificate of title. In evidence Ms Chen tried to give the impression that it was the plaintiffs' idea to go and claim that the certificate of title was lost and to seek a replacement.
6. But there were two difficulties with this account. First, Ms Chen was pressed as to why she did not just ask Wei Zhu for the certificate of title. The obvious answer to this question was that she could not do that because on both her and the plaintiffs' version, Wei Zhu was being kept in the dark about the trip to Shanghai and the fact that the Shanghai property might be sold when the plaintiffs got there. But Ms Chen instead gave a rather strange answer that on 5 November, when they were still in Sydney, when she had asked Wei Zhu to return some belongings of the plaintiffs' back to them that Wei Zhu is said to have responded, "Stay out of it, it's none of your business". This evidence does not make much sense and is not accepted.
7. Second, Ms Chen gave inconsistent evidence about what actually happened at the real estate registration centre in Shanghai. Her account was that it was the plaintiffs' own initiative to replace the certificate of title. At one point under cross-examination she said that her brother drove them all to the real estate registration centre and that she stayed in the car and only the plaintiffs went in to the office. But then in a few answers she said that she was in the queue in the real estate registration centre office with the plaintiffs and she heard the plaintiffs' request for a replacement of the certificate of title. In the Court's view, the latter version is likely to be correct. She is likely to have been present to make sure the plaintiffs did request the replacement of the certificate of title as she wanted them to do. But the fact that she was able to give inconsistent answers about what transpired at the office damaged her credibility significantly.
8. Ms Chen also took them to their bank in Shanghai and had them allege they had lost their bank and social security cards, and she took possession of the new ones. They now could not travel or transfer the Shanghai property, or undertake any significant financial transaction without Ms Chen's permission.
9. Ms Chen denies that she coerced the plaintiffs in this way. But an event that occurred in the second week, after they returned to Shanghai, strongly and independently confirms an important aspect of Ms Jiang's story and is inconsistent with Ms Chen's story. The event involved the real estate agent, Mr Wu, who Wei Zhu had retained to sell the Shanghai property. Both Mr Wu and Ms Jiang give nearly identical evidence about what happened.

Mr Wu Tries to Enter the Shanghai Property - Mid-December 2017

1. Ms Jiang says that she and her husband and Ms Chen happened to be at the apartment on a weekend in about early December when Mr Wu, the real estate agent that Wei Zhu had retained to sell the Shanghai property for her and her husband, suddenly arrived. He tried to open the door to the apartment but could not do so because the locks had already been changed. As she was there too, Ms Chen opened the door for him. This was the first time that Mr Wu had met the owners of the apartment, Ms Jiang and Lun Zhu. When Mr Wu came in, Ms Chen gave him instructions directly for the sale of the Shanghai property, "as soon as possible". According to Ms Jiang, Mr Wu then left the property.
2. Mr Wu's version is much the same as Ms Jiang's. He is sure that when he brought a prospective buyer to the Shanghai property for an inspection he found that his key did not work in the lock. But according to Mr Wu, Ms Chen opened the door and pointed out Ms Jiang and Lun Zhu as Wei Zhu's parents and the owners of the property. According to Mr Wu, he enquired of Ms Chen why his key did not work in the lock and received the following answer from her: "I changed the lock. I am taking care of them, you can contact me directly in the future for inspections and all other matters. What is the price of this apartment advertised [for] now?"
3. Mr Wu says he told Ms Chen, "RMB 11.6 million." Importantly he says that his key did not work on this occasion, because the locks had been changed and Ms Chen took responsibility for making the change. The Court accepts him as a witness of truth.
4. Ms Chen's story about this occasion is fundamentally different. She says that two men accessed the property with a key, not mentioning any problem with the locks at all. She says she and the plaintiffs were unaware of their identity and that Ms Jiang challenged them in Mandarin saying, "Who are you? What are you doing here?" According to Ms Chen, Mr Wu replied saying that he was a real estate agent authorised by Wei Zhu to sell the property and that the other man was his client. According to Ms Chen, Ms Jiang said in reply to this, "this is my property. It is not up to Wei to decide. He has no rights to sell this property."
5. A fundamental part of Ms Jiang's version of events is that Ms Chen had taken control of the Shanghai property and changed the locks. If Ms Chen had not taken control of the property contrary to Ms Jiang's wishes, there would be no good reason for Ms Chen to change the locks and keep the key. Moreover, the Court does not accept Ms Chen's evidence that Ms Jiang and her husband had totally lost faith in Wei Zhu's capacity to sell the Shanghai property on their behalf. So whether or not the locks had been changed is an important indicator of which version is correct. The Court does not accept Ms Chen's version that the agent was able to gain access with the key that he was using and that the locks had not been changed by then.
6. Mr Wu and Ms Jiang's versions are confirmed by another event, which happened directly after this. Mr Wu says that Ms Chen immediately signed another Exclusive Sales Power of Attorney with him and Ms Jiang says that Ms Chen gave Mr Wu instructions for the sale of the Shanghai property. If Ms Chen had signed an agency agreement in her own name, it would have been another indicator that she was trying to take control of the sale of the Shanghai property from Ms Jiang and Lun Zhu and confirm their version.
7. Mr Wu's affidavit includes a copy of the exclusive agency agreement signed by Ms Chen and dated 2 December 2017 ("the Chen Agency Agreement"). Her signature on this document looks quite similar to that on her affidavits in these proceedings. When this document, the Chen Agency Agreement, was put to Ms Chen, she expressed doubt that the signature on it was hers. But the Court accepts Mr Wu's evidence that she signed it.
8. Her signing of the Chen Agency Agreement is wholly consistent with Ms Jiang's version of events. If she were trying to take control of the sale of the Shanghai property, it is not unlikely that she would have executed a document like the Chen Agency Agreement. If Ms Chen was merely assisting the plaintiffs to sell their own property in their own way, even if they had doubts about continuing with Wei Zhu, there is no reason why the Chen Agency Agreement would ever have been executed. Instead, Ms Chen would have merely assisted the plaintiffs to execute another agency agreement directly with Mr Wu to replace the Wei Zhu Agency Agreement. The plaintiffs did indeed execute an agency agreement with Mr Wu later, but only on 20 December, after Wei Zhu had returned to Shanghai.
9. The Court accepts Mr Wu's evidence that Ms Chen tried to dissuade him from being a witness in these proceedings. This is conduct on her part that can only really be explained on the basis that she appreciated Mr Wu's evidence would be damaging to her case and that she wished to deter him from being available to the Court. That is an admission on her part that she had something to fear from his evidence, which she must have anticipated would be inconsistent with her version of what had happened in Shanghai.

Wei Zhu Comes to Shanghai Again - Late December 2017

1. Meanwhile back in Australia, on 4 December 2017, Wei Zhu discovered that his parents had left the Waterloo property without telling him. So puzzled was he by what had happened, and so unsure about what to do next, he reported them missing to the police at Redfern Police Station in Sydney. He did not know where they were. Under cross-examination he repeated his anxious concern at not being able to find his parents upon attempting to call on them after 1 December 2017.
2. The Redfern police were of great assistance. They found Wei Zhu's parents. Immigration records showed they had departed Australia for China. Wei Zhu immediately made arrangements to travel to Shanghai, arriving on or about 15 December 2017. He found his parents in the Shanghai property. Ms Jiang said how relieved she was when he arrived. Notwithstanding the differences that had existed between them, the Court accepts that she was very relieved to see him, in part because of the ordeal that Ms Chen had put her through.
3. This was a moment of great regret for Ms Jiang. She and Lun Zhu told Wei Zhu everything. Wei Zhu explained then that their Chinese pensions had not been diverted to pay for his overseas trip with his partner. The plaintiffs realised that what Ms Chen had told them was untrue. They deeply regretted concealing their trip from their son.
4. Wei Zhu's recollection of this first conversation with his parents confirms Ms Jiang's version of events. He recalls, and the Court accepts, that his parents immediately complained to him in Shanghai that although Ms Chen had given them back the balance of their $30,000, despite their requests, she had not returned to them the $60,000 and HK 11,100 they had given to Ms Chen.
5. But then the plaintiffs had another change of heart about Shanghai. It had changed beyond their recognition in the previous five years. By 2017 they could not find their way around the city of Shanghai, as they had in in 2012. In particular they felt they could not tolerate its cold winter and preferred to be back in Australia. They then declared to Wei Zhu that they would like to return to Australia for their retirement.
6. Ms Jiang and her husband were concerned. They began to ask Ms Chen for the money. As Ms Jiang said, she was asking Ms Chen, "how about the money we gave you, when can we see it?" Ms Chen gave her the brush off, "don't rush me! I will arrange it to be transferred to you". She never did. But her replies acknowledged its receipt.

Arrangements to Return to Australia - Late December 2017

1. Once he got to Shanghai, Wei Zhu started making enquiries of various sorts, including about the flight tickets Ms Chen had purchased. He discovered that Ms Chen had purchased two return tickets with a return date of 27 February 2018 and that the actual airfare per person was $2,637.42, not $4,500 as Ms Chen had previously told his parents. Moreover, the actual airfare for Ms Chen was $577 not $2,000 as Ms Chen had previously represented.
2. There were issues in the proceedings about this discrepancy. Ms Chen said that she purchased the return tickets, rather than one-way tickets, in the best interests of the plaintiffs. But the Court accepts the plaintiffs' evidence that the purchase price of these tickets was not what Ms Chen had represented them to be. She could not satisfactorily explain the price that was actually paid for them, another matter that goes to undermine her credibility.
3. But to return to Sydney, Ms Jiang and Lun Zhu needed their passports. They telephoned Ms Chen and asked for them, as well as for their newly issued identification cards, social security cards, bank cards and the new certificates of title. They also asked for the money that they had given her to be transferred back to Sydney.
4. Ms Chen agreed to return all the physical identity and title documents but not the money, saying, "I will keep the money for my lawyers just in case Wei Zhu sues me". Despite her admission of receipt, she did not explain this any further. But in answer to Ms Jiang's queries, Ms Chen said "ask Wei Zhu to call me".
5. Wei Zhu was present at the time of this conversation. He recalls his mother's demand for the return of the money from Ms Chen. The Court accepts that he overheard Ms Chen say on the telephone that she would keep the money "just in case your son sues me". He also recalls Ms Chen saying on the telephone to his parents that she would keep the $60,000 "as my compensation".
6. Wei Zhu rang Ms Chen. They had the following conversation: "Wei Zhu: "As you demanded, I am calling you now, what do you want?" Ms Chen: "I just want to know how you are going to compensate me?" Wei Zhu: "Ask your employer to provide proof of how much you earn for two weeks worth and we pay you for that." Ms Chen: "Well in that case, we have nothing to talk about then. I will keep the $60,000 as my compensation." Wei Zhu: "What?" Ms Chen: "You don't have any evidence to prove that you gave me 60,000 dollars anyway. You are welcome to sue me because without any evidence, you are definitely going to lose!" Wei Zhu: "I don't want to argue with you about this now. Just tell me the passport numbers. We need them to change the flight tickets." Ms Chen: "No, no, I don't have time to deal with you today, you can call the police if you like."
7. The plaintiffs were keen to get out of Shanghai as it was getting very cold, but they had no passports. So they went to the local police station near the Shanghai property to seek help. In fact, the plaintiffs struggled to find Ms Chen's address in Shanghai but eventually they did. The fact they did not have Ms Chen's address is another example of the information fog that Ms Chen had created around them.
8. Once they made contact with Ms Chen, she promised to provide the documents by 8pm, but she did not show up that night. The plaintiffs contacted the police again. Ms Chen refused to return their documentation. Instead, she requested that the matter be mediated at the Xietu Street Neighbourhood Committee. At the mediation, Ms Chen returned all the plaintiffs' documentation including the plaintiffs' passports, identification cards, social security cards, documents for re-issuing the certificate of title, and a key to the Shanghai property. An agreement was signed to record the mediation outcome.
9. But at the mediation, Ms Chen refused to admit that she had received $60,000. Instead, she took the position that she took during the proceedings that she had only collected $30,000 from the plaintiff.
10. Wei Zhu corroborates his mother's account of what happened at the Xietu Street Neighbourhood Committee mediation. The Court accepts his evidence that Ms Chen returned all the documentation, the ID cards and the key to the Shanghai property in her possession but when Ms Jiang asked Ms Chen for the return of the $60,000 and the HKD11,100 Ms Chen denied receipt of these sums, apparently for the first time.
11. The outcome of the mediation revealed a damaging inconsistency in Ms Chen's evidence. In her principal affidavit she explained that when she was invited to go to the mediation the request was for her to "hand us back Jiang and Zu's passports immediately". Her version was that she only had the plaintiffs' passports. But the mediation agreement that Ms Chen signed showed clearly that she had more than the plaintiffs' passports. It recorded that the parties had voluntarily agreed that Ms Chen would return to the plaintiffs' guardian, Wei Zhu, their "ID cards, household register (or hukou) and passports". To maintain consistency with her previous denial that she had the plaintiffs' ID cards and household register, she gave an explanation that all the items were "packed in a white envelope and passed to me by Ms Jiang" and that she did not "take a look at what's inside so I was not sure what items are included in that envelope either".
12. But this explanation is hardly consistent with the mediation agreement in which she assented to the return of the plaintiffs' ID cards and household register. It can be inferred that she was aware she possessed those items before she signed the mediation agreement. The Court does not accept the "white envelope" evidence and infers that it was an attempt to cover an inconsistency in her case, a manoeuvre which damaged her credibility considerably.
13. Ms Chen submits that the mediation agreement assists her case because item 3 of the mediation agreement that was reached records, "there are no other disputes between the parties". Ms Chen submits that had the $60,000 and the HKD11,100 been provided to her and not been returned that would have been another dispute which should have been recorded in the mediation agreement.
14. But the answer to that submission is that the mediator at the Xietu Street Neighbourhood Committee told both sides of the mediation that "this is a neighbourhood committee, not a court; any dispute about money should be heard in a court". And Ms Chen agreed that the statement of the mediation agreement "there are no other disputes between the parties" was included by the mediator. This is understandable: the Court infers that the mediator wanted to ensure that all disputes within the mediator's own jurisdiction were resolved. But that did not extend to declaring that there were no other money disputes between the parties that were justiciable by a Court.

Li Ying Song Witnesses a Conversation - Early to Mid-December 2017

1. When Ms Jiang returned to Shanghai, she contacted a former colleague and neighbour, Ms Song. Ms Jiang and Ms Song had been close friends for a long time. Ms Jiang let Ms Song know that she was back in Shanghai.
2. Following telephone contact, Ms Song visited Ms Jiang the same day. Only Ms Jiang and Lun Zhu were there to greet her. The Court accepts that during that conversation, Ms Song enquired of Ms Jiang whether she had "bought enough money to Shanghai?" The offer was made because Ms Song was prepared to tide her friend over, if she did not have enough funds.
3. Ms Jiang answered clearly, "we brought $60,000 to Shanghai. This money is in Ya Juan's care". Ms Song warned Ms Jiang that she should not have entrusted the money to Ms Chen. Ms Jiang replied to Ms Song, "don't worry, I trust Ms Chen, that's why I've left all this money in her care".
4. This conversation was admitted into evidence on the basis that it rebutted an allegation of recent invention being made against Ms Jiang. Ms Song's account that this was said to her never shifted. Ms Song was cross-examined about her recollection but her credibility was not impaired by this questioning.
5. Ms Chen concedes that Ms Jiang probably did tell Ms Song that Ms Jiang had given $60,000 to Ms Chen. But Ms Chen submits that when Ms Jiang said this to Ms Song she was being untruthful. Ms Jiang submits that had the representation been truthful Ms Jiang would also have mentioned the sale of her apartment for the proposed figure of 11.6 million RMB, the $30,000 and the HKD11,100 and the plaintiffs' Chinese government pensions.
6. But this submission is not persuasive. First, the Court assesses Ms Jiang as a truthful witness. Moreover, the $60,000 was the largest amount that Ms Jiang actually entrusted to Ms Chen. The HKD11,100 was a much smaller sum. There was no particular reason for the other suggested topics to have been discussed between Ms Jiang and Ms Song. There were a number of other minor differences between Ms Jiang and Ms Song's evidence but the Court does not regard them as materially impacting upon the credibility of either witness. They are the natural differences of recollection that are evident in truthful accounts based on recollection.
7. Ms Song also saw Ms Chen at the Shanghai apartment, and later discussed Ms Jiang's financial arrangements with her on the telephone. Ms Chen telephoned Ms Song and complained about Wei Zhu wanting her to, "return the money". The Court accepts that in one of these conversations, the following exchange occurred between Ms Song and Ms Chen: Li Ying Song: "I don't want to hear anything in relation to the argument between you and Zhu. I know Xiu has put her money in your care, just return the remaining amount of what you have left, from what was given by her." Ms Chen: "I don't have a lot." Li Ying Song: "Even if there is not a lot remaining, this is still Xiu's money."
8. Ms Song says that Ms Chen did not respond to this advice. When the allegation was put to her by Ms Song that she had Ms Jiang's money in her care, Ms Chen did not deny it. This is an admission that she had received the money. It is also an admission that Ms Chen accepts that Ms Jiang "has put your money in your care" and that the money received is therefore Ms Jiang's money.

The Family Returns to Sydney - Early 2018

1. It was difficult for the plaintiffs to get back to Sydney over the Christmas and New Year period in 2017-2018. Wei Zhu returned to Sydney on 28 December 2017. One of Wei Zhu's friends accompanied the plaintiffs back to Sydney on 4 January 2018.
2. The Court accepts that after their return to Sydney, the plaintiffs attempted to make numerous telephone calls to Ms Chen but she did not answer them. By then the plaintiffs had asked Ms Chen for their money back on numerous occasions, so she could have anticipated what their calls were about. Her failure to return the calls is not conduct consistent with someone who has a good answer to a false allegation. If Ms Chen had never received the $60,000, there was little to be lost on her part in returning a phone call and saying just that to the plaintiffs.
3. The plaintiffs engaged lawyers to represent them. Their previous legal advisors, Lawside Lawyers, wrote to Ms Chen on 19 February 2018, setting out the case which is now advanced in these proceedings. They received no answer.
4. On 31 July 2018, Wei Zhu saw an advertisement for the sale of the Lakemba property and on 2 August 2018, the plaintiffs caused their new lawyers, Chen Shan Lawyers, to send a letter of demand to Ms Chen requesting the return of the money. Once again, Ms Chen did not respond to this letter of demand. The non-response led to the commencement of these proceedings and the ordering of freezing orders preventing the sale of the Lakemba property.
5. Ms Chen claims she has a simple and complete answer to the plaintiffs' claim that the money they are claiming was never given to her. That is not a difficult claim to answer without the expenditure of much energy. But the failure of Ms Chen to respond, either herself or through solicitors, is not the conduct of someone who genuinely maintains that defence. When pressed as to why she did not respond to these letters, she did not give any adequate or coherent explanation.

Analysis of the Plaintiffs' Claim

1. Although it was pleaded, the plaintiffs did not pursue any case concerning misrepresentation of the cost of the airline tickets. Therefore that contention is considered no further. Nor is the allegation that Ms Chen failed to look for an appropriate nursing home in Shanghai, in which the plaintiffs could be accommodated.
2. The case ultimately put at trial, and now considered related to the cash given to Ms Chen on 8 November 2017. The Court has found that the plaintiffs gave Ms Chen $60,000 and HKD11,100 on 8 November 2017. The plaintiff claims that such monies were given to Ms Chen to hold on trust for the plaintiffs.
3. The plaintiffs' case is made out. There is no obstacle to a creation of a trust here. Trusts of legal interests in personalty, excluding leaseholds, may be created orally by means of a declaration of a trust: Jones v Lock (1865) 1 Ch App 25. There is no requirement of writing under Trustee Act 1925, s 23C(1)(c): at the time of the disposition of the money from the plaintiffs to Ms Chen, a disposition of an equitable interest, or a trust subsisting at the time of the disposition, was not involved.
4. The words spoken at the time of the disposition of the trust fund by the disponor, may throw light upon the intention of the disponor to create a trust. The words spoken will be admissible to ground inferences as to the intention of the disponor to create a trust. Here, the words are clear: that the fund was only transferred for the limited purpose of being given back to the plaintiffs in China. The desire of the plaintiffs to retain a beneficial interest in the fund was made clear to the defendant, who can be presumed to have taken the fund on the terms on which was given. The money being entrusted to Ms Chen, Ms Jiang described it as "our savings" that she wanted "to bring back to Shanghai" for "our retirement". Ms Chen offer to "handle this for you". The words spoken invite Ms Jiang to "trust" Ms Chen with the money and are quite inconsistent with the making of a mere loan to Ms Chen. The funds were not Ms Chen's to deal with as she wished. They had to be made available in Shanghai for the plaintiffs' retirement.
5. No document recording the trust was created, so the statements made do not need to be construed in relation to contrasting documentary evidence.
6. The Court will therefore declare that the fund was held on trust for the plaintiffs from 8 November 2011. The trust fund has not been returned to the plaintiffs despite the solicitors' demands for it. The plaintiffs had asked for the money back no later than when Wei Zhu arrived in Shanghai on 15 December 2017. The failure to return the trust fund in response to that first request is a breach of trust.
7. The parties are yet to agree upon a date for conversion of the HKD11,100 into Australian dollars. Nor has any argument about the calculation of interest taken place. This would normally occur in a short inquiry into damages. No other loss is claimed other than interest. Those matters can be the subject of further short written submissions and a determination in chambers.
8. The plaintiffs have been successful. Costs would ordinarily follow the event. But the amount claimed is small and the defendant disputes that a costs order should be made, in the event that the plaintiffs were to be successful. The parties are invited to make submissions about costs in light of this judgment.

Conclusions and Orders

1. For these reasons, the court makes the following orders and directions: 1. Declare that the defendant holds on trust for the plaintiffs, and has held on trust for the plaintiffs since 8 November 2017, the sum of AU$60,000 and HKD$11,100 ("the trust monies"). 2. Declare that the defendant's failure to return to the plaintiffs the trust monies when requested on or before 15 December 2017 is a breach of the trust declared in (1). 3. Direct an enquiry as to damages in relation to the defendant's breach of trust. 4. Direct the parties to put on written submissions as to damages and costs within 14 days and to put on written submissions in reply within a further 14 days. 5. The Court notes that the injunction over the defendant's Lakemba property continues until further order. .**********

Amendments 19 June 2020 - paragraph [87] - duplicated text removed 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: 19 June 2020