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Long Spring Pty Ltd v RD Beechworth Pty Ltd [2025] NSWSC 437 | Case summary | Zoe

NSWNSWSC

Long Spring Pty Ltd v RD Beechworth Pty Ltd

[2025] NSWSC 437

Supreme Court of NSW|2025-05-07|Before: Peden J

View on NSW Caselaw

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2025-05-07

Before

Peden J

Catchwords

CONTRACT – Formation – Agreement – oral contract to
advance money to developer – whether term of contract
that money repayable
within 18 months or at the end of the development – relevance of logic and

Source

Original judgment source is linked above.

Catchwords

CONTRACT – Formation – Agreement – oral contract toadvance money to developer – whether term of contractthat money repayablewithin 18 months or at the end of the development – relevance of logic andobjective facts to determinationof terms of contract

Judgment

Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.

Medium Neutral Citation: Long Spring Pty Ltd v RD Beechworth Pty Ltd [2025] NSWSC 437

Hearing dates: 5-6 May 2025

Date of orders: 7 May 2025

Decision date: 07 May 2025

Jurisdiction: Equity - Commercial List

Before: Peden J

Decision: At [78]

Catchwords: CONTRACT – Formation – Agreement – oral contract to advance money to developer – whether term of contract that money repayable within 18 months or at the end of the development – relevance of logic and objective facts to determination of terms of contract

Cases Cited: Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (2000) 202 CLR 588
County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193
ET-China.com International Holdings Ltd v Cheung [2021] NSWCA 24
Gerrard Toltz Pty Ltd v City Garden Australia Pty Ltd (in liq) (No 2) [2024] NSWCA 232
John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451
Lawrence v Ciantar [2020] NSWCA 89
Onassis v Vergottis [1968] 2 Lloyd’s Rep. 403
RD Beechworth Pty Ltd v Ku-ring-gai Council [2024] NSWLEC 1074 Ren v Jiang [2014] NSWCA 1 Singh v AKM Investments Group Pty Ltd [2024] NSWCA 268 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 Turner v Richards [2025] NSWCA 83 Watson v Foxman (1995) 49 NSWLR 315

Mr Wei Shu was born in China. In 2019, he migrated to Australia with his wife, Ms Lihua Lin, and his son, Yikai Shu. Mr Shu speaks Mandarin and does not understand English. He is a very successful businessman, with all his business being located in China. He owns four petrol stations and trades petroleum with an annual turnover worth several tens of millions of Australian dollars. Mr Shu has funded the purchase of at least four residential properties in Sydney for his wife and son, collectively valued at tens of millions of dollars. Mr Shu has incorporated entities “in case” he wants to do business projects. However, Mr Shu denied any knowledge of “details” of the property purchases. Further, Mr Shu denied he had any understanding of property development in China or in Australia.
Mr Shu considered himself the "actual controller" of the plaintiffs. However, he is not a director. Instead, his son is the director of Long Spring, and his wife is the director of Forevet Flourish. Mr Shu considered that his wife and son "act following [his] directions if necessary".
Also in 2019, Mr Shu was introduced to Mr Ning. Mr Shu met Mr Ning's father when he was inspecting houses for purchase in Sydney. Then, Mr Ning's father invited Mr Shu to his house and introduced him to his son. From the time they met, Mr Shu knew Mr Ning was a property developer.
Mr Ning founded the Rudder Group of companies in 2010 with his business partner, Mr Changyang Li. The Rudder Group has been involved in property development and construction activities in New South Wales, Victoria and the Australian Capital Territory. Most of the Rudder Group's developments have been on the upper north shore of Sydney. One of Ms Lin’s properties, purchased with Mr Shu’s money, is an apartment in Killara, developed by the Rudder Group. Mr Ning’s business office is also located there and Mr Shu’s family lived at the Killara development previously.
After their initial meeting, Mr Shu and Mr Ning caught up from time to time and discussed the property market in Sydney and Mr Ning’s development projects at a high level.
In early December 2021, Mr Shu and Mr Ning met at Mr Ning's parents' house in Killara, at which time Mr Shu said that he and Mr Ning had a conversation in words to the following effect:

Mr Shu said that a few days later, Mr Ning telephoned him again and told him to use two companies to hold the shares in the development company, with each holding 20%. Mr Shu said he did not know why Mr Ning made that suggestion and he did not ask. Mr Shu denied Mr Ning suggested the idea so that Mr Shu or the plaintiffs’ directors could avoid giving personal guarantees for any loans. Mr Ning was not cross-examined on why he suggested using two companies to Mr Shu. Mr Shu also said he was not involved in the incorporation of the plaintiff entities that were registered on 14 December 2021, but that he controls them.
On 17 December 2021, RD Beechworth was registered. Mr Ning and Mr Li were appointed as its two directors. The company's paid up share capital is $100, of which it has issued 100 shares as follows:
30 shares to NZY Pty Ltd, a company associated with Mr Ning;
30 shares to LM Family Capital Pty Ltd, a company associated with Mr Li;
20 shares to Long Spring; and
20 shares to Forevet Florish.
On 21 and 22 December 2021, RD Beechworth entered into contracts to purchase the two Pymble properties for a total price of $9 million. The settlement date was on or about 22 September 2022.
Between January and September 2022, Mr Shu caused the plaintiffs to advance amounts totalling $5 million to RD Beechworth. He paid instalments as and when directed by Mr Ning, and he said he did so without questioning the purpose each time. The payments were as follows:
On 19 January 2022, each plaintiff advanced $500,000;
On 7 March 2022, each plaintiff advanced $500,000; and
On 5 September 2022, each plaintiff advanced $1.5 million, a few weeks before settlement of the property purchases.
Mr Shu denied that he understood that the instalments before settlement were being used to progress a development application through the engagement of engineers and architects. His complete understanding was that the money was being used “to purchase and/or develop” the properties. He never asked any questions and stated that he had very few conversations with Mr Ning about the development, because he “trusted” Mr Ning. Mr Ning also considered there were few conversations about the development; Mr Shu left Mr Ning and Mr Li to progress the development.
RD Beechworth recorded the advanced funds as borrowings/non-current liabilities in its 2022 and 2023 financial statements.
In about July 2023, Mr Ning told Mr Shu that the development application was likely to be refused and that if the properties were sold then, it would be at a $2 million loss. Mr Shu stated in cross-examination that “even … as of today” he did not “quite fully comprehend” what a development application means.
In about August 2023, Mr Shu said he had a conversation with Mr Ning, in which he complained that RD Beechworth had mortgaged the properties for about $6.3 million, and asked about the funding of the construction costs. Mr Shu said he told Mr Li that “I need my money back. Just sell the lands”.
On 27 February 2024, the New South Wales Land and Environment Court upheld an appeal granting consent to RD Beechworth’s concept development application, approving the subdivision of the properties into four new allotments: RD Beechworth Pty Ltd v Ku-ring-gai Council [2024] NSWLEC 1074.
If the loan was to be repaid within 18 months of the final advance, it was repayable by about 5 March 2024.
On 26 April 2024, the plaintiffs’ solicitors sent a letter to RD Beechworth on Mr Shu’s instructions, which demanded repayment of the $5 million by 24 May 2024. That letter included the following:

The legal principles relevant to determining the terms of an agreement are not in dispute.
Where parties agree that they entered into a contract and the issue is the terms of that contract, the Court must ascertain the objective intention of the parties, that is, the intention of the parties as outwardly manifested by their words and conduct, not each party’s unspoken subjective intention: see eg Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ).
Where a contract is entirely oral, or partly oral and partly to be inferred from conduct, the Court must consider all the relevant circumstances when determining the terms of the agreement, including both pre-contractual and post-contractual conduct as a matter of fact: see eg County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 at [7]-[8], [17]-[27] (Spigelman CJ); Lawrence v Ciantar [2020] NSWCA 89 at [114] (Bathurst CJ, Meagher and Gleeson JJA agreeing); Gerrard Toltz Pty Ltd v City Garden Australia Pty Ltd (in liq*) (No 2)* [2024] NSWCA 232 at [35] (Stern JA, Kirk JA and Basten AJA agreeing).
The plaintiffs must satisfy the civil standard of proof, requiring “actual persuasion” of the occurrence or existence of the fact in issue: see eg Singh v AKM Investments Group Pty Ltd [2024] NSWCA 268 at [44]-[47] (Gleeson JA, Bell CJ and Stern JA agreeing).
Where a dispute concerns an oral agreement, the appropriate considerations involved in factual findings concerning what was agreed were recently set out by Payne JA (Leeming and Adamson JJA agreeing) in Turner v Richards [2025] NSWCA 83 at [58]-[60]. Without seeking to depart from the principles detailed in that judgment and those cited therein and above, some key matters are:
Human memory is fallible and worsens with time and the intervention of disputes: see Onassis v Vergottis [1968] 2 Lloyd’s Rep 403 at 431 (Lord Pearce); see also Watson v Foxman (1995) 49 NSWLR 315 at 318-319 (McLelland CJ in Eq). It is possible for witness testimony to be honest, credible, but wrong: see eg discussion in Mark J Steele, “Witness Preparation and the Corruption of Evidence in Civil Proceedings” (2023) 42(2) Civil Justice Quarterly 148.
Available objective evidence is likely to be the most reliable basis for determining matters of credit. Further matters relevant include the inherent unlikelihood of an occurrence of a given description or the gravity of the consequences flowing from a particular finding: see also John Holland Pty Ltd v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451 at [94] (Hammerschlag J, as his Honour then was); ET-China.com International Holdings Ltd v Cheung [2021] NSWCA 24 at [27]-[29] (Bell P, Bathurst CJ agreeing).
It has been said that “the law ordinarily will take the parties at their word and the court will be slow to find that a bargain is not as the parties expressed it”: Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (2000) 202 CLR 588 at [40] (Gaudron, McHugh, Gummow and Hayne JJ). The plaintiffs cited this proposition in support of their case. However, that does not assist the plaintiffs here, where the issue is what the parties’ “word” or expression in fact was.

I do not accept that Mr Ning was shaken on any of his affidavit evidence or answers in cross-examination. He made appropriate concessions. For example, he accepted that he had not included in his affidavit any evidence about discussing the timing of the likely completion of the project. He accepted he did not provide Mr Shu with any feasibility study or exact break down of development costs, in contrast to the materials he provided Mr Shu for another development in Turramurra. However, there is no dispute that Mr Ning told Mr Shu that construction costs beyond the land purchase were to be about $8 million on Mr Shu’s evidence and total additional development costs were about $11-12 million on Mr Ning’s evidence.
Further, I did not consider cross-examination about Mr Ning’s understanding of the appropriate legal characterisation of the payment (whether it was a “loan” or “advance”) or the way it was pleaded or expressed in legal submissions was relevant to the issues in dispute or Mr Ning’s credit.
Other challenges to Mr Ning’s evidence amounted to memory tests and went nowhere. For example, Mr Ning was challenged as to whether he had included in his affidavit that he knew Mr Shu was involved in property development. While he could not find it in the witness box, his affidavit referred to Mr Shu having told him he had been involved in three to four developments. Similarly, it was suggested that Mr Ning did not include discussing potential losses with Mr Shu. However, in his affidavit, he twice referred to the project “losing” money.
Mr Ning did include in his affidavit that he considered it would take “about 18 months to get to the stage of subdividing the land”. It was suggested to him that he mentioned repayment of the money based on that 18 month milestone. Mr Ning rejected that suggestion and he was not challenged further. His clear evidence was that he did not say the project would be finished in 18 months, because he did not believe that was possible. Mr Ning was not cross-examined on his version of the relevant conversation.
Mr Ning and Mr Li were experienced property developers. They were aware that Mr Shu was a wealthy businessman who was interested in property investments. He also had a personal connection to Mr Ning’s father. It would have been in Mr Ning and Mr Li’s interests to have Mr Shu as an investor, who might invest in other projects in the future. It would not have been in their interests to deceive Mr Shu about the likely length of time for completion or the repayment trigger. They understood the complexity of the development, the development application process, and the cost and time involved in construction.
As for Mr Li, while he was not involved in any of the key conversations, he did give evidence that Mr Ning had never told him that Mr Shu was to be repaid in 18 months, and that Mr Shu never represented that idea to him in their conversations. Mr Li was not cross-examined, and no submission was made that I ought not accept his evidence. There is no reason why Mr Ning would not have told Mr Li if the agreement was for repayment in 18 months, as it would impact on the money needed for the project and their business relationship.
I prefer Mr Ning’s evidence over that of Mr Shu.

I do not consider RD Beechworth’s solicitor’s 7 May 2024 letter contains an “admission” that assists the plaintiffs. The letter makes plain RD Beechworth’s position that the plaintiffs’ $5 million was a loan repayable upon completion of the development, which is consistent with the submissions made at trial. RD Beechworth’s promise was to return the $5 million and pay 40% of the net profit of the development, which is agreed between the parties. The only issue is the time for repayment of the loan.
However, I consider the plaintiffs’ solicitor’s letters dated 26 April 2024 and 19 July 2024 are telling against the plaintiffs. In the first letter, the plaintiffs’ solicitor, on Mr Shu’s instructions, never stated that the loans were repayable within 18 months or “about 18 months”, as pleaded, or a “maximum of 18 months”, as asserted by Mr Shu.
When asked why there was no reference to that important 18 month timeframe in the April 2024 letter, Mr Shu stated: “Maybe I forgot to tell him, or maybe I got memory wrong”. The available inference is that Mr Shu told his solicitor that there was no discussion about a repayment date, including the 18 month timeframe, particularly in circumstances where there is no explanation as to why Mr Shu’s instructions later changed.
The second letter of July 2024 does not assist the plaintiffs either, as it introduces further inconsistent possibilities of when the loans were agreed to be repayable. One of those was when the development approval was obtained, but Mr Shu’s evidence was he did not understand what such an approval was, and it is unlikely he agreed to that being the trigger. Further, the reference to a timeframe for repayment after the money was advanced did not deal with the fact that the money was advanced in tranches, and therefore the letter contained no certainty of the repayment date. The fact that Mr Shu’s instructions changed without explanation does not assist the plaintiffs’ case.

As noted above, the objective evidence and the logic of events are important in determining the time for repayment under the oral agreement.
I consider that the advances to RD Beechworth are repayable on the completion and sale of the development for the following reasons and based on the above understanding.
First, the logic of events, the likely commercial reality, and the conduct of the parties supports the finding that Mr Ning and Mr Shu orally agreed that the loans were repayable at the conclusion of the project. The recording of the advances as loans in RD Beechworth’s books, together with the shareholdings in that special purpose vehicle, are consistent with an agreement that the distribution of profit, repayment of loans, and discharge of mortgages would take place when the project was sold and the company had fulfilled its purpose.
If the loans were for 18 months, the plaintiffs would be receiving a 40% interest in RD Beechworth, with no further liability to contribute, but where significant further funds were needed to complete the development but 40% of the shareholding had been divested. I do not accept that was the parties’ intention. Mr Ning was accustomed to sourcing funding from various lenders or investors, and it is unlikely he would have agreed to borrow $5 million for 18 months, where the “interest” on that loan would be, on his estimate, almost 50% of the loan amount.
Secondly, it is more probable that the occurrence of an event would trigger the obligation to repay, rather than a particular period elapsing. I consider Mr Shu was sufficiently aware of the uncertainties associated with property development that would make it difficult to ascertain a precise date, by which the development would be completed and sold. Mr Shu may well have thought that the trigger event would be subdivision of the development properties, and that this would take 18 months as that is consistent with Mr Ning’s estimate. However, that is beside the point.
Thirdly, supposing that repayment of the loan was due in 18 months, it is unclear from what date the 18 month period would run, considering that the advances were being made as and when Mr Ning directed Mr Shu to make them. This uncertainty militates against the possibility that the parties agreed to repayment being triggered when a particular period of time had elapsed.
Fourthly, Mr Shu did not act consistently with an 18 month repayment term. From mid-2023, Mr Shu demanded the money back. For example, his evidence is that he said in August 2023 (less than one year after the final instalment):

In November 2023, again before the 18 months after the last payment was made, Mr Shu’s evidence was that he said “I need my money back. Just sell the lands”. While these demands did not adhere to the 18 month timeframe, they did appear to indicate that Mr Shu understood repayment would come from the sale proceeds and therefore he wanted the land sold.
Fifthly, I do not accept the plaintiffs’ case theory that it ought to be inferred that Mr Ning was desperate for money and that Mr Ning considered Mr Shu an “interim lender”, who would be replaced by a first tier lender bank after subdivision. Nor do I accept that this supports Mr Shu’s case that the loan was only for 18 months, which would accord with Mr Ning’s estimate of time until subdivision. The structure of the plaintiffs’ loans was unlike ordinary lenders, because the interest component was linked to profit.
I reject Mr Shu’s submission that Mr Ning was desperate for Mr Shu’s money to complete the sale. It was apparent that Mr Ning’s group had various projects at the time and was interested in finding investors. However, from June 2019, Mr Shu had been engaging with Mr Ning about possible property developments in China and on Sydney’s north shore. I do not accept there is any evidence of any urgency on Mr Ning’s part; the properties had not been purchased and there was no obligation on Mr Ning to purchase them. Instead, Mr Shu had expressed an interest in being involved in Mr Ning’s property development. Further, I accept Mr Ning’s evidence that he did not have the intention to refinance on subdivision.
Sixthly, I consider it highly unlikely that Mr Shu would have considered it foreseeable or certain that the whole development and sale could complete within 18 months. As noted above, I accept Mr Ning’s evidence that he did not promise Mr Shu that the advances would be returned within 18 months, and instead said the money would be repaid on completion of the sale of the project. This is consistent with Mr Ning not agreeing to pay out the plaintiffs early before the development’s completion as requested by Mr Shu, but instead offering to transfer the plaintiffs’ funds to another project.
Consequently I do not accept that the parties agreed that the money would be repaid in 18 months.