Li v Yang

EQUITY - TRUSTS - RESULTING TRUSTS - illegality - whether breaches of the Foreign Acquisitions and Takeovers Act 1975 (Cth) preclude relief sought by the plaintiff

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - STRIKING OUT CLAIM AND STATEMENT OF CLAIM - whether the plaintiff has a reasonable cause of action - whether plaintiff's claim and statement of claim should be struck out - whether the plaintiff's claim for the imposition of a resulting trust is viable - whether breaches of the Foreign Acquisitions and Takeovers Act 1975 (Cth) mean that any resulting trust may not be enforced

REAL PROPERTY - CAVEATS - whether caveat should be removed with respect to the land in question under s 127 Land Title Act 1994 (Qld) - whether caveatable interest - whether a resulting trust is void and unenforceable

Foreign Acquisitions and Takeovers Act 1975 (Cth) s 4, 5, 10, 12, 15, 47, 81, 83, 84, 94, 95, 134

Foreign Acquisitions and Takeovers Legislation Amendment Act 2015 (Cth)

Land Title Act 1994 (Qld) s 127

Uniform Civil Procedure Rules 1999 (Qld) r 157, 171, 293

Bao v Li [2022] NSWSC 1335, applied

Bosanac v Federal Commissioner of Taxation [2022] HCA 34; (2022) 275 CLR 37, applied

Calverley v Green [1984] HCA 81; (1984) 155 CLR 242, cited

Coldham-Fussell v Commissioner of Taxation [2011] QCA 45; (2011) 82 ASCR 439, applied

Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd (1997) 143 FLR 18, considered

Deputy Commissioner of Taxation v Salcedo [2005] QCA 227; [2005] 2 Qd R 232, applied

Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 246 CLR 498, applied

General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125, cited

GLJ v Roman Catholic Church [2023] HCA 32; (2023) 280 CLR 442, applied

Gnych v Polish Club Ltd [2015] HCA 23; (2015) 255 CLR 414, applied

Ikeuchi v Liu [2001] QSC 54; (2001) 160 FLR 94, applied

Lee v Abedian [2016] QSC 92; [2017] 1 Qd R 549, cited

Li v Yang [2025] QSC 233, cited

Liu v Wang [2024] NSWSC 697, cited

Menezes v Salmon [2009] NSWSC 2, considered

Meshumar v Otmy [2018] NSWSC 125; (2018) 97 NSWLR 615, considered

Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538, applied

Polar Aviation Pty Ltd v Civil Aviation Authority [2012] FCAFC 97; (2012) 203 FCR 325, cited

NRNQ v MEQ Nickel Pty Ltd [1991] 2 Qd R 592, considered

Royalene Pty Ltd v Registrar of Titles [2007] QSC 59, cited

Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118, applied

Thiess Pty Ltd v FFE Minerals Australia Pty Ltd [2007] QSC 209, applied

Trade Practices Commission v Pioneer Concrete (Qld) Pty Ltd (1994) 124 ALR 685, cited

Williams & Humbert Ltd v W & H Trade Marks (Jersey) Ltd [1986] AC 386, cited

Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd [1978] HCA 42; (1978) 139 CLR 410, applied

[1] The plaintiff is a citizen of the People's Republic of China ("PRC"). The defendant is also from the PRC, but now lives in Australia with their child. The plaintiff says he advanced approximately $3,000,000 AUD to the defendant for her to purchase a house for him in Clear Island Waters in 2021. The plaintiff claims that the defendant holds the property on trust for him.

[2] The defendant denies this and alleges that the plaintiff can acquire no interest in the house she purchased, as it would be illegal to do so by reason of the Foreign Acquisitions and Takeovers Act 1975 (Cth) ("FATA").

[3] This is an application by the defendant for summary judgment under r 293 Uniform Civil Procedure Rules 1999 (Qld) ("UCPR") or alternatively to strike out the plaintiff's claim and statement of claim pursuant to r 171 of the UCPR. It is alleged that the claim discloses no reasonable cause of action.

[4] There is also an associated application to remove a caveat on the land the subject of this dispute.

[5] The plaintiff also seeks further and better particulars of the defence.

[6] The amended claim seeks a declaration that the defendant holds the house and land at 24 Staysail Crescent Clear Island Waters on trust for the plaintiff absolutely. The plaintiff also seeks an order that the defendant transfer absolutely to the plaintiff all of the right, title and interest in the property. Alternatively, it is claimed that if the court finds the defendant made a contribution to the purchase monies used by her to purchase the property, the property should be transferred to the plaintiff on condition the plaintiff pays into a court an amount equal to the amount of contributions made by the defendant with interest.

[7] Alternatively, a claim is made that the plaintiff holds the property on trust for the defendant in a fractional amount proportionate to the fraction of any purchase monies found the court to have been contributed by the defendant towards the purchase.

[8] There is also a claim for equitable damages for the defendant's failure to account for the excess of the plaintiff's money over the purchase monies in the amount of $158,569.08.

[9] The ASOC pleads that the plaintiff was born on 12 January 1967 in China and he and the defendant are the biological parents of a child born 24 June 2019.

[10] The defendant was from 12 July 2021 the registered proprietor of 24 Staysail Crescent Clear Island Waters.

[11] It is alleged that on 13 September 2019, the plaintiff obtained a business innovation and investment (provisional) visa (subclass 188(B)) to migrate from the PRC to Australia.

[12] The defendant migrated to Australia to commence law studies at Bond University on 6 January 2020.

[13] In about May 2021, the plaintiff and the defendant agreed that the plaintiff would apply to include their child as a dependant on his visa application so the child could also migrate to Australia.

[14] From January 2021 until 12 July 2021, the plaintiff intended to purchase a property for himself on the Gold Coast for investment purposes and to provide the plaintiff, the defendant and the child a place to live until that investment was eventually realised by the plaintiff and the defendant would assist in facilitating this purchase.

[15] On or about 9 May 2021, the defendant sent messages to the plaintiff on the WeChat messaging application as to the property on realestate.com.au and the plaintiff should purchase it as an investment.

[16] On about 12 May 2021, the defendant entered into a written contract with Diane Gillman to purchase the property for $2,850,000. The total purchase price was $3,228,539.32 which included the following:

(a) The $25,400 fee payable under the FATA as well as associated legal costs of $550.

(b) An inspection fee of $565.

(c) Search fees, legal costs and charges of $877.22.

(d) Conveyancing legal costs of $2,556.50.

(e) Stamp duty of $336,946.88.

(f) Lodgement fees of $10,273.

(g) Council rates of $1,972.

(h) Bank fees of $30.

[17] It is alleged the plaintiff transferred the total sum of 16,400,000 RMB to the defendant's Chinese bank account. This was equivalent to $3,387,108.40 AUD. These monies were not paid as a gift and were paid with the intention of the plaintiff purchasing the property.

[18] It is alleged the defendant has not accounted to the plaintiff for the excess of $158,569.08. The defendant transferred the plaintiff's monies from her Chinese bank account to a bank account in Australia.

[19] On 12 July 2021, the settlement of the sale of the property occurred at Brisbane and the plaintiff's monies with the exception of $158,569.08 were used for the settlement. The defendant was registered on the title as the sole registered owner.

[20] The defendant made no financial contributions to the purchase of the property. A resulting trust has arisen in favour of the plaintiff. It would be unconscionable for the defendant to deny that she holds the property on trust for the plaintiff.

[21] In the FAD, it is admitted that the plaintiff is the biological father of the child. It is also admitted that the defendant is the biological mother of the child. It is alleged that whilst the plaintiff obtained a business Australian visa, he never wanted to become a permanent resident and was never ordinarily a resident in Australia.

[22] The defendant admits she entered Australia on or about 6 January 2020 and has ordinarily been a resident in Australia at all material times.

[23] She admits she agreed that the child would obtain a s 188 visa but does not admit the plaintiff would apply to include the child for the purpose of the child migrating to Australia.

[24] The defendant does not admit the allegations that the property was to be purchased for the plaintiff. She alleges there was no agreement, understanding or common intention that the plaintiff would purchase for himself a property on the Gold Coast and that the defendant would assist in such a purchase.

[25] She says that the plaintiff swore a statutory declaration on 2 June 2021 that the parties never lived together and agreed not to live together in the future. It is alleged that the Federal Circuit and Family Court of Australia ("FCFCA") has relied on this fact and ordered the plaintiff unlikely to succeed.

[26] It is alleged the plaintiff is a foreign person and was never eligible to acquire an interest in Australian residential land without relevant approval or exemptions. The plaintiff is prohibited from acquiring interests in the property as he already had a beneficial interest in a property at 188 Chelsea Road Ransome. She applied to the Foreign Investment Review Board ("FIRB") as the sole applicant and sole purchaser.

[27] The defendant admits the purchase price alleged in the pleading. She says the purchase price was paid entirely from her own funds from an Australian bank account. She denies that she received the 16,400,000 RMB. She says that a judgment of a court in the PRC determined that the alleged bank of China account was held by a person identified as Jian Hui Li and not the plaintiff. She does not admit the alleged funds were transferred to her for the purpose of purchasing the property.

[28] She alleges that the plaintiff, in the FCFCA proceedings, has asserted these funds were transferred for the purposes of a de facto relationship namely daily living, education and medical expenses to demonstrate the defendant's financial capacity to pay an education in Australia. She says that the plaintiff's contribution to purchase the property is unlawful. She says she is under no obligation to account for the excess.

[29] She says there was no agreement, understanding or common intention that the plaintiff would acquire any legal or beneficial interest in the property; the plaintiff did not make any contribution to the purchase of the property and at all material times he was a foreign person and did not obtain any approval or exemption under the foreign investment regime.

[30] In the reply the plaintiff persists in the allegation there was an understanding that the defendant would purchase the property for the plaintiff on the Gold Coast. It is alleged the allegations by the defendant inaccurately summarise the statutory declaration. The defendant had no funds of her own to pay for the property. They were the plaintiff's funds. The 16,400,000 RMB was transferred by the plaintiff for the purchase of the property. With respect to the allegation that the plaintiff contravened the FATA, it was the defendant who contravened this Act as she instructed her Australian agent that she was the sole purchaser of the property when she was not. It is further alleged the plaintiff did not contravene the Act. If there is a contravention, that is collateral to the plaintiff's equitable interest.

[31] In Li v Yang,[1] Hindman J dismissed the defendant's application to remove a caveat lodged by the plaintiff to protect his alleged interest in the land and for a striking out of the action. Accordingly, it is necessary for Ms Yang to show a material change of circumstances.

[32] She now alleges that any agreement alleged by the plaintiff is illegal and void as it was in breach of the FATA. In those circumstances the plaintiff cannot succeed in his claim.

[33] The plaintiff on the other hand submits that any agreement between them is not illegal, there is a valid cause of action, and the applications should be dismissed.

[35] In the first affidavit dated 21 January 2026, she says that she is the sole registered proprietor of the Staysail property. She purchased it on 12 July 2021. When she purchased it, she held a valid Australian temporary visa and was a temporary resident. She was entitled to purchase the property at the time.

[36] On 14 May 2021, she applied to the FIRB for approval to purchase the property noting that she was the sole purchaser and was to use the property as her principal place of residence. No FIRB applications were made seeking approval for the plaintiff to acquire any interest in the property. She encloses relevant emails between herself and the plaintiff concerning their relationship.

[37] She received the FIRB approval on 21 May 2021. This noted she was the sole purchaser.

[38] She alleges that on 2 June 2021 the plaintiff made a statutory declaration stating that he and the defendant were never married, had never lived together, and they did not own any assets or liabilities jointly.

[39] She says that the plaintiff is not eligible to acquire an interest in the property. Between August 2008 and October 2024, the plaintiff held a number of Australian visas. One of the exhibits is a decision to cancel his visa. Between 13 September 2021 and 19 November 2021, the plaintiff stayed in Australia for 101 days. She says that in his affidavit filed in the FCFCA sworn 20 November 2024, the plaintiff said that he spent 139 nights in Australia. She says that the plaintiff under ss 4 and 5 of the FATA is a foreign person. Under sections 84, 94 and 95 of the FATA it is an offence for him to acquire an interest in this property.

[40] At no stage did the plaintiff notify the Treasurer of his intention to acquire an interest in the property. He holds no relevant approvals.

[41] The plaintiff lodged a caveat on the property on 14 December 2021. She says that the caveat is lodged without a proper basis.

[42] Also, she says with respect to the property at 188 Chelsea Road Ransome the plaintiff was a foreign person and was prohibited from acquiring an interest in it. He had no approval to acquire an interest in that property and it cannot be used for any undertaking given to the court.

[43] She also sets out illegality alleged in the claim, and inconsistencies in the plaintiff's case concerning the FCFCA proceedings and as to his identification. She also relies on a judgment of a Chinese court in 2025 finding that the plaintiff failed to establish that he and Jian Hui Li were the same person.

[44] In her second affidavit dated 2 March 2026, the defendant repeats much of which is contained in the first affidavit.

[45] In the third affidavit the defendant refers to the history of the action. She alleges that:

(a) There is inconsistency between the ASOC and the reply.

(b) The ASOC fails to disclose a coherent action.

(c) The pleadings are inconsistent.

[46] She again refers to the 2025 Chinese judgment. She also says that in the defence to the Chinese proceedings, the plaintiff claimed the money was for living expenses and child maintenance.

[47] In his affidavit dated 28 May 2025, the plaintiff says that he cannot speak, read or write the English language. He says that he is the real owner and purchaser of the property at 24 Staysail Crescent Clear Island Waters. He provided all of the purchase monies to permit the purchase of the property in the name of Ms Yang. He did not intend these purchase monies to be a gift to her.

[48] He was born on 12 January 1967 in the PRC. He left high school and started working fulltime. Between 1998 and 2002 he studied law online and obtained the degree of Bachelor of Laws. He was a permanent resident of Hong Kong. In 2008 he established with others a law firm known as Guangzhou Yao Li law firm (GYH) located in Guangzhou city in PRC. He was also the CEO of a TV station.

[49] He has 16 children by six different mothers but has only been married once. He married Ziaoyun Chen on 25 May 1995. He divorced her on 9 October 2006.

[50] His childhood nickname is Li Kin Fai. In mainland Mandarin this translates a Jian Hui Li. Thus, Yiu Fai Li and Jian Hui Li/Li Kin Fai have been his true names. It is not unusual in the Southern part of China for children to be given two true names. He encloses a residential card which notes he is known by both names. During the course of his marriage to Ziaoyun Chen she gave birth to three children. The eldest is known as Matthew. Matthew has lived in Australia since 2008 operating a bubble tea shop and later restaurants.

[51] At the time of the purchase of the property he was making regularly monthly payments to support his three children by his former wife. Between May and July 2021 Matthew suffered large losses in the bubble tea shop and restaurants. The plaintiff is the true owner of these businesses. He funded him 5,000,000 RMB ($1,000,000 AUD). The losses were caused by the COVID-19 pandemic.

[52] He obtained the 5,000,000 RMB from his sister Yau Li. He met Xuichun Liu towards the end of his marriage to Ziaoyun Chen. He lived in a de facto relationship with her between 2006 and 2022 and had five children with her.

[53] At the time of the purchase of the property his assets were about $4,240,000AUD. He took out the loans of 15,500,000 RMB ($3,300,000 AUD).

[54] In 2021 he thought it was a good time to buy real property in Australia including South-East Queensland. The property of 188 Chelsea Road Ransome had increased in price, and he thought this was a likely trend.

[55] The defendant was already on the Gold Coast and had gone to study law at Bond University in September 2020. He thought she would be of assistance to him by helping him purchase the property on the Gold Coast and he wished to have her live in the property with him.

[56] He first met the defendant in 2012 at GYH. She had applied for a position as a lawyer and was hired. In early 2015, her marriage was breaking down. He started having an affair with the defendant. In 2016 the defendant resigned her employment at GYH and started working at the Ming Chen Bank. He made a s 188B Innovation and Investment visa application to allow him to come to Australia because he was concerned about the way in which political life in PRC was developing. The defendant became antagonistic to his other sex partners.

[57] In late September 2019 to January 2020 there were a number of face-to-face conversations and telephone conversations with the defendant. He says that he was intoxicated for most of the ones on 22 November 2019. Through his discussions with the defendant, he knew she could not afford to purchase the property on the Gold Coast with her own resources and funds. The defendant conducted herself in the task of finding a property for him as he was providing the purchase monies. They communicated through WeChat texts.

[58] Shortly before 16 May 2021, he discussed with the defendant the need to apply for an approval from the FIRB to buy the property. It was more likely she would get approval than him. It was agreed the contract would be in her name as purchaser.

[59] The total purchase monies were $3,229,119 AUD. He advanced a total of 14,900,000 RMB. He borrowed 3,000,000 RMB from Xui Dao Hu and 2,000,000 RMB from Chenzhan Lv. Exhibits YFL 7 and YFL 8 are the loan agreements. He denies the allegation by the defendant he would gift her the money to buy the property.

[60] He agrees that following the appeal in the Guangzhou Intermediate People's Court he took necessary steps to reflect the fact he should go by one name.

[61] He agrees that on 20 July 2022 he consented (without admission) to a protection order in favour of the defendant. He has complied with this. As a result of the protection order his visa was cancelled. He says that on five occasions in 2024 the defendant approached him at GYH's law offices in Guangzhou city. He recorded these.

[62] In his affidavit dated 11 June 2025, the plaintiff swears that he is the full beneficial owner of all the property located at 188 Chelsea Road Ransome. He undertakes not to deal with his beneficial interest in the property until the resolution of this action.

[63] Cheuk Pang Li in his affidavit dated 11 June 2025 confirms that the plaintiff owns all of the beneficial interest in the property. It is worth about $3,500,000. The outstanding mortgage is $654,530.45. He undertakes not to dispose of the property.

[64] The defendant submits that the evidence is that the plaintiff never was an Australian citizen. She is the sole owner and the purchaser. The plaintiff never had approval to acquire an interest in the property. The same applies to the Chelsea Road property.

[65] It is submitted that it was illegal for the plaintiff to acquire any interest in the land, and he has breached the provisions of the FATA.[2] At all material times the plaintiff was a foreign person,[3] and he took no steps to notify the Treasurer of his intention to acquire an interest in the land.[4]

[66] Any agreement alleged by him is illegal and his action for any kind of trust cannot be maintained. It is submitted it would be wrong for the court to be party to the plaintiff's continued illegality.[5]

[67] The defendant submits that she was the one who obtained FIRB approval and the land is registered solely in her name. She was eligible for the approval. She has complied with the conditions of it.

[68] She also submits that s 15 of the FATA required the approval of the Treasurer before there could be an agreement as to the acquisition by the plaintiff of the property.

[69] In those circumstances there is no cause of action available and his claim and ASOC should be struck out.[6]

[70] It is also submitted that the plaintiff's case has continually evolved. Originally it was brought on the basis of a constructive trust. Now it is alleged it was a resulting trust. It is further alleged the pleadings are vague and inconsistent and non-responsive to the FAD. The defendant specifically referred to paragraphs of the reply in this regard.[7]

[71] It is submitted the monies to purchase the property came from the defendant's bank account, not the plaintiff's bank account. It is submitted that the money was transferred from Jian Hui Li which is not the plaintiff's name, and a Chinese court has found it doubtful that he is the same person. It is submitted the plaintiff made a different claim in other proceedings.

[72] The application to remove the caveat is on the same grounds. It is also alleged that the plaintiff cannot use the Chelsea Road property for the purposes of his undertaking.

[73] In further written submissions the defendant refers to the FATA regime and submits the change from s 38 to s 134 indicates an intention that an act is invalid if it constitutes an offence rather than just a civil penalty. The cases before s 134 are not relevant.

[74] This is the defendant's second application to remove the caveat. The first was dismissed by Hindman J. It is noted that the defendant has changed her position concerning the money used to purchase the property. Initially she contended it was a gift but now she has deleted this and she now contends the money was hers.

[75] The only basis on which the defendant may make this application is on the FATA ground. It is submitted that in order to succeed the defendant must show a material change of circumstances. This has not been shown here.

[76] As to the FATA point, it is accepted that it applies to the acquisition of both legal and equitable interests in Australian land. However, no provision of the FATA directly prohibits the creation of a resulting trust in favour of a foreign resident. Certainly, s 15 of the FATA does not.

[77] Indeed, it is submitted that section 134 of the FATA provides a direct answer to the defendant's point. It has been previously held that the FATA does not invalidate a resultant equitable interest in favour of a foreign person.[8]

[78] It is submitted that the equitable interest here arose on the purchase of the property. There is a case to be run at trial.

[79] As to the strike out application it is submitted that the ASOC is conventionally pleaded. Also, Hindman J was satisfied there was a serious question to be tried. The pleading apprises the defendant of the case she has to meet.

[80] Rule 293 of the UCPR permits a court to enter summary judgment for a defendant if the plaintiff has no real prospect of succeeding on all or part of the plaintiff's claim and there is no need for a trial of the claim or the part of the claim.

[81] Rule 171 of the UCPR provides:

(1) This rule applies if a pleading or part of a pleading -

(a) discloses no reasonable cause of action or defence; or

(b) has a tendency to prejudice or delay the fair trial of the proceeding; or

(d) is frivolous or vexatious; or(e) is otherwise an abuse of the process of the court.

(2) The court, at any stage of the proceeding, may strike out all or part of the pleading and order the costs of the application to be paid by a party calculated on the indemnity basis.

(3) On the hearing of an application under subrule (2), the court is not limited to receiving evidence about the pleading."

[82] Insofar as summary judgments are concerned in Deputy Commissioner of Taxation v Salcedo,[9] it was said that the court must consider whether there exists a real, as opposed to a fanciful prospect of success.

[83] In other words, the procedure is only appropriate where the case is not fit for trial.[10]

[84] It must be borne in mind though that the power to summarily terminate proceedings must be attended to with caution and ordinarily a party should not be denied the opportunity of a trial.[11]

[85] In deciding whether to strike out a pleading I have regard to the following principles:

(a) The court's discretion to strike out pleadings should only be exercised in clear cases.[12] One should err on the side of caution.[13]

(b) The discretion to strike out pleadings should not be exercised lightly.[14]

(c) A party should not be shut out from an arguable cause of action.[15]

(d) A party should not be denied the opportunity to put their case before the usual interlocutory processes are complete.[16]

(e) The decision to strike out or not strike out a pleading is a value judgment for the judge.[17]

(f) Just because the case is a weak one does not mean the pleadings should be struck out.[18]

(g) Relevant to the discretion includes whether the striking out will substantially reduce the burden of preparing for trial or the burden of the trial itself.[19]

(h) A court should not shrink from striking out a defective pleading where it does not disclose a reasonable cause of action.[20]

[86] I now turn to the issue of whether the claim for a resulting trust is maintainable.

[87] It may be accepted that the plaintiff was a foreign person under ss 4 and 5 of the FATA. To acquire an interest in land he needed to give notice to the Treasurer under the FATA. It is likely that the plaintiff has breached the offence/civil liability provisions of the FATA.[21] It may also be accepted that FATA applies to acquisition of both legal and equitable interests in Australian land.[22]

[88] The question though is whether such illegal conduct renders any alleged agreement between the parties or any trust void and unenforceable.

[89] The High Court has examined the issue of illegality of contract on a number of occasions.

[90] In Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd,[23] it was said there was a distinction between an express statutory provision against the making of a contract or the imposition of a trust; a provision which impliedly treats an act as prohibited and illegal and acts not expressly or impliedly prohibited but in furtherance of illegal purposes. In that case, the court held that the mortgage and guarantees were not void or unenforceable despite a breach of the Banking Act. Gibbs ACJ noted[24] that the question whether a statute intends to vitiate a contract which breaches its provisions is one which must be determined in accordance with the principles which govern the construction of a statute. The words used and the scope and purpose of the statute are to be considered. His Honour held that there is a distinction between a statute with the intention of protecting the public as distinct from simply securing revenue. It was relevant in that case that the money was not borrowed for an illegal purpose.

[91] Mason J asked three questions:[25]

(a) Did the statute expressly prohibit the contract.

(b) Did the statute by necessary implication prohibit the contact.

(c) Whether the court will enforce a contract at the suit of a party who has entered into a contract with the object of committing an illegal act. This involves questions of public policy.

[92] His Honour held that the Banking Act was directed at aiding the government in executing its fiscal policy rather than regulating the relationship between customer and banker which lent support to the view that penalties in the Act were intended to be the only consequences of a breach of the section.[26]

[93] Yango Pastoral was followed in Nelson v Nelson.[27] In that case a mother provided funds to purchase a house in her children's names. She later falsely declared concerning another purchase that she had no other interest in a house. The first house was sold and the mother claimed the proceeds, which was opposed by the daughter. It was held that a resulting trust arose in favour of the mother despite the mother's illegal purpose. It was held that there was no general proposition that equity will let the loss lie where it falls in the case of illegality consisting of contravention of a statute. Deane and Gummow JJ noted the distinction between the equitable defence concerning clean hands and the notion of illegality. Ultimately the issue of illegality depends on the construction of the statute.[28] It was said:

"[the cases] suggest the drawing of a distinction between (i) an express statutory provision against the making of a contract or creation or implication of a trust by fastening upon some act which is essential to its formation, whether or not the prohibition be absolute or subject to some qualification such as the issue of a licence; (ii) an express statutory prohibition, not of the formation of a contract or creation or implication of a trust, but of the doing of a particular act; an agreement that the act be done is treated as impliedly prohibited by the statute and illegal; and (iii) contracts and trusts not directly contrary to the provisions of the statute by reason of any express or implied prohibition in the statute but which are 'associated with or in furtherance of illegal purposes'."

[94] In Equuscorp Pty Ltd v Haxton,[29] the High Court considered a situation in which a number of investors invested in a blueberry farm project. The investment schemes were held to be unenforceable. It was held that the illegality which rendered the loan agreement unenforceable deprived the lender of a right to claim money advanced to the investors. The plurality noted that the court must discern from the scope and purpose of the relevant statute whether the legislative purpose will be fulfilled without regarding the contract or the trust as void and unenforceable. Crucial to the decision in that case was the statutory provision contravened. This was s 170 of the Companies Code 1981 (NSW) which provided that a company should not issue to the public an invitation to subscribe or purchase a prescribed interest unless a statement in writing had been registered by the Commission. The policy was to protect the public by requiring disclosure of information relevant to their investment decisions. Whilst the making of the loan agreements was not expressly prohibited by the Code, the plurality held that the loan agreements were an integral part of the scheme and the offers to investors furthered the illegal purpose. Their protection was the object of the scheme.[30]

[95] Likewise, in Gnych v Polish Club Ltd,[31] it was noted that the question of whether a contract prohibited by statute is void depends on statutory construction.

[96] In this particular case there is no express provision which renders any contract or trust void and unenforceable. Indeed, there is an express provision to the contrary.

"Validity of acts done in contravention of this Act

An act is not invalidated by the fact that it constitutes an offence against or contravention of a civil penalty provision of this Act."

[98] The defendant contends that despite this provision in this case the court should not further the illegal conduct of the plaintiff by imposing a resulting trust.

[99] I turn to a consideration of the FATA. The overall statutory policy of the FATA appears in section 3. This provides:

"This Act deals with certain actions to acquire interests in securities, assets or Australian land, and actions taken in relation to entities (being corporations and unit trusts) and businesses, that have a connection to Australia. These actions are called significant actions. For an action to be a significant action, the action must in most cases result in a change in control involving a foreign person or be taken by a foreign person.

This Act also deals with actions taken by persons that have, or may have, implications for Australia's national security. These actions may or may not be significant actions. Actions relating to a national security business or national security land are notifiable national security actions. If an action is a reviewable national security action, or a significant action that is not a notifiable action or a notifiable national security action, the Treasurer may review the action if the Treasurer considers that the action may pose a national security concern.

If a person proposes to take or has taken an action, the Treasurer has power to do one or more of the following:

(a) decide that the Commonwealth has no objection to the action;

(d) require the action to be undone (for example, by requiring the

Offences and civil penalties apply for failing to comply with:

(a) an order made prohibiting an action, or requiring an action to

Significant actions that are notifiable actions, and notifiable national security actions, must generally be notified to the Treasurer before the actions can be taken. Offences and civil penalties may apply if a notifiable action is taken without a notice having been given. Broadly, if a notice has been given stating that a significant action is proposed to be taken, the action must not be taken before the end of a specified period (generally of 40 days, or an additional period of up to 90 days from the registration of an interim order)."

[100] The criminal offence provisions are in Division 2 of Part 5 ss 84 to 88A of the FATA. The relevant civil penalty offence provisions are in Division 3 Part 5 ss 89 and 94 to 98F of the FATA.

"To ensure that persons comply with their obligations under this Act, this Part provides for a range of enforcement options, including criminal offences and civil penalties.

There are additional civil penalties in relation to residential land. Some of these penalties may be calculated by reference to the market value of, or consideration for, the acquisition of the interest in the residential land or the capital gain from disposing of the interest.

The Regulatory Powers Act applies in relation to civil penalty orders, infringement notices, searches and enforceable undertakings under this Act. The Treasurer may give directions if the Treasurer has reason to believe that a person has engaged, or is engaging, in conduct that contravenes, or will contravene, this Act.

A charge on Australian land may apply for unpaid penalties under this Act."

(a) The intention of the legislature was to regulate the acquisition of Australian assets by foreign nationals because of national security concerns.

(b) If the FATA was breached, then the intention of the parliament was that the consequences would be penalties and other action taken by the Treasurer.

(c) It was not the intention of the legislature to set aside contracts or other arrangements made between parties.

(d) The FATA does not expressly or impliedly prohibit the formation of contracts or prohibit the imposition of resulting trusts.

(e) There are also no public policy reasons requiring a court to consider contracts and trusts made in breach of the FATA to be void.

[103] There are a number of decisions which support this view.

[104] Menezes v Salmon[32] was a case which involved the plaintiff claiming the existence of an express trust. He was an Indian citizen who advanced sums for the purchase of property. No relevant FATA approvals were obtained. McCready AsJ stated at [118]:

"I would agree with plaintiff's submissions that by refusing the plaintiff his beneficial interest the court would be imposing a further sanction where the parliament has indicated that the sanctions imposed by the statute are sufficient to deal with conduct that breaches or evades the operation of the statute and its policies."

[105] Of note, s 38 of the FATA was the predecessor of s 134. It was in slightly different terms providing:

"38 Validity of acts done in contravention of Act

The doing of any act that constitutes an offence against section 30 or 31 is, notwithstanding the commission of that offence, valid for all purposes."

[106] In Cordinup Resorts Pty Ltd v Terana Holdings Pty Ltd,[33] the Western Australian Full Court held that the relevant agreement was not invalidated by a breach of the FATA because of s 38. The Treasurer had his own remedy for a breach (of s 26A) namely a power to direct the disposal of land.

[107] Likewise, s 38 of the FATA was considered by Muir J in Ikeuchi v Liu.[34] In that case the plaintiff, a Japanese citizen, gave money to the defendant to enable an Australian home to be purchased for them to settle in. The relationship broke down and the plaintiff claimed that the property was held by the defendant on trust for him. The defendant argued that any trust was not enforceable because of the provisions of the FATA. Muir J held that although the efficacy of the FATA was capable of being subverted, it was apparent the penalties provided by the legislature were thought to be a sufficient deterrent against avoidance of the Act's provisions. He therefore did not accept the submission that public policy required the denial of equitable assistance to the plaintiff.

[108] Section 134 of the FATA was introduced in 2015 by the Foreign Acquisitions and Takeovers Legislation Amendment Act 2015 (Cth). However, the position has not changed.

[109] In Meshumar v Otmy,[35] the plaintiff claimed he paid a man $200,000 in exchange for a 1/3 equitable interest in a unit. He was an Israeli citizen. The defendant submitted that the trust should not be enforced because of breaches of the FATA. Robb J held that s 134 applied and the defence was rejected.

[110] Finally in Bao v Li,[36] Peden J held at [70]:

"Secondly, in opening Ms Li argued that it was impossible for Mr Tao to own the properties because he never sought approval from the Foreign Investment Review Board, and the Court would not make an order that Ms Li holds the properties on trust for Mr Tao because it would "promptly place both [Tommy] and [Mr Bao] into breach of the law", relying on Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA Act). However, section 134 of the FATA Act provides that "[a]n act is not invalidated by the fact that it constitutes an offence against or contravention of a civil penalty provision of this Act". I accept Mr Bao and Mr Tao's submissions that a defence of a similar kind was rejected by Robb J in Meshumar v Otmy (2018) 97 NSWLR 615; [2018] NSWSC 125 at [478]; see, to similar effect, Ikeuchi v Liu [2001] QSC 54 at [97]- [106] (Muir J); Szetu v Situ (No 2) at (Emmett AJA); and at - (Rein J). As accepted in closing by Ms Li's counsel, I do not consider the Act provides an impediment to Ms Li holding the properties on trust for Mr Tao."

[111] In light of the above authorities and section 134 of the FATA, I find that any alleged resulting trust is not void and is enforceable. The plaintiff is entitled to continue with his suit against the defendant.

[112] I reject the defendant's argument that any order of the court would be a perpetuation of the illegal conduct. The existence of the trust crystallised when the money was paid for the property. Any declaration simply acknowledges this.

[113] As to s 15 of the FATA I do not consider this section excludes the possibility of a resulting trust. Also, I did not accept the defendant's argument that s 134 does not apply to an offence. I consider the words "offence" and "civil penalty provision" are disjunctive.

[114] I consider it reasonably arguable that a resulting trust was created in favour of the plaintiff here.[37] There are triable issues on who advanced the funds for the purchase and a judge needs to determine that issue.

[115] It is also arguable that the defendant is not entitled to any presumption of advancement as she was not married to the plaintiff.[38] It is true that the presumption of a resulting trust may be rebutted from evidence from which it may be inferred there was no intention on the part of the person providing the money to have an interest in the land.[39] But in this case the plaintiff asserts that the money was provided with that intention in mind. A question of intention is one of fact to be determined by the court. The subjective intention of the provider of the purchase monies is admissible on this question.

[116] I find there is a prospect that the plaintiff may succeed on his claim and there is a need for a trial.

[117] Also, in my view the pleading discloses a reasonable cause of action, and it sufficiently apprises the defendant of the case she needs to meet. I did not accept the defendant's submissions as to inconsistency between the ASOC and the reply. The reply was answering allegations made by the defendant.

[118] I further find in light of the fact the registered proprietor of the Chelsea Road property has provided an undertaking as well as the plaintiff there is also no reason to disturb the findings of Hindman J that the caveat should not be removed.

[119] I accept the plaintiff's argument that the particulars sought are necessary to define the issues for the trial.[40]

[120] Paragraph 6(c)(ii) of the FAD alleges that the FCFCA relied on a statutory declaration of the plaintiff and ordered that the plaintiff unlikely to succeed. I agree that the defendant should provide the further particulars referred to below.

[121] Paragraph 9A of the FAD alleges that funds were paid entirely by the defendant from her own bank account. I agree that the defendant should provide the further particulars referred to below. The provenance of the money is a central matter to be determined at trial.

[122] Paragraph 9B makes a similar assertion to 9A. I agree that the defendant should provide the further particulars referred to below.

[123] Paragraph 10(e) of the FAD alleges that the plaintiff asserted in FCFCA proceedings that the funds were for the purposes of de facto life, child, education and medical expenses and to demonstrate the defendant's financial capacity to pay education fees. I agree that the defendant should provide the further particulars referred to below. The purpose of the money is a central matter to be determined at trial.

1. The defendant's application to strike out the claim and statement of claim is dismissed.
2. The defendant's application to remove the caveat is dismissed.
3. The defendant is to provide to the plaintiff the following further and better particulars within fourteen (14) days of this Order, namely:-

(a) As to paragraph 6(c)(ii) of the Further Amended Defence specify:

1. The identity of the member of the Federal Circuit and Family Court of Australia (Division 1) ("FCFCA") referred to.
2. The date of the alleged reliance and order by the FCFCA.
3. If the reliance and order was oral, the substance of what is alleged to have been said.
4. If that reliance and order was made in writing, provide a copy of that writing.

(b) As to paragraph 9A of the Further Amended Defence specify:-

1. the name of the defendant's Australian bank with which she held her Australian bank account; and
2. the BSB number of the defendant's Australian bank account;
3. the account number of the defendant's Australian bank account.

(c) As to paragraph 9B of the Further Amended Defence specify:-

1. the name of the defendant's Australian bank with which she held her Australian bank account; and
2. the BSB number of the defendant's Australian bank account;
3. the account number of the defendant's Australian bank account.

(d) As to paragraph 10(e) of the Further Amended Defence specify:

1. by name each and every Court and the member there presiding in which it is alleged the alleged assertions were made;
2. the proceeding by number in each such Court in which it is alleged the alleged assertions were made;
3. say, by date, in each such proceeding when it is alleged each such assertion was made;
4. insofar as it is alleged the assertion was made orally, give the substance of the words used;
5. insofar as it is alleged such assertion was made in writing, provide a copy of that writing.

[1] [2025] QSC 233.

[3] He was not ordinarily a resident of Australia - see section 4 of the FATA.

[5] Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 246 CLR 498.

[6] General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69; (1964) 112 CLR 125.

[8] Meshumar v Otmy [2018] NSWSC 125; (2018) 97 NSWLR 615.

[9] [2005] QCA 227; [2005] 2 Qd R 232 at [17].

[10] Coldham-Fussell v Commissioner of Taxation [2011] QCA 45; (2011) 82 ASCR 439 at [99].

[11] Spencer v Commonwealth [2010] HCA 28; (2010) 241 CLR 118 at [24].

[12] Royalene Pty Ltd v Registrar of Titles [2007] QSC 59 at [6]; Lee v Abedian [2016] QSC 92; [2017] 1

[13] Trade Practices Commission v Pioneer Concrete (Qld) Pty Ltd (1994) 124 ALR 685 at page 695.

[14] Williams & Humbert Ltd v W & H Trade Marks (Jersey) Ltd [1986] AC 386 at pages 435-436.

[15] Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118 at [24].

[16] Spencer v The Commonwealth [2010] HCA 28; (2010) 241 CLR 118 at [24].

[17] GLJ v Roman Catholic Church [2023] HCA 32; (2023) 280 CLR 442 at [16].

[18] Polar Aviation Pty Ltd v Civil Aviation Authority [2012] FCAFC 97; (2012) 203 FCR 325 at [43].

[19] Williams & Humbert Ltd v W & H Trade Marks (Jersey) Ltd [1986] AC 386 at pages 435-436.

[20] Lee v Abedian [2016] QSC 92; [2017] 1 Qd R 549 at [39].

[21] Sections 81, 94 and 95 of the FATA.

[23] [1978] HCA 42; (1978) 139 CLR 410.

[24] [1978] HCA 42; (1978) 139 CLR 410 at pp 413-414.

[25] [1978] HCA 42; (1978) 139 CLR 410 at pp 423-424.

[26] [1978] HCA 42; (1978) 139 CLR 410 at p 429.

[27] [1995] HCA 25; (1995) 184 CLR 538.

[28] [1995] HCA 25; (1995) 184 CLR 538 at pp 550-552.

[29] [2012] HCA 7; (2012) 246 CLR 498 at [23].

[30] [2012] HCA 7; (2012) 246 CLR 498 at [45].

[31] [2015] HCA 23; (2015) 255 CLR 414 at [37].

[32] [2009] NSWSC 2.

[33] (1997) 143 FLR 18.

[34] [2001] QSC 54; (2001) 160 FLR 94 at [106].

[35] [2018] NSWSC 125; (2018) 97 NSWLR 615 at [478]

[36] [2022] NSWSC 1335 at [70]. Also see Liu v Wang [2022] NSWSC 796 at [98]- [102].

[37] Bosanac v Federal Commissioner of Taxation [2022] HCA 34; (2022) 275 CLR 37 at [12].

[38] Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 at p 248.

[39] Bosanac v Federal Commissioner of Taxation [2022] HCA 34; (2022) 275 CLR 37 at [13].

[40] R 157 of the UCPR; Thiess Pty Ltd v FFE Minerals Australia Pty Ltd [2007] QSC 209 at [34]- [35]; NRNQ v MEQ Nickel Pty Ltd [1991] 2 Qd R 592 at pp 594-598.