Liu v Cooper

The Contract

1. On 13 February 2015, Mr Liu and Mr Cooper entered into a written contractual agreement for the purchase of Mr Cooper's business, a service station located at 42 Ambrose Street, Carey Bay in NSW, for the purchase price of $80,000.
2. The terms of the agreement were that Mr Liu would pay an initial deposit of $5,000 with the remainder to be paid on completion; that the completion would take place on 13 February 2015; and that Mr Liu would pay any outstanding amount at completion in monthly instalments on or before 13 June 2015; and pay 12.9% interest per month on any outstanding balance as at 13 June 2015.
3. On 25 January 2015, the plaintiff paid a part deposit of $500 and the remainder of the $5,000 deposit was paid on about 1 February 2015. On 13 February 2015 the plaintiff paid the defendant $60,000 upon settlement and completion of the sale. The plaintiff paid a further $3,000 on about 13 March 2015. There were no further payments made by the plaintiff before 13 June 2015, leaving an outstanding amount of $12,000, to which it was contractually agreed that interest would accrue monthly.
4. On 17 June 2015, the defendant, through his solicitor, issued a letter of demand for the payment of the outstanding $12,000 within 10 days. The monies were not paid by the plaintiff.

The Local Court Proceedings

1. By Statement of Claim filed on 6 August 2015, the defendant Mr Cooper initiated proceedings against the plaintiff for the outstanding amount of $12,000 as well as amounts of interest and others costs totalling $15,540.45.
2. Mr Liu filed a defence which admitted that $12,000 was not paid, but denied owing that amount with accrued interest to Mr Cooper. He filed a cross-claim on 12 October 2015 against Mr Cooper for an amount of $100,000 in damages (made up of $60,000 the price paid less real value of the business and $40,000 lost profits) and $4,403.71 in other costs.
3. In the cross-claim Mr Liu pleaded that, on or about 21 January 2015, he and Mr Cooper entered into negotiations relating to the purchase of business assets of the business known as Paradise Service Station, which included a convenience store and fuel sales. Between 21 January and 13 February 2015, the defendant Mr Cooper made the following representations to the plaintiff upon which Mr Liu relied to enter into the agreement: (at [3] of the cross-claim) "a) The shop takings between 1 July 2014 and 31 January 2015 were $2,250 per day. b) The equipment was worth $30,000. c) There would be $50,000 worth of stock handed over on settlement. d) The earnings from the sale of fuel were 15c to 20c per litre. e) The gross profit for fuel sales is 12.5% to 15%. f) The profit rate for the convenience store was approximately 50%. g) The quarterly electricity bill was between $600 and $800. h) The insurance is $3,600 per year. i) There were not compliance issues with the Lake Macquarie City Council."
4. The plaintiff claimed that, in contravention of the Competition and Consumer Act 2010 (Cth), the above representations were misleading and deceptive for the following reasons: (at [5] of the cross-claim) "a) The daily shop takings after takeover were $1,750 per day […] b) The value of the equipment was $3,000 and not $50,000. c) There was only $5,000 worth of stock handed over on settlement. d) The fuel earnings were 10c per litre […] e) The gross profit for fuel sales was about 9%. f) The profit rate for the convenience store varies from 28% to 33% from day to day. g) The electricity bills are between $1,800 and $2,500. h) The insurance is $4,000 per year. i) There was a compliance issue with Lake Macquarie City Council in that a fine of $235 was levied for worn flooring, insufficient wall tiling, open cupboards and non-compliant kitchen equipment. The cross-claimant estimates that the cost of bringing the premises up to compliance is about $3,000."
5. In defence of the cross-claim, Mr Cooper pointed to clauses 13 and 55 of the written agreement in that "only the representations contained in the Agreement had been made, that any other representations were of no effect and that only the written terms of the Agreement could bind the parties." He otherwise denied making the alleged representations.
6. During the first two hearing dates, the plaintiff was represented by counsel. By the third day of hearing he had withdrawn instructions from his solicitor and barrister, and appeared self-represented.
7. As Mr Cooper's original statement of claim was admitted by Mr Liu, the hearing proceeded on the basis of Mr Liu's cross claim, which was in the nature of a set off. It was therefore up to him to establish on the balance of probabilities that Mr Cooper made the alleged statements, knowing them to be false or misleading; that Mr Liu was induced to enter into the contract in reliance on those misrepresentations; and that he suffered a loss as a result of those representations.
8. On the first two hearing dates, the plaintiff presented his case, reading and relying on his affidavit of 2 November 2015 and an expert report under the hand of Mr Ross Mottershead, a forensic accountant, of 2 November 2015.
9. The plaintiff gave oral evidence as to the alleged misrepresentations on 10 November 2015. As his then counsel said to the magistrate, evidence of the nine representations pleaded was anticipated to come from Mr Liu, supported to a degree by evidence of exchanges of text messages. It was intended additionally to call evidence from Mr Taylor (by report only), Mr Mottershead, and the plaintiff's wife.
10. Mr Mottershead was called first in Mr Liu's case, although he was almost immediately stood down. There was a significant issue about the relevance of Mr Mottershead's evidence and many parts of his affidavit and report were objected to and subsequently ruled inadmissible. The principle difficulty went to the methodology adopted by Mr Mottershead, who had made his calculations based on instructions from Mr Liu, and looking at the profitability of the business only since it had come under the plaintiff's management.
11. Mr Liu was then called. His evidence was, in the ultimate conclusion of the magistrate, unsatisfactory in many regards.
12. Mr Liu was taken to a number of errors he had made in the affidavit sworn for the proceedings, and conceded some uncertainty about various statements that he had made about his dealings with Mr Cooper. He may have been mistaken about details of the advertisement for the sale of the business, recalling an incorrect sale price, and a reference to the sale price being "cheap" due to a change of lifestyle for the owner. Although he had not kept a copy of the advertisement, he deposed that it gave him the "impression" that it was a very good business for sale at a very good price (T25:23 of 10.11.2015).
13. Mr Liu's complaint about the stock present in the business premises when he acquired it being less than the amount represented to him was based upon his own estimate, an estimate he had made, "Basically it's by sight and also by the sale per day, the shop sale per day, because there is a gap between our takeover and the stock list was transferred to us" (T23:21-23 of 10.11.2015).
14. He had made no notes or other record of the stock he claimed had been sold by the Coopers prior to his take-over of the business. He claimed to be certain that Mr Cooper had said the value of the stock present at sale would be $50,000, with $30,000 worth of equipment.
15. He claimed that he had been shown around the service station only "briefly", denying that his first visit on 22 January 2015 had lasted for about 2 hours, and said that he later payed a $500 deposit on the purchase, "completely on reliance of whatever information Barry and Jody [Cooper] provided" (T34:30 of 10.11.2015). He also volunteered, "I was influenced by my wife" (T34:35 of 10.11.2015).
16. Mr Liu agreed that he had undertaken training at Mrs Cooper's suggestion, attending the service station to be shown its operation between 2 and 13 February 2015. He sought to give the impression, however, that the Coopers had kept things from him during the training period. An example of his evidence is, "Q. On about 31 January Mr Cooper told you that it was too hard to do a complete stock list because the person who was preparing it had to work in the business at the same time? A. I didn't hear that. Q. In your training periods with Mrs Cooper she gave you unrestricted access to the premises of the business? A. What do you mean "unlimited access"? Q. Unrestricted access. You could go wherever you wished? A. I mainly stay in the shop. I - you mean just for the premises, not documents, right? Q. The premises? A. Yeah, premises is I mainly stay in the front of the shop. I very, very rarely go to the back. Q. And she showed you the cash books that she kept? A. I never, I never saw the cash book. Q. She showed you the fuel book that she kept? A. Showed me a few pages. Q. And she showed you a folder of invoices and accounts? A. No, never, never. Q. That related to the business? A. Never any invoice. Q. And that folder included electricity accounts? A. That's a joke" (T37:20 - 50 of 10.11.2015).
17. He claimed not to remember being shown how to complete fuel books, but then conceded that Mrs Cooper had him practice the method on some sheets of paper. He denied taking photographs and videos of the operation of the business in this period, and later said he did not remember doing so. He frequently made claims in cross-examination to have had relevant conversations not referred to in his affidavit.
18. Mr Liu had to be recalled by his counsel on Day 2, 21 January 2016, to give some evidence as to the origins of estimates of fuel stock on hand when he took over the business, they being the figures provided by Mr Liu to Mr Mottershead. He gave evidence of Mrs Cooper "dipping" the fuel tanks, after which Mr Liu made a calculation of the fuel in the tanks based upon subtracting the "dipped" figure from a load of fuel that was delivered later on the same day.
19. The evidence was most unclear; it does not appear to have done anything to provide a basis for the opinions of Mr Mottershead. It did however, suggest that, contrary to Mr Liu's earlier evidence, he had been instructed in the operation of the fuel book by Mrs Cooper.
20. Mr Mottershead was available on the first hearing date to be called as a witness and he gave some preliminary evidence. His substantive evidence was not taken because his opinion was based upon unsubstantiated information provided to him by Mr Liu. Counsel for the plaintiff conceded that many of the opinions expressed by Mr Mottershead in his report were based upon estimates of value or quantities given to him by Mr Liu, such as the estimates of fuel on hand, referred to above. The witness was stood down, to permit the plaintiff to secure information supportive of the opinions expressed by Mr Mottershead (T60 - 61 of 10.11.2015. See also T20 of 21.1.2016).
21. The matter was adjourned until 21 January 2016.
22. Although Mr Mottershead was due to resume his evidence that day, he did not appear at court. Counsel for Mr Liu sought an adjournment to secure his attendance, but his Honour was not well-disposed to that application. He noted the difficulties with the relevance and weight of the expert opinion, based as it was on nothing more than Mr Liu's estimates of value and the like. His Honour raised the apparent difficulties with proof of Mr Liu's case, in proving that representations were made, and that loss had been incurred. He suggested the parties could benefit from discussions aimed at settling the matter, particularly bearing in mind the expanding legal costs. That invitation was not taken up by the parties.
23. Mr Liu's wife, Yan Huang, was called to give evidence. Ms Huang's affidavit of 4 November 2015 was in evidence (with some inadmissible portions rejected).
24. Some of her evidence contradicted that of her husband. For example, Mr Liu had conceded that, on the day the contract was signed, he and his wife were at the business for some hours and, whilst he sought to minimise the time available to him to consider the contract, he agreed he had had a considerable period of time to read it. Ms Huang deposed that she and her husband had had only 15 to 20 minutes to consider the contract, denying as "impossible" the suggestion that they had had a much longer period (at T11:43 of 21.1.2016). Despite the "impossibility" of the proposition, when taken through the time spent at the service station, she agreed that she and her husband had arrived as early as 3.30pm on the relevant day, and did not leave until after 7pm.
25. Her recall of conversations was very imprecise, with Ms Huang conceding that she could not "cover every word [Mr Cooper] say" (T12:49 of 21.1.2016).
26. His Honour ultimately concluded that Ms Huang had endeavoured in giving her evidence to support her husband's account of events.
27. The plaintiff also relied on valuations provided by Mr Taylor of Bluegum Asset Advisory. There was argument as to the admissibility of the valuations and the basis of the opinions expressed. Determination of its admissibility was not finalised that day.
28. Further consideration was given to the admissibility of the evidence of Mr Mottershead, but the plaintiff had not obtained any relevant evidence to substantiate the figures upon which the expert based his opinion, despite having had an adjournment for that express purpose.
29. His Honour again urged the parties to try to settle the matter, without result.
30. After the luncheon adjournment, the plaintiff was again not in a position to proceed, in that Mr Mottershead had not attended court. The matter was adjourned for further hearing to 24 March 2016.
31. On 17 March 2017, a notice of removal of solicitor was filed. On 24 March 2016 Mr Liu informed the court that he had had to withdraw instructions to his former lawyers because, "Right, basically because my solicitor has not represented me in my best interest. He forgot to subpoena Barry's last two financial years tax return and also banking details. They are very, very important documents for me and for the court to make well informed decisions" (T1:38 - 41 of 24.3.2016).
32. He applied for an adjournment, an application without notice to, and opposed by, Mr Cooper. Mr Liu was warned that he would have to pay Mr Cooper's costs thrown away if the matter was to be adjourned, but seemed dismayed at the prospect of paying those monies before the matter could proceed. "HIS HONOUR: Again I'll deal with Mr Liu with some of the practicalities of his situation but, Mr Liu, you understand if I adjourned it today-- DEFENDANT: Yes. HIS HONOUR: --you would be liable for the costs of the other side? DEFENDANT: Yeah. HIS HONOUR: Three and a half thousand dollars. DEFENDANT: Yeah, I understand that. HIS HONOUR: And if I adjourned it, say, for a month for you to consider your position, that money would have to be paid before the matter proceeded again. DEFENDANT: After the whole case was finalised, not before? HIS HONOUR: No, no. DEFENDANT: Before the case was finalised? HIS HONOUR: Before the case starts again" (T2:50 - T3:22 of 24.3.2016)
33. There followed some discussion concerning a fresh affidavit Mr Liu had filed, with his Honour observing, "You've given your evidence. You can't start filing more evidence…You've given your evidence, you've been cross-examined. You can't give more evidence (T4:16 - 22 of 24.3.2016)
34. His Honour observed, the time for filing evidence to be relied upon had ended "months ago", noting: "So far as the court is concerned, we have our rules about what's supposed to have been filed and when and there are rules of evidence about the fact of you can't split your case. You've given your evidence. You can't then file another one to make up for the fact that you weren't happy with what you said" (T5:23 - 27 of 24.3.2016).
35. The magistrate stood the matter down to enable Mr Liu to obtain some legal advice. When the hearing resumed, Mr Liu confirmed that he had obtained legal advice and wished to proceed with the matter that day (T7:03 of 24.3.2016).
36. Mr Mottershead was again not before the court, and there was no information as to his availability. Mr Liu said only, "Mr Mottershead and Mr Wiggins hasn't given me the best advice and they are - well, they missed some very important information" (T8:01 - 2 of 24.3.2016)
37. The magistrate again suggested the parties discuss settlement, telling Mr Liu, "Can I really suggest that you think with your head, rather than your heart? Just because you feel strongly and perhaps morally that you've been hard done by, doesn't mean that you can prove it in a court of law. A court of law, we're all about proof. Do you understand that?" (T8:30 - 33 of 24.3.2016)
38. Mr Liu queried the prospect of obtaining further evidence. "DEFENDANT: Do me a favour? That is, well, if I subpoena Barry's documents, well, how much chance do I have that the court may accept them? HIS HONOUR: I'm not in a position to be able to say that but I've already indicated what problems you have. The evidence has already been filed. Just because you subpoena something doesn't mean that you get to look at it. There can be arguments about whether you're entitled to look at it or not and then there's a question about how you get it into evidence anyway. So, there are a number of difficulties. I'm not saying what would happen at any stage, but there are at least those three hurdles you've got to get over. Yes, three big hurdles" (T10:16 - 27 of 24.3.2016).
39. Although Mr Cooper's counsel was prepared to discuss settlement with Mr Liu, and time was allowed for that purpose, the discussions came to nothing and the matter proceeded.
40. Mr Cooper objected to the admission of Mr Liu's affidavit of 21 March 2016. He did not object to Mr Taylor's report being received in evidence, but did suggest it had little or no weight because the methodology and basis upon which valuations were made were not exposed in the report. The magistrate ruled that, whilst the report was admissible, little weight could be placed upon it "by reason of the fact that he [Mr Taylor] has failed to provide any basis upon which he has based his opinion" (T13:38 of 24.3.2016).
41. Mr Liu then raised the possibility that he would make an application for an adjournment, for the purposes of obtaining Mr Cooper's financial records and submitting them to Mr Mottershead, who he would call. He asked the magistrate if there "was a chance of using the document" (T15:11 of 24.3.2016). The magistrate replied, "I've told you sir that there are certain legal hurdles, I'm not saying whether you'd be able to get over them, but there's a number of legal hurdles, and the first one is a very significant one, and that is that all of this should've been done before" (T15:13 - 16 of 24.3.2016).
42. The application for an adjournment that was then made by Mr Liu was opposed. Counsel for Mr Cooper submitted that his client would be disadvantaged by further delay: "Your Honour, this is the third occasion on which this matter's come back and it would be now adjourned part heard for a fourth time. My client is taking time off work and he will have to find another day and take time off work. His wife has just started a new job, which will involve her in ten weeks of training, locally and in Sydney and in Melbourne, it will be very awkward if she has to approach her new employer for a day off to interrupt that training when she's only just begun the job. My other witness, Mr Holmes, is currently self-employed and is giving up his time to come, yet again, to court, but he tells me that he has plans to take up paid employed work, become an employee, and that's likely to happen before this matter comes back, so he will be in a similar position of having to ask a new employer for time off to attend these proceedings. He's here, ready to give evidence, so are they all. They are, particularly Mr Cooper, subject to the stress of litigation in a very unusual way, they've been in a trial now for more than four months, not simply preparing for a trial but coming each time thinking that they would be called to give evidence and go into the witness box and each time not having to do so. I think that is a very unusual stress to put witnesses under and simply not fair that they be here, ready to give evidence, and they want the matter determined. And then there's the cost issue. In my submission, Mr Liu is in this position - your Honour said that you don't know where the fault lies, and obviously none of us knows that, but Mr Liu did say this morning that he had dismissed his solicitor because he had failed to carry out his, in Mr Liu's opinion, correctly. So that was a forensic choice that he made and took the risk that he would not be represented, but he hasn't given any indication of what attempts he's made to seek alternative representation in the meantime or why he didn't change solicitors after the hearing in January, and waited until March to drop this on everyone" (T15:34 - T16:14 of 24.3.2016).
43. His Honour ultimately denied the plaintiff's application as, "The overriding principle that matters should be dealt with on their merits at this stage would appear to be that Mr Liu has had every opportunity through his previous legal representatives to put all the material before the court. I cannot see that an adjournment is going to fix that. So the purposes of an adjournment at this stage I do not see is really going to change the evidence, or the weight of evidence that is available and admissible on the rules before the court at the moment. So bearing in mind the principle that matters should be dealt with on their merits, I cannot see that the adjournment is going to change any such situation and the court has to be fair to all parties, and just because one party has terminated their lawyer just before the hearing today, I am of the view that Mr Cooper should not be prejudiced by that and I do not feel that Mr Liu is going to be advantaged by it in any event by reason of the improbability that he would be able to get any further evidence before the court" (T17:00 - 15 of 24.3.2016).
44. The defence case was heard that day. Mr Cooper gave oral evidence as did his wife Mrs Jody Cooper (who previously ran the service station on a daily basis) and Chad Holmes, one of the service station's casual employees.
45. Both parties made written submissions as to the evidence before the court, although much of Mr Liu's submissions related to matters not in evidence, or calls for Mr Cooper to be referred to the Director of Public Prosecutions to be prosecuted for making fraudulent misrepresentations.

Findings of the Magistrate

1. The magistrate dealt with each pleading made by the plaintiff in his cross-claim except for pleading (h) in relation to the insurance price, which was abandoned by Mr Liu through his then counsel on the first day of hearing.

A. The shop takings between 1 July 2014 and 13 February 2015

1. This representation was based on the plaintiff being unable to replicate the takings that were evidenced in the "Z1 reports" annexed to the affidavit of Mrs Cooper. The Z1 reports were provided to the plaintiff on 22 January 2015 and outlined the takings for the relevant period. There was no evidence before the magistrate which suggested the reports were falsified and the magistrate found that the allegation was not proved.

B. The equipment was worth $30,000

1. The magistrate concluded that the fact that the figure of $30,000 was expressly referred to in the contract as the value of equipment gave some support for Mr Liu's claim in this regard. However, his Honour was also conscious of Mr Liu's somewhat contradictory evidence in this regard, in that he deposed that the figure of $30,000 was based upon his own estimation of the value of equipment.
2. The final sale price of $80,000 was not on the basis of the division of that sum returned the value of equipment and stock. The defendant explained that the reason the $30,000 was included in the agreement was due to Chad Holmes having downloaded a pro-forma contract from the internet, there being evidence that Mr Holmes could not proceed further with the completion of the pro-forma document unless he entered a figure, which he made up, into the relevant section of division of stock and equipment.
3. The magistrate was sceptical of Mr Liu's recollection as he had concluded that the plaintiff's recall of dates and conversations was faulty. The magistrate was not satisfied that the representation was in fact made, nor that the plaintiff relied upon it, despite the figure appearing in the written agreement. This was due to the evidence given by the defendant and Mr Holmes, as well as the concession made by the plaintiff in cross-examination. Furthermore, his Honour concluded that the plaintiff was not able to prove that any damages were sustained.

C. There would be $50,000 worth of stock handed over on settlement

1. The figure of $50,000 worth of stock is again included in the written agreement and gives the plaintiff's claim some substance. However, the magistrate noted the explanation given above as to the pro-forma contract and the division required due to the necessity of entering a sum, the figure of $50,000 being inserted.
2. The evidence of Mrs Cooper and Mr Holmes was that the stocktake conducted by Mr Holmes at Mrs Cooper's request was incomplete. Mr Liu denied being told this and asserted that he was assured by Mrs Cooper that the stock would be as normal. The plaintiff did not conduct a stocktake to ascertain that the amount of stock was less than promised, but had come to the conclusion that one third of the stock had been sold by sight and daily sales.
3. The plaintiff was unable to provide any evidence that the stock was less than promised, or as to its value. Whilst noting that there was also no evidence as to damages, the magistrate concluded that the representation had not been made out.

D. The earnings from fuel were 15 to 20 cents per litre

1. In respect of this representation, the plaintiff relies on a text message from the defendant sent on 22 January 2015 which reads "15 to 20 cents per litre". The defendant explains that he was referring to the figure the business was making at that moment, but noting that fuel prices went up and down. This explanation is corroborated by the corresponding business records. There was a subsequent telephone conversation relied upon by both parties, Mr Cooper having said that the amount referred to was "at the moment", whilst Mr Liu denied having heard the qualifying comment.
2. Mrs Cooper gave evidence as to the fluctuation of fuel prices day to day and the impact such fluctuation has on profit margins. The magistrate did not accept that the plaintiff would not know about these fluctuations or the effects of such on profitability. He did not accept Mr Liu's evidence that he was not shown fuel books during a training period her underwent, as knowing how to fill out the books was an essential part of running the business. The magistrate accepted the evidence of Mrs Cooper over that of Mr Liu in this regard. His Honour also concluded that there was no evidence as to damages.

E. The gross profit of fuel is 12.5% to 15%

1. The magistrate, for the reasons outlined in particular (d) above found this allegation not proven and, furthermore, concluded that there was no proof as to damages suffered.

F. The profit rate for the convenience store was approximately 50%

1. There was conflicting evidence as to the conversation relating to the 50% profits. Mr Liu's evidence was that he was told the figure around 30 January 2015 during a discussion with Mr and Mrs Cooper. There was also evidence of a text message from 25 January 2015 which raised an issue, albeit out of context, of a 50% profit margin. The magistrate was of the view that this went some way to support the plaintiff's claim regarding his understanding of the conversation. The defendant and his wife gave evidence that the 50% figure was in relation to the hot food only and that the conversation occurred during the training period. The magistrate accepted that at an early stage, the plaintiff had a basis to believe the profits of the store would be considerably more.
2. However, there was evidence that the plaintiff was provided "the Z1 reports", a complete record of transactions, on 22 January 2015. The magistrate ultimately held that, "At the best Mr Liu was being very naïve and I struggle to believe that a purchaser would rely upon such a representation from a complete stranger without some degree of proof or investigation" (p.16 of the judgment).
3. Furthermore, despite the text message not dispelling any misunderstanding on behalf of the plaintiff, the magistrate looked to the plaintiff's behaviour during the training period and ultimately concluded that it was difficult to accept that the plaintiff would not have made inquiries as to the finer details of the business, a business in which he had no prior experience. His Honour concluded that the fact that Mr Liu was invited to undertake training with Mr and Mrs Cooper was inconsistent with the claim the defendant was attempting to hide information about the business.
4. The magistrate ultimately held that if there was any misunderstanding on behalf of the plaintiff, by the time of settlement on 13 February 2015, he was certainly made fully aware of the details and as such, was unable to rely on any former misunderstanding.

G. The quarterly electricity bill

1. The defendant produced a quarterly electricity bill issued in August 2014 for the amount of $679.84. There was evidence given by the defendant and his wife wherein they had observed the lights of the service station being left on by the plaintiff overnight, a practice that they themselves had not followed. His Honour noted that could go some way to explaining the increase in the electricity bill received by the plaintiff, which was much higher. The bill produced by the defendant supports what he told the plaintiff about the range and therefore the plaintiff was unable to establish that the representation had been false.

I. There were no compliance issues with the Lake Macquarie City Council

1. In respect of this final particular relied upon by the plaintiff, the magistrate heard evidence that Mr Cooper and Mr Holmes had told the plaintiff about the issues. In this event, the magistrate had to accept the evidence of the plaintiff over that of the defendant and Mr Holmes, something he said he was not in a position to do. The representation was therefore found not proven.

The Current Proceedings

1. The plaintiff relies on three grounds of appeal, contending that the learned magistrate erred in law.

Ground One: that his Honour failed to afford the plaintiff procedural fairness

1. This ground relates to the refusal of the magistrate to grant Mr Liu's adjournment application, made on the third day of hearing. Mr Liu accepts that his challenge is against a discretionary decision, but contends that the magistrate applied the wrong principles.
2. The magistrate had regard to the fact that, having withdrawn instructions from his lawyers, Mr Liu had done little or nothing to ready himself for the third day of the proceedings, having, for example, done nothing to secure the attendance of Mr Mottershead to give further evidence. Without notice to Mr Cooper, he sought an adjournment so that he could obtain Mr Cooper's tax and banking records, and so that Mr Mottershead could attend to give evidence.
3. The magistrate considered that much of the evidence Mr Liu wished to obtain was likely to be inadmissible, not least because the time in which evidence was to be filed and served was closed. He reasoned that, even if the evidence was admitted, it was unlikely to redress the difficulties the plaintiff had with his case before the Local Court. The evidence of Mr Mottershead for example, dealt only with an analysis of the value of the service station business as it was conducted by Mr Liu (but not with its value as managed by the Coopers) and upon the basis of estimates of value and stock on hand given him by Mr Liu.
4. His Honour was also very concerned at the mounting costs to both parties, and the disproportionate nature of the costs to the quantum of the dispute. The final consideration was that of the strain involved in litigation, and the disadvantage occasioned to Mr Cooper in granting an adjournment, in that at least one of his witnesses was unlikely to be available at a later time.
5. Mr Liu submits that the magistrate was in error in refusing the adjournment application, a decision based upon an incorrect understanding of the admissibility and probative worth of the evidence the plaintiff sought to obtain. It is contended that his Honour had an obligation to advise Mr Liu of his right to obtain documents by making a call for them, or issuing a notice to produce or a subpoena. It is further argued that the material that might have been obtained could have given weight to the opinions expressed by Mr Mottershead or, conversely, assisted in undermining the evidence given by the Coopers.
6. The plaintiff submits that the decision to refuse the adjournment caused him substantial injustice, compared to which the disadvantage that would have flowed to Mr Cooper if the adjournment application was allowed "paled into insignificance".

Ground Two: that his Honour erred in law by not providing assistance as required by his overriding duty to ensure a fair trial to the unrepresented plaintiff

1. Referring to a Victorian decision of Yusof v AAMI [2016] VSC 518, Mr Liu argues that his Honour failed in the duty owed to him as an unrepresented litigant. Much of what is argued in support of this ground reproduces the contentions with respect to ground 1; that is, the magistrate was obliged to advise Mr Liu as to his rights to seek further evidence, and the mechanisms by which that could be done, and to fail to do so was a fundamental breach of that duty.

Ground Three: that his Honour erred in law by failing to provide proper reasons for dismissing the plaintiff's cross-claim

1. Again relying on Yusof v AAMI the plaintiff submits that the reasons given by the learned magistrate fell far short of what was required to deal with the points raised, note relevant findings of fact, and expose the path of reasoning by which the ultimate conclusion was reached.
2. It is argued that the magistrate failed to express findings of fact or to determine whose evidence should be accepted.

Consideration

1. It is not irrelevant to note that these proceedings commenced over a dispute concerning an unpaid debt of $12,000. At the conclusion of the second day of hearing before the Local Court the magistrate noted that the costs for each party to that point were in the vicinity of $40,000. To bring the matter before this Court as an appeal is likely to at least have doubled those costs.
2. That such a dispute has been permitted to proceed in the manner that this matter has should give everyone - the litigants and their respective lawyers - pause for serious thought. Whilst litigants are entitled to seek the intervention of the courts to adjudicate in business and other disputes that cannot be reasonably settled in any other way, sometimes the best advice a lawyer can give a client is not to take that course. This is such a case.
3. Although Mr Liu contends they are obscure, it is evident to me that the conclusions of the learned magistrate were based upon his Honour's assessment of the credit of the respective witnesses, (and in particular, his conclusion that Mr Liu was not a reliable witness in some material respects) and upon his findings of fact. That assessment, and those findings, informed his decision not to grant Mr Liu's application for an adjournment, and not to facilitate his desire to secure taxation and other records from Mr Cooper.
4. Having considered the evidence, together with the transcript of the proceedings, I am not persuaded that the magistrate fell into error. He took a practical approach to a matter in which the costs involved were in danger of far exceeding the quantum of the dispute, even accepting that Mr Liu's claim for $100,000 in damages was anything like a reasonable estimate of actual loss. For the reasons noted below, this appeal must be dismissed.

Ground 1

1. The refusal of the magistrate to grant Mr Liu's adjournment application was based upon a number of considerations, all of which were proper matters to be taken into account. His Honour had regard to: 1. The court ordered time for filing evidence had closed months previously. 2. The fact that Mr Liu had already been granted two adjournments (on days 1 and 2) to secure the viva voce evidence of Mr Mottershead, together with material that could sustain his opinions, and, despite the allowance of that time, nothing had been done by the plaintiff to this end. 3. There were difficulties for Mr Liu in obtaining Mr Cooper's banking, taxation, and other financial records. As the magistrate observed, a subpoena could be issued for the material (necessarily with leave, as the magistrate correctly observed), but that did not guarantee that Mr Liu would get access to the documents, or that they would be of assistance to him. 4. Mr Liu had already completed his evidence, having been called, and re-called, and been cross-examined. As his Honour noted, "You can't then file another [affidavit] to make up for the fact that you weren't happy with what you said" (at T5:26 of 24.3.2016). 5. A day of court time, a valuable public resource, that had been set aside for the hearing of the matter, would be wasted. 6. The quantum of the costs thrown away if the matter could not proceed, in the context of a matter where substantial legal costs had already been incurred, were costs disproportionate to the quantum of the dispute. 7. If the plaintiff was permitted to recast his case at such a late stage, further delay and costs would follow. 8. Mr Cooper opposed the application: he had to take time off work each day the matter was listed, and there were difficulties in securing the attendance of Mrs Cooper and Mr Holmes for further dates due to the work commitments of each. 9. Litigation was stressful, and a further adjournment exacerbated the stress. 10. Mr Liu had made a choice to dismiss his lawyers only a matter of days before the matter was due to resume, in circumstances where he had had since 21 January 2015 to resolve the issue. 11. His Honour saw no real disadvantage to Mr Liu in refusing the adjournment.
2. Whilst the court had an inherent power to grant the application for an adjournment, it was appropriate for his Honour to view the matter as a balancing exercise, requiring him to consider not just Mr Liu's wishes and interests, but also those of Mr Cooper, and the justice system more broadly. The magistrate was under a duty to exercise his discretion to grant the application or refuse it, in accordance with the overriding purpose of the Civil Procedure Act 2005 (NSW) and the Uniform Civil Procedure Rules 2005 (NSW) of facilitating the just, quick, and cheap, resolution of the real issues, in accordance with the dictates of justice: ss 56 and 58 of the Act.
3. In Sali v SPC Ltd (1993) 67 ALJR 841 at 843 - 844, the High Court said, "In determining whether to grant an adjournment, the judge of a busy court is entitled to consider the effect of an adjournment on court resources and the competing claims by litigants in other cases awaiting hearing in the court as well as the interests of the parties. As Deane J pointed out in Squire v. Rogers (4) (1979) 27 ALR 330, at p.337 this 'may require knowledge of the working of the listing system of the particular court or judge and the importance in the proper working of that system of adherence to dates fixed for hearing'. What might be perceived as an injustice to a party when considered only in the context of an action between parties may not be so when considered in a context which includes the claims of other litigants and the public interest in achieving the most efficient use of court resources."
4. Gleeson CJ took a similar approach in State Pollution Control Commission v Australian Iron and Steel Pty Ltd (1992) 29 NSWLR 487 at 493-494 wherein he observed, "The courts of this State are overloaded with business, and their workload has, over a number of years, increased at a greater rate than any increase of the resources made available to them. The inevitable consequence has been delay. This, in turn, has brought an increasing responsibility on the part of judges to have regard, in controlling their lists and cases that come before them, to the interests of the community, and of litigants in cases awaiting hearing, and not merely to the concerns of the parties in the instant case. The days have gone when courts will automatically grant an adjournment of a case simply because both parties consent to that course, or when a decision to grant or refuse an adjournment sought by one party s made solely by reference to the question of whether the other party can adequately be compensated in costs."
5. See also Aon Risk Services Australia v Australian National University (2009) 239 CLR 175 ("Aon Risk") per French CJ at [6]; Gummow, Hayne, Crennan, Kiefel and Bell JJ at [111], and Heydon J at [133].
6. Applying the principles noted in Aon Risk I am unable to discern error in the approach taken by the magistrate to Mr Liu's application. The matter had been before the Court for many months, and the timetable during which evidence could be filed and served (October 2015) had long past. Whilst it was open to the court to grant leave to rely upon evidence filed outside that timetable, there were good reasons in this case not to permit such an approach.
7. Mr Liu had already had a significant period of time in which to finalise his evidence, and Mr Cooper's case (as defendant to the cross-claim) had been conducted on the basis of the evidence disclosed by Mr Liu, significantly, when he had the benefit of representation by a solicitor and counsel. For it to be recast at such a late stage would inevitably have led to considerable delay into the future, and a troubling escalation in costs. Mr Cooper would have had to have been given an opportunity to further cross-examine witnesses already called; and to obtain further evidence to meet any new evidence relied upon by Mr Liu.
8. Whilst Mr Liu submits to this Court that it should be concluded that the legal representatives had been negligent or incompetent in their conduct of the matter, and he thus should have been given this opportunity, I would not draw such a conclusion on the basis of the material before me. The case appears to have been conducted in an acceptable way; Mr Liu's dissatisfaction seems to have been based upon the fact that proceedings were not progressing generally in a manner that seemed favourable to him. On my reading of the material, this had more to do with Mr Liu's presentation as a witness than with the skill or otherwise of his lawyers.
9. Even were the material obtained, it is difficult to see how it could cure the fundamental problem in Mr Liu's case: the only evidence of the alleged misrepresentations was his; bank or other financial records could not fill that gap.
10. Mr Liu had made it clear that he sought further time to obtain Mr Cooper's financial records, and to secure Mr Mottershead's attendance. Even assuming the records and the witness could have been secured, and relevant evidence admitted, there is no real basis upon which to conclude that the plaintiff's position would have been materially altered.
11. His case of false representation was entirely reliant upon his evidence, with some marginal support from that of his wife (of her observations on 22 January 2015). His case could only be made out if the tribunal of fact accepted his evidence about the asserted misrepresentations. Even without having heard oral evidence from Mr and Mrs Cooper and Mr Holmes, it is clear that the magistrate, sitting as the tribunal of fact as well as the tribunal of law, was unimpressed by Mr Liu's evidence, as he ultimately noted in giving judgment.
12. Although this Court did not share his Honour's advantage of seeing Mr Liu give his evidence, on the basis of transcript alone it is plain to me why the magistrate would have had reservations as to the reliability of Mr Liu's evidence. His evidence was in some regards lacking in credibility, and his assertions were made with a vehemence which lacked the ring of truth. He refused to concede matters that seemed to be common sense, and he was caught out on more than one occasion.
13. For example, Mr Liu was initially dismissive of the idea that he had been shown the fuel books by the Coopers and trained in their use. He subsequently conceded that he had been shown the books, but contended that it was only a few pages. When recalled to give evidence intended to support his estimates of fuel on hand as supplied to Mr Mottershead, it became clear that Mr Liu had in fact received training in the use of the fuel books, and understood the way they were maintained. His unwillingness to concede that at the outset has the flavour of false testimony, given from a desire to support his case rather than with an intention to tell the truth.
14. (Although his Honour did not then know it, the evidence of Mr and Mrs Cooper was believable and credible. Mrs Cooper in particular gave evidence of what seems to have been her careful management of the business and records. This evidence further undermines the plaintiff's case.)
15. The plaintiff had already had considerable indulgence of time in which to secure Mr Mottershead's attendance, and to provide him with anything that might give a solid basis for his opinions. His Honour was well aware of the nature of the evidence the plaintiff sought to obtain with the benefit of an adjournment, and it was open to him to conclude that the evidence was not certain or even likely to make a material difference. There has been no denial of procedural fairness.
16. This ground of appeal has not been made out.

Ground 2

1. Much of what Mr Liu advanced with respect to ground 1 is also relied upon in support of this ground. It is contended that his Honour was obliged to provide Mr Liu with information and assistance about how to conduct the case he evinced a wish to conduct when he appeared unrepresented on 24 March 2016.
2. The obligations that fall on a trial judge with respect to an unrepresented litigant were considered by the Court of Appeal in Reisner v Bratt [2004] NSWCA 22 at [4] - [6]. "Parties are entitled to appear unrepresented in proceedings in the Court, and sometimes, because of lack of funds or other reasons, they have no alternative. The Court has the duty to give such persons a fair hearing, and it may be appropriate for the Court to give some assistance to such persons in order to fulfil that duty. However, the Court hearing a case between an unrepresented litigant and another party cannot give assistance to the unrepresented litigant in such a way as to conflict with its role as an impartial adjudicator. In deciding what to do when a case is not adequately presented by an unrepresented litigant, it is appropriate for the Court to take into account that, in some cases, the circumstance that one party is unrepresented can place far greater burdens of time and costs on the other party than would be involved if both litigants had competent representation. There are a number of reasons for this, including the following: the time and costs involved in trying to understand and answer claims that are not formulated so as to clearly raise relevant issues can be much greater than where relevant issues are clearly raised; adjournments are often required, because an unrepresented party is not ready to proceed with the case, either because material required for presentation of the case is not available or for other reasons; and when a case is actually heard, the hearing itself may be much longer than if both sides were represented by a lawyer. Where a case is brought before the Court by an unrepresented litigant, and material required for adequate consideration of that person's case is not available or not presented to the Court, it is not generally the case that the Court should itself undertake an investigation of whether such material exists, and if so, seek to have it brought to the Court so that it can be considered. It may be sometimes appropriate for the Court to attempt to have such material available, particularly if the deficiency of the material is obvious and can be remedied without prejudice to the other side; but otherwise, it would generally conflict with the Court's position as an impartial adjudicator for it to take steps to seek to improve an unrepresented litigant's case by investigating whether there is more material to support that case than has been presented to the Court, and then taking steps to obtain that material."
3. It is not always easy to determine the extent of assistance a trial judge must give to an unrepresented litigant; much depends upon the circumstances of the case and the apparent intelligence and level of comprehension of the litigant: Abram v Bank of New Zealand (1996) ATPR 41-507; Minogue v Human Rights and Equal Opportunities Commission (1999) 166 ALR 129. It is important for the judge not to compromise his or her impartiality.
4. Here, the plaintiff submits that his Honour provided incorrect information as to the requirement for leave to issue a subpoena, but such leave is required pursuant to rule 7.3 of the UCPR, which provides: "7.3 Issue of subpoena in certain circumstances requires leave (1) A subpoena may not be issued, except by leave of the court, unless the party at whose request the subpoena is to be issued is represented by a solicitor in the proceedings. (2) Leave under subrule (1) may be given either generally or in relation to a particular subpoena or subpoenas. (3) Despite subrule (1), a subpoena may not be issued in relation to proceedings in the Small Claims Division of the Local Court, except by leave of the court, in any circumstances."
5. It is further contended that his Honour should have advised the plaintiff about his right to make a call for Mr Cooper's financial and taxation records, or issue a Notice to Produce. The former suggested course assumes that Mr Cooper would have had those records available to him in court on 24 March 2016 to produce in answer to the call, something that seems most unlikely; the latter course assumes that an adjournment should have been granted, something I have concluded was not required.
6. There seems to be little point in a magistrate giving an unrepresented litigant a lesson in the means by which evidence could be secured, when securing the material was but one step on a difficult road to the goal of using the evidence, and in circumstances where his Honour was not prepared to grant an adjournment to Mr Liu.
7. The magistrate advised the applicant to obtain legal advice and stood the matter down for that purpose. That was probably the best assistance he could have given to Mr Liu in the circumstances of the case. His subsequent conduct of the case, and his decision to refuse the plaintiff an adjournment, was on the basis that Mr Liu had, as he confirmed in court, obtained legal advice.
8. I am not satisfied that the obligations upon the magistrate to ensure that the plaintiff received a fair trial were not discharged. This ground of appeal fails.

Ground 3

1. The plaintiff complains that the magistrate did not provide adequate reasons for his decision. I am unable to agree with that complaint.
2. After permitting the parties an opportunity to provide written submissions his Honour delivered judgment and written reasons. The reasons set out the basic facts of the dispute, and then deal with the eight alleged misrepresentations and what Mr Liu had to prove on the balance of probabilities to establish his claim.
3. The evidence of Mr Liu was set out in summary, with his Honour noting some of the bases for the reservations he had about Mr Liu's reliability. For example, at p.3 of the reasons, "I note that Mr Liu had originally stated in his affidavit that this occurred on 27th January and then changed that to the 29th January at the start of the examination. The significance of the conversations on the 24th and 25th January relates [to] alleged representations made after that date and what reliance was being placed upon any breakdown of equipment and stock and the reliability of Mr Liu's recollection."
4. His Honour went on to refer to some of the concessions Mr Liu had been obliged to make in cross-examination, concessions that clearly added to the magistrate's concerns about Mr Liu's reliability. He also noted some of those aspects of Mr Liu's evidence that were directly contradicted by the evidence of Mr and Mrs Cooper, such as the extent of the training given him and his access in that regard to records of the business (p.4 of the judgment).
5. His Honour then addressed each of the eight alleged misrepresentations, and the evidence of Mr Liu relevant to each.
6. In turning to Ms Huang's evidence the magistrate set out the limited nature of her evidence, in that it was confined to her observations on 22 January 2015 and 13 February 2015, and her training. He observed that Ms Huang had made the same errors as to dates in her affidavit that Mr Liu had made and been obliged to correct, concluding that the history she gave was "in line with her husband's original affidavit" with the incorrect dates (p.6 of the judgment).
7. His Honour's overall conclusion as to the reliability of Ms Huang was adverse: "I was of the opinion that she fully understood the questions that were being asked of her and certainly tried to avoid some obvious questions that may have been adverse to her husband's case."
8. The circumstances surrounding the rejection of Mr Mottershead's expert evidence - being the twofold basis of its dependence upon Mr Liu's instructions as fact, and his failure to attend for cross-examination - were set out, as was the reason for the limited weight to be given to Mr Taylor's report.
9. His Honour then turned to the evidence called from and by Mr Cooper and summarised the evidence of the witnesses. The summary of Mrs Cooper's evidence was thorough, she being the witness whose testimony in his Honour's view significantly rebutted that of Mr Liu. The evidence of Mr and Mrs Cooper was supported by that of Mr Holmes.
10. On the basis of all of the evidence, the magistrate then set out his conclusions with respect to each of the alleged misrepresentations. I have had no difficulty in discerning what his Honour concluded and why.
11. As to the first misrepresentation (a), his Honour concluded that there was no evidence that the representations made as to average takings were false. The magistrate found that the likely reason for any difference between the takings when the Cooper's ran the business and those when Mr Liu managed it was Mrs Cooper's experience and better management.
12. Of misrepresentation (b) the magistrate found that Mr Cooper had not represented that the equipment was worth $30,000. His Honour accepted the evidence of Mr Cooper in that regard, corroborated as it was by the evidence of Mr Holmes. His Honour did not accept the plaintiff's evidence as reliable, observing, "Generally, I also have to question the reliability of Mr Liu's recollection of events and conversations, given the fact that it has been established that his recall of dates and dates of specific conversations was faulty. For example, his evidence as to the date he was told of a 50% gross profit margin on stock sold conflicts with the text messages" (p.14 of judgment).
13. The third alleged misrepresentation (c) was never made in the conclusion of the magistrate. He referred to the evidence of Mrs Cooper and Mr Holmes in this regard, and accepted that evidence in preference to that of Mr Liu. He also referred to the evidence (in my view quite damning of Mr Liu) that Mr Liu had never himself done any sort of stock take but, rather, had made his claims based upon "sight" and "daily sales". His Honour was very obviously unimpressed by evidence of that nature as a basis upon which to allege misrepresentation. Finally, his Honour observed there was no evidence of loss.
14. Similarly, the magistrate did not accept Mr Liu's evidence with respect to misrepresentations (d) and (e). He referred to Mrs Cooper's evidence and the support for her recollection of relevant conversations with Mr Liu that was to be found in the business records, stating unequivocally "I accept the evidence of the Coopers over that of Mr Liu". The magistrate also noted Mr Liu's concession in cross-examination as to not having heard the qualifier "at the moment" concerning fuel profits, and recorded his dissatisfaction with Mr Liu's evidence, which he regarded as incredible, that he was unaware of the fluctuation in fuel prices, affecting as that must, profit from fuel sales.
15. His Honour's dismissal of misrepresentation (f) was based upon his acceptance of the "impressive" evidence of Mrs Cooper, and the rather incredible nature of Mr Liu's evidence on this point. His Honour noted that Mr Liu did not dispute receiving "Z1 reports", this being information which should have dispelled any misinformation about overall profits of the convenience store, as would the inquiries he made. The magistrate observed, "Having seen all the parties in the witness box I note that I found Mrs Cooper to be an impressive witness, particularly in respect of Mr Liu's behaviour in the shop during the training period. Mr Liu certainly made a number of relevant inquiries about the business as evidenced by the text messages annexed to both his and Mr Cooper's affidavits. It is difficult to accept that he would not continue to inquire about the finer details of how the business was run during the training period. On that basis Mr Liu should have had no misunderstanding of the profit margins. I accept Mr's Cooper's evidence over that of Mr Liu as it indicates a far more credible and realistic approach by a potential purchaser trying to learn the finer details of how to operate a business in which he had no experience whatsoever. Again I refer to his evidence of wanting to know the expenses in detail and the more detailed the better. The fact that Mr Cooper invited Mr Liu to train in the business, in the absence of any legal obligation, is inconsistent with Mr Cooper seeking to conceal any information about the business" (p.16 of judgment).
16. As to misrepresentation (g) his Honour accepted Mr Cooper's evidence over that of Mr Liu, as well as the evidence of Mrs Cooper as to having seen electricity used in a much less conservative manner than was her practice when managing the business.
17. His Honour concluded that Mr Liu had failed to prove the last misrepresentation, (i), because he did not accept Mr Liu's evidence over the contrary evidence of Mr Cooper and Mr Holmes.
18. In conclusion, his Honour noted, "Objectively this was a difficult case for Mr Liu to prove from the outset as so much of Mr Liu's case depended on Mr Liu's version of conversations over that of Mr Cooper and Mrs Cooper. It was not assisted by the flawed reports obtained from Mr Motorshead and Mr Taylor by his then legal representatives. Mr Liu's case was in difficulty on the morning of day one, when Mr Motorshead gave his limited evidence. Mr Liu's then legal representatives should have been aware of that. On the basis of the rulings and comments I made at that time in respect of part of Mr Motorshead's report, Mr Liu was going to have a problem proving damages, which of course is an essential element of his cause of action. I encouraged the parties on numerous occasions to attempt to settle the matter, unfortunately to no avail" (p.17 of judgment).
19. In my view, the reasons were comprehensive, and clearly explained why the magistrate had made the findings of fact that he did, in large part based upon his conclusions as to the unreliability of Mr Lui as a witness.
20. This ground has not been made out.

orders 1. The amended summons dated 1 September is dismissed. 2. Mr Liu is to pay Mr Coopers costs, subject to any further application by Mr Cooper for indemnity costs. 3. Any such application is to be filed and served by 4pm on 8 November 2017 and any response to be filed and served within 7 days thereafter. 4. Any such application will be dealt with on the papers in Chambers.

Amendments 02 November 2017 - Orders renumbered from 1 to 4. 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: 02 November 2017