Ning Shen v ASF Properties Pty Limited & Ors

District Court of NSW|2016-07-19

Introduction

By an Amended Statement of Claim filed on 26 May 2015, the plaintiff sues the defendants on two causes of action. The first is based on s 52 of the Trade Practices Act 1974 (Cth), ("the TPA") and alleges that the first, second, third and fourth defendants made certain representations to the plaintiff that were misleading or deceptive, or likely to mislead or deceive him, in respect of the purchase of a property at Breakfast Point.
The second cause of action relied on by the plaintiff is a common law action of deceit, relying on the same representations.
The plaintiff pleads that he relied on the representations as pleaded, and further, that by virtue of their fraudulent conduct, the sum of $350,000.00, which the plaintiff believed was to be paid to an existing purchaser of the property at arms-length from defendants, as part of the purchase price of $3,880,000.00, was in fact paid to the second or third defendants, or alternatively to the fourth defendant, Mr Liu. Mr Liu has not been served with the pleadings, and took no part in the hearing. The first, second and third defendants were represented by the same legal representatives and are referred to herein as "the defendants".
The plaintiff's claim is for the sum of $350,000 plus interest to 18 November 2016 (a total of $362,434.60), and continuing at $55.14 per day.

Defence of the first, second and third defendants

The defendants have filed a Defence denying the various components of the plaintiff's claim as pleaded by him. The defendants have further pleaded that the plaintiff's claim is a proportional claim pursuant to s 34 of the Civil Liability Act 2002 (NSW) ("CLA"), and that the persons responsible for the whole of the loss, if any, are the plaintiff and the fourth defendant.
The defendants have further pleaded limitation defences to the two causes of action. It is common ground that the plaintiff's cause of action accrued on 27 June 2007. Pursuant to s 82 of the TPA, the plaintiff had six years in which to bring his claim, which expired on 26 June 2013. The plaintiff was therefore out of time when he commenced the proceedings on 2 October 2014.
In respect of the plaintiff's cause of action in deceit, the plaintiff relies on s 55 of the Limitation Act 1969 (NSW), which allows for a suspension of time running in fraud cases until the defrauded person can reasonably discover the fraud, deceit or concealment concerned. Otherwise the limitation period is six years for that cause of action. The defendants have pleaded that, in the event that the court found that any of the defendants were engaged in fraudulent or deceitful conduct as pleaded, the plaintiff should have discovered any such conduct within the period 16 July 2007 to 5 September 2007, in which event the relevant limitation period pursuant to s 14 of the Limitation Act, would have expired on 5 September 2013. On those bases, the defendants have pleaded that the plaintiff's claims are not maintainable.

The issues to be determined

From the outset, the plaintiff's counsel conceded that the plaintiff's claim brought pursuant to s 52 of the TPA was brought more than six years after the cause of action arose and there was no basis in law for extending the time for bringing that action. That cause of action could not therefore be maintained, which left the following issues to be determined: 1. Has the plaintiff made out the representations relied on? 2. If so, has the plaintiff made out his action in deceit? 3. If so, is the plaintiff within time for suing on that cause of action? 4. If the answer to any of these questions is in the negative, the plaintiff's case must be dismissed. If all three are answered in the affirmative, a further question arises as to whether the plaintiff's claim is a proportional claim pursuant to s 34 of the CLA, and if so, whether the claim should be apportioned as pleaded by the defendant, for any loss caused by the plaintiff and/or the fourth defendant.

The evidence relied on by the plaintiff

The plaintiff affirmed two affidavits in the proceedings on 10 September 2015 and 7 July 2016. His first affidavit set out the circumstances in which he met the fourth defendant on 27 April 2007, when he was visiting Sydney. Mr Liu introduced him to the second and third defendants, Quan Fang and Min Yang. A conversation took place in the Mandarin language. In that conversation, the plaintiff alleges that he was told by Min Yang that the first defendant, ASF Properties Pty Limited, was "a very big company listed in the stock market". Ms Yang is alleged to have said that the company, of which she and her husband, Quan Fang, were directors, had a very good relationship with the government, that she was a justice of the peace, and that they had a very big mining project in Western Australia. Ms Yang then said: "You are so lucky. We've got the last house in Breakfast Point which can be sold to you." Quan Fang said: "We've bought a house in Breakfast Point too. Don't worry, we definitely can get you the best price ever." Quan Liu said: "This house they are talking about is in the best position of the whole Breakfast Point project, as it's located on higher land." Quan Fang said: "The wooden colour outside the house has purple colour, that's a very good colour in fengshui." Mr Liu then said: "You are so lucky, this house was actually bought by a person already, the Chinese Peoples' Political Consultative Conference (CPPCC) vice chairman of Tong Zhou District in Beijing. He's got a marriage problem and doing a divorce, so he does not want the property any-more." Quan Fang then said: "The total price is $3.88 million for the property. He's paid $350,000. You just need to pay off what he paid first, then pay the balance of that total price of $3.88 million, then the house is yours." The plaintiff (Ning Shen) said: "I can't actually get as much as $3.88 million to you right now." Quan Fang said: "Don't worry, we can apply for a mortgage for you. The bank will evaluate the property. The property is worth that much so the bank will lend to you either as 3:7 or 4:6, for an overseas person. The bank will lend you about 60% anyway. In Australia, you can get an interest only loan, unlike in China where you can only get a principal and interest loan, so you won't have pressure and you don't need to worry at all."
On the next day, 28 April 2015, Mr Fang and Mr Liu took the plaintiff to Breakfast Point to look at the property. Whilst viewing the property, Mr Fang is alleged to have said: "This is a really good property. They have all been sold, and the only one left is this one number 95. They have all been sold equal to or above $3,980,000.00. This is a cheap bargain."
Later the same day, at Mr Fang's office, the plaintiff alleges that he was given materials and a brochure about the Breakfast Point project. Mr Fang said to him: "All the properties in the development that are similar to number 95, have been sold for amounts equal to or above $3,980,000.00, and that property at number 95 is cheap for a price of $3,880,000.00. The transport is very convenient to everywhere. There are nine golf clubs around the area …"
On 12 June 2007, the plaintiff alleges that Mr Fang and Mr Liu, by telephone, asked him to transfer $176,500.00 to an account known as "Rosecorp Marketing Trust Account". He later received an instruction paper requesting transfer of those funds. The plaintiff transferred that sum from the HSBC Bank in Shanghai to the Rosecorp account, and received a receipt for that amount dated 12 June 2007 from Rosecorp. It is common ground that that sum represented a deposit of 5% of the purchase price.
The plaintiff alleges that a few days before 27 June 2007, he received a telephone call from Mr Fang, and they had a conversation in Mandarin to the following effect: Mr Fang: "Could you please pay the $350,000.00 to the previous buyer? You can transfer this money to us, then we will return this money to the previous buyer. Liu Quan Li will send you some instructions as to where to send the money." Plaintiff: "So the instructions Liu Quan Li will give me is your bank account is it?" Mr Fang: "Yes, that's Min Yang's account. So this money does not need to come to Australia, you pay us to our Hong Kong account, then we will just pay to the previous purchaser. It's all easy and convenient to everyone." Plaintiff: "Okay."
The plaintiff then received the following direction to pay: "Dear Mr Shen Please transfer funds to the following account. Bank - HSBC, Hong Kong Account number - 808-014518-838 Account name - SINO Property Network Limited Amount: A$350,000.00 Best regards, Quan Li Liu"
The plaintiff deposed that he paid the sum of $350,000.00 as directed to the Hong Kong HSBC by way of transfer on 27 June 2007. He deposed as follows: "When I paid that money, I thought I was paying to the previous buyer in accordance with the conversations that I had had with Quan Fang, Min Yang, and Quan Li Liu in their office and at Breakfast Point."
The plaintiff deposed that in late 2007, after settlement on the property, Mr Fang handed him an envelope with some documents in it. One of those was a Deed of Nomination between Quan Li Liu, as grantee, and Ning Shen as the nominee. The document bore the date 24 May 2007, and the final page bore the signatures of both Mr Liu and the plaintiff, witnessed by Ms Min Yang. The plaintiff deposed that when he saw that document he asked Mr Liu, "Why is your name here"? Mr Liu said, "It's just a formality. I was acting for my friend, the previous purchaser".
The plaintiff deposed that he did not read the documents as he considered the matter was settled and that he owned the property. He believed what Mr Liu told him because he had been told that the previous purchaser was a friend of Mr Liu, and wanted to get out of the purchase.
Also included in the envelope was a receipt dated 30 June 2007. That document was on letterhead that contained information that was indecipherable, and a logo which contained Chinese characters and the description: "A S FORTUNE" The receipt itself read: "Received from Mr Ning Shen for the sum of (A$350,000.00) for the purchase property at 95 Peninsula Drive, Breakfast Point, New South Wales, Australia (Certificate of Title folio identified 2/285959). Received by, (Authorised signature) AUS SINO Fortune Investment Consulting Pty Limited, the Sales Agent of Rosecorp Pty Limited."
The signature in handwriting that appeared over the words "Authorised signature", appeared to be that of David Fang.
I interpolate that Mr Fang denied that that signature was his, or that he prepared that document.
In respect of the Deed of Nomination, the plaintiff deposed that around the middle of 2007 he had received a phone call from Mr Fang and Mr Liu. Mr Fang was in Australia, and Mr Liu was elsewhere in China. Both men said on the phone: "You will need to sign a piece of paper to take over the purchase of the property. We will send you a document to sign so that you can take over the purchase." Plaintiff: "Okay, just send it to me and I will sign."
The plaintiff deposed that he received a document headed "14 Governing Law". That was the final page, page 7 of the Deed of Nomination. There were no signatures on the page and he signed it opposite where his name appeared. No person witnessed the document in his presence and he sent it back to Mr Fang, but did not keep a copy. Of this document, the plaintiff said: "When I received that document and signed it, I thought I was merely signing something to enable me to take over the purchase of the Breakfast Point property. I thought this because what Quan Fang and Quan Li Liu had said to me over the telephone shortly before."
The plaintiff deposed that in 2007 his English was not very good, and that if he thought the document was an important legal document, he would have got someone to translate it for him and got some advice. He deposed that he did not think that this was an important legal document because he had been told by Mr Fang and Mr Liu that he just needed to sign "something to take over the previous purchaser and it was only one page". He further said that it had always been his habit to initial every page of a legal document, apart from the page which requires full signature.
The plaintiff gave evidence that in 2010 he purchased another property at 103 Peninsula Drive, Breakfast Point, for a purchase price of $3,880,000.00. When the time came for him to pay stamp duty on that property, his assistant advised him that the stamp duty was more than the stamp duty he had paid on the purchase of 95 Peninsula Drive. He then asked Mr Fang why there was a difference in stamp duty when he paid the same purchase price for both properties. He deposed that the following conversation took place in Mandarin: Plaintiff: "95 Peninsula and 103 Peninsula have the same purchase price, why is the stamp duty for 103 Peninsula more than the stamp duty for 95 Peninsula?" Mr Fang: "95 Peninsula is your own property that you'll live in. 103 Peninsula is your investment property, of course the stamp duty is different. The stamp duty for investment property is higher."
The plaintiff deposed that he believed what Mr Fang said. Further, he never signed any documents witnessed by and in the presence of Min Yang or Mr Bernard Chiu, a solicitor, who called him on 18 March 2013, asking whether he wanted to sell his property at 95 Peninsula Drive, Breakfast Point. The following conversation occurred between the plaintiff and Mr Chiu: Plaintiff: "I don't know you, how do you know I've got this property in Australia?" Mr Chiu: "I was your lawyer acting for your purchase of the property." Plaintiff: "I don't know you, I never thought of selling this property, but if I did, around how much can it be sold for?" Mr Chiu: "Around $3.3 million." Plaintiff: "I paid $3.88 million to purchase the property, why is it so low now? Have the value of properties in Sydney dropped this much?" Mr Chiu: "No, you didn't pay that much, when you bought the property you paid about the price I just told you that the property is worth now. I will send you some of my details, if you decided to sell the property you can contact me."
The plaintiff deposed that this was the first time he had ever spoken to Mr Chiu and it was the first time that he knew that there was a lawyer involved in the transaction. He rang Mr Fang, who told him not to believe what Mr Chiu said.
In April 2013, the plaintiff came to Australia and visited the office of ASF Properties Pty Limited to speak to Mr Fang and Ms Yang. He asked for a copy of the contract for 95 Peninsula Drive, Breakfast Point. Mr Fang said to him: "There's no need to ask for a contract, even when you want to sell the property you don't need a contract. I even don't know whether the lawyer would still have it anyway." The plaintiff said: "Why I paid $3.88 million for the property but Mr Chiu said I only paid $3.3 million?" Ms Yang said: "That lawyer is unbelievable, Bernard Chiu has now started being a real estate agent, he is competition. We've been treating him so well and gave a lot of matters and he earned a lot of fees through us and now he backstabs us. … There is seriously no need for you to get that contract."
In mid April 2013, the plaintiff visited Mr Chiu at his office and was shown a contract for the property at number 95 Peninsula Drive, Breakfast Point. He had a conversation with Mr Chiu in the Mandarin language as follows: Plaintiff: "Why is it $3.53 million but not $3.88 million?" Mr Chiu: "Quan Fang and Min Yang cheat and they are dodgy." Plaintiff: "If you were my lawyer, how come you never contacted me when purchasing this property? You should have explained the terms and conditions in the contract to me and keep in touch with me." Mr Chiu: "They said they have dealt with everything so I only need to do my part."
The plaintiff gave evidence that after that meeting, he attended a restaurant with Mr Fang and Ms Yang near the Opera House, where the following conversation took place in Mandarin: Min Yang: "Your house is not expensive, you've got a bargain, you didn't lose anything or are disadvantaged, you earn more money anyway. The exchange rate was quite good when you bought the property. Some of the houses around yours were sold for more than $4 million, and the price for your property has gone up too."
The plaintiff then obtained a copy of the contract from Mr Chiu. He deposed that in China, when people buy properties, the transaction is just between the vendor and the purchaser, and there is no involvement of a lawyer.
Finally, the plaintiff gave evidence that in about 2009, Ms Yang and Mr Fang arranged a one-to-one employer sponsorship visa for him, and he got permanent residency in Australia.
In his second affidavit affirmed on 10 December 2015, the plaintiff responded to the affidavit of Quan Fang, sworn on 3 November 2015. Of the matters referred to therein, the plaintiff deposed that he signed the loan application for a loan to purchase 95 Peninsula Drive, Breakfast Point, at the HSBC bank in Shanghai, and subsequently met Ms Belinda Wong at the HSBC office in Burwood, where she told him, to complete the purchase, he would have to transfer to her the sum of $1,200,000.00 before 28 November, 2007.
The plaintiff deposed that the loan application that he signed at the HSBC branch in Shanghai was for a loan of $2,200,000.00. The two printed pages were not filled out, and when he signed them, there was no other handwriting on those pages.

Cross-examination of the plaintiff

In cross-examination, the plaintiff gave evidence that he was the President of two companies in China, namely, China Ports International Logistics Limited and China Ports International Shipping Agency Limited, in 2007. Before 2007, he had purchased property in Shanghai for the equivalent of $A3,000,000.00. He had also bought an apartment in China.
Before buying a property in Australia, the plaintiff gave evidence that he did not think of obtaining advice or some assistance from someone who knew the property market. He said he was not aware that there were lawyers in Australia who advised people about purchasing property until 2013. He said: "In China we didn't need that."
The plaintiff was introduced to Mr Liu through a friend in China, but met him for the first time in Sydney after talking to him by phone. Mr Liu met him at the airport and drove him to David Fang's office. Mr Fang and Min Yang were introduced to the plaintiff by Mr Liu as "his bosses". He did not know at that time that they were real estate agents.
The plaintiff gave evidence that he came to Sydney on that occasion for tourism, and had not discussed potentially purchasing property with Mr Liu before he took him to the Mr Fang's office.
The plaintiff gave evidence that he accepted everything that Mr Fang and Ms Yang told him about Rosecorp and ASF as being truthful. He was asked what Mr Liu had told him about his friend who had first purchased the property at 95 Peninsula Drive, Breakfast Point. His answer was: "Mr Liu said he has a friend who is a politician of Tong Zhou sitting near Beijing, who has purchased a property but he is in the process of getting divorced so he didn't want to proceed with the purchase."
The plaintiff gave the following evidence: "Q. It would matter if you had to pay some money to his friend to get the property, wouldn't it? A. INTERPRETER: Because they told me the price of the property is 3.88 million and his friend has already paid $350,000, so if I pay that $350 to the friend then I can continue with the contract to buy the property. Q. Was it a matter that concerned you that it was suggested that you pay $350,000 to Mr Liu's friend? A. INTERPRETER: Because I have not met that friend before and they told me the money is to be paid to Yang Min's bank account so I don't feel that would be a problem, and I have no need to worry how she would pay the money to that person. Q. Mr Shen, you've just come from the airport with someone you've never met before and met two strangers and they suggested to you that you pay $350,000 to one of their friends. Was that not something that caused you any suspicion or concern? A. INTERPRETER: I didn't agree to pay that amount straightaway. On the following day they took me to have property inspections and then after more considerations I agreed."
The plaintiff denied knowing that Mr Liu had an option to purchase the property himself. He denied having discussions with Mr Liu about transferring his rights under an option agreement, stating: "We have never discussed that question because at all times I was believing I was purchasing the property direct from the property developer. The property developer was Rosecorp."
The plaintiff agreed that shortly after he purchased number 95 Peninsula Drive, he purchased a property at 103 Peninsula Drive for the same amount, namely, $3.88 million. He did so by way of a put and call option.
The plaintiff gave evidence that when Mr Fang told him that he and Min Yang had bought a house at Breakfast Point too, and that it was a good development.
The defendants' case was put to the plaintiff as follows: "Q. So going back to what your version of the events is in CB 40 to 41, you are wrong when you say that Mr Liu discussed in the presence of Mr Fang and Ms Yang anything about the previous purchaser of the property being unable to complete the property. It never happened at that meeting. A. INTERPRETER: It was mentioned. Q. It was mentioned, I suggest to you, in a conversation that you had with Mr Liu in the absence of Ms Yang and Mr Fang. A. INTERPRETER: I was in their office, so if you say they were not there, who would be there? Q. You are wrong when you say that Mr Fang told you at that meeting you could buy the property for 3.88 million if you paid off what the first purchaser had paid, namely $350,000. A. INTERPRETER: Yes. The other person has paid a deposit of 350,000 and what I need to do is to repay him back. Q. The discussion you say at the bottom of page 41 about Mr Fang assisting you with getting a mortgage is a conversation that took place at a later date, not in your first meeting with him? A. INTERPRETER: For sure it was mentioned on that day and maybe he repeated that in later days. Q. Where you say in paragraph 7 that Mr Fang said to you, "This is a really good property. They have all been sold and the only one left is number 95. they have all been sold equal to, above 3.98 million. This is a cheap bargain," you're incorrect, aren't you? A. INTERPRETER: That's what he said. Q. What was really said by Mr Fang was the following, "There are a few free-standing houses in the development. These are the first six due for completion and people are snapping them up. They are nearly all sold. This kind of stock is really unique for the development. Overseas purchasers cannot buy second-hand properties, only new ones." That's what Mr Fang said that day. A. INTERPRETER: I think he just said that there were only six left. Actually there were eight. Q. The only discussion that there was about price was in these terms: you asked Mr Fang how much the properties were selling for and Mr Fang said to you, "I have a developer's list of the asking prices". COOK: I am sorry, your Honour; I should correct that - "launch prices". Your Honour will hear evidence in due course about a mistake in the affidavit. Q. "I have a developer's list of the launch prices in my office. I will give one to you. The prices range from approximately 3.8 million to 4.3 million." That's what Mr Fang told you, didn't he? A. INTERPRETER: He didn't show me that price list. If I had a chance to look at it, I wouldn't have purchased this property because the other property had got much bigger land. This property had got very small land. Q. If Mr Fang had said to you that the property was a bargain or cheap at the time, that would not have been something that you would have placed much reliance on, would it? A. INTERPRETER: Why should I learn-- Q. Are you saying that his Honour should believe that you as an experienced businessman would place any reliance on a developer selling you some property and telling you it was a bargain? A. INTERPRETER: If I were an experienced businessman, that would be restricted to the shipping area. I didn't have much experience in the property sector. Most of the people being cheated were business people."
The plaintiff gave evidence that he had never seen a document setting out the prices of properties at Breakfast Point, but that he relied completely on what Mr Fang told him the property was worth in paying $3.88 million. He was asked: "Q: You would never have agreed to pay $3.88 million for a property without seeing any price list at all? A: I was buying a property direct from a property developer so I had nothing to worry about."
The plaintiff acknowledged that he received a receipt from Rosecorp for the sum of $176,500.00 that he paid on instruction from Mr Liu. He understood that Rosecorp was the developer of the Breakfast Point development. He gave this evidence: "Q. Now, between the time that you went to inspect the property at Breakfast Point with Mr Liu and Mr Fang, and you say in your affidavit you decided to buy the property then, between that time and the receipt of the instruction from Mr Liu to pay $176,500, that's the time I'm talking about, did you have any discussions with Mr Liu about Breakfast Point? A. INTERPRETER: We didn't discuss about the project. I'm not very clear about the project. Q. So between those points, the inspection of the property and the payment of the $176,000 you didn't discuss anything with Mr Liu about Breakfast Point and buying number 95? A. INTERPRETER: No. Q. You're very sure about that? A. INTERPRETER: Yes. Q. During that same time period, did you discuss buying number 95 with Mr Fang? A. INTERPRETER: I did mention that to Quan Fang that I wanted to buy number 95 and also Mr Fang has rang me talking about this deposit payment, this payment. Q. Was that a telephone call that happened just before you made the payment? A. INTERPRETER: Yes. Q. In that same period did you speak to anyone from Rosecorp about buying number 95? A. INTERPRETER: No, I didn't know anyone until now. Q. In that time period did you try to get an independent opinion as to what the property was worth? A. INTERPRETER: No, I was in China. Q. In that period did you get any assistance or make any inquiries to get assistance from any lawyer to act for you in that sale? A. INTERPRETER: No, we don't use a solicitor for that so I didn't think about engaging a solicitor. Q. So to be absolutely clear, you see the property, you tell Mr Fang that you like the property, you want to buy it, and the next thing that happens is you get a phone call, you say, from Mr Fang to say that you need to make a deposit and then you get the letter from Mr Liu as to where to pay the money. That's what happened, you say. A. INTERPRETER: Yes."
The plaintiff was sure that he had not communicated with Mr Bernard Chiu, solicitor until March 2013.
The plaintiff was cross-examined about what he referred to as the "one page document", being the signature page to the Deed of Nomination (Pg 7 of the Deed). He said that he had received that document, signed it and mailed it back to Mr Fang. Subsequently, Mr Fang had given him an envelope which contained the seven page Deed. He gave the following evidence: "Q. When you say you received the one-page document either by post or it might have been given to you in person, you say-- A. INTERPRETER: That's right. I can't remember whether it was mailed to me or someone handed it to me. Q. Could it be Mr Liu that handed it to you? A. INTERPRETER: That could be possible. Q. It wasn't Mr Fang, was it? A. INTERPRETER: That is also possible. Q. You say Mr Fang flew to China to hand you a document. A. INTERPRETER: It won't be. Q. No, it wasn't Mr Fang, was it? A. INTERPRETER: Your question was whether he flew to China to give that to me and I answered that question no. Q. I need to be clear with you, Mr Shen. You agree that Mr Fang did not hand you the one-page document before you signed it. A. INTERPRETER: He could mail that to me. Q. But he didn't physically hand it in your presence to you, did he? A. INTERPRETER: That happened in China. That would be impossible. Q. Yes. It could be Ms Fang who handed you the document. Correct? Ms Yang - did I say Ms Yang? INTERPRETER: No. You said Ms Fang. COOK Q. Sorry. I will repeat the question. It could have been Ms Yang who handed a document to you to be signed in China? Correct? A. INTERPRETER: Impossible, because Ms Yang was not involved in the actual dealing of this matter."
The plaintiff gave evidence that he never signed a document in China with Ms Yang present, however, he did meet her once in a hotel near the airport in Shanghai. He had not read the Deed of Nomination for several years after settlement of the property because he would not have been able to understand it. He did understand, however, that the two parties to the document were Mr Liu and himself.
The plaintiff was asked if he signed the Deed of Nomination with all of its pages in place it would be very difficult for him to say that he did not know that he was paying Mr Liu the sum of $350,000.00 to obtain the right to buy the property at number 95 Peninsula Drive. He was directed to answer that question, however, he persisted with stating that he could not understand the content of the Deed.
The plaintiff was then asked: "Q. Did anyone give you any explanation as to why you were only given one page of an agreement to sign? A. INTERPRETER: I remember that in addition to this piece of paper there were two more pages regarding a payment of $350,000 to the previous buyer and they told me just to sign it and I'll get the property. So I didn't pay much attention to this piece of paper."
As to the plaintiff's understanding of the transaction, he gave the following evidence: "Q. Mr Shen, if you really had no arrangement with Mr Liu as to purchasing number 95 Breakfast Point and you had received two documents that has Mr Liu as the only other party to the agreement can I suggest to you that you would have been very confused by those documents? A. INTERPRETER: It was Mr Liu who told me his friend, a politician in Beijing who had purchased the property. Why would he tell me this story? It was until when I got the documents by subpoena that I found out that person didn't exist. And I believe that was the reason that he was engaged by his friend to make a deal with me. Q. You knew, when you signed these documents, Mr Shen, that you were in a deal with Mr Liu? A. INTERPRETER: I did not. Q. And you certainly did not think at the time you signed these documents that you were buying anything from Mr Fang or from ASF Properties? A. INTERPRETER: Of course I was buying a property from them because my understanding is that they are in cooperation with the developer. I was buying a property from the developer.
The plaintiff also gave evidence that he signed the contract for sale as a one page document only (CB 230). He agreed the contract for sale showed a purchase price of $3,530,000.00, and a deposit of $176,500.00. The plaintiff gave evidence that he paid that sum before he paid $350,000.00, but he was not aware that he was paying it as a deposit, notwithstanding that he received a receipt from Rosecorp for that amount which was described as a "part-deposit".
Settlement of the transaction took place on 18 December 2007. The plaintiff gave evidence that he did not see a copy of the contract for sale until he received a copy of it from Mr Chiu in March 2013. It was at that time that he first learnt that the purchase price he paid was $3.53 million. The plaintiff then repeated that he received the signature part of the contract for sale, without the front page of it.
It was put to the plaintiff that he was only prepared to sign the contract for sale because he knew he had a solicitor looking after his interest, to which he said "that's impossible". It was put to him that he had omitted to mention anything about signing the contract for sale in his affidavit evidence because he knew it created a problem for him. He agreed that after the settlement of the property in December 2007, Mr Fang had given him the Deed of Nomination in an envelope and a receipt, but that he did not read it.
He was asked: "Q: You accept that if you had opened the letter and read the Deed of Nomination, you would have known that you had paid Mr Liu $350,000.00 as a nomination fee? A: If I did have open the envelope, I would believe this was Mr Liu representing his friend to get the $350,000.00 for the amount he paid before."
The plaintiff was asked about a conversation he had with Mr Liu in the following terms: "Q. When you spoke to Mr Liu, what exactly did he tell you about the $350,000? A. INTERPRETER: He explained that $350,000 is to be paid the previous buyer who have paid that amount to the developer and I was to repay him this amount. Q. Did Mr Liu say to you he would provide you with the bank details of the account to pay the money into? A. INTERPRETER: No, because I have no dealing with Mr Liu. Q. So is it your evidence that whilst Mr Liu didn't tell you where you should pay the money other than in this notice? A. INTERPRETER: Of course I had to raise the question of where to pay this money and he said this is to a company of Min Yang. Q. Mr Liu said you must pay it into a company of Ms Yang, correct? A. INTERPRETER: That's right. Q. He then sent you the document at page 57? A. INTERPRETER: And before that, Mr Quan Fang also told me that. Q. You know Mr Fang doesn't agree with you? A. INTERPRETER: I do not. Q. Well, I put it to you wrong when you say that Mr Fang told you to pay the $350,000 into this account? A. INTERPRETER: But I didn't know whether he agreed with that or not. Q. Can I suggest to you that all of your dealings in relation to the amount of $176,000 and $350,000 were with Mr Liu? A. INTERPRETER: I don't agree with this, to what you said."
The plaintiff asserted that the receipt he received for payment of the $350,000.00, which was dated 30 June 2007, was issued by the Beijing office of ASF Properties. That receipt became Ex A. The second defendant, Mr David Fang, denied that the signature appearing on that document was his signature.
The plaintiff had no memory of signing the Notice of Nomination (CB 273).
In cross-examination, the plaintiff conceded that it was possible that he signed the Notice of Nomination (CB 273) and the Deed of Nomination (CB 69), at the same time. It was put to him that it was possible that he signed those documents with Mr Bernard Chiu, solicitor present, but he denied that, saying that before 2013 he did not know Mr Chiu. That is consistent with Mr Chiu's signature not appearing on those two documents. He did, however, suggest that he had a suspicion that the Notice of Nomination (CB 273) might be a forged document.
It was also put to the plaintiff in cross-examination, that he had not mentioned those documents in his affidavit, nor had he mentioned the mortgage to HSBC. The plaintiff identified his signature on the mortgage, and the purchase price was specified as $3,530,000.00. However, he denied that the person who witnessed his signature on the mortgage application signed it at the same time he did, contending that the document was blank when he signed it.
The plaintiff was shown the sales advice notice in respect of 103 Peninsula Drive, Breakfast Point, which he purchased in January 2008 for $3,880,000.00. He could not recall that he purchased that pursuant to a put and call option agreement. That property settled in 2010.
The plaintiff also gave evidence that he purchased five apartments in Cairns from a developer with whom Mr Fang and Ms Yang cooperated. He gave evidence that he was surprised to know that Mr Bernard Chiu was the solicitor acting for him on all of those transactions.
The plaintiff was shown a Deed of Agreement dated 18 December 2007, which was the same day that his purchase of 95 Peninsula Drive settled. On page 10 of that Deed (Ex 1, tab 5), his signature appears witnessed by that of Mr Bernard Chiu, solicitor. The plaintiff had denied that he had ever signed any document witnessed by, or in the presence of Mr Chiu, again stating that he never saw Mr Chiu before 2013.
The plaintiff also denied receiving emails addressed to him at an email address cqy@chinaports-agency. The emails were sent to him from a Ms Yeung, a paralegal employed by Mr Bernard Chiu. One of those emails dealt with monies that were deposited into a bank account of the plaintiff. He denied any knowledge of that.
The plaintiff gave evidence that he had never seen the Sales Advice Notice dated 16 January 2008 in respect of 103 Peninsula Drive, Breakfast Point, before he was cross-examined about it. He denied receiving it when he purchased the property in 2008.
In respect of the $80,000.00 paid by ASF Properties Pty Limited to the plaintiff following the delivery of a tax invoice dated 30 August 2010 (CB 198), the plaintiff had deposed that he suddenly recalled something about that in 2010. He was asked as follows: "Q. Do you remember what it was that caused you to suddenly remember something that happened two years earlier? A. INTERPRETER: I can't remember what caused me to think about it but I remember I did suddenly recall this matter. It was Liu who said to me that because I was going to buy a second house, he would give me some incentive, maybe take 80,000 off the purchase price, so that would be advantageous to me and I'm thinking, "So the price would be 3.8 million," and then I thought of Ms Chen. I went to see Ms Chen and asked her how much the property would be and how much stamp duty would be on the property, the stamp duty will be worked on what price? Q. This was the discussion you had with Mr Liu where Mr Liu said to you that if you took over the sale that your friend couldn't complete, you would get a commission, isn't it, Mr Shen? A. INTERPRETER: Would you think this is strange? If I'm buying a property myself why would I pay more for the property so that I need to pay more on stamp duty and in return I'll get some commission from it? Q. Why were you dealing with Mr Liu at all as to discounts for the sale of 103? A. INTERPRETER: I did not discuss that with Mr Liu. It was - he told me that if I was going to buy the second property, Quan Fang would give me discount. Q. You say in paragraph 22 you didn't even know that Mr Liu was the referral agent yet you don't explain why it was that Mr Liu was negotiating discounts for the purchase price with you? A. INTERPRETER: I didn't discuss with him. It was he..(not transcribable).. Q. If what you're saying is correct, that you understood that the property was going to be sold to you for 3.8 and not 3.88 million, you would expect after 2010 to treat the purchase price of the property as 3.8 million and not 3.88 million. Correct? A. INTERPRETER: What - treat as 3.8 million."
In cross-examination, the plaintiff described the invoice as a receipt and said: "I've never seen that document before with my standard and skills, I cannot make up such an invoice, even today."
The plaintiff denied signing the sales inspection report and exclusive agency agreement in respect of the property at 103 Peninsula Drive, and alleged that his signature on that document was a forgery.
The plaintiff conceded that he was employed by ASF until the end of 2013. In respect of Mr Liu, the plaintiff was asked as follows: "Q. Can I suggest to you that you have not tried too hard to have the statement of claim served on Mr Liu in these proceedings. A. INTERPRETER: I have tried many ways to locate him. I have checked the China in and out records and also the immigration in and out records and also the Chinese police, who tried to find out his home address, and I also asked my staff Ms Chen to look for him and also my driver tried to look for the driver of Mr Liu. That driver is called Mr Li and his..(not transcribable)..was mentioned. The car was given for his use by Min Yang, so I thought that if I contact his driver to see, then I have done everything. Q. I suggest to you, Mr Shen, that whatever your unhappiness is in relation to number 95, it really is a matter between you and Mr Liu, isn't it? A. INTERPRETER: I have no relation with him."
In re-examination, the plaintiff denied ever having been called Nixon Shen, as appeared on the tax invoice (CB 198). The apartments that he purchased in Cairns did not proceed to completion because of the global financial crisis. He gave further evidence that he had wholly repaid the salary that he had been paid by Mr Fang. A payroll document was adduced as Ex B. Exhibit C was a four page email, including an invoice dated 12 December 2013.

Evidence of Qiu Yan Chen

Ms Chen affirmed an affidavit on 11 May 2016. In 2010 she was employed by the plaintiff to assist in his financial affairs. She deposed to a conversation she had with the plaintiff in August or September 2010 about stamp duty he paid in relation to his purchase of 103 Peninsula Drive. She overheard a telephone conversation he had with Mr Fang about a refund to him of $80,000.00 on that transaction.
Ms Chen deposed that later in 2010 she noticed that the plaintiff had paid different amounts of stamp duty on the properties he purchased at number 95 and 103 Peninsula Drive, Breakfast Point, despite paying the same purchase price on each property. The plaintiff told her that Mr Fang had told him that because 103 Peninsula Drive was an investment property, there was more stamp duty to be paid. She also deposed as to some steps that were taken to contact Mr Liu.
Ms Chen described the plaintiff as a very good employer to her over a period of 13 years. He had bought a property in Cairns for her, but the matter did not proceed. She had not kept notes of the two conversations she deposed to in her affidavit, which took place in 2010. She said that the words attributed to Mr Fang in the latter conversation were said to her by the plaintiff after he put down the phone.

Evidence of Qiu Yan Li

Ms Li affirmed an affidavit on 10 September 2015, in which she deposed two events that took place in April 2013 when she visited Australia with her boyfriend, the plaintiff. Her evidence corroborated the plaintiff's evidence as to conversations the plaintiff had in the Mandarin language with Mr Fang and Ms Yang, in relation to the contract for 95 Peninsula Drive, Breakfast Point, and conversations the plaintiff had with Mr Bernard Chiu when the plaintiff visited his office.
Ms Li was cross-examined about the similarity in the conversations deposed to by her, in her affidavit, to those affirmed by the plaintiff in his affidavit. She described the plaintiff as being angry when he saw the contract and she confirmed that Mr Chiu had described Mr Fang and Ms Yang as "dodgy".
Ms Li gave evidence that the plaintiff had said to Mr Chiu on that occasion, "if you were my solicitor, why didn't you explain to me the terms for the property?" She could not recall them discussing any other matters.
Ms Li also corroborated the evidence of the plaintiff, that in China when people buy properties, the transaction is just between the buyer and the vendor, and no lawyer needs to get involved. There was no re-examination.

Evidence of Mr Bernard Chiu

Mr Bernard Hang Man Chiu swore an affidavit on 15 July 2016, in which he deposed the following: "1. I am a solicitor practising in New South Wales. 2. I am the principal solicitor for Bernard Chiu Legal and Business Solutions. 3. I was the solicitor acting for the grantee, Quan Li Liu in relation to the purchase of the property of 95 Peninsula Drive, Breakfast Point in the state of New South Wales (Lot 2 in neighbourhood plan DP285959) ("the property"). 4. On 18 May 2007, Quan Fang came to my office indicating that he had found a buyer for 95 Peninsula Drive, Breakfast Point. Mr Fang said the buyer was from Shanghai. Mr Fang asked me to prepare a Deed of Nomination. Mr Fang said that the purchase price if $3,880,000 and the nomination fee is $350,000 being the consideration for the nomination. 5. On 25 May 2007, after preparing the draft Deed of Nomination, I sent the documents to Mr Allan Wong from Allan Wong & Co Solicitors who acted for the nominee, Mr Ning Shen. 6. On 28 May 2007, I sent an email to Min Yang and her assistant, Emma confirming that I had sent the full contract to Mr Allan Wong who was acting for the purchaser, Mr Ning Shen. 7. During the entire time of my acting for the purchase of the property, including the exchange of contracts until settlement, I had never spoken or met Mr Ning Shen personally who I understand resided in Shanghai. I only met and spoke to Quan Fang (David Fang) and Min Yang (Mary Yang) in connection with the property who gave me the instructions to act for Quan Li Liu. 8. In relation to the entire process of the purchase of the property, I only spoke and met Quan Fang and Min Yang. 9. I never met or spoke with Quan Li Liu. In relation to Quan Li Liu, I only drafted a Deed of Nomination between Quan Li Liu and Ning Shen under the instructions of Quan Fang and Min Yang. 10. The first time I met Mr Ning Shen was around April 2013, when Mr Shen came to my office with another two girls and someone else asking me for a copy of the Contract for 95 Peninsula Drive Breakfast Point. 11. In about March 2013, I called Mr Ning Shen in China on the telephone. That was the first time I spoke to Mr Ning Shen. 12. Mr Ning Shen later came to my office to pick up the original contracts for the property. 13. I have not spoken to Quan Fang and Min Yang for some time. The only time I spoke to Quan Fang recently was after I was served with a Subpoena to attend in these proceedings."
The plaintiff was given leave pursuant to s 38 of the Evidence Act 1995 to ask leading questions of Mr Chiu on the question of whether he acted for the plaintiff on the purchase of number 95 Peninsula Drive, Breakfast Point. Counsel for the plaintiff then read the above affidavit but no questions were asked of the deponent, and Mr Chiu was not required for cross-examination.
The plaintiff has also given leave to read an affidavit of Mr Alan Wong, referred to in Mr Chiu's affidavit. Mr Wong deposed that he had no recollection of acting for any party in the transaction and that he had no records or documents in relation to it. The defendants declined to cross‑examine Mr Wong.

The defendants' case

The defendants relied on an affidavit of Quan Fang sworn on 3 November 2015. That affidavit set out the circumstances in which the then purchaser of 95 Peninsula Drive, Breakfast Point, was unable to settle, and forfeited the deposit to the developer, Rosecorp.
Mr Fang deposed that the fourth defendant, Mr Liu, then proceeded to purchase the property from Rosecorp by way of a put and call option, paying 90% of the original purchase price. Mr Bernard Chiu was to act as solicitor for the purchaser.
Mr Fang deposed that approximately two days later Mr Liu informed him that he had a purchaser for the property. About a week after that, Mr Liu brought the plaintiff to the offices of ASF and introduced him to Mr Fang and his wife. The next day the plaintiff visited the Breakfast Point development with Mr Liu and Mr Fang, following which, Mr Fang gave the plaintiff a copy of the developer's price list, a marketing brochure from the developer and a floor plan for number 95 Peninsula Drive.
Approximately one or two weeks later, Mr Fang received a phone call from Mr Liu, in which he was told that the plaintiff wished to purchase the property with a five per cent deposit. Rosecorp agreed to that proposal, and Mr Liu nominated Bernard Chiu as the "solicitor". A deposit was paid direct to Rosecorp on 12 June 2007.
After exchange of contracts, Mr Liu advised Mr Fang that the plaintiff wished to borrow money to complete the purchase. A home loan application was made on behalf of the plaintiff to HSBC Bank, and finance was approved on a purchase price of $3,530,000.00. Mr Fang deposed that the plaintiff was aware of that and telephoned him to ask whether the bank would accept as purchase price the total paid by him, namely, $3,880,000.00, including the sum of $350,000.00 he had paid to Mr Liu.
On 24 September 2007, Mr Fang sent an email to an employee of Bernard Chiu, namely, Winnie Yeung, informing her that the plaintiff would be in Sydney to arrange settlement and would like to meet with Mr Chiu. Settlement of the property did not occur until 18 December 2007. Annexed to Mr Fang's affidavit was a copy of the facsimile transmission dated 13 December 2007 addressed to the plaintiff, care of Mr Fang, from Mr Chiu. The letter set out details of the settlement, together with a request for funds to complete the settlement.
The plaintiff was cross-examined extensively in relation to the identity of a number of Chinese corporate bodies, or businesses, e.g. "A S Fortune', however, at the conclusion of the proceedings, counsel for the plaintiff conceded those matters to be irrelevant to any issue to be determined. There is therefore no need to traverse much of Mr Fang's cross-examination.
Mr Fang agreed that Rosecorp was the developer of the Breakfast Point properties. "Aushome" was a trading name used by ASF Property Limited as agent for the vendor.
Mr Fang conceded that the corporation "Sino Property Network Limited" was registered in Hong Kong. His wife Min Yang was a director of that corporation, which had an arrangement with Rosecorp.
Mr Fang was cross-examined on a document produced on subpoena by Mr Bernard Chiu, solicitor, being the Sales Advice Notice in respect of 95 Peninsula Drive, Breakfast Point, dated 18 June 2006. On that document a vendor was recorded as being Quan Li Liu, and his solicitor was Mr Bernard Chiu. The purchaser's details were also listed and his solicitor was described as Alan Wong & Co. The contract price was recorded as $3.88 million with a special condition being "nomination of the put and call option to the purchaser". The document became Ex J.
Mr Fang conceded that Mr Liu was a referral agent in respect of the Breakfast Point properties, and that for his part in selling those properties, he gave Mr Liu part of the commission earned, up until December 2006.
In respect of the one page document comprising the final page of the Deed of Nomination, Mr Fang denied having anything to do with that document. He did not know how Min Yang came to witness the signatures of Mr Liu and the plaintiff on that document.
Mr Fang was asked about the payment of the 5% deposit on the transaction by the purchaser, the plaintiff. That amount was $176,500.00 for which Rosecorp issued a receipt on 12 June 2017. Mr Fang did not send that document to Mr Chiu when he received it. He gave further evidence that he was not paid a commission on this sale, which was the second sale of the property. In respect of the sum of $350,000.00 paid pursuant to the Nomination Deed, that was a private matter between Mr Liu and the plaintiff. When asked whether he rang the plaintiff prior to 27 June 2007 to talk to him about that payment, Mr Fang could not recall the date of the conversation, however, he denied the conversation as alleged by the plaintiff in its terms. He had never seen the Deed of Nomination prior to the proceedings commencing. He did, however, acknowledge that the money was transferred into an account of Sino Property Network Limited on 27 June 2007. He denied that his signature was on the receipt dated 30 June 2007 for that sum.
Mr Fang denied that in the middle of 2007 he had a three-way conversation with the plaintiff about sending a document to him for him to sign. He denied sending the one page document, meaning the signature page of the Deed of Nomination to the plaintiff. Mr Fang denied receiving a one page document and assembling it with the previous pages in the Deed of Nomination. Exhibit M was a copy of a letter from Mr Bernard Chiu, solicitor, to Mr Alan Wong, solicitor, enclosing a copy of the Deed of Nomination for execution by the plaintiff. The letter was dated 25 May 2007. Mr Fang was also asked about an email from Mr Chiu to Ms Yang dated 28 May 2007 enclosing a Notice of Nomination, contract front and execution pages, and a copy of bank guarantee. That email advised that a full contract had been forwarded to Alan Wong, who was acting for the purchaser, the plaintiff, - see Ex N. Mr Fang denied having a meeting on 18 May 2007 with Mr Chiu at his office to discuss the sale of 95 Peninsula Drive, Breakfast Point. Whilst there was a bank guarantee required for the first sale of that property, there was no bank guarantee required from Quan Li Liu in respect of the second transaction. Mr Fang denied wanting to get back a bank guarantee of $163,000.00, which was provided to Breakfast Point on exchange of the Option Agreement, notwithstanding a note to that effect produced on subpoena by Mr David Chiu, solicitor - see Ex O.
Exhibit Q was a letter dated 10 July 2006 from Messrs Corrs Chambers Westgarth Lawyers to Mr Bernard Chiu, who was acting for Quan Li Liu on his purchase of that property.
In respect of a letter dated 30 August 2010, under the hand of "Nixon Shen", addressed to ASF Properties Pty Limited, claiming a commission on sales of 175 Peninsula Drive and 103 Peninsula Drive, Breakfast Point, in the sum of $80,000.00, Mr Fang denied creating that document. Further, he gave evidence that the plaintiff used the name "Nixon Shen". The document appeared to have no relevance to any issue in the proceedings.
Mr Fang agreed that the first purchaser of 95 Peninsula Drive, Breakfast Point, was Wenfang Liu. He denied that that person was a public official in Tong Zhou, China.
It was put to Mr Fang that he was very much involved in the whole process of the purchase of the property at 95 Peninsula Drive, Breakfast Point, by the plaintiff. He conceded that after exchange of contracts he had a level of involvement to assist with the purchaser's finance. He denied wanting to sell the plaintiff a property in Breakfast Point when he first met him. He denied that his wife told the plaintiff that she was a Justice of the Peace, that he was lucky to be able to buy the last house in Breakfast Point, and, that they had bought a house in Breakfast Point too, and could definitely get him the "best price ever".
Mr Fang also denied making representations about the price of the property or that the plaintiff would have to pay $350,000.00 to the first buyer. He did refer the purchaser to HSBC for the purpose of obtaining a mortgage and introduced him to Ms Belinda Wong at the Burwood branch. Mr Fang agreed that he gave the plaintiff the launch price list of the properties available for purchase at Breakfast Point. He agreed that he went with the purchaser and Mr Liu to look at the property, but denied that he was interested in selling the plaintiff the property. Finally, Mr Fang denied that he had handed any marketing brochure to the plaintiff.
In re-examination, Mr Fang was asked about the absence of his wife, Min Yang, overseas and her inability to give evidence in the case. That matter is referred to below.

Other evidence relied on by the defendants

The defendant read an affidavit of Juliana Ng Liah Nah affirmed on 18 July 2016. There was no objection to the affidavit and the deponent was not required for cross-examination. The purpose of the affidavit was to establish attempts made by the deponent to locate Ms Belinda Wong, who had at relevant times been employed by the HSBC Bank. The evidence established that Ms Wong was, at the time of affirming the affidavit, employed by Mr Bernard Chiu, solicitor. She had no recollection of the transactions with which these proceedings were concerned.
The defendant also relied on an affidavit sworn by Mr Tarrek Najr, solicitor. There was no objection to the affidavit and the deponent was not required for cross-examination. It attached an extract from the National Business Credit Information Public Access System (Beijing), together with a translation in the English language in respect of the corporation Australia-China Fortune Investment Consulting (Beijing) Co Limited.
In addition to the above evidence, the defendant tendered the following documentary evidence: Ex 1 - comprising a bundle of documents including the Notice of Exercise of Call Option signed by the plaintiff on 16 July 2007, email correspondence, the purchaser's Deed of Agreement dated 18 December 2007, and the plaintiff's HSBC home loan application dated 13 June 2007. Ex 2 - was an extract from the web page of ASF Group Limited. Ex 3 - is a further bundle of documents admitted without objection, including the Transfer and Mortgage documents, together with the plaintiff's home loan application and documents relating to Mr Liu's option to purchase the relevant property.
There was no case in reply.

Determination of factual issues

The transaction the subject of the dispute between the parties took place in 2006 and 2007. Clearly, with the passage of time, memories become unreliable, and for that reason, it is important to assess the evidence of each witness against any available objective evidence. In this case, that objective evidence comprises the documentation supporting the transaction. The evidence establishes the following chronology of events based on that documentation: Item No. Date Event 1 20 January 2006 Option granted to Wenfang Liu purchase number 95 for the sum of $3,800,000.00. Mr Bernard Chiu signs solicitor's certificate as grantee's solicitor (Ex 3). 2 28 July 2006 Developer agrees to grant option to fourth defendant to purchase number 95 for $3,530,000.00. Bernard Chiu acts as solicitor for the grantee and again signs solicitor's certificate. 3 25 August 2006 Fourth defendant provides bank guarantee for $163,000.00. 4 20 September 2006 Vendor grants "put and call option" to fourth defendant to purchase property for $3,530,000.00. Mr Chiu signs solicitor's certificate. 5 27 April 2007 Plaintiff meets second, third and fourth defendants and alleges first representation made. 6 28 April 2007 Plaintiff inspects number 95 with second and fourth defendants and alleges second representation made. 7 12 June 2007 Plaintiff pays 5% deposit of $176,500.00 as requested by fourth defendant. Receipt issued by Rosecorp. 8 13 June 2007 Plaintiff completes HSBC premier home loan application for loan of $2,200,000.00, noting purchase price of number 95 of $3,530,000.00. The application notes the solicitor acting on behalf of the borrower as Mr Bernard Chiu. 9 27 June 2007 Plaintiff pays $350,000.00 by deposit to HSBC Limited, pursuant to undated Deed of Nomination signed by fourth defendant and plaintiff, both signatures witnessed by third defendant, Min Yang. 9 30 June 2007 Receipt issued for payment of the sum of $350,000.00 under the hand of the first defendant, David Fang (who denied signing the document). 11 16 July 2007 Plaintiff signs Notice of Exercise of Call Option. 12 16 July 2007 Contract for sale executed for number 95 between Breakfast Point Pty Limited and the plaintiff for the sum of $3,530,000.00. 13 No date Transfer signed by Mr Bernard Chiu as transferee's solicitor. 14 18 December 2007 Sale of number 95 completed. Transfer signed on behalf of the purchaser (plaintiff) by Mr Bernard Chiu, solicitor. On the same day, a Deed of Agreement between Breakfast Point Pty Limited and the plaintiff is signed by the plaintiff and the signature is witnessed by Bernard Chiu, solicitor. 14 Undated Following settlement, the second defendant hands to the plaintiff an envelope containing, inter alia, a full copy of the Deed of Nomination.

Having regard to the objective documentary evidence, I make the following findings of fact: 1. That the plaintiff purchased the subject property by way of a "put and call" option exercised by him as evidenced by his signature. 2. The consideration for that option was the sum of $350,000.00 paid by the plaintiff into an HSBC account in Shanghai by way of transfer on 27 June 2007. 3. That account was the account of, or under the control of the first defendant. 4. Having exercised the call option, the plaintiff then entered into a contract for sale as purchaser of the subject property for the sum of $3,530,000.00 on 16 July 2007. 5. The plaintiff then successfully applied for a home loan from HSBC of $2,200,000.00, based on a contract price of $3,530,000.00. 6. The solicitor acting for the plaintiff, as evidenced by the mortgage application, transfer and Deed of Agreement referred to above, was Mr Bernard Chiu, solicitor. Mr Chiu also acted for the vendor, the fourth defendant.

Determination - Has the plaintiff made out the representations relied on?

The onus is on the plaintiff to prove, on the balance of probabilities, that the representation pleaded in [6] of the Amended Statement of Claim is made out. That paragraph pleads as follows: "(6) In or about April 2007, the first, second, third and fourth defendants represented to the plaintiff that an unnamed person ("the existing purchaser") who had paid a deposit and exchanged contracts on the property, wished to be relieved of his obligations and liabilities under the said contract, and that the plaintiff could take over the purchase of the property by paying a sum of $350,000.00 to the existing purchaser and then paying the balance of the purchase monies of $3,530,000.00 on completion or when requested to do so and therefore purchasing the property for $3,880,000.00 ('the first representation')."
In Watson v Foxman & Ors (1995) 49 NSWLR 315, at pp 318-319, (McClelland CJ in Eq) held in relation to determining the difficulty of proof in relying upon oral misrepresentations: "Where in civil proceedings, a party alleges that the conduct of another was misleading and deceptive … it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) What the alleged conduct was; and (2) Circumstances which rendered the conduct misleading. Where the conduct is a speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the Court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all), the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to have been relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word of phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. Each element of the cause of action must be proved to the reasonable satisfaction of the Court, which means that the Court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is 'not … attained or established independently of the nature and consequence of the fact or facts to be proved' including the 'seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding': Helton v Allen 1 at 712. Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as a foundation of causes of action based on s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), in the absence of some reliable contemporaneous record or other satisfactory corroboration …"
His Honour went on to say (at p 319) that these considerations were equally applicable to causes of action based on contract. In applying these principles, in Carrier v Georges [2013] NSWSC 401 at [27] Nicholas J said: "The requisite 'reasonable satisfaction' should not be produced by 'inexact proofs, indefinite testimony, or indirect inferences' (Briginshaw v Briginshaw (1938) 60 CLR 336 per Dixon J, p 362)."
In Gould v Vaggelas (1985) 157 CLR 215, the High Court held that it was well established that in an action of deceit where a plaintiff has been induced by fraudulent misrepresentation of the defendant to enter into a contract of purchase of property, the measure of damages usually applicable is the difference between the real value of the property at the time of purchase and what the plaintiff paid for it. However, events that happen after the time of the purchase may throw light on the real value of the property at that time, relying on Potts v Miller (1940) 64 CLR 282 at [289] - [290], that proved inducement rests on the party seeking relief in respect of fraudulent misrepresentation.
I am not satisfied that the first representation relied on by the plaintiff has been made out to the requisite standard for the following reasons: 1. The plaintiff, giving his evidence through a Mandarin interpreter, could not be accepted as a reliable witness as to critical events. His evidence was replete with inconsistencies, and evidence that was inconsistent with the documents set out above. 2. For example, the plaintiff's evidence that he did not know that the second and third defendants were real estate agents (see [44] above). Secondly, his sworn belief that he was buying direct from the developer (see [48] and [52] above), notwithstanding his execution of the call option. 3. The plaintiff's evidence omitted to set out in detail the fact that the transaction was subject to a "put and call" option, a matter of which the plaintiff must have known. He went on to purchase a second property, i.e. 103 Peninsula Drive, in 2010 by means of the same mechanism. He further denied that it was his signature on the sales report regarding that property (see [76] above). 4. The plaintiff's evidence that he had no communication whatsoever with Mr Chiu, solicitor, until March 2013, was inconsistent with the arrangements made for him to visit the solicitor's office prior to settlement in late 2007. 5. The plaintiff's evidence (at [55] above) that Ms Yang was not involved in the actual dealing. Further, it was not pleaded that the sum of $350,000.00 was fraudulently dealt with by the third defendant. 6. The plaintiff's evidence (at [58] above) that he did not know that he was in a deal with the fourth defendant Mr Liu. 7. The plaintiff's evidence (at [60] above) that he signed the contract for sale as a one-page document. Also, his evidence that he was not aware that he was paying a deposit. 8. Also inconsistent was the Deed of Agreement dated 18 December 2007 (referred to at [71] above) where his signature was witnessed by Mr Chiu. 9. Also inconsistent were the emails that he received from a Ms Yeung of Mr Chiu's office, following one of which money was deposited into his account (as referred to in [72] above). 10. Further, the plaintiff's evidence that he signed the loan application with HSBC as a blank document could not be accepted. That document identified Mr Chiu as his solicitor. 11. I further am not satisfied to the required standard that the plaintiff signed the alleged "one page document" that was in in fact the Deed of Nomination in the circumstances he alleged - see Briginshaw v Briginshaw, supra. I do not accept his evidence (set out at [29] above) that he received one phone call from both Mr Fang and Mr Liu about that matter.
Further, at best, the first representation, to the extent that it was established that conversation occurred between the first, second and fourth defendants and the plaintiff in respect of the subject property, could not be regarded as any more than "sales talk", the type of which is common in real estate transactions and of which the plaintiff had every opportunity to test. He had the opportunity to make his own enquiries as to the market, and to obtain advice in respect of the transaction. He failed to do either.
The plaintiff received what he bargained for by way of the "put and call" option and contract for sale. He believed he was purchasing the property for $3,880,000.00 and in fact he did so. The fact that he purchased a subsequent property in 2010, using the same mechanism, demonstrated he had an understanding of the transaction which belied his evidence regarding the purchase of the subject property.
For those reasons I am not satisfied that the alleged first representation has been made out as a fraudulent representation upon which to base an action in deceit. Whilst the plaintiff pleaded the representation was made partly oral and partly in writing, no written document was relied on in support of it. As conceded by the plaintiff's counsel at the outset, the second representation had little role to play, and could not found the plaintiff's cause of action in deceit.
In any event, the plaintiff has proven no loss. His counsel disavowed any reliance on a reduction in valuation of the property following inducement by the alleged representations. Rather, the plaintiff's case evolved into a proposition that, as the consideration for the granting of the option, namely $350,000.00, was paid into an account controlled by the first defendant, he had been defrauded of that money. The evidence does not establish what occurred to the funds after the monies were transferred on 27 June 2007, however, the mere fact of that payment does not establish that they were fraudulently misappropriated by any of the defendants.
It is true that there were some curious aspects raised by the evidence in this case. I am not satisfied that the plaintiff received a one page document as alleged by him, being the final page of the Deed of Nomination. It was unexplained how the third defendant, Min Yang, came to witness both signatures on that document. Her decision to not give evidence was a deliberate one. An explanation was provided for her absence, namely, that she preferred to pursue the commercial interests of the first defendant in the UK rather than give evidence, and rather than apply for an adjournment so that she could give evidence. That explanation was insufficient to overcome the usual inference that would arise pursuant to Jones v Dunkel (1959) 101 CLR 298, namely that her evidence would not have assisted the defendants' case. However, her absence from the witness box could not establish the plaintiff's case - see Manly Council v Byrne & Anor [2004] NSWCA 123.
For the above reasons, the plaintiff's case must fail. Whilst it is unnecessary for me to decide, I would have, in any event, held that the plaintiff was out of time for bringing his claim in deceit. Following completion of the sale in December 2007, the plaintiff was armed with all of the knowledge of events, and was armed with all relevant documentation with which to discover with reasonable diligence any possible cause of action he may have had against any person.
Section 55 of the Limitation Act 1969 (NSW) provides as follows: "55 Fraud and deceit (1) Subject to subsection (3) where: (a) there is a cause of action based on fraud or deceit, or (b) a cause of action or the identity of a person against whom a cause of action lies is fraudulently concealer, The time which elapses after a limitation period fixed by or under this Act for the cause of action commences to run and before the date on which a person having (either solely or with other persons) the cause of action first discovers, or may with reasonable diligence discover, the fraud deceit or concealment, as the case may be, does not count in the reckoning of the limitation period for an action on the cause of action by the person or by a person claiming through the person against a person answerable for the fraud deceit or concealment. (2) Subsection (1) has effect whether the limitation period for the cause of action would, but for this section, expire before or after the date mentioned in that subsection. (3) For the purposes of subsection (1), a person is answerable for fraud deceit or concealment if, but only if: (a) the person is a party to the fraud deceit or concealment, or (b) the person is, in relation to the cause of action, a successor of a party to the fraud deceit or concealment under a devolution from the party occurring after the date on which the fraud deceit or concealment first occurs. (4) Where property is, after he first occurrence of fraud deceit or concealment, purchased for valuable consideration by a person who is not a party to the fraud deceit or concealment and does not, at the time of the purchase, know or have reason to believe that the fraud deceit or concealment has occurred, subsection (1) does not, in relation to that fraud deceit or concealment, apply to a limitation period for a cause of action against the purchaser or a person claiming through the purchaser."
Having found that the plaintiff was in a position to discover with reasonable diligence any fraud by 18 December 2007, the above section does not extend the six year limitation period prescribed by reason of s 14 of the Limitation Act. Accordingly, I would have found that the claim brought by the plaintiff in deceit was not maintainable and it would have been dismissed on that basis.
It is further unnecessary for me to decide whether the plaintiff's claim is a proportional claim pursuant to s 34 of the CLA. If required to do so, on the basis of the evidence before me, no liability on the part of the first, second or third defendants could be apportioned on the basis that the plaintiff has not established that he suffered any loss. As the fourth defendant was not a party to the proceedings, no finding could be made in relation to that defendant in any event.

Conclusion and Orders

For the above reasons I conclude that the plaintiff has not made out his claim in deceit against the first, second and third defendants and a verdict will be entered in their favour. There is no evidence of service of the proceedings on the fourth defendant, and given the findings made in respect to the limitation defence raised against the plaintiff, the proceedings will be dismissed against the fourth defendant.
I therefore make the following orders: 1. There will be a verdict for the first, second and third defendants. 2. The plaintiff is to pay the costs of the first, second and third defendants. 3. The Amended Statement of Claim is dismissed against the fourth defendant. 4. The exhibits are returned forthwith. 5. Any application by a party for a special costs order is to be made by Notice of Motion and affidavit evidence in support thereof, served in accordance with the UCPR.

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: 09 February 2017

Trade Practices Act 1974(Cth)ss 52, 82

Limitation Act 1969(NSW)ss 14, 55

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