Liu v Wang

Liu's late application

1. The hearing completed shortly before the lunch adjournment on 16 May 2024. At 2pm the matter was called for judgment. At that time, Liu, through different counsel, made an oral application for judgment not to be delivered, and instead for the Court to allow Liu to bring an application to amend her statement of claim and re-open her case to rely upon further evidence. The reason given was that the plaintiff or the plaintiff's lawyers had made an error in the way the case had been framed and run. The particular amendment was not explained, nor was the likely new evidence identified.
2. Because the defendant had not appeared and therefore was not, in the first instance, prejudiced by such an application, I granted Liu until 23 May 2024 to provide the proposed further material to chambers.
3. On 23 May 2024, at 11.54pm, Liu sent correspondence to the Court seeking to rely upon a further affidavit from herself, but not making any application to amend her pleading.
4. Liu indicated in her affidavit that she was abandoning her claims for a resulting trust and constructive trust, and only pressed her prayer for relief 3, namely: …a declaration that the Defendant holds the property subject to an equitable charge in favour of the Plaintiff to the extent commensurate with the Plaintiff's contributions to the acquisition of the property or as determined by the Court.
5. Liu's submissions supporting her application to re-open and to rely upon further evidence made no reference to rr 2.1 and 29.5 UCPR.
6. However, in exercising its powers to make directions and orders under those rules, the Court must seek to give effect to the overriding purpose of the Civil Procedure Act 2005 (NSW) and the UCPR to facilitate the just, quick and cheap resolution of the real issues in the proceedings: see ss 56(1) and 56(2) Civil Procedure Act and the considerations in ss 57-60 Civil Procedure Act.
7. In Shaw (as liquidator of ACN 166 338 138 Pty Ltd (in liq) (formerly Structural Projects Pty Ltd) v KPR Recruitment Australia Pty Ltd (No 2) [2017] NSWSC 707 at [9]-[15], Gleeson JA set out the relevant principles concerning re-opening, including the following (citations omitted): The principles governing an application to reopen are well settled. In Smith v NSW Bar Association (1992) 176 CLR 256 at 266 - 267; [1992] HCA 36, the plurality said: If an application is made to re-open on the basis that new or additional evidence is available, it may be relevant, at that stage, to inquire why the evidence was not called at the hearing. If there was a deliberate decision not to call it, ordinarily that will tell decisively against the application. But assuming that that hurdle is passed, different considerations may apply depending on whether the case is simply one in which the hearing is complete, or one in which reasons for judgment have been delivered. It is difficult to see why, in the former situation, the primary consideration should not be that of embarrassment or prejudice to the other side. In the latter situation the appeal rules relating to fresh evidence may provide a useful guide as to the manner in which the discretion to re-open should be exercised. It has also been said that the Court should not provide a back door method by which unsuccessful litigants can seek to re-open their cases by giving an opportunity to reargue them: Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 at 303; [1993] HCA 6 (Mason CJ). In Urban Transport Authority v Nweiser (1992) 28 NSWLR 471 at 478, Clarke JA (Mahoney and Meagher JJ agreeing) stated the following general principles in relation to the grant of leave to reopen: The principle which should guide the court in determining whether to grant an application for leave to re-open is whether the interests of justice are better served by allowing or rejecting the application as the case may be. No doubt it is relevant to take account of a number of matters such as likely prejudice to the party resisting the application and the reasons why the evidence was not led in the first place. … Where the decision was not made for tactical reasons and is based on a mistaken apprehension of the law or the facts the case is more appropriately to be considered as one in which the application has resulted from an error by counsel. The categories of case in which the Court may grant leave to re-open were summarised by Kenny J in Inspector General in Bankruptcy v Bradshaw [2006] FCA 22 at [24] (Bradshaw) as follows: The authorities indicate that, broadly speaking, there are four recognised classes of case in which a court may grant leave to re-open, although these classes overlap and are not exhaustive. These four classes are (1) fresh evidence; (2) inadvertent error; (3) mistaken apprehension of the facts; and (4) mistaken apprehension of the law. In every case the overriding principle to be applied is whether the interests of justice are better served by allowing or rejecting the application for leave to re-open... In Australian Securities and Investments Commission v Rich [2006] NSWSC 826 at [18], Austin J listed a number of factors potentially relevant to consideration of whether to permit a reopening (in the context of a civil penalty case): (a) the nature of the proceeding; (b) whether the occasion for calling the further evidence ought reasonably to have been foreseen; (c) the consideration of fairness that the defendant is entitled to know all of the evidence he has to meet in taking forensic decisions as to cross-examination and the nature and extent of the evidence he will himself adduce on the matters in question; (d) the extent to which the plaintiff has embarked upon calling evidence on the issue in question in its case in chief; (e) the importance of the issue on which the further evidence is sought to be adduced to the pleaded issues in the case; (f) the degree of relevance and probative value of the further evidence sought to be adduced and its potential to involve an undue waste of time; (g) the prejudice to the defendant in terms of delay in the completion of the proceeding and the consequential costs; (h) the public interest in the timely conclusion of litigation; (i) what explanation is offered by the plaintiff for not having called the evidence in chief. Although these factors provide useful guidance, ultimately the discretion to permit a party to re-open their case must be exercised having regard to all the circumstances of the case … Those circumstances include the public interest in a just, quick and cheap resolution of the real issues in the proceedings and the need for finality of litigation as reflected in the Civil Procedure Act 2005 (NSW), s 56(1)
8. When the matter was called for hearing this morning, an affidavit demonstrating service of the further material on Wang was filed in Court. I accept that there is little prejudice to Wang, should further evidence be admitted. However, I reject Liu's application to re-open to rely on the further evidence, because it would not be just, quick and cheap to do so, including because: 1. There ought generally be finality to proceedings. These proceedings have been on foot for over six months and at all times Liu has been legally represented, including by counsel. Liu understood the importance of the conversations in January 2023 concerning the arrangements with Wang and had already dealt with them in her evidence in chief. 2. As made plain below, the reason given by Liu on affirmation for not giving the evidence previously is not compelling and only applies to a small portion of the evidence sought to be relied upon. I do not accept that there was "inadvertent error" by Liu or her lawyers, but rather a conscious decision was made not to bring forward that evidence earlier. It may be that the interaction between the Court and the plaintiff's counsel during the hearing led to the plaintiff's lawyers considering that further evidence may bolster her case. But as noted above, courts do not allow a "back door" method of running a case a second time. 3. The evidence is not significantly probative.
9. On the assumption that conclusion to refuse the application to re-open is wrong, I deal with that new evidence in the consideration of Liu's evidence as a whole.

Factual findings

1. Liu has not relied on the legal effect of r 14.26 UCPR in relation to Wang's failure to file a defence, and the possibility of that failure being taken to be admissions of fact: see eg Macdonald v Australian Securities and Investments Commission (2007) 73 NSWLR 612 at [49] (Mason P, Giles JA agreeing); Quality Bakers Australia Pty Ltd v Yassin Modern Bakery Pty Ltd (t/as Yassin Lebanese Bakery) [2007] NSWSC 804 at [2] (Brereton J); and contra Sneddon v New South Wales [2012] NSWCA 351 at [152] (Macfarlan JA).
2. As such, the matter must be determined on the evidence, and on the balance of probabilities. I make the following findings.
3. In around 2019, Liu, who only speaks Mandarin, was introduced to Wang, whom she understood to be a real estate agent and Australian Citizen. At the time, Liu was considering starting a real estate development business in Sydney, for which purpose she had several conversations with Wang.
4. In or around January 2023, Wang offered to look for suitable properties for Liu "to invest and reside in". Only latterly, Liu disclosed to the Court that she is a Chinese citizen and currently in Australia on a Bridging B visa, and at the time of the property's purchase held a temporary resident visa.
5. The original totality of Liu's evidence concerning the oral agreement she alleges with Wang is as follows: Wang suggested to me to invest in real estate properties in Sydney and said to me words to the effect that he could look for suitable properties for me to invest in and reside in, and I would pay the purchase price for the property. As I could not speak any English, he suggested the property to be registered under his name so that it was easier for him to manage the property for me. He further suggested that this should be formalised in a loan agreement and the amount I paid for the purchase of the property would be due and payable by him upon my demand.
6. The substance of the arrangement that Wang offered, and to which Liu agreed, therefore, was that: 1. Liu would pay to Wang the purchase price to acquire properties for her to "invest in and reside in", but that the properties would be registered in his name alone; and 2. the arrangement would be structured as a "loan agreement", under which the amount paid by Liu towards the acquisition of the property would be due and payable by Wang upon Liu's demand.
7. In her rejected out of time affidavit, Liu included a more detailed alleged conversation with Wang in January 2023. The new evidence indicates again that the parties discussed Wang looking for (plural) properties for Liu to both "invest in and reside it". Further, Wang would "manage" any property. Wang would receive a fixed sum commission. Liu gives no evidence of her investigations as to her legal entitlement to own residential property in Australia.
8. The highest the new conversation rises is the substance of the following alleged oral promise by Wang to Liu: I promise I will hold the purchased property for you to invest and reside and I can transfer the property to you under your request. And I am even willing to provide you with a loan involving a security of the property. So that if anything happens in the future you can enforce it. … The details of such a loan agreement could be discussed later.
9. Notably at that time, in January 2023, there was no discussion that Wang would become personally liable on any mortgage secured over any property. Further, there is no alleged discussion about any interest being charged on "such a loan agreement", and the details of such agreement had not been discussed and agreed. Therefore, while Wang allegedly stated that he was "willing to provide you with a loan involving a security of the property", the type of terms of such a loan and "security" were to be discussed and agreed, which they never were.
10. On 13 January 2023, Wang accompanied Liu to a Commonwealth Bank branch, where a joint bank account was set up in their names. The parties agreed that Wang was not entitled to use the funds in that joint account without Liu's consent.
11. From 7 to 15 February 2023, Liu and Wang engaged in WeChat messaging correspondence in mandarin concerning the acquisition of the Zetland property.
12. On 6 and 7 February 2023, Wang informed Liu that the deposit for the property was $65,000, and sent her a photo of a handwritten note which read: IOU Weiming Wang borrowed $65,000 Australian dollars from Shouping Liu, for the purpose of purchasing [the Zetland property].
13. Liu did not contradict Wang's characterisation of a loan of the money, which she then transferred into the joint account on 10 February 2023.
14. On 15 February, Wang transferred $63,000.00 from the joint account to an account of the sales agent for the Zetland property. At this time, Wang was committed as the purchaser of the property, and there had been no further discussion of the of a loan agreement, nor any document drafted.
15. On 10 March, Wang asked Liu to prepare further funds, which he said were required to finalise the settlement of the property. By that stage, it appears that the parties realised that Liu would not provide the whole of the purchase price, and instead that a bank loan for the remainder of the price of about $240,000 would be needed. Wang sent a message to Liu, including: … It's just the loan is not available yet, and then, $240,000, well, we have to get the bank help us pay the $240,000. We will prepare for this matter next. I think you can do it by yourself when you come next week, and I can go with you too.
16. On 16 March 2023, Liu attended a Commonwealth Bank branch with Wang and transferred the sum of $355,328.43 from one of her personal bank accounts to an account for settlement of the property. There is no evidence from Liu as to whether she discussed a loan from the bank for the remainder of the purchase price at that time and was refused. There is no evidence about how the parties decided that Wang would become solely liable to the bank for the loan and mortgage.
17. On the same day, Liu "consulted lawyers in relation to the preparation of a loan agreement". During that process Liu sought information from Wang concerning "borrower's name, address, loan amount, loan period, whether the interest rate is agreed upon, whether a real estate property is provided as collateral."
18. Wang did not answer all Liu's questions. He did indicate that he was changing his address to the Zetland property address. He also indicated in relation to "amount" and "period" that they could discuss it later. He included: … As for the repayment date, about this, because we agreed at the time and I will just transfer it to you when the time comes, right? ... there must be no interest. How to pay the interest? There's no way to pay yet. Regarding the collateral, it is because the money is used to buy this property. …
19. No submissions were made on the meaning of this message, and it is unclear exactly what this message means. There is no doubt that the parties intended that Liu's money would be used towards the purchase of the property. However, it also appears that the parties were approaching the arrangement through the lens of a loan agreement. Further, by this time, the parties understood that Wang would be taking out a bank loan for the remainder of the purchase price.
20. There is no evidence as to the parties' intentions concerning the repayment of the bank loan, other than some vague reference in Liu's late rejected affidavit that she would make repayments, but before the value of and liability for the mortgage was known. There was no documentation in evidence that indicated Liu had any responsibility to Wang to repay the mortgage. Instead, at that time before settlement, the few communications on the topic were to the effect that Liu would be living in the property. Her evidence was that she had no income in Australia and was not providing the whole purchase price, and it is unclear how the mortgage was in fact going to be repaid, if Liu lived in the property.
21. In Liu's late rejected affidavit, she deposes to another alleged conversation with Wang on 17 March 2023, that includes in part: Liu: … I think it is better to discuss the terms with your [sic] now as I have already engaged a lawyer for the preparation of the loan agreement. I want to have a legally binding document to protect my interests over the property. … Liu: … But we already have an agreement that I will pay the repayment of the mortgage amount and I will put the mortgage amount into the loan agreement. … … Liu: I know usually a loan agreement would have a property as security. You told me before that you have a property in Sylvania Waters. Can you provide that one as security for me? Wang: No I can't. that property is mutually owned by me and my wife. Liu: Does that matter? Wang: …I will be honest with you. I am currently going through a divorce with my wife and it is uncertain who will get this house. Therefore, I cannot use this house as security for you. … you can use this [Zetland] property as the security. Liu: Ok then, I will tell my solicitor about our discussions today and ask them to prepare a document as soon as possible. Once it is ready, I will send it to you to review.
22. The explanation for the application to reopen and rely upon that evidence was that Liu had not previously provided evidence of that conversation because a divorce is "a culture embarrassment for Chinese people, and I did not intend to disclose such private information about the defendant's family situation in court documents". She has changed her mind.
23. At most, that explanation suffices in relation to the alleged discussion about the Sylvania Waters property being used for security, but nothing more. Further, the recent attempted disclosure about that part of the discussion demonstrates a conscious decision was taken not to include it, rather than it being a mere oversight by Liu or her lawyers, which might lend to Liu being entitled to re-open her case. Liu does not indicate that her lawyers made any error.
24. In any event, I do not consider the discussion about the Sylvania Waters property to be of significant probative relevance to Liu's claim.
25. Further, the evidence read as a whole does not assist Liu. Wang allegedly stated: …the loan amount would be the amount of money you have spent plus the mortgage amount of $240,000.
26. However, Wang was personally liable to the bank for the mortgage and therefore Wang's statement is another indication that he intended to borrow the whole purchase price of the property from Liu and repay her.
27. Further, during that alleged conversation there was still no agreement about interest. It seems Liu was agitating for "standard loan agreement" terms and her draft document included 5.5% interest, but Wang had stated, "I do not think there should be any interest".
28. On 18 March 2024, Liu visited the property and decided that she did not want to live in it and told Wang "I can only rent it out". Wang wrote to Liu: I thought about it all night, but there is no way to solve it immediately. It could be rented out right away, but where are you going to stay at?
29. On or about 20 March 2023, the property settled. The balance of the purchase price, totalling around $240,000.00, was financed by a registered mortgage over the property, in Wang's name. As noted, Liu gives no evidence about when and why Wang took out the loan in his own name.
30. On 26 March 2023, Liu transferred $10,000.00 into the joint bank account for Wang's agreed "commission fee". While not expressly stated, it can be inferred that Liu was content for Wang to withdraw that amount from that bank account. It appears that in March and April 2023 some withdrawals from that account were described as having been used towards the mortgage repayments, however, there were no mortgage bank statements in evidence, and no evidence of who, if anyone, has been paying the mortgage repayments for the last 13 months. Liu did not give any evidence that she has made any payments toward the mortgage repayments after April 2023.
31. In early April 2023, Liu again contacted Wang, including: … the agreement was about what was discussed earlier, which is this loan will be repaid later, um, write all this in the agreement.
32. By 11 April 2023, Liu had obtained a lawyer-drafted loan agreement. That loan agreement, to be executed as a deed, was stated to be for the sum of $658,328.43. However, Liu does not give evidence that she had advanced more than $418,328.43. The Loan Agreement did contemplate Liu further lending Wang the difference between these sums, but there is no evidence or suggestion that this related to the mortgage.
33. The loan agreement also contemplated a "security interest" over the property, but did not identify what form of security interest would be involved. It did not refer to Wang holding the property on trust for Liu. It recorded Wang's address as at the property. It also included a loan term of 60 months and an interest rate of 5.5%. The loan was therefore inconsistent with what Liu alleges Wang had communicated to her before the property settled and before he became liable for the mortgage.
34. On 18 April 2023, Liu sent that loan agreement to Wang. It was never signed. Wang indicated to Liu that he considered the terms too complicated and wanted to engage a lawyer. Liu responded that "I asked you to do it but you refused."
35. Throughout April 2023, Liu and Wang engaged in various WeChat correspondence concerning mortgage repayments and renting the property.
36. On 22 April 2023, Liu messaged Wang: … So when can we sign this loan agreement? … I'd like to sign this agreement as soon as possible so that I can focus on my work with peace of mind!
37. On 31 May 2023, Liu messaged Wang including: .., I bought a property in your name. We agreed for you to write up a loan agreement and pay the rent to the joint account. … In short, we need to solve the issue of such a large sum of more than $400,000 Australian dollars transferred to you, how will you return it to me and how can we make arrangements? …
38. There are no communications from Wang after that date.
39. On 30 June 2023, Liu lodged a caveat on the title of the property, which describes her claimed interest as a "charge", supported by "an equitable interest in the land by virtue of a resulting or constructive trust arising from contributions made to the acquisition of the land."
40. On 18 July 2023, Liu's lawyers sent a letter of demand to Wang that outlined the alleged agreement as follows: a. [Wang] would look for suitable properties for our client to invest; b. [Liu] would pay the purchase price of the targeted property under your request; c. The targeted property would be registered under [Wang's] name; d. [Wang] would repay the money that was paid by [Liu] for the purchase of the targeted property in the future. e. [Liu] would open up a joint account with [Wang] and transfer the money for the purchase of the targeted property into that joint account. The use of the balance of the joint account shall be agreed by [Liu].
41. Notably, that letter does not refer to Liu's original intention to live in the property or how the mortgage was to be repaid. However, the letter's description of the agreement is consistent with a loan agreement without security, and inconsistent with an agreement, whereby Liu would be obtaining a proprietary interest in the property, including ever being placed on title. There is no reference in that lawyer's letter to the parties agreeing to a trust relationship or the loan including any security. The letter demanded repayment of the sum of $418,328.43, that was used towards the purchase of the property.
42. However, the letter also makes sweeping statements, including: Based on the above matters, it is clear that our client is entitled to an equitable interest in the Property by virtue of a resulting or constructive trust arising from the monetary contributions made to the purchase of the Property. Further or alternatively, in the event that the Property is being sold under the judicial sale, our client is entitled to the whole proceeds of the Property.
43. As noted, after the hearing adjourned, Liu abandoned her resulting trust and constructive trust claims. The statement that Liu would be entitled to the whole proceeds of the property appears wrong, at least because there is a registered mortgagee. The letter made other demands that formed part of the statement of claim that have been abandoned.
44. On 20 August 2023, Liu sent a WeChat message to Wang: I hope we can meet to discuss the matter of borrowing money to buy the property. The loan agreement and the lawyer's letter have been sent to you, but you have ignored me and haven't responded at all. … You have proved the old saying "Chinese people tend to trick Chinese people" is true.
45. On 20 November 2023, Liu commenced these proceedings.
46. In her first affidavit, Liu complains "I have not received any payment from Wang for the monies I contributed towards the acquisition of the Property".

Does Liu have a proprietary interest giving rise to an equitable charge?

1. As noted above, Liu originally sought declarations that she has an equitable interest in the property based on a resulting or constructive trust or an equitable charge "to the extent commensurate with her contributions". Since 23 May 2024, she only presses for a declaration of an entitlement to an equitable charge.
2. For the reasons that follow, Liu must fail in her claim.

Principles of equitable charge

1. Generally, for an equitable charge to come into existence, there "must be an intention to create an immediate proprietary interest or immediate right of recourse to identifiable, present, or in the case of a charge, future property": Roberts v Investwell Pty Ltd (in liquidation) [2012] NSWCA 134 at [29] (Bathurst CJ, Beazley JA and Tobias AJA agreeing).
2. However, courts have also ordered equitable charges where a plaintiff has expected a proprietary interest and that expectation has been disappointed, and where it is appropriate to order return of the plaintiff's fund put towards the property and protect those funds by way of an equitable charge.
3. For example, in Chalmers v Pardoe [1963] 1 WLR 677 the appellant expended moneys on building a residence on leasehold land of the respondent who subsequently resiled from an undertaking to apply for consent to the transfer of this part of the land to the appellant. The Privy Council said at 618: There can be no doubt upon the authorities that where an owner of land has invited or expressly encouraged another to expend money upon part of his land upon the faith of an assurance or promise that that part of the land will be made over to the person so expending his money, a court of equity will prima facie require the owner by appropriate conveyance to fulfil his obligation; and when, for example, for reasons of title, no such conveyance can effectively be made, a court of equity may declare that the person who has expended the money is entitled to an equitable charge or lien for the amount so expended. …
4. In Delaforce v Simpson-Cook [2010] NSWCA 84 at [3], Allsop P (Giles JA agreeing) said: Equity will look at all the relevant circumstances that touch upon the conscionability (or not) of resiling from the encouragement or representation previously made, including the nature and character of the detriment, how it can be cured, its proportionality to the terms and character of the encouragement or representation and the conformity with good conscience of keeping a party to any relevant representation or promise made, even if not contractual in character.
5. Liu did not make detailed written or oral submissions in relation to the operation of the legal principles to her only maintained claim for equitable charge, beyond referring to the cases of Morris v Morris (1982) 1 NSWLR 61 (Morris) and Giumelli v Giumelli (1999) 196 CLR 101 (Giumelli). However, by reason of her reliance solely on these cases, it is apparent that she is asking the Court to order an equitable charge as an equitable remedy, and not asking the Court to recognise an equitable charge created agreement of the parties.
6. Liu relies on a passage from Morris at 63-64, where McLelland J observes: I do not think … there is room for inferring the existence … of an actual intention on the part of the plaintiff or the defendants that a trust of the property or any share therein was to be created in favour of the plaintiff … However, in my view wider equitable principles operate in the present case. The plaintiff spent money on the defendants' property in the expectation, induced or encouraged by the defendants that he would be able to live there indefinitely as a member of their family. This expectation has been defeated by the occurrence of events which were not in contemplation when the money was spent and as a result of which any subsisting right of residence by the plaintiff in the property is now of no practical consequence. In my opinion, on the facts of this case, it would be unconscionable and inequitable that the defendants should now retain the benefit of the expenditure by the plaintiff of his money on their property free of any obligation of recoupment to him … [I]n the particular circumstances of the present case the plaintiff's equity would in my opinion be satisfied by his having an equitable charge over the Kingsgrove property …
7. As McLelland J makes clear, the unconscionability which justified the imposition of an equitable charge in that case was the defendants' retention of the plaintiff's expenditure, free from an obligation to repay the plaintiff, in circumstances where the plaintiff had expected a proprietary interest. In that case, the plaintiff had paid money towards an extension to a home jointly owned by his son and daughter-in-law on an assurance that they would provide accommodation to him. There was subsequently a breakdown in the relationship between them, which led to the imposition of a charge in favour of the plaintiff concerning the money spent on the property.
8. In Giumelli an equitable charge was imposed as the appropriate form of relief in circumstances where a proprietary estoppel claim had succeeded. No estoppel is claimed here.

Application

1. For the reasons that follow, I do not accept on the balance of probabilities that Wang induced an expectation in Liu that she would receive a proprietary interest, nor has Wang retained a benefit "free of any obligation of recoupment". Instead, the most likely arrangement is that the parties entered into an oral loan agreement, whereby Wang agreed to repay the amounts Liu advanced. A formal loan and some security arrangement were discussed, but the terms were never agreed. Liu sought a loan in the form of a deed; it was never executed.
2. I reach that conclusion for the following reasons.
3. First, while there is no doubt that Wang used Liu's money towards the purchase of the property, Liu has conceded in various ways that the arrangement, into which she entered with Wang, was a "loan agreement", under which amounts paid by Liu to the acquisition of property would be due and payable by Wang upon Liu's demand.
4. The proposition that what was envisaged was a loan arrangement, and not a trust arrangement or one conferring the expectation of an immediate proprietary interest induced by Wang, finds further support in the fact that Wang sent Liu correspondence indicating he was "borrowing" the deposit from Liu before she provided money to him. Liu also referred to the "money I lend you".
5. Wang also asked Liu to ensure that in any documented loan agreement she "deduct the two amounts you promised earlier", which were commission payments. This is consistent with Wang indicating that he would not be liable to repay those sums pursuant to a loan, because he had earned them. Further, in Liu's late rejected affidavit Wang said the loan amount would be all the money Liu had advanced and the mortgage, which suggests Wang was borrowing all that money from Liu.
6. Secondly, the parties expected an agreed loan to be documented. Liu consulted lawyers about preparing a written "loan document" before settlement, which she subsequently discussed with Wang. It can be inferred that she gave instructions based on her understanding of the oral arrangement and the lawyers then formulated a formal loan document with Liu's preferred more extensive terms.
7. The formal loan document was created and provided to Wang, but never signed. I reject Liu's submission that the loan agreement, which she has disavowed in this litigation as evidencing the true relationship between the parties, ought nevertheless be considered as evidence of the parties' common intention that Liu would have a proprietary interest in the property. I accept that, had the loan agreement been executed, then Liu could have sought to enforce whatever security arrangement was agreed, noting the draft agreement was unclear as to the nature of a security interest in the property. However, no such document was executed prior to or after the purchase of the property.
8. Thirdly, while Liu framed the oral agreement in January 2023 as a purchase "for her benefit", the benefit intended was never clearly articulated on the evidence. It may have been the case that the parties had a vague intention that Liu would become the legal owner of the property, on terms to be agreed, had she decided to live in the property, and that was the reason for the references to "your property". However, Liu chose not to pursue those negotiations and reach an agreement as to the terms of any proprietary entitlement, because she did not want to live there. Instead, she consistently referred to a loan.
9. Fourthly, Liu has consistently demanded repayment of her money, rather than asserting a proprietary interest in the property. Until the beginning of the hearing, Liu had a pleaded claim for return of money Wang had used from the joint account money to make mortgage repayments, which has now been abandoned. That abandonment is consistent with Wang borrowing all the money Liu advanced including into that joint account.
10. Fifthly, I accept that there are various WeChat communications between the parties that may appear inconsistent with this conclusion. For example, Wang did from time to time refer to Liu moving into the property and referred to it as her "new property". However, before settlement Liu decided she did not want to live in the property, and then Wang completed the sale as the sole owner and mortgagor, and without an agreement as to the terms of any loan, including any security.
11. Wang did ask her about renting the property and informed her about his mortgage repayments. However, that is also consistent with Wang borrowing money from Liu for the mortgage repayments. However, there is no clear evidence as to the extent to which Liu paid the mortgage repayments or deposited money into the joint account for that purpose, and she does not give evidence that she advanced the whole purchase price or amount stated in her proposed loan agreement.
12. Therefore, based on the above, I consider it possible to determine from the evidence, on the balance of probabilities the intentions of the parties, which at their base were to enter into a loan agreement, whereby Liu loaned Wang money for the purpose of purchasing the Zetland property. That loan was agreed to be repayable on demand. The parties acted on the basis of the oral arrangement, rather than ever executing a formal document with more detailed terms, including any security arrangement.
13. The correspondence between the parties does not disclose any clear common understanding that Liu was to have an interest in the property, beyond, possibly, a right to reside in the property (which Liu chose not to do) or a vague right to purchase the property outright from Wang at some unidentified point in time.
14. Any intentions about Liu's ownership of the property and how that would come about were never clearly evidenced. I do not accept that Liu has demonstrated she is entitled to an equitable charge over the property.

Statutory illegality

1. If the above analysis is mistaken and Liu is, in fact, entitled to an equitable charge over the property, then an additional question arises as to whether the Court should refuse to declare that interest in circumstances where Liu may have breached the Foreign Acquisitions and Takeovers Act 1975 (Cth) (FATA Act). Further, it may be that "purchaser surcharge duty" was also payable.
2. The Court raised this issue of the possible impact of the legislation with Liu before the hearing and sought written and oral submissions on the issue. The written submissions included: There is no such defence [of unclean hands or statutory illegality] or contention before the Court, and in that circumstance it is respectfully submitted the Court should not consider or determine the issue.
3. I reject that submission. It is always appropriate for a court to consider all the matters apparently relevant to the granting of relief. The Court is not constrained to only considering matters raised by the parties, providing the parties are provided with procedural fairness: Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82 at [101]-[102] (McHugh J). Liu does not suggest she has been denied procedural fairness on this issue. Further, Liu accepted that litigants in ex parte hearings are expected to be candid with the Court.
4. In her submissions, Liu did not expressly provide a position as to whether the FATA Act applies to her transaction or not, but accepted it "may". Liu's submissions were framed on the basis that the legislative intention was not to invalidate transactions, such as those involved here.
5. Section 94 of the FATA Act provides: a foreign person who proposes to take a notifiable action or notifiable national security action that is a residential land acquisition must not take the action if the foreign person has not given a notice relating to the action under section 81.
6. Under s 4 FATA Act, "foreign person" is defined to include "an individual not ordinarily resident in Australia". To be ordinarily resident in Australia a person must be in Australia during 200 or more days of the preceding 12-month period and the person's continued presence in Australia must not be subject to any limitation.
7. Under s 4 FATA Act, "temporary resident" means a person who: (a) holds a temporary visa under the Migration Act 1958 that allows the individual to remain in Australia for a continuous period of more than 12 months (disregarding the amount of that period remaining); or (b) meets the following conditions: (i) the individual is residing in Australia; (ii) the individual has applied for a permanent visa under the Migration Act 1958 ; (iii) the individual holds a bridging visa under that Act that allows the individual to remain in Australia until the application has been finally determined; or (c) meets the conditions prescribed by the regulations.
8. Under s 4 FATA Act, the phrase "residential land" means land where there is at least one dwelling, or where the number of dwellings that could reasonably be built on the land is less than ten: reg 19 Foreign Acquisitions and Takeovers Regulation 2015 (Cth) (FATA Regulations). The Zetland property is residential land in this sense.
9. Under s 47 FATA Act, a "notifiable action" includes an action by a foreign person to acquire an interest in Australian Land, in circumstances where the relevant "threshold test" is satisfied. An "interest" in land includes both legal and equitable interests: s 12 FATA Act. Moreover, the threshold test is automatically met if the land in question is residential land: reg 52 FATA Regulations.
10. Under s 49 FATA Act, an action is not a "notifiable action" if it involves a foreign person acquiring an interest in Australian land, and the action is not a "significant action" for the purposes of section 45. However, there is no evidence that these exceptions are engaged, noting that they require, inter alia, the person acquiring an interest in land to be specified in an exemption certificated in force under ss 57, 58 or 59 FATA Act
11. If Liu was or is a "temporary resident" in Australia, that may allow her to make an application under FATA Act to purchase a property for her own residence. However, Liu has never lived in the property. Further, Liu has not given notice in accordance with s 81 FATA Act.
12. On the evidence before me, I therefore consider that, if Liu has in fact acquired an equitable interest in the property, then it appears that she has also taken a "notifiable action" in circumstances prohibited under s 94 of the FACTA Act.
13. This generates a question as to whether Liu should be denied equitable relief by virtue of statutory illegality, or whether it ought be granted on terms. In Nelson v Nelson (1995) 184 CLR 538, the majority made clear that statutory illegality does not require a plaintiff to be denied equitable relief unless granting the relief would frustrate or defeat the purposes of the relevant statute: at 564-567 (Deane and Gummow JJ) and 612-613 (McHugh J). Their Honours also emphasised that the policy of a statute may sometimes be sufficiently protected by granting equitable relief on appropriate terms: at 571 (Deane and Gummow JJ) and 616 (McHugh J).
14. In Meshumar v Otmy (2018) 97 NSWLR 615 at [478], Robb J considered it would not frustrate the purpose of the FATA Act to enforce a proprietary interest acquired in breach of the FATA Act, since s 134 explicitly provides that "An act is not invalidated by the fact that it constitutes an offence against or contravention of a civil penalty provision of this Act". Similar observations were made by Emmet AJA in Szetu v Situ (No 2) [2019] NSWSC 1312 at [33] and Rein J in Huang v Fu [2011] NSWSC 316 at [29]-[41].
15. I note also that, under s 84 FATA Act, a failure to provide proper notification under s 81 is punishable by imprisonment for 10 years, or 15,000 penalty units, or both. Following Nelson v Nelson, the existence of such a sanction suggest that the policy of the Act is sufficiently protected by its own provisions: at 570-571 (Deane and Gummow JJ) and 616-617 (McHugh J).
16. However, that does not mean that terms ought not be imposed on any relief given: see eg Sheikholeslami v Tolcher [2011] FCA 1050 (Yates J). Liu did not make submissions against terms being imposed if the Court considered it appropriate.
17. For these reasons, if I had found that Ms Liu did have an equitable interest in the property, then I would not have refused to recognise that interest on grounds of statutory illegality. I would, however, not have given effect to any relief, until Liu had demonstrated to the Court that she had complied with the FATA Act and any relevant and applicable stamp duty laws.

Other issues

1. Liu abandoned additional relief, should a proprietary interest be found.
2. While Liu's abandonment of all relief sought save for her prayer for an equitable charge could constitute an abandonment of prayer 11 of her Statement of Claim, which was for "such further or another order as the Court deems fit or appropriate", I do not consider that this was her intention. In accordance with the overriding purpose applicable by reason of the Civil Procedure Act, I consider it appropriate to provide Liu with an unpleaded remedy, in light of the findings made. It is appropriate to give Liu judgment against Wang in the sum advanced to him pursuant to the loan agreement found. Alternatively, the money would be repayable, for example, as money had and received.
3. Liu has sought a costs order. However, in circumstances where she has not obtained the relief sought, and instead the Court has framed a remedy for her, contrary to her submissions, I do not consider it is an appropriate exercise of the Court's discretion to award Liu costs.

Orders

1. Therefore, the appropriate orders are: 1. Judgment for the plaintiff in the sum of $418,328.43. 2. Statement of claim otherwise dismissed. 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: 06 June 2024