Ling v Beyond Development Group Pty Ltd

0499, 7 September 1998 Graham v Hall (2006) 67 NSWLR 135; [2006] NSWCA 208 Gray v Haig (1854-1855) 20 Beav 219; 52 ER 587 Hastie Group Ltd (in liq) v Bourne; Hastie Group Ltd (in liq) v Moore [2017] NSWSC 709 Houghton v Arms (2006) 225 CLR 553 Hoxton Park Residents Action Group Inc v Liverpool City Council [2012] NSWSC 1026 In the matters of Earth Civil Australia Pty Ltd, RCG CBD Pty Ltd, Bluemine Pty Ltd, Diamondwish Pty Ltd and Rackforce Pty Ltd (all in liq) [2021] NSWSC 966 Jackson v Sterling Industries Ltd (1987) 162 CLR 612; [1987] HCA 23 Jainti Pty Ltd v Fraser Panorama Pty Ltd [2021] NSWSC 744 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Katsilis v Broken Hill Pty Co Ltd (1977) 18 ALR 181 Kayteal Pty Ltd v Dignan (2011) 15 BPR 29,515; [2011] NSWSC 197 Lloyd v Grace, Smith & Co [1912] AC 716 Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 Manly Council v Byrne and Anor [2004] NSWCA 123 Matouk v The Entrance Seabreeze Pty Ltd [2010] NSWSC 649 Musa v Alzreaiawi [2020] NSWSC 638 Musa v Alzreaiawi [2021] NSWCA 12 National Commercial Banking Corporation of Australia Limited v Cheung (1983) 1 ACLC 1326 National Roads and Motorists' Association Ltd v Construction, Forestry, Mining, and Energy Union (2019) 291 IR 28; [2019] FCA 1491 NEC Information Systems Australia Pty Limited v Linton (Wood J, 17 April 1985, unreported) Ninemia Maritime Corp v Trave Schiffahrtsgesellschaft mbH & Co KG; The Niedersachsen [1984] 1 All ER 398 Nominal Defendant v Cardin (2017) 79 MVR 210; [2017] NSWCA 6 NWR FM t/a North West Radio v. Broadcasting Commission of Ireland & Anor [2004] IEHC 109 Payne v Parker [1976] 1 NSWLR 191 Perpetual Trustee Company Limited v Peter Ishak [2012] NSWSC 697 Perpetual Trustee Company Ltd v Milanex Pty Ltd (in liq) [2011] NSWCA 367 Perre v Apand Pty Ltd (1999) 198 CLR 180 Perre v Apand Pty Ltd (1999) 198 CLR 180 Podrebersek v Australian Iron and Steel Pty Ltd (1985) 59 ALJR 492; [1985] HCA 34 Rosebanner Pty Ltd v Energy Australia (2009) 223 FLR 406; [2009] NSWSC 43 Scottish Amicable Life Assurance Society v Reg Austin Insurance Pty Limited (1995) 9 ACLR 909 Sellers v Adelaide Petroleum NL (1994) 179 CLR 332; [1994] HCA 4 Sergienko v AXL Financial Pty Ltd [2019] NSWSC 1610 Severstal Export GmbH v Bhushan Steel Ltd (2013) 84 NSWLR 141; [2013] NSWCA 102 State Bank of NSW Ltd v Yee (1994) 33 NSWLR 618 Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640; [1975] HCA 63 Stellar Vision Operations Pty Ltd v Hills Health Solutions Pty Ltd [2022] NSWSC 144 Street v Luna Park Sydney Pty Ltd (2009) 223 FLR 245; [2009] NSWSC 1 Superbarn Supermarkets Pty Ltd v Cotrell Pty Ltd [2016] ACTSC 49 Tepko Pty Ltd v Water Board (2001) 206 CLR 1; [2001] HCA 19 The Ophelia [1916] 2 AC 206 Vella v Permanent Mortgages Pty Ltd (2008) 13 BPR 25,343; [2008] NSWSC 505 Vukicevic v Alliance Acceptance Co Ltd; Vukicevic v Ellison (1987) 9 NSWLR 13 Watson v Foxman(1995) 49 NSWLR 315 Wickham v Marquis of Bath (1865) LR 1 Eq 17 Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65 Texts Cited: Bruce Feldthusen, Economic Negligence (2000, 4th ed, Carswell) David Rolph et al, Balkin & Davis Law of Torts (2021, 6th ed, LexisNexis) at [13.24] Found B & Rogers D Eds (1999) Documentation of Forensic Handwritting Comparision and Identification Method: a Modular Approach, Journal of Forensic Document Examination 12 G E Dal Pont, Law of Costs (2009, 2nd ed, LexisNexis) Gino Dal Pont, Law of Agency (2020, 4th ed, LexisNexis) R F Norton, R J A Morrison, H J Goolden, Norton on Deeds (1928, 2nd ed) Torts Cases and Commentary (2017, 8th ed, Lexis Nexis) Young, Newton and Cahill, Conveyancing Service New South Wales (2003, Lexis Nexis) Category: Principal judgment Parties: Kuo Shu Ling (First Plaintiff) Chuan Dian International Trade Co Ltd (Second Plaintiff) Beyond Development Group Pty Ltd (First Defendant) Liping Wang (Second Defendant) Peter Zhuang (Third Defendant) Pang (trading as O Pang & Co) Oliver (Fourth Defendant) Representation: Counsel: DP O'Connor with P Lin (Plaintiffs) DC Eardley (Second Defendant) DA Lloyd SC with C Robertson (Fourth Defendant)

Solicitors: Pinnacle Lawyers (Plaintiffs) Praxis Lawyers (Second Defendant) DLA Piper (Fourth Defendant) File Number(s): 2018/00012504 Publication restriction: Nil

Judgment

1. HER HONOUR: This matter involves a dispute between various parties relating to the plaintiffs' attempt to recover moneys under two instruments each titled "Mortgage Linked Loan Agreement" (and referred to collectively in submissions as the Loan Agreements) but which in their terms guaranteed the obligations of the first defendant, Beyond Development Group Pty Ltd (Beyond Development Group) (a company now in liquidation), to repay sums totalling $900,000 plus interest to the plaintiffs. The instruments are expressed to be executed as deeds.
2. Neither of the Loan Agreements was signed by Beyond Development Group; thus the instruments on which the plaintiffs sue would seem to be guarantees as such (not loan agreements per se). However, in reply submissions the plaintiffs contend that Beyond Development Group is a party to the Loan Agreements (an argument that I address in due course).

Parties

1. The first plaintiff is Ms Kuo Shu Ling (the wife of Mr Jonathan Lee, a director of the second plaintiff). The second plaintiff is a company, Chuan Dian International Trade Co Ltd (Chuan Dian). Ms Ling did not give any evidence in the proceeding. Rather, the evidence given for the plaintiffs was from Mr Lee and Mr Tupou, the solicitor for the plaintiffs.
2. The first defendant is Beyond Development Group, which was placed into liquidation in September 2018, after default judgment was entered against it in the proceeding in the sum of $1.3 million pursuant to orders made by Rees J on 25 May 2018.
3. The second defendant is Ms Liping Wang who purportedly signed the Loan Agreements as a guarantor. I say "purportedly" because Ms Wang denies that she signed the Loan Agreements and denies liability under the guarantees.
4. The third defendant, Mr Peter Zhuang, was the director of Beyond Development Group and also a guarantor under the Loan Agreements. Mr Zhuang (Ms Wang's former husband) did not appear in the proceeding (and default judgment is sought against him). I was informed by the plaintiffs' Counsel that Mr Zhuang had "effectively absconded" - see T 2.31-2.48; and that Mr Zhuang's trustee in bankruptcy did not wish to take any part in the proceeding - see T 308.23.
5. The fourth defendant is Mr Oliver Pang, an accountant (and, relevantly, a Justice of the Peace) trading as O Pang & Co, who purportedly witnessed the guarantors' signatures on the Loan Agreements (next to the words "SIGNED SEALED & DELIVERED in the presence of O Pang"). I say "purportedly" because Mr Pang (who concedes that the signatures look like his own) cannot recall whether or not he witnessed the signatures but says that, if he did, then it would have been done in accordance with his invariable practice (i.e., to do so only in the presence of the signatory in question).

Issues

1. As adverted to above, Ms Wang denies that she signed the Loan Agreements (and has adduced expert evidence providing strong "qualified" support for the proposition that they are not her genuine signatures). Should that contention be accepted, it logically follows that Mr Pang cannot have witnessed Ms Wang's signature in her presence, despite (on the face of the documents) attesting that he had done so. Therefore, on the hypothesis that Ms Wang's signature is not genuine, if Mr Pang's signature on the Loan Agreements is genuine, there are logically only a number of possibilities: that Mr Pang witnessed a blank document (or at least one without anything appearing to be Ms Wang's signature); that Mr Pang witnessed a document that already purportedly bore Ms Wang's signature (but not in her presence); or (though no-one suggests this occurred) that someone other than Ms Wang attended Mr Pang's offices and he witnessed that other person sign the documents (whether or not knowing that it was not Ms Wang (see discussion at T 309.7-309.20). In any of those scenarios, the attestation by Mr Pang would be false but only in the first two scenarios would it necessarily be knowingly false.
2. It is also relevant to note that Mr Pang's own evidence is that he did not deal with Ms Wang (whose tax returns he prepared) in person (but only communicated with her through her husband, Mr Zhuang, by email) and had not met Ms Wang (and this is corroborated by Ms Wang, although her evidence is somewhat unreliable in a number of other respects - as to which I say more in due course). If so, it might perhaps be expected that Mr Pang would have been more definitive about not having witnessed Ms Wang physically sign any document (let along the documents in question). Hence, the significance the plaintiffs attach to Mr Pang's seeming acceptance of the possibility that it is his signature. However, the explanation for this appears to be that Mr Pang has been scrupulous not to deny something of which he has no positive recollection (and he was adamant that if he had witnessed the signature then in accordance with his invariable practice he could only have done so in the presence of the signatory).
3. The issues for determination may be summarised as being: first, whether Ms Wang signed the Loan Agreements and is bound by the guarantees contained therein; second, if the signatures on the Loan Agreement are not those of Ms Wang, whether Mr Pang signed the Loan Agreements; third, whether (if it be found that Mr Pang did sign the Loan Agreements) whether Mr Pang is liable to pay to the plaintiffs the outstanding amount under the Loan Agreements as a result of: knowing involvement in the alleged misleading or deceptive conduct of Mr Zhuang; or misleading or deceptive conduct in his own right; or in negligence for breach of a duty of care owed to the plaintiffs in relation to his execution of the Loan Agreements; and, finally, if Mr Pang is liable to the plaintiffs, whether that liability is reduced as a result of the defences Mr Pang has here raised.

Chronology of Events

1. Mr Lee (as noted above, one of the directors of Chuan Dian) was a business associate of Mr Zhuang, having known Mr Zhuang for some ten years (see at T 22.35-22.37) and having met through Mr Lee's business of importing and selling mobile telephones (see Mr Lee's first affidavit sworn 17 April 2019 at [4]). Mr Lee made clear in his oral evidence (more than once) that he trusted Mr Zhuang (and said he had no reason to distrust him).
2. Mr Lee's evidence is that in early 2016 he had discussions with Mr Zhuang, in which Mr Lee says Mr Zhuang told him about an investment opportunity in relation to a commercial property development at 117-119 Stoddart Street Roselands, NSW (referred to in submissions as the development properties) for which Mr Zhuang said he had already obtained funding from NAB (see T 24.36-24.39). Mr Lee says that Mr Zhuang told him that he had set up a new development company called Beyond Development Group. According to Mr Lee, Mr Zhuang sought a $1 million loan from Mr Lee for one year, with a fixed interest rate of 30% p.a. (an interest rate that in cross-examination Mr Lee did not regard as high but which he seems to have been keen at the time to procure - at one point in cross-examination suggesting that the fixed interest rate was a factor contributing to it being a "safe" investment). (I note that it is accepted by the plaintiffs that the best that the plaintiffs can now achieve is to be put back in the position they were in prior to advancing the funds and hence that they cannot obtain interest at 30% - see T 336.38-336.45.)
3. Mr Lee says that Mr Zhuang offered security over the property development, and that personal guarantees would be given by Mr Zhuang and his wife, Ms Wang. Relevantly, Mr Lee has also deposed that, in January 2016, Mr Zhuang indicated that his and his wife's Bella Vista property would secure (or provide a guarantee for) the loan, by Mr Zhuang saying to Mr Lee words to the effect that "my wife and I own property in Bella Vista and we would personally guarantee the loan" (see [8] of Mr Lee's first affidavit). (There is a distinction between proffering a guarantee and proffering security for such a guarantee but this may not have been appreciated by Mr Lee.)
4. Mr Lee accepted in cross-examination that he was not in the property business (T 26.15); that he had not seen the land (only pictures of the land) (T 27.5). Mr Lee was based at all relevant times overseas. Mr Lee seems to have relied on projections of profit put to him by Mr Zhuang (see T 26.47) but said in cross-examination that he intended to do "research" if he was going to lend Mr Zhuang the money (T 27.35).

Pleadings

1. The plaintiffs sue on a fifth further amended statement of claim filed on 10 February 2021.
2. Against Ms Wang, the claim (pleaded at [5]ff and [9]) is a claim under the guarantee for repayment of the moneys advanced. At the time of the hearing, $800,000 plus interest on the Loan Agreements remained outstanding. Ms Wang filed her amended defence on 16 December 2019 and disputes that she signed any loan agreement. Ms Wang has deposed that she did not sign either of the Loan Agreements (see Ms Wang's first affidavit affirmed 5 September 2018 at [13]-[18]) and Ms Wang affirmed this evidence in cross-examination (see T 144.34-144.49; T 146.18-146.19). Ms Wang has also deposed that she did not authorise any other person to sign any document on her behalf.
3. Against Mr Zhuang, the contraventions (in which it is alleged that Mr Pang was knowingly concerned) are pleaded at [18B] of the fifth further amended statement of claim, it being alleged that Mr Zhuang was in breach of s 18 of the Australian Consumer Law, being Schedule 2 to the CCA (ACL). The plaintiffs allege that Mr Zhuang represented to them that: the loans would be personally guaranteed by Ms Wang and Mr Zhuang and that Ms Wang and Mr Zhuang owned the Bella Vista Property, which would provide the plaintiffs with further security over the loans.
4. The alleged representations are said to have been made by Mr Zhuang: in conversations between Mr Zhuang and Mr Lee in January 2016 and October 2016; and on the loan agreements, including on the execution page.
5. The plaintiffs allege (at [18C]) that the representations were false, because (on the hypothesis that it is not Ms Wang's signature on the documents) Ms Wang did not in fact sign the Loan Agreements and that Mr Zhuang either forged Ms Wang's signature or caused someone else to do so.
6. Against Mr Pang, the allegations are of: knowing concern and involvement in the misleading or deceptive conduct of Mr Zhuang; misleading or deceptive conduct Mr Pang in his own right; and negligence (see at [18D]-[29]).
7. Mr Pang is said to have falsely attested that Mr Zhuang had signed the execution page of the loan agreements in his presence and to have done so intentionally (and that, in so doing, Mr Pang made good Mr Zhuang's promise to reduce the loan agreement to writing with terms that provided security over the development properties and the personal guarantee). It is further said that Mr Zhuang could not have made the representation that he would provide the loan agreements in writing without the knowing assistance of Mr Pang.

Loan Agreements

1. As noted, the first Loan Agreement is dated 9 November 2016 and it is common ground that the second Loan Agreement was signed on that date. Under the first Loan Agreement, Ms Wang and Mr Zhuang each personally guaranteed a loan of $200,000 from Ms Ling to Beyond Development Group (see original loan agreements, Ex D) and, separately, under the second Loan Agreement, each of Ms Wang and Mr Zhuang personally guaranteed a loan of $700,000 from Chuan Dian to Beyond Development Group (see Ex D).
2. Each Deed contains (see cl 9 of the respective Loan Agreements) both a guarantee and indemnity in favour of the plaintiffs in the following terms: The guarantor hereby guarantees to the mortgagee the due and punctual performance of all the obligations of the mortgagor contained or implied in this deed and hereby indemnifies the mortgagee against all losses, expenditure costs and expenses of whatever nature suffered or incurred directly or indirectly by the mortgagee in receiving the principal sum, interest and all other amounts that may become due under this deed or the mortgage.
3. Both Loan Agreements contain signatures underneath the printed names of Mr Zhuang and Ms Wang. Next to those signatures appear the name and apparent signature of Mr Pang. As noted above, Mr Pang accepts that the signatures on the agreements look like his signature. However, Mr Pang's position is that if, in fact, Ms Wang did not sign the documents in his presence, then (based on his invariable practice) he did not witness her signature (because, on Ms Wang's account, that would involve Mr Pang signing the agreements as a witness to her signature, without in fact having seen her sign the documents).

Evidence

1. Each of Mr Lee, Ms Wang and Mr Pang gave affidavit evidence and was cross-examined. There was no evidence from Ms Ling; nor was there any evidence from Mr Zhuang. In that regard, amongst a number of Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 (Jones v Dunkel) submissions, the plaintiffs say (in reply submissions) that, despite giving evidence that Mr Zhuang is the person who could best resolve the dispute as to who affixed his signatures to the agreements, Mr Pang did not call Mr Zhuang to give evidence as to what occurred and to bolster Mr Pang's version of the conversation in September 2018 (see the chronology above). The plaintiffs say that this is because Mr Zhuang's evidence would not help Mr Pang, and "probably" would be "quite the opposite" (this last submission, in my opinion, traversing beyond the limits of a Jones v Dunkel inference - which I discuss in due course).
2. I do not accept that an adverse inference should be drawn from the fact that Mr Pang did not call Mr Zhuang (someone who the plaintiffs' Counsel himself suggested had "absconded" - see at T 2.31-2.48; although Ms Wang's evidence was that she was still in contact with her ex-husband - see T 151.15). This is because I do not accept that it can fairly be said that Mr Zhuang is in Mr Pang's camp or that it would be more natural for Mr Pang to call Mr Zhuang than for Mr Lee to do so. The requirements for such an inference to be drawn are well-known (see as summarised at [155] in Jainti Pty Ltd v Fraser Panorama Pty Ltd [2021] NSWSC 744) and are discussed in greater detail below. In my opinion, they are not here satisfied in relation to Mr Zhuang.
3. As to expert evidence, there was the following.
4. Valuation evidence was given by Mr Joshua Towndrow (see his affidavit sworn 22 December 2020), called by the plaintiffs, and Ms Dimity Marshall (see her report dated 30 June 2020 - Ex 3; see also her supplementary report of 15 January 2021 - Ex 4), called by Mr Pang; with a joint report (Ex 6). These experts gave their opinion as to the valuation of the development properties (relevant to the issue as to the ability of the plaintiffs to have recovered the loan amounts had there been action taken at an earlier time).
5. Evidence was given from two solicitors - Mr Dennis Bluth, called by the plaintiffs (see Ex A to his affidavit sworn 30 September 2021), and Mr Peter Rosier, called by Mr Pang (see his report dated 19 March 2020 - Ex 1; and his supplementary report dated 24 March 2021, Ex 2; with a joint report 19 May 2021 (Ex 5), that evidence going to the practice of solicitors in relation to the certification of parties to property transactions.

Mr Lee

1. I have referred through the chronology of events to much of Mr Lee's evidence in the proceeding (both his affidavit evidence and the evidence that he gave in cross-examination). I considered Mr Lee to be a genuine and co-operative witness. Mr Lee certainly did not shy away from the fact that he had decided to take the risk or a business risk in his decision to advance the loan funds, though his constant refrain was the importance to him of the personal guarantees. I accept that those were of importance to him but the fact remains that ultimately Mr Lee placed trust in Mr Zhuang (both to make good his promise that the personal guarantees would be executed and to make good the underlying assumption that the Bella Vista property would be sufficient security if those guarantees were to be called upon); just as Mr Lee seems to have placed trust in little more than Mr Zhuang's projections as to the profit to be made from the proposed development.
2. Thus, while I accept that Mr Lee was a credible witness, the issues in dispute do not turn on his credibility as such.

Ms Wang

1. Ms Wang was in a number of respects an unreliable witness. In the course of her cross-examination, Ms Wang gave varying accounts of being employed by a company known as Elite Express (whose registered office was the same as the office of Mr Pang) and admitted that she had lied when representing to a bank, from which she had sought to secure a refinance, that she was earning almost $300,000 per annum (see T 175.25 - T 175.41).
2. For Ms Wang, it is submitted that, although the evidence given in relation to the salary recorded and the loan application given to the bank was false (in respect of which Ms Wang was given a certificate under s 128 of the Evidence Act 1995 (NSW)), Ms Wang nonetheless conceded that she had been untruthful. It is said that the untruth that was told by Ms Wang was in relation to a loan application and her employment status (not in relation to questions put to her about signing the loan agreements) and that, although Ms Wang was untruthful in relation to her employment that does not necessarily infect the balance of her evidence as to the signing of the two loan agreements.
3. It is said for Ms Wang that her evidence was clear and unequivocal in relation to not signing the two loan agreements. While Ms Wang accepts that a cautionary approach is warranted in this regard because of the untruthful evidence given by Ms Wang in cross-examination, it is said that this is not the only source of evidence upon which reliance can be placed on the question as to whether Ms Wang did indeed sign the respective Loan Agreements.

Mr Pang

1. Mr Pang's evidence as to whether it is his signature on the guarantees (noting he has been a justice of the peace since 24 July 1991 - see his affidavit at [5], which I note is not consistent with Mr Pang's oral evidence at T 198.22 that he has been a justice of the peace since 1995), is that, on viewing the copy of the guarantees provided to him in September 2018, it appeared to him that his signature (or a signature that looked like his signature) is adjacent to the execution signatures of Mr Zhuang and Ms Wang (see his affidavit at [28]); and that his practice is not to certify that he has witnessed a signature unless the person is in his presence (see T 196.48-197.1; T 197.26-28).
2. Relevantly, Mr Pang's evidence is that in about 2013 or 2014, he implemented an invariable practice of making an electronic copy of important documents the execution of which he had witnessed, and saving that electronic copy to the computer system located in his business premises (see his affidavit at [6]). He says that the guarantees and the certified identity documents are documents of the kind that if he witnessed them he would enter into that log in accordance with his usual practice (see T 198.43, T 199.8, T 199.2-3).
3. I have referred above to Mr Pang's evidence that, when he was contacted by Mr Tupou in September 2018, he found copies of the identity documents in his witness log (but no copy of the Loan Agreement). Mr Pang consistently maintained in his oral evidence that he had no recollection as to whether he witnessed the guarantees, but his position that (if it was the case that Mr Zhuang or Ms Wang did not sign them in his presence), then in accordance with his invariable practice that he would not have put his signature on them certifying that he had witnessed the signature ultimately were signed in his presence (see for example T 196.48-197.1, T 197.26-28).
4. Mr Pang's evidence was that he was anxious if someone had forged his signature (T 206.2) but he took comfort from the fact that Mr Zhuang had confirmed at it was not his signature (T 207.24).
5. Mr Pang did not know Mr Lee and had had no dealings with him (T 215.50), basically having dealt with Mr Zhuang most of the time (T 219.49). Mr Pang's office was the registered address for both Beyond Development Group and Elite Express (companies with which Mr Zhuang was associated). Mr Pang, who has been a Justice of the Peace since (at least) 1995, had acted as accountant for Mr Zhuang and his companies and had prepared taxation returns for Ms Wang (though he had not met Ms Wang).

Mr Tupou

1. Mr Tupou gave his evidence with due solemnity and in a calm manner. As the plaintiffs emphasise, he was unshaken in his evidence that he had an actual recollection of the 22 November 2016 conversation and that Mr Pang confirmed to him that he had witnessed the documents. I make no adverse credit findings in this regard. I consider that Mr Tupou was a truthful witness. That said, I consider that there are (not surprisingly) inconsistencies in his recollection of events and that it is likely that his adamant recollection of the relevant conversation has been (unconsciously) bolstered in his mind by the conclusion he drew from that conversation and not necessarily by its content.

Handwriting experts

1. As to the handwriting experts, I note as follows.

Ms Holt

1. Ms Melanie Holt's expert evidence in her report dated 20 October 2018 (annexed to her affidavit filed 22 October 2018) concludes (at [21]-[22]) that there is strong support that someone other than Ms Wang wrote the signatures attributed to Ms Wang. There is no expert evidence to rebut the report of Ms Holt. I found Ms Holt to be a helpful and considered witness who gave cogent evidence and was able to explain the logic behind her conclusions.
2. Ms Holt suggested that one explanation for similarly or uniformly of signatures might be that they are simulated (in that one would ordinarily expect a slight variation in signatures) (see T 286.35; 287). (Here, there were some variations in signatures of Mr Pang - see Ex D, and the loan agreements - see Ex E in the hearing before Pembroke J, - although some were fairly close in appearance.)

Mr Hobden

1. Mr Clifford Hobden's expert evidence (see his report dated 8 October 2019, Ex A) concluded that there was "qualified support" for the proposition that the signatures of the witness on the Loan Agreements are genuine and were written by Mr Pang. Although expressed in somewhat different terms (and by reference to what he termed a moral certainty as to particular matters), in essence there was a similar level of support expressed by Mr Hobden for his conclusions as that which had been expressed by Ms Holt for her conclusions.
2. In cross-examination, when taken to the article cited by Mr Hobden as the source of the methodology adopted (being, Found B & Rogers D Eds (1999) Documentation of Forensic Handwritting Comparision and Identification Method: a Modular Approach, Journal of Forensic Document Examination 12, at 1-68, Ex C), Mr Hobden accepted that the description by the authors of that article of the equivalent opinion level to Mr Hobden's opinion level 2, aptly described the status of satisfaction he had reached in expressing his opinion (namely that there was "moderate support" for that conclusion - see T 268.44; Ex 10 at p 303).
3. For Mr Pang, there is criticism of Mr Hobden's conclusion insofar as it is based upon the premise that the copied (i.e., not original) images of the questioned and specimen signatures are accurately representative of the originals they purport to represent. Mr Hobden's conclusion was stated as follows: There is qualified support for the proposition that the question signatures Ql a, band Q2a, b are genuine and were written by the writer of the specimen signature. This opinion level is used when there is an identifiable limitation associated with the examination process.
4. Mr Hobden identified two limitations to his conclusion: first, that the specimen signatures were not so sufficiently complex as to prevent the "unlikely chance" of a "skilled forger copying the specimen signatures to a level of perfection as to render the forgeries undetectable" (Mr Hobden concluding that although extremely unlikely this was a remote possibility preventing him from a more definite conclusion); and, second, that "[t]he examination of the images inserted original ink signatures does not allow an examination of the line quality of the ink strokes used to write their signatures".
5. Mr Hobden accepted in cross-examination that the first limitation presented his conclusion about the degree of skill of a forger required to render someone "a skilled forger", (cf the reference in his report to "a very highly skilled forger"). It is noted that in relation to the first limitation, Mr Hobden offered the opinion that the likelihood that a skilled forger might have copied the specimen signatures but considered that this was "extremely unlikely" or a "remote possibility". Pausing here, I accept the criticism made by Mr Pang as to the basis on which Mr Hobden made such an assessment as to the probability of someone having copied the specimen figures (as going beyond his expertise and straying into the area of fact-finding).

Solicitors' evidence

1. Mr Rosier's report dated 19 March 2020 (see Ex 1 at p 7) concluded that the plaintiffs' solicitors (Pinnacle Lawyers) departed from the usual or common professional practice of reasonably competent solicitors by failing to require Mr Zhuang (on his own behalf and as the sole director of Beyond Development Group) and Ms Wang to execute the loan agreements before a solicitor, instructed independently of the lenders, with a requirement that that solicitor provided the evidence of independent advice as to the effect of the loan agreements and of verification of identity and execution of the documents, in accordance with r 11 of the Legal Profession Uniform Legal Practice (Solicitor) Rules 2015. In the alternative that this first requirement could not be met, Mr Rosier concluded that Pinnacle Lawyers failed to require Mr Zhuang and Ms Wang to execute the loan agreements in the presence of Pinnacle Lawyers for the purpose of ensuring proper execution by each of the three defendants and obtaining verification of identity in accordance with s 56C of the Real Property Act 1900 (NSW) and the Participation Rules under the National Electronic Conveyancing Law (NSW) (ECNL).
2. Mr Rosier further concluded that for Pinnacle Lawyers to be satisfied as to verification of identity and execution of the loan agreements in reliance upon a party not asked to undertake verification of identity in accordance with the Participation Rules and who is not asked to provide any evidence other than a signature as a witness, that the documents were in fact signed by the defendants. Mr Rosier was of the opinion that in 2016, it was common or usual practice for competent solicitors undertaking conveyancing transactions to undertake a formal verification of the identity of a borrower where that solicitor was acting for the lender. Mr Rosier considers that if Pinnacle Lawyers were proposing to rely upon the verification conducted by Mr Pang, Pinnacle Lawyers should have obtained a certification from Mr Pang (see Ex 1 at p 17). Mr Rosier further considered that Mr Tupou's email dated 21 November 2016 (in which he wrote that he was waiting on Mr Zhuang and Ms Wang to come into his office so he could "view his 100 points of ID and have the witness properly identify his capacity as a witness") demonstrated that Mr Tupou realised that a face-to-face verification was the best manner of conducting a verification.

Accounting evidence

1. The nature and extent of the plaintiffs' lost opportunity is set out in the expert report dated 28 May 2020 of Mr Trevor Vella to the effect that: Beyond Development Group had capacity to repay the debts plus interest under the Loan Agreements as at January or February 2017; and that, by about 13 August 2018, Beyond Development Group would no longer have capacity to repay the debts.
2. Mr Vella, in his first report, set out what is known about the financial circumstances of Beyond Development Group at the relevant time and what occurred in 2018 and 2019 in the attempts by various parties to recover money from that entity. Mr Vella's evidence may be summarised relevantly as follows.
3. Mr Vella did not know the details of the unsecured liabilities of Beyond Development Group as at January/February 2017, apart from the debt to the plaintiffs (9); nor the extent of the assets of Beyond Development Group other than the development properties as at January/February 2017, apart from amounts in the bank which varied between I January 2017 and 28 February 2017 between $7,691 and $267,531 (9). Mr Vella noted that between 4 November 2016 and 25 January 2017 virtually the whole of the funds in the Beyond Development Group account which came from the plaintiffs were withdrawn, leaving a balance of $7,691 (12). There was no information in the report as to where those funds were paid (12). (As noted in the chronology of events, it appears that by 2 December 2016, much of the loan funds advanced by the plaintiffs had been disbursed.)
4. Mr Vella then described the events leading to the administration and winding up of Beyond Development Group and the realisation of the development properties by the receivers (see chronology above).

Valuation evidence

1. Finally, as to the expert valuation evidence, there was criticism made by the parties of the other side's experts.
2. Mr Pang says that Mr Towndrow was not impressive, particularly having regard to answer 4 in the joint report (see Ex 6) as compared to his oral evidence (see at T 253.43 - T 254.32). In this respect, it is noted that Mr Towndrow agreed with Ms Marshall in the joint report that market activity in January is not generally as buoyant as from February through to November; in cross-examination, he disagreed that there was less market activity or less interest by buyers for commercial properties in the last three weeks of December and the entirety of January (although he acknowledged that activity would be less in the first week of January than in the first week of February). Mr Pang submits that Ms Marshall's evidence as to a discount for a forced sale should be accepted. I accept that Mr Towndrow's evidence as to the likely market activity was not consistently expressed but on balance I accept that his opinions are based on his expertise and explained in his report.
3. The plaintiffs, however, complain that Ms Marshall gives no basis for her conclusion of a 20% discount (and the plaintiffs say that Ms Marshall admitted as much in cross-examination - see T 245.38; 339.48) and it is said that it should be rejected as contrary to the basis rule as outlined in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705 (Makita) (at 731-732 per Heydon JA, as his Honour then was, with whom Priestley JA agreed). Complaint is made that Ms Marshall also gives no basis for her conclusion of a 22.50% deduction for developers' profit and risk (again, it is said that this is accepted by Ms Marshall in cross-examination - see T 245.10), and the plaintiffs note that Ms Marshall further admitted that her report contains no evidence of equivalent forced sales from the period. The plaintiffs contend that the lack of evidence of equivalent market-based evidence to support Ms Marshall's conclusion is fatal to the acceptance of that conclusion.
4. The plaintiffs further say that the whole of Ms Marshall's report is misconceived for the simple reason that is appears to be based on Mr Vella's use of the words "forced sale". It is said that Mr Vella was not asked in cross-examination if his conclusions as to the likely parameters of a forced sale aligned with those of Ms Marshall. The plaintiffs say more weight should be placed on the contemporaneous valuation report commissioned by NAB; and it is submitted that its findings are conservative and representative of what would be recovered if the first mortgagee had to sell.

Adverse inferences sought

1. I have noted that various adverse inferences have been sought from the failure of one or other of the parties to call evidence from particular witnesses (such as Mr Zhuang) or to call expert evidence to rebut the evidence relied upon by others. I do not here repeat my observations as to those matters, save to note the position in relation to the so-called rule in Jones v Dunkel and that it does not permit an inference to be drawn that the "missing" evidence would be positively damaging to the relevant party's case (see below).
2. The rule in Jones v Dunkel (Jones v Dunkel) can be summarised thus: an unexplained failure by a given party to call witnesses, tender documents, or produce particular material to an expert witness in order to contradict a matter which arises upon the issues in the proceedings may, in appropriate circumstances, give rise to an inference that any such uncalled evidence would not have assisted the case of the party expected to call such evidence (Jones v Dunkel at 320-1).
3. The rule in Jones v Dunkel only applies where a party is required to explain or contradict something (see at 321). That is, no inference can be drawn unless evidence is given of particular facts which require an answer (see at 322). Further, no inference may be drawn where a party fails to call a witness unless it would have been natural for, or one may have reasonable expected, that party to call a given witness (Payne v Parker [1976] 1 NSWLR 191 (Payne v Parker) at 201-202 per Glass JA). In order for a Jones v Dunkel inference to be drawn, the missing evidence must be such that it would have elucidated a matter in contention (Payne v Parker at 202). The inference does not permit the filling of gaps; nor does it allow an inference that the missing evidence would positively damage that party's case. Furthermore, the "rule" only becomes relevant if there are competing available inferences (Stellar Vision Operations Pty Ltd v Hills Health Solutions Pty Ltd [2022] NSWSC 144 at [273]).
4. What is relevant to deal with at this point is the submission made by the plaintiffs that there should be an adverse inference drawn from the loss of Mr Pang's computer records (and that the inference would extend to an inference that those records would have been positively damaging to Mr Pang's defence). Reliance is placed by the plaintiffs in this regard on the maxim considered in Allen v Tobias (1958) 98 CLR 367 (Allen v Tobias), namely omnia praesumuntur contra spoliatorem (which has been translated as "all things are presumed against the wrongdoer" per Mozley and Whitley's Law Dictionary as cited by Peart J in NWR FM t/a North West Radio v. Broadcasting Commission of Ireland & Anor [2004] IEHC 109).

Claim against Ms Wang

1. I deal first with the claim against Ms Wang, as the conclusion reached on this claim is relevant to the claims made against Mr Pang.

Plaintiffs' submissions

1. The plaintiffs maintain that Ms Wang is liable to pay the outstanding loan amount due under the Loan Agreements that the plaintiffs say Ms Wang signed on or about 9 November 2016.
2. The plaintiffs contend that each of the Loan Agreements is an enforceable deed which satisfies the requirement of sub-ss 38(1) and (3) of the Conveyancing Act 1919 (NSW) (Conveyancing Act) having been signed by the parties whose signatures have been attested by a witness not being a party to the deed. In order to be deemed to be sealed, a deed must also stipulate that it is a "deed" (or the deed can stipulate that it is an "indenture" or that it is to be "sealed"). (I interpose to note that the word 'attested' is not defined in the statute; however, the word has been considered judicially to mean "that one or more persons are present at the time of the execution for that purpose, and that as evidence thereof they sign the attestation clause, stating such execution" (see Lord Romily's discussion of the meaning of attestation in Wickham v Marquis of Bath (1865) LR 1 Eq 17 at 24, adopted in Norton on Deeds (1928, 2nd ed) at 24; Ellison v Vukicevic (1986) 7 NSWLR 104 at 112 per Young J (as his Honour then was) (upheld on appeal in Vukicevic v Alliance Acceptance Co Ltd; Vukicevic v Ellison (1987) 9 NSWLR 13 at 17 per Samuels, Priestley and McHugh JJA)); see also Young, Newton and Cahill, Conveyancing Service New South Wales (2003, Lexis Nexis) at [30700].)
3. The plaintiffs say that, as neither Beyond Development Group nor Mr Zhuang was solvent, Ms Wang's liability to guarantee the obligation of Beyond Development Group under cl 9 of the Loan Agreements was triggered; and that Ms Wang bears the onus of establishing that the Loan Agreements should not be enforced. (Ms Wang, to the contrary, maintains that it is for the plaintiffs to prove, pursuant to s 140 of the Evidence Act 1995 (NSW), that Ms Wang did indeed sign the two loan agreements.) (Nothing here turns on the onus issue because I am comfortably persuaded that the signature on the document was not that of Ms Wang. However, insofar as Ms Wang asserts that the purported signature is a forgery, she would bear the onus on that allegation - see, for example, Musa v Alzreaiawi [2020] NSWSC 638, upheld on appeal in Musa v Alzreaiawi [2021] NSWCA 12.)
4. As to the handwriting evidence, the plaintiffs emphasise that the Court is not bound to accept expert forensic evidence (such as that of Ms Holt) and may come to its own conclusion as to the similarities or differences of the signatures in question, referring to what was said by Young CJ in Eq, as his Honour then was, noted in Vella v Permanent Mortgages Pty Ltd (2008) 13 BPR 25,343; [2008] NSWSC 505 (Vella v Permanent Mortgages) at [245]-[247] (to the effect that a judge sitting as a tribunal of fact must "consider all the evidence before making his or her decision", and may prefer the oral evidence to the evidence of experts).

Ms Wang's submissions

1. Ms Wang relies upon Mr Pang's evidence (at [34] of his affidavit) as to the conversation with Mr Zhuang, in which Mr Pang recorded his concern about his signature being annexed to the Loan Agreements as a witness; and Mr Pang's acceptance in cross-examination evidence that he did not witness Ms Wang sign either of the Loan Agreements (T 233.20-234.24). Ms Wang says that the evidence clearly establishes that the Loan Agreements were not witnessed by Mr Pang (and she relies on this for the conclusion that they are not enforceable as Deeds - see below).
2. Ms Wang also argues that the fact that Beyond Development Group did not give evidence in the proceeding is compelling (maintaining that that evidence could have greatly assisted in a determination that Ms Wang did not sign the respective Loan Agreements). (Pausing here, I consider that no weight can be placed on the fact that there was no evidence on behalf of Beyond Development Group at the hearing. Apart from the fact that it was initially a party against whom default judgment was entered; and that it is now in liquidation, I cannot see that it could be said to be an entity within the plaintiffs' camp such that it might be expected that the plaintiffs would seek to adduce evidence from an officer of the company in the present proceeding.)
3. Ms Wang (as did the plaintiffs) points to the requirements for the execution and attestation of a deed (set out in s 38 of the Conveyancing Act) and says that the deeds are of no effect in law because they were not signed and attested in compliance with s 38 (referring in that context to the discussion of those requirements in Matouk v The Entrance Seabreeze Pty Ltd [2010] NSWSC 649 (at [53]-[60], including that it is a statutory requirement that a deed must be signed, cf the requirements at common law). Thus, if it be accepted that Mr Pang did not witness the signature of Ms Wang on any document relating to this proceeding, Ms Wang argues that the Loan Agreements are ineffective as deeds.
4. More significantly, in my opinion, Ms Wang relies on the expert opinion of Ms Melanie Holt for the conclusion that Ms Wang did not sign either of the Loan Agreements. Ms Wang says that Ms Holt was a forthright witness who assisted the Court, was not an advocate for her client, and provided cogent and clear reasoning as to her methodology, her approach and her findings; and that it is compelling that the plaintiffs did not call any expert evidence to rebut Ms Holt's evidence. Ms Wang argues that the only inference that can be drawn from this (absent any explanation from the plaintiffs) is that there was a forensic decision taken by the plaintiffs not to call an expert to challenge the evidence of Ms Holt and that any such expert evidence would not have assisted the plaintiffs in their claim against Ms Wang.

Determination

1. Perhaps the most telling piece of evidence in relation to the claim against Ms Wang are the signatures themselves, which to a lay eye appear markedly different to the specimen authentic signatures. Coupled with Ms Holt's expert opinion (to which I have referred above) and Ms Holt's cogent reasons as to why it is not likely that the signatures were disguised signatures (and the absence of anything to suggest that Ms Wang was suffering from some disability at the time the signatures were placed on the documents of the kind postulated by the plaintiffs in submissions), I have no hesitation in concluding (on the balance of probabilities) that the signatures purporting to be those of Ms Wang on the Loan Agreements are not Ms Wang's genuine signatures.
2. Mr Pang's evidence (against his interest since his exposure to liability arises only if Ms Wang did not sign the documents) supports this conclusion, since his evidence in cross-examination was that he never met Ms Wang (the accounting work done for her being conducted through email communications with Mr Zhuang). Logically, if Mr Pang never met Ms Wang (which is also her evidence), he cannot have physically witnessed her sign anything.
3. I accept that Ms Wang was an unreliable witness and I would in general exercise caution in accepting her account of events other than as supported by objective contemporaneous evidence. Apart from the inconsistencies in her evidence as to her employment with Elite Express and the admitted untruths to the bank on her finance application, Ms Wang also gave admittedly untruthful evidence in the witness box (despite it having been explained to her that the s 128 certificate that had been provided would not protect against the giving of false evidence to the Court).
4. However, it does not follow that because a witness is disbelieved on particular matters he or she ought to be disbelieved on all matters (see Steinberg v Federal Commissioner of Taxation (1975) 134 CLR 640; [1975] HCA 63 at 695 per Gibbs J, as his Honour then was; Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 (Farah Constructions) at 136 [100] per Gleeson CJ, Gummow, Callinan, Heydon and Crennan JJ; Australian Securities and Investment Commission v Hellicar (2012) 247 CLR 345; [2012] HCA 17 at [232] per Heydon J).
5. I place weight on the forensic analysis of Ms Holt, which to my mind overcomes the problematic nature of Ms Wang's evidence. Thus, I have concluded that the signatures on the Loan Agreements purporting to be those of Ms Wang are not her genuine signatures; and the claim against Ms Wang therefore fails.

Plaintiffs' submissions

1. In the alternative to the claims against Ms Wang, the plaintiffs contend that Mr Pang is liable to the plaintiffs for the outstanding loan amount, putting their claim on three bases: for knowing concern in the misleading or deceptive conduct alleged against Mr Zhuang (the accessorial liability claim); for contravention of the prohibition against misleading and deceptive conduct (the misleading or deceptive conduct claim) and for breach of a duty of care owed to the plaintiffs in relation to the execution of the Loan Agreements (the negligence claim).
2. The plaintiffs say that it follows that, if Ms Wang did not sign the Loan Agreements, then Mr Pang cannot have witnessed Ms Wang's signature notwithstanding that he signed as witness on the Loan Agreements. It is submitted that, in so doing, Mr Pang gave the plaintiffs the misleading understanding that the documents were duly executed by Ms Wang.
3. As to the second of the ways in which the claim is put, the plaintiffs contend that Mr Pang breached the prohibition on misleading or deceptive conduct in four main ways, each with compounding effect on the former; namely by: improperly signing as witness; thereafter failing to correct the position; subsequently confirming to Mr Tupou (in 2016) that he did witness the documents; and his continuing silence and ongoing failure to correct the position.
4. As to the third of the ways in which the claim is put, the plaintiffs rely upon Graham v Hall (2006) 67 NSWLR 135; [2006] NSWCA 208 (Graham v Hall), to which I refer in due course. There, Ipp JA (at [107]) said that: Justices of the peace who sign attestation clauses stating that declarants have made and subscribed the declaration before them when that is not true, commit an act that is the antithesis of their function. Such an act strikes at the heart of the system they are charged to protect. …
5. Addressing in turn the ways in which the claim against Mr Pang is put, I note the plaintiffs' submissions as follows.

Accessorial liability claim

1. As to the claims based accessorial liability, the plaintiffs contend that Mr Pang was knowingly concerned in Mr Zhuang's misleading or deceptive conduct.
2. The plaintiffs say that, if it is found that Ms Wang did not execute the Loan Agreements, then Mr Zhuang's representations to the effect that Beyond Development Group, Ms Zhuang and Ms Wang would secure the loans were misleading or deceptive. (As noted above, the plaintiffs also say that Mr Zhuang took the additional step of either falsely signing the Loan Agreements on behalf of Ms Wang or procured someone else to do so.) It is submitted that this conduct was intended to (and did) induce the plaintiffs into thinking that Ms Wang had executed the Loan Agreements and, accordingly, that the moneys advanced were properly guaranteed by the Bella Vista property.
3. The plaintiffs contend that that Mr Pang knew or ought to have known at least two essential facts: first, that he was witnessing a deed (which it is said would have been apparent from any cursory glance at the documents); and second (on the hypothesis that Ms Wang did not sign the documents), that he did not witness anyone sign at all. It is said that, despite this, Mr Pang proceeded to sign the Loan Agreements, and, in doing so, he was knowingly concerned in, and party to, Mr Zhuang's contravention (because to sign, without in fact witnessing, was clearly apt to mislead).
4. Reference is made to Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65 at 670, where Mason ACJ, Wilson, Deane and Dawson JJ said that there can be no question that a person cannot be knowingly concerned in a contravention unless he has knowledge of the essential facts constituting the contravention and is an intentional participant ("the necessary intent being based upon knowledge of the essential elements of the contravention"). The plaintiffs say that the essential fact in the present case was that Mr Pang was witnessing a deed (without in fact witnessing the document). The plaintiffs further say that Mr Pang's failure to correct this when he knew or ought to have known he had an obligation to do so was a failure that contributed to the misleading or deceptive conduct.
5. To the extent that Mr Pang knew that he was falsely attesting the signature of Ms Wang it is said that he had actual knowledge for the purposes of the requisite categories of knowledge in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 at [174]-[178]. In the alternative, it is said that Mr Pang had knowledge of circumstances which would indicate the facts to an honest and reasonable person (the fourth of the categories of knowledge there said to be sufficient for accessorial liability).

Misleading or deceptive conduct claim

1. As noted above, the plaintiffs contend that Mr Pang's conduct was misleading or deceptive in four main ways (each predicated on a finding that Ms Wang did not sign the relevant documents): by improperly signing as a witness; by failing to correct the position thereafter; by representing to Mr Tupou that he had witnessed the signature(s); and by his continued silence and failure to correct that position thereafter.
2. As to the first of those ways, the plaintiffs contend that, by signing as witness, Mr Pang was effectively attesting to witnessing Ms Wang's signature where Ms Wang did not in fact sign the Loan Agreements. The plaintiffs says that this was clearly misleading because it gave, or was likely to give, the plaintiffs the understanding that the signatures of the guarantors were true because they were witnessed by an independent party to the transaction. The plaintiffs emphasise that Mr Pang is an accountant and a justice of the peace. It is submitted that his attestation ought bring a degree of confidence to those who would rely on the due execution of the document (referring to the observations made in Graham v Hall as extracted above). The plaintiffs contend that from the moment they received the (on this hypothesis) falsely executed agreements this constituted ongoing misleading and deceptive conduct by Mr Pang.
3. As to the second of those ways, it is said that Mr Pang would (or ought to) have known that his attestation as witness was inappropriate. It is submitted that this gave rise to an obligation that Mr Pang correct the position (and that his failure to do so was an omission that contributed to the misleading conduct).
4. As to the third, reliance is placed on the 22 November 2016 conversation to which Mr Tupou has deposed with Mr Pang (see the chronology of events above). The plaintiffs say that, in circumstances where both Loan Agreements have the apparent signatures of Ms Wang, it was sufficiently clear that Mr Tupou was asking Mr Pang about the witnessing of the whole deed, including Ms Wang's signature. It is said that Mr Pang knew, or ought to have known, that the plaintiffs wanted to confirm the due execution of the whole "contract"; and it is submitted that an answer in the affirmative was apt to mislead in circumstances where the "contract" was not so executed.
5. Fourth, as to the continued silence by Mr Pang, the plaintiffs say that candid disclosure was required from the beginning. They submit that the fact that the true position was not revealed by Mr Pang led them to believe that the documents had been duly executed; and therefore they were lulled into the comfort of believing that they did not need to take any remedial action prior to the end of the loan term to reclaim their advances.

Negligence claim

1. Further, in the alternative, it is said that Mr Pang is liable to the plaintiffs in damages for negligent execution of the Loan Agreements. The plaintiffs contend that Mr Pang owed them a duty to take reasonable care, in the witnessing of the Loan Agreements, to avoid causing the plaintiffs loss (it being reasonably foreseeable that Mr Pang's conduct may be likely cause loss to the plaintiffs, because they would no longer be able to rely on the Loan Agreements as duly executed).
2. As noted above, reliance is placed by the plaintiffs on Graham v Hall, which they maintain is analogous to the present case. There, a Justice of the Peace falsely attested in a statutory declaration that a mortgage document was signed by a signatory in his presence (the relevant signature having been forged by the purported signatory's husband). It was held that the witness, by attesting the signature, implicitly assumed responsibility to those who could be affected by negligence on his part in carrying out that task (at [66]). In the present case, the plaintiffs say that Mr Pang assumed responsibility to the plaintiffs by representing that Ms Wang had executed the Loan Agreements in his presence.
3. The plaintiffs also refer to State Bank of NSW Ltd v Yee (1994) 33 NSWLR 618, where a solicitor had wrongly attested that a loan facility document was signed in his presence (though there it was not disputed that solicitor owed a duty of care both with respect to the representation of due execution and with respect to failure to correct the position thereafter). The plaintiffs say that these authorities demonstrate the general proposition that a witness owes a duty of reasonable care to other parties who will foreseeably rely, or be affected by, the apparent due execution of the document.
4. Thus, the plaintiffs say that Mr Pang owed them a duty to take reasonable steps to ensure that the persons signing the Loan Agreements were in fact Ms Wang and Mr Zhuang; and that Mr Pang either should not have attested to the proper execution of the document (if it in fact did not happen) and/or should have corrected the position thereafter by advising the plaintiffs, or their legal representative, of the true position. It is submitted that it was foreseeable that, if Mr Pang did not take reasonable care to duly execute the documents, the plaintiffs would be oblivious to the underlying "anomaly" that the guarantor did not actually sign the document.

Mr Pang's submissions

1. At the outset, Mr Pang notes that the causes of action against him are overlapping, stemming from the allegation that Mr Pang witnessed Ms Wang sign two loan agreements on 9 November 2016. As noted above, Mr Pang's evidence is that he does not recall witnessing Ms Wang's signature on the Loan Agreements but (if it be found that Ms Wang did not sign the agreements), then (based on his claimed invariable practice) Mr Pang denies that he signed the documents without actually witnessing Ms Wang execute the document.
2. Mr Pang further says that even in the event of a finding that he did witness Ms Wang's signature without Ms Wang being present, the case against him should fail because the plaintiffs have not established reliance, or that any conduct by Mr Pang caused loss. Further, if there was a breach which caused loss, Mr Pang says that the damages should be discounted for contributory negligence and/or on account of concurrent wrongdoer and proportionate liability defences.
3. As to the two relevant contested factual matters in the case against Mr Pang (first, whether Mr Pang placed his signature on the guarantees other than in the presence of Mr Zhuang and Ms Wang; and, second, whether Mr Pang made the representations as alleged in the telephone conversation with Mr Tupou on 22 November 2016), Mr Pang says the following (noting that the first is an allegation of dishonesty on the part of Mr Pang, giving rise to the principles stated in Briginshaw at 361-363). I consider each in turn.

Witnessing of the signatures other than in the presence of the signatories

1. For Mr Pang, it is said that the effect of his evidence (which I have summarised earlier) is that the only circumstance in which Mr Pang would have put his signature on the guarantees is if he had in fact witnessed the signatures of Mr Zhuang and Ms Wang. It is said that this evidence admits of the possibility that Mr Zhuang and Ms Wang signed the documents in his presence (in which case Mr Pang accepts that it may be his signature that is on the documents) and of the possibility that he did not witness their signatures in his presence (in which case Mr Pang contends that his signature on the documents must have been forged). What Mr Pang does not accept (as being inconsistent with his claimed to be invariable practice) is a third possibility, namely that the documents were brought to him with the signature already on the document and that he then falsely attested that they were signed in his presence.
2. Mr Pang contends that the more likely finding is that at least Ms Wang (and probably Mr Zhuang) did not sign the documents in his presence, on the basis that such a finding is more consistent with Mr Pang's usual practice with respect to the witness log. (Pausing here, it seems to me that it is unlikely that there would be a relevant distinction between Ms Wang and Mr Zhuang's signatures in this regard unless there is an alternative scenario under which Mr Pang witnessed Mr Zhuang sign the document(s) but that Ms Wang's signature was not on the document(s) at that time; and no such scenario was here put.)
3. Mr Pang relies upon the following matters in support of his submission that his evidence should be accepted.
4. First, (and I accept) it is said that Mr Pang's evidence during cross examination demonstrated that he was a witness who was doing his best to assist the Court. It is said that Mr Pang did not overstate the extent of his recollection about any relevant matters (cf Mr Tupou) but was firm in his position that he would not have certified that he had witnessed the signatures unless the parties executing the documents were in his presence when they signed.
5. Second, that Mr Pang's position is corroborated by the evidence of the witness log that Mr Pang contends he maintained (this being a reference, as I understand it, to Mr Pang's evidence that he looked at that log, and that it did not contain scanned copies of the guarantees - since there is in fact no evidence of the witness log itself; it having been corrupted and lost in the cataclysmic computer incident of which Mr Pang gives evidence). Reference is made to Mr Pang's evidence was that it was his invariable practice to have scanned, and to keep a copy on that log, of documents such as the guarantees (T 202.9-202.10). It is noted that in cross examination Mr Pang denied that that he had looked at the log and that the agreements were in fact there (T 222.39-222.42); and that Mr Pang also denied the proposition that he had then deliberately destroyed the computer hard drive or arranged for that to be done (T 223.1-223.3).

Telephone conversation of 22 November 2016

1. As to the second of the factual contests (whether Mr Pang made the representations as alleged in the telephone conversation with Mr Tupou on 22 November 2016 - see chronology above), Mr Pang contends that Mr Tupou's evidence about that conversation should be rejected, for the following reasons.
2. First, that the conversation is inconsistent with the contemporaneous file note taken by Mr Tupou on 22 November 2016 (Ex 7). As to the relevance of contemporaneous documents in fact finding of this kind, Mr Pang refers to Nominal Defendant v Cardin (2017) 79 MVR 210; [2017] NSWCA 6.
3. Second, that the account given is inconsistent with the contemporaneous emails authored by Mr Tupou on 21 and 22 November 2016 (see chronology above). Mr Pang submits those emails provide powerful contemporaneous support for the conversation between Mr Tupou and Mr Pang being limited to Mr Pang advising Mr Tupou that he was a justice of the peace, and not a conversation in the terms recounted by Mr Tupou (at [13]).
4. Third, that Mr Tupou's account at [13] is inconsistent in material respects with a number of other accounts of that conversation that he has given or been involved in giving (referring, by way of example, to Mr Tupou's affidavit of 1 March 2021 (at [4] where first appearing (see Ex 1 at p 152)); and the second further amended statement of claim dated 8 February 2019 (at [24] (see Ex 10 at p 247)). In the circumstances, Mr Pang contends that Mr Tupou's evidence that he remembered the actual words used in the conversation of 22 November 2016 (see T 98.44) or anything about the conversation other than by reference to his contemporaneous written documents, should be rejected.
5. In reply submissions as to the findings to be made in relation to the representations as alleged in the telephone conversation with Mr Tupou on 22 November 2016, the plaintiffs emphasise that Mr Tupou was unwavering in his evidence that he did confirm with Mr Pang that he witnessed the agreements as alleged. It is submitted that Mr Tupou should be accepted as a witness of truth. The plaintiffs say that Mr Tupou's evidence was not beset by the continuous lapses in memory that plagued Mr Pang's evidence. It is submitted that regard should be to the fact that Mr Pang does not exclude the fact that the conversation did happen as alleged (see at T 224.46 ff): Q. But nevertheless, is it fair to surmise that your evidence as regards to that conversation is, you don't remember it? A. I don't remember it. Q. But it's possible it happened? A. It possible, yeah.

Findings as to contested factual disputes

1. As to the findings in respect of the above two contested matters, I have concluded as follows.
2. First, as to whether Mr Pang's signature was placed on the Loan Agreements other than in the presence of (relevantly) Ms Wang, I am not persuaded to the requisite level of satisfaction that it was. Ultimately, the telling evidence in my opinion is the email from Mr Pang to Mr Zhuang when confronted with the request for information as to Ms Wang's denials from Mr Tupou in September 2018. Mr Pang's inaction or lack of immediate response when confronted with Ms Wang's denials seems to me equally consistent with Mr Pang seeking to avoid involvement in a dispute not of his own making as with this displaying any consciousness of guilt.
3. Second, as to the conversation said to have taken place on 22 September 2016, I cannot confidently conclude that Mr Pang there made an admission as to having witnessed the signature (relevantly) of Ms Wang. I also place weight on the fact that neither Mr Tupou's contemporaneous file note created on 22 November 2016, nor Mr Tupou's email to Mr Lee of same date, provides any evidence that Mr Tupou asked Mr Pang whether he witnessed the signatures on the loan agreements; rather, both documents provide that Mr Pang confirmed his status as a justice of the peace.
4. Returning then to the claims made against Mr Pang, I address those as follows.

Accessorial liability claim

1. Mr Pang submits that the accessorial liability (knowingly concerned) claim fails for four reasons, the first being that there is a discord between the pleaded falsity of Mr Zhuang's representations (in [18C]) and the case pleaded against Mr Pang (in [18D]). As noted above, the pleaded representations are that the loans would be personally guaranteed by Ms Wang and Mr Zhuang; and that Ms Wang and Mr Zhuang owned the Bella Vista Property which would provide the plaintiffs with further security over the loans; the alleged representations being said to have been made by Mr Zhuang in conversations with Mr Lee in January 2016 and October 2016 and on the Loan Agreements including on the execution page.
2. Mr Pang argues that, even taking the plaintiffs' case at its highest, there is no evidence that he (Mr Pang) was knowingly involved in Mr Zhuang forging Ms Wang's signature on the loan agreements, or in Mr Zhuang's intention to induce a false belief on the part of the plaintiffs that Ms Wang had signed the agreements. Mr Pang says that the particulars pleaded in [18D], even if accepted, do not support the case that Mr Pang was knowingly involved in Mr Zhuang's fraud.
3. Pausing here, I accept that there is no evidence to suggest that Mr Pang had any knowledge of any conversations between Mr Zhuang and Mr Lee in January 2016 and October 2016, so that any knowledge of the making of a false representation could only (on the pleaded case) come from what appears on the Loan Agreements - and in particular the execution page. The most that Mr Pang could have known if he signed the documents not in the presence of the signatories (which I am unable to conclude on the balance of probabilities that he did) was that the documents were being improperly attested. That says nothing about the falsity of a representation as to the ownership of the Bella Vista Property (of which there is no evidence that Mr Pang was aware) and in that regard I note that the loan agreements themselves do not refer to the Bella Vista property (beyond the fact that it is listed as the residential address of Mr Zhuang and Ms Wang) or that there was some dishonest design relating to the personal guarantees.
4. Second, it is said that the case pleaded against Mr Pang (as noted above) was not put to Mr Pang in cross examination.
5. Third, that none of Mr Pang's conduct was in trade or commerce (see defence at [18D.6]). Mr Pang says that the suggestion that Mr Pang's conduct was in trade or commerce is a suggestion that asserts the same broad construction to s 52 of the Trade Practices Act 1974 (Cth) (now s 18 of the ACL) that was rejected in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; [1990] HCA 17 (Concrete Constructions). It is noted that conduct in the course of business activities which is divorced from any relevant actual or potential trading or commercial relationship or dealing does not of itself constitute conduct "in trade or commerce" for the purposes of s 52 of the Trade Practices Act (Concrete Constructions at 604 per Mason CJ, Deane, Dawson and Gaudron JJ; reference also being made to Street v Luna Park Sydney Pty Ltd (2009) 223 FLR 245; [2009] NSWSC 1; Glueck v Stang (2008) 76 IPR 75; [2008] FCA 148; Chapman v Luminis Pty Ltd (No 4) (2001) 123 FCR 62; [2001] FCA 1106); and that the focus is on the conduct which is alleged to be in breach of the prohibition and not upon the range of activities in which the relevant corporation engages (the plaintiffs citing National Roads and Motorists' Association Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2019) 291 IR 28; [2019] FCA 1491 at [132] per Griffiths J).

Misleading or deceptive conduct claim

1. As to the claim of direct liability for misleading or deceptive conduct against Mr Pang, it is alleged that Mr Pang made a representation (by witnessing Ms Wang and Mr Zhuang's signatures on the loan agreements), upon which the plaintiffs relied that Mr Zhuang and Ms Wang had executed the documents ([20]); and that Ms Wang instructed Mr Tupou to contact Mr Pang to confirm that he had signed the agreements, and Mr Pang on 22 November 2016 represented to Mr Tupou that he was a Justice of the Peace and he had in fact witnessed Ms Wang and Mr Zhuang's signatures on the Loan Agreements ([23]-[24]).
2. Mr Pang accepts that, if it is established that he in fact signed the loan agreements in circumstances where Ms Wang had not executed them in his presence, then he made the representation alleged in fifth further amended statement of claim at [20], and that that representation was misleading or deceptive. However, Mr Pang submits that this case fails because there should not be a finding that Mr Pang falsely certified that he witnessed Ms Wang's signature on the guarantees.
3. Further, Mr Pang denies that he made the representation to Mr Tupou alleged (at [24]), unless the position was that in fact Ms Wang had signed the agreements in his presence.

Negligence claim

1. As to the alleged breach of duty pleaded at [26]-[29], complaint is made by Mr Pang that the plaintiffs' allegations of a breach of duty by Mr Pang do not conform with the pleading rules with respect to a case alleging a breach of a general law duty of care (Mr Pang referring by way of example to Hoxton Park Residents Action Group Inc v Liverpool City Council [2012] NSWSC 1026 at [55]-[73]; Hastie Group Ltd (in liq) v Bourne; Hastie Group Ltd (in liq) v Moore [2017] NSWSC 709; Sergienko v AXL Financial Pty Ltd [2019] NSWSC 1610 at [45]-[53]).
2. In any event, Mr Pang contends that he did not owe a duty of care to the plaintiffs because: the plaintiffs' alleged losses are in respect of pure economic loss; there was no existing relationship as between the plaintiffs and Mr Pang; and (most significantly), in Mr Pang's submissions, the plaintiffs were not vulnerable in the legal sense to any want of reasonable care on the part of Mr Pang (noting that the plaintiffs had retained the services of lawyers to protect them against the exact loss for which they now contend).
3. Mr Pang says that Graham v Hall (on which the plaintiffs rely in support of their proposition that a duty of care was owed to them) is distinguishable from the facts in the present case (though the plaintiffs complain that Mr Pang does not identify how this case is distinguishable on the facts, Mr Pang maintains that the representation there was of a different order from that of the representation in the present case - see T 362.41-362.49). In reply submissions, the plaintiffs say that in Graham v Hall the Court of Appeal did not limit the ambit of the duty to a person who is a fiduciary by reason of employment (at [66]-[68]) noting that the duty arose irrespective of whether Mr Graham acted as a justice of peace or as an ordinary witness").
4. Mr Pang notes that, if a duty was owed, then the question whether that duty was breached must be answered by reference to s 5B of the Civil Liability Act 2002 (NSW) (Civil Liability Act); and that the sole pleaded allegation of breach of duty (at [27]) is that Mr Pang failed to ensure that Ms Wang did in fact execute the loan agreements in his presence. Mr Pang accepts that, in the event that there is a finding that Mr Pang did witness Ms Wang's signature other than in her presence, and if there is a finding that he owed a duty, then that alleged breach will be established. However, Mr Pang contends for a contrary finding.

Reliance

1. As to reliance, Mr Pang notes that the plaintiffs must prove that they relied on the relevant representation as a matter of fact (Lloyd v Grace, Smith & Co [1912] AC 716; Briess v Woolley [1954] AC 333; Commercial Banking Co of Sydney Ltd v R H Brown & Co (1972) 126 CLR 337); and that, if factual reliance is established, the plaintiffs must also establish that their reliance upon the relevant representation was reasonable (Tepko Pty Ltd v Water Board (2001) 206 CLR 1; [2001] HCA 19 at [47] per Gleeson CJ, Gummow and Hayne JJ).
2. Mr Pang submits that the plaintiffs' case on reliance should fail for the following reasons.
3. First, that Ms Ling (the first plaintiff) has given no evidence of reliance at all (and it is said that no inference in her favour should be drawn).
4. Second, that there is no evidence of reliance on the part of Chuan Dian. It is said that the highest that the evidence on reliance on the part of Chuan Dian goes is the evidence of Mr Lee (at [17] of Mr Lee's second affidavit sworn 14 January 2020) to the effect that "I cannot see why the plaintiffs were not entitled to rely on it" (which Mr Pang argues, and I agree, is not evidence of reliance at all). Mr Pang says that, to the extent the plaintiffs relied upon any statement with respect to the apparent signatures of Mr Pang on the guarantees, the communication upon which the plaintiffs relied was the email of Mr Tupou of 30 November 2016 (see Ex "JL6" to Mr Lee's first affidavit), which in the first line contains a misdescription of what had occurred in the telephone call contact on 22 November 2016.
5. In reply to Mr Pang's reliance submissions, the plaintiffs say that they have pleaded reliance clearly in their statement of claim and in the reply. The plaintiff say that pleadings repeatedly state that the plaintiffs and Pinnacle Lawyers were entitled to rely upon, and did reply upon, the signatures and statements of Mr Pang attesting that Ms Wang had executed the Loan Agreements. Further, the plaintiffs say that the totality of the lay evidence is "almost entirely premised" upon the fact that the plaintiffs relied upon the signature of Mr Pang to verify the agreements. It is said that there is no rational explanation as to why Mr Tupou would go to such lengths to confirm the identity of Mr Pang, and to confirm that he did in fact witness the signature of Ms Wang, unless Mr Tupou proposed to place reliance on it.

Causation

1. Reference is made by Mr Pang to the observations of Rees J in About Life Pty Ltd v Maddocks Lawyers [2021] NSWSC 1370 (About Life) (at [409]) as to the two stage analysis here required (namely, the determination of factual causation - the but for test; and then the appropriate scope of the defendant's liability); her Honour there posing the question of factual causation as whether the failure in question was a necessary condition of the occurrence of the harm, being deprivation of the relevant valuable opportunity.
2. Mr Pang says that there is no evidence as to what the plaintiffs would have done, but for the alleged misrepresentation or breach of duty by Mr Pang, and that while this may be understandable with respect to the duty case (having regard to s 5D(3)(b) of the Civil Liability Act), that is not so with respect to the claims under the ACL.
3. Insofar as Mr Tupou gives some evidence as to this in his affidavit sworn 1 March 2021, Mr Pang's response is that (having regard to Mr Lee's routine rejection of advice from his retained professionals) that evidence should be afforded no weight.
4. Mr Pang contends that in the circumstances, the inference may be available (though only on the duty case, since he submits that no inference should be drawn favourably to the plaintiffs on the ACL cases) that the first thing that would have happened (but for the alleged misrepresentation or breach) is that Mr Lee would have contacted Mr Zhuang, and that Mr Zhuang would have told him a lie about the circumstances, which Mr Lee would have believed (referring to instances in which Mr Lee admitted to such action). Accordingly, noting that the plaintiffs bear the onus of proof on causation, it is said that in the circumstances an inference should not be drawn that, but for the alleged misrepresentation or breach by Mr Pang, the plaintiffs would have done anything differently.
5. Mr Pang says that if it is established that the plaintiffs would have acted differently, then it is necessary to address the question as to what they would have done and to identify with a degree of precision the nature of the lost opportunity they allege (i.e., whether they have lost anything of value as a consequence of the breach).
6. It is noted that the plaintiffs frame their case as a loss of opportunity ([30]) (as to which reference is made to what was said by Rees J in About Life at [505]-[512]). Mr Pang points to the lost opportunities contended for by the plaintiffs as being: the lost opportunity to recover from Mr Zhuang or Ms Wang under the guarantees (see at ); the lost opportunity to recover the loan sum from Beyond Development Group by rescinding the agreements and obtaining a repayment of the loan amounts in full from Beyond Development shortly after November 2016 ( and (f)); and the lost opportunity to seek advice and to commence action in a timely manner to seek a freeze funds advanced or sue for their return (). (As noted, a further aspect of the second lost opportunity is the tracing argument that is not pleaded and that I do not here address.)

Plaintiffs' reply submissions on causation

1. In reply to Mr Pang's submissions on causation (at [89]-[120]) the plaintiffs contend that they would have acted differently had they known that Ms Wang's signature had not been properly witnessed by Mr Pang (as outlined in the affidavit of Mr Tupou of 1 March 2021) and the plaintiffs say that the proposition that Mr Lee would simply have rejected that advice was not put to him in cross examination. (I accept that this hypothetical was not expressly put to Mr Lee. Nevertheless, it is abundantly clear that Mr Lee trusted Mr Zhuang and had chosen not to follow advice as to numerous other steps to protect the plaintiffs' interests. Therefore, the proposition that Mr Lee would suddenly have chosen to act in a more prudent way seems to me highly unlikely.)
2. It is said that Mr Bluth's evidence as to what a competent solicitor would have done in the event that the execution of the Loan Agreements by the guarantor had come into question was unchallenged; as was Mr Tupou's evidence in his affidavit of 1 March 2021. The plaintiffs say that it was never put to Mr Tupou that he would not have acted as he said in his evidence he would have done.
3. As to the balance of Mr Pang's submissions on causation, insofar as Mr Pang argues that the plaintiffs would not have been able to obtain a freezing order because they did not have a good arguable case against Beyond Development Group (as Beyond Development Group was not a party to the Loan Agreements), the plaintiffs contend that on any view of the matter Beyond Development Group was a party to the agreement. It is said that the Loan Agreement noted Beyond Development Group as a party to the agreement (as mortgagor)and that the agreement was executed by the sole director and controlling mind of the company (Mr Zhuang) (see Ex D). It is said that Beyond Development Group purported to give security over property owned by it as part of the consideration of the agreement. The plaintiffs say that the only point that Mr Pang here raises is that Mr Zhuang's signature is not accompanied by the words as director or agent of the company.
4. In Clark Equipment Credit of Australia Ltd v Kiyose Holdings Pty Ltd (1989) 21 NSWLR 160 Giles J, as his Honour then was, having considered what was said in National Commercial Banking Corporation of Australia Limited v Cheung (1983) 1 ACLC 1326; NEC Information Systems Australia Pty Limited v Linton (Wood J, 17 April 1985, unreported) and Scottish Amicable Life Assurance Society v Reg Austin Insurance Pty Limited (1995) 9 ACLR 909), concluded (at 174-175), that the proper approach in determining whether a signatory has assented to be personally bound is to ascertain the objective (not subjective) intention as to that issue, having regard to the construction of the document as a whole and the surrounding circumstances (to the extent to which evidence of the latter is permissible); the enquiry not being limited to consideration of the signature and its qualification, if any. In that case, his Honour declined to find an intention that the directors were personally bound having regard to the form of the signing clause (which stated that one was signing for and on behalf of the company and the other as witness) in circumstances where: the same form of words had been used for a person who no one contended was personally bound; the addition of the common seal pointed to them having signed simply in their capacity as directors; and that the same form of words were used in a separate document where there was no provision for personal responsibility.

Defence raised by Mr Pang

1. Turning then to the defences raised by Mr Pang, I note as follows.

Claim against Mr Zhuang

1. Reference is made by Mr Pang to cases while there has been apportionment of liability to fraudsters in professional liability cases, such as Kayteal Pty Ltd v Dignan (2011) 15 BPR 29,515; [2011] NSWSC 197 (Kayteal), where Brereton J, as his Honour then was, apportioned liability between a solicitor, a negligent valuer and a defaulting borrower; and Chandra v Perpetual Trustees Victoria Ltd (2007) 13 BPR 24,675; [2007] NSWSC 694 (Chandra) per Bryson AJ (as His Honour then was) at [113].
2. Mr Pang points to the examples listed by Brereton J (as His Honour then was) in Perpetual Trustee Company Limited v Peter Ishak [2012] NSWSC 697 (Perpetual Trustee v Ishak): 10% in Ginelle Finance Pty Ltd v Diakakis [2007] NSWSC 60; 12.5% in Chandra: 12.5% to the negligent solicitor and 15% to a solicitor who engaged in fraud; in Vella v Permanent Mortgages; 12.5% to the negligent solicitor in Kayteal, although a grossly negligent valuer's percentage was put at 40%, and the balance was apportioned to the fraudster; and notes that 25% would have been apportioned to a conveyancer whose misleading conduct was enhanced by his professional status in Perpetual Trustee v Ishak if apportionment orders had been made.
3. Mr Pang relies upon the plaintiffs' pleaded case against Mr Zhuang, which principally alleged fraud he perpetrated on the plaintiffs ([18B]-[18C]) was compounded by Mr Zhuang's conduct in early 2017 (as set out in Mr Pang's defence at [36]). It is noted (see annexure "C" to Mr Pang's affidavit ), that Mr Zhaung had amassed millions of dollars' worth of debt (some of which was through gambling), and it is said that obviously there was further money owing to Megatop, which had lodged a caveat over the development.
4. It is noted that Mr Zhuang persuaded Mr Lee to advance $900,000 on the promise of a 30% return over 12 months and prior to exchanging any loan documentation. Further, it is said that Mr Zhuang lied as to his ability to give security over the residence in circumstances in which he did not own it; lied as to the willingness of his wife to give security over the residence in circumstances in which Ms Wang's evidence is that she knew nothing of the transaction until August 2018 (T 144.22). It is said that Mr Zhaung or someone at his direction, likely forged signatures of Ms Wang and Mr Pang in circumstances in which neither of them knew anything of the transaction (see T 144.22) (regarding Ms Wang); also Mr Pang's affidavit (at [20]-[25], [34]).

Pinnacle Lawyers

1. The allegations against Pinnacle Lawyers are pleaded in Mr Pang's defence (at [50]-[83]).
2. It is noted that Mr Tupou admitted in cross examination that he had concerns about the transaction the subject of this dispute (T 84.39) and identified three important matters to be addressed in order to ensure that his clients were protected in respect of the funds they were advancing (T 87.50; see also T 126.20-22). Those matters were: for Mr Zhuang and the guarantors to obtain independent legal advice (see Ex 10 at p 50; see also T 92.18); for Mr Zhuang's signature to be witnessed by a Justice of the Peace or a person qualified to do so (see Ex10 at p 50, see also T 92.18); and the provision of 100 points of identification for each of the parties signatory to the Loan Agreements so that Mr Tupou could properly verify their identity (see Ex 10 at p 50; see also T 92.18), so as to enable Mr Tupou to compare the signatures on the Loan Agreements with the identification provided (T 91.12, 19; see also Ex "SFT3" to Mr Tupou's first affidavit).
3. The plaintiffs note that, despite this, neither Mr Zhuang nor Ms Wang obtained independent legal advice in relation to the Loan Agreements. It is noted that Mr Tupou took no steps to ascertain whether Mr Zhuang and/or Ms Wang obtained independent legal advice in relation to the Loan Agreements, assuming that they had done so (by reference to the fact that their signatures had been witnessed) (T 91.50- T 92.1), in circumstances in which Mr Tupou had no evidence to this effect (T 92-18), and that no solicitor's certificate was requested or provided by Mr Tupou (T 93.17). Mr Pang refers to Mr Tupou's evidence in cross-examination where he accepted that, in order to protect his clients' interests he should have requested from Mr Zhuang proof or evidence that he had obtained independent legal advice (T 94.27; see also T 94.12-13) (Mr Pang says that such a request could have been made for example in the email dated 18 November 2016 from Mr Tupou to Mr Zhuang (see Ex "SFT3" to Mr Tupou's first affidavit). Mr Pang notes that Mr Tupou also failed to advise Mr Lee that he had no evidence that Mr Zhuang or Ms Wang had obtained independent legal advice (and says that Mr Tupou also accepted this was a failure on his part see T 95.44-49).
4. It is noted that it was March or April 2017 (T 128.38), before Mr Tupou received the 100 points of identification for each party that was a signatory to the Loan agreements (T 110.7) and that at no point did he actually meet with Mr Zhuang or Ms Wang to verify their identities (T 128. l 0, 42, 49; T 129.29) (indeed it is noted that Mr Tupou's evidence is that at no point did he ever meet Ms Wang - see T 128.4).

Plaintiffs' reply submissions

1. In reply to Mr Pang's closing submissions as to the concurrent wrongdoer defence (see [121]-[139]), the plaintiffs say (and Mr Pang does not dispute this) that if Mr Pang is found intentionally or fraudulently to have caused the loss then no apportionment of its liability to the plaintiff to another concurrent wrongdoer is permissible (referring to s 34A(1) of the Civil Liability Act and s 87CC(1) of the CCA); and the plaintiffs say that their pleading (that Mr Pang "falsely attested" that Ms Wang had signed the execution page of the loan agreements in his presence and that Mr Pang did so intentionally (see [18D] of the fifth further amended statement of claim; and see the reply), sufficiently amounts to a pleading of fraud (see Banque Commerciale SA (in liq) v Akhil Holdings Limited (1990) 169 CLR 279 at 285 per Mason CJ and Gaudron J, and 295 per Dawson J). The plaintiffs further say that they have joined issue by citing the facts said to ground the allegation that Mr Pang behaved dishonestly such as to engage the fraud exception. It is noted that the word "fraud" does not need to be pleaded but the facts that underly the allegation must be pleaded. Thus it is submitted that the concurrent wrongdoer claims fail.
2. The plaintiffs say that even if the claims were able to be prosecuted by Mr Pang the amounts claimed are grossly inflated, noting that no authority is provided for a 75% reduction.
3. As to the claims as against Mr Lee (to the effect that he should not have entered into the agreement in the first place against advice), the plaintiffs maintain that the risk he took was not as egregious as suggested. It is said that, Mr Lee observed in his cross-examination, he was confident in the transaction because he thought he had a personal guarantee from the second and third defendants and they owned property.
4. As to the claims as against Pinnacle Lawyers, the plaintiffs rely on the report of Mr Bluth (see above).

Contributory negligence defence

1. Mr Pang refers to the principles regarding contributory negligence by Rees J set out in About Life (at [657]-[660]). It is noted that a finding of contributory negligence turns on a factual investigation of whether the plaintiff contributed to its own loss by failing to take reasonable care of his or her person or property, quoting Astley v Austrust Ltd (1999) 197 CLR 1.
2. The application of the relevant principles involve the following issues: the degree of any departure from the standard of care by the plaintiffs; and the causal potency of any departure(s) from the standard of care of the plaintiffs.
3. Mr Pang submits that the standard of care is that of a reasonable business person and that it at least required the plaintiffs to address the matters particularised in the defence at [31] (many of which, it is noted, Mr Lee himself considered important, and which were raised by the plaintiffs' solicitors and/or accountant at various times).
4. In summary, the particulars of contributory negligence assert the failure to take any steps, or any adequate steps to understand how the deposit and purchase of the development properties had been funded and how Beyond Development Group would service the loan advanced by NAB to Beyond Development Group; to understand the intended use of the funds advanced; independently to verify the identity of Ms Wang; to investigate the creditworthiness of Beyond Development Group and Mr Zhuang and to investigate the ability of Beyond Development Group, and Mr Zhuang and Ms Wang as guarantors, to repay the plaintiffs; to investigate the presale of unit 2, and more generally, the nature and profitability of the development; to have regard to the advice and warnings provided by the accountant and Mr Tusa (see Mr Pang's defence at [31.2(1)]); and to obtain confirmation from Beyond Development Group that it had obtained independent legal advice.
5. It is Mr Pang's case that Mr Lee knew very little about the proposed development (referring to his 10 May 2018 affidavit though see amendments in 17 April 2015 affidavit) and was determined to advance the funds in circumstances in which Mr Zhuang had asked him to do so, and in which Mr Lee trusted Mr Zhuang with whom he had had a close working business relationship with for in excess of ten years (referring to the evidence at T 22.35, 49-50; T 23.22-23.23; T 66.48-66.50). It is submitted that this is apparent from Mr Lee's blatant indifference to the due diligence undertaken by Mr Tusa in relation to the proposed transaction referring to the communication in October 2016 set out in the chronology of events above.

Determination

1. The conclusion reached above as to the lack of authenticity of Ms Wang's signatures gives rise to obvious difficulty for Mr Pang if his signature on the Loan Agreements is genuine. It is accepted that in those circumstances Mr Pang could not have attested the signing of the documents by Ms Wang in her presence (and the attestation would therefore be false).
2. The first issue, therefore, is as to the authenticity or otherwise of Mr Pang's signatures on the documents. In that regard, while I accept that Mr Pang's evidence of his invariable practice (of only attesting documents in the presence of the signatories) is eminently plausible (indeed it would be surprising if that were not the case for someone in his position), I bear in mind that Mr Pang has an obvious self interest in giving such evidence and it is impossible to test on the material before me (so it rests entirely on acceptance of his word).
3. Mr Hobden's expert evidence thus becomes highly relevant. Mr Hobden (as noted above) gave qualified support (much of the same level as that expressed by Ms Holt in her separate opinion about Ms Wang's signature) for the proposition that Mr Pang's signatures were authentic. However, the force of that opinion is lessened in circumstances where it is not disputed that Mr Hobden did not have the original documents from which to make the comparison between signatures and had fewer specimen signatures than his own evidence would suggest was preferable. I reject Mr Hobden's expression of opinion as to the likelihood of the signatures being those of a skilled (or very highly skilled) forger (as I consider that assessment of probability goes beyond Mr Hobden's expertise as a forensic handwriting analyst) but I accept that Mr Hobden has expertise as to forensic analysis of the handwriting itself. (I note that Mr Hobden was not asked to analyse the capital letters on the documents that appear in relation to Mr Pang's signature, which seem to be of the same general handwriting as the signature.)
4. To my eye, some of the "Pang" signatures seem almost identical in the specimen group considered by Mr Hobden but there are certainly others where there are observable variations (which would tell against the signatures having been precise copies but not against them being forgeries). However, and also from a lay perspective, Mr Pang's signature does not appear to be a particularly complicated signature and might well lend itself more readily to copying than, say, Ms Wang's signature. In this regard, it is also relevant to note that Mr Zhuang had possession of the documents for some eight days before the executed documents were provided to Mr Tupou (and therefore ample opportunity to have executed a forgery had he wished to do so).

Claim against Mr Zhuang

1. As to the claim for judgment against Mr Zhuang, I can deal with this very briefly in light of the conclusions reached already as to the factual aspects of this matter. Assuming that Mr Zhuang's signatures on the Loan Agreements are genuine (and there is no reason to doubt this), there must nevertheless be an issue as to whether Mr Pang attested these signatures. In circumstances where I have found that Mr Pang did not attest Ms Wang's signatures on the documents, and having regard to the evidence of Mr Pang's communications with Mr Zhuang in September 2018, I am not satisfied that the Loan Agreements were properly attested as deeds (and I accept the force of the argument that they would not be enforceable as contracts for lack of consideration - past consideration being no consideration).
2. However, it seems to me abundantly clear that there was misleading or deceptive conduct on the part of Mr Zhuang in the making of the alleged representations; and I would accept that Mr Lee (and through him the plaintiffs) relied on these representations in advancing the moneys (albeit before execution of the documents) and then in not taking steps to recover or attempt to recover the moneys. Mr Lee's constant refrain as to the trust he reposed Mr Zhuang makes that clear. I would also accept that there was a relevant causal link between the misleading or deceptive conduct and the loss of the funds advanced. In addition, it would seem that Mr Zhuang breached his oral agreement with Mr Lee to provide a valid and enforceable personal guarantee, giving rise to damages for compensable and measurable loss. In those circumstances, I will enter judgment against Mr Zhuang for the amount claimed.

Costs

1. I see no reason that costs should not follow the event. However, in her written submissions at the hearing, Ms Wang included submissions as to costs, in which Ms Wang made clear that she seeks costs on an indemnity basis or alternatively on an ordinary basis. It appears that the basis on which indemnity costs are here sought is that explained in "Law of Costs" by G E Dal Pont (2009, LexisNexis Butterworths, 2nd ed) at [16.51] (in effect that the proceeding has been commenced or continued in circumstances where the plaintiffs, properly advised, should have known that the proceeding had no chance of success); and see Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225; [1993] FCA 536 at [5] per Sheppard J.
2. As it is not clear whether the plaintiffs wish to respond to the special costs order sought by Ms Wang, and Mr Pang may seek to make submissions as to costs, I will make directions to permit any further submissions on the issue of costs.

Orders

1. For the above reasons, I make the following orders: 1. Dismiss the plaintiffs' claim against the second and fourth defendants with costs. 2. Enter judgment for the plaintiffs against the third defendant in the sum of $800,000 plus interest and costs. 3. Direct that any brief written submissions as to costs of the second and fourth defendants be filed within 14 days with a view, if possible, to dealing with costs on the papers

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: 30 May 2022