Plaintiff v Defendants

1. Jieyun submitted that Mr He knew the essential facts constituting the dishonest and fraudulent breach, being:

(a) the Approved Purpose under the Loan Deed;

(b) the fact that the funds received by SMM were TDG's funds; and

(c) the fact that the funds received by SMM were not applied for the 'Approved Purpose'.

(a) was aware of the nature of this proceeding;

(b) was a director of TDG and so is presumed to have known about the circumstances of TDG's accounts; and

(c) gave no credible explanation as to why Sentosa Capital paid out the unusual invoices issued by Mr He's Company, SMM.

1. On behalf of Mr He, it was submitted that Mr He was not aware of the relevant essential facts, because Mr He:

(a) was not aware that the funds had come from TDG;

(b) had done nothing to assist;

(c) could not have attended the offices of TDG prior to the transfer of the funds from TDG; and

(d) did not know of the details of the proceeding and the freezing orders until he received a copy of the statement of claim on 4 October 2018.

1. I am satisfied that Mr He did know all of the essential facts constituting the dishonest and fraudulent breach of the Jieyun Trust and the misappropriation of the $155,156 at least from the time that the SMM payments were made into SMM's account on 4 September 2018, for the following reasons:

(a) As a director of TDG, Mr He executed the Loan Deed on 20 September 2017 and conceded that he was aware that the moneys were advanced to TDG for the purposes of acquiring the Toorak Properties.

(b) Mr He knew the funds received by SMM were TDG's funds. I refer to my findings in paragraphs 141 to 145 above and note that Mr He's own evidence is that he understood the SMM payments were in satisfaction of the SMM Invoices, which had been rendered to TDG. Mr He has not put forward any basis upon which he could have believed that the source of the funds were otherwise than from TDG.

(c) Mr He knew the funds received by SMM were not for the 'Approved Purpose'. In particular, he was aware that the services which were the subject of the SMM Invoices had not been performed on the instructions of TDG or for the benefit of TDG. Further, for the reasons set out above, Mr He and through him SMM were aware that the purpose of the transfers was to misappropriate the money from TDG's account.

Was the Xu payment a dishonest and fraudulent breach of the Jieyun Trust?

1. Jieyun submitted that Mr He's knowing assistance by receiving the funds into the SMM account contaminated the transaction by which Mr He paid $150,000 to Mr Xu on 11 September 2018. Accordingly, for the same reasons, the Xu payment perpetuates the same breach of the Jieyun Trust and amounted to a dishonest and fraudulent breach of the Jieyun Trust.
2. Jieyun further submitted that:

(a) there is no evidence before the Court as to the purpose of the Xu payment other than Mr He's self-serving statement that it was repayment of a 'personal loan';

(b) there is no documentary evidence to support any claim by Mr Xu against Mr He in debt; and

(c) Mr Xu was not called to give evidence.

1. Mr He submitted that the Xu payment was not in breach of any trust because:

(a) no such trust existed; and

(b) SMM had a proper basis for believing that the moneys in its account were paid on a proper basis.

Mr He otherwise relied upon his earlier submissions.

1. For the reasons set out in paragraphs 141 to 145 above, I find that in transferring the $150,000 to Mr Xu in Hong Kong on 11 September 2018, Mr He participated in a dishonest and fraudulent breach of the Jieyun Trust.

By the Xu payment, did Mr He assist in the dishonest and fraudulent breach of the Jieyun Trust?

1. Each party relied upon their previous submissions.

1. For the reasons set out above, I find that Mr He did assist in the dishonest and fraudulent breach of the Jieyun Trust.

Did Mr He know of the essential facts constituting the dishonest and fraudulent breach of the Jieyun Trust by the Xu payment?

1. Each party relied upon their previous submissions.

1. For the reasons set out above, I find that Mr He did know of the essential facts constituting dishonest and fraudulent breach of the Jieyun Trust by transferring the $150,000 to Mr Xu in Hong Kong.

1. Jieyun submitted that the Settlement Representation arose out of the following WeChat messages, in circumstances where Mr He had express knowledge of the Loan Deed and the Approved Purpose.

(a) By WeChat message of 23 January 2018 to Jieyun, Mr He called for the Second Tranche and impressed upon Jieyun the importance of settling the lands and obtaining clear title.

(b) By WeChat message of 14 February 2018 to Jieyun, Mr He referred to Jieyun's unit holding dispute with TDG and again referred to the importance of receiving the Second Tranche to settle the Toorak Properties.

(c) By WeChat message of 24 February 2018 to Jieyun, Mr He again referred to Jieyun's unit holding dispute with TDG and made assurances that he was protecting the security of the funds throughout.

(d) By WeChat message of 28 February 2018 to Jieyun, Mr He continued to ask for the Second Tranche to be transferred.

1. On behalf of Mr He, it was submitted that Mr He did not make the Settlement Representation, for the following reasons:

(a) Mr He's statements were merely passing on information for what it is worth, from TDG to Jieyun.

(b) Mr He was not the principal or directing mind of TDG.

(c) Mr He was not involved in the design of the project, the VCAT proceedings, the bank affairs or the communications between the lawyers.

Principles - what is the test for determining whether a representation has been made?

1. To determine whether an express representation has been made, the Court asks the question:

Would a reasonable person have understood the representor's words in their context, to mean the representation?

1. To determine whether an implied representation has been made, the Court similarly asks:

Would a reasonable person have inferred, from the representor's words and conduct in their context, that the representation was being implied?[34]

1. As Toulson J explained in IFE Fund SA v Goldman Sachs International:[35]

In determining whether there has been an express representation, and to what effect, the court has to consider what a reasonable person would have understood from the words used in the context in which they were used. In determining what, if any, implied representation has been made, the court has to perform a similar task, except that it has to consider what a reasonable person would have inferred was being implicitly represented by the representor's words and conduct in their context.[36]

1. The text of the WeChat messages from Mr He, which were relied upon by Jieyun are as follows:

(a) By WeChat message of 22 January 2018, Mr He stated:

Dear Shareholders, the part two investments are to be completed [paid] by the end of 2017 as agreed originally, but because VCAT has been scheduled on 31st January this year, I did not notify everyone to invest before the finalization of the ultimate proposal. It won't make sense either to keep the money in the account for two months. The current situation ... is clear, we will obtain the permit in February and start presale. Please refer to the project progress report sent a few days ago for details. Currently, we need to settle the two lots of lands with clear fund before the end of February. As we need to quickly prepare for the construction loan the lands must be paid in full and obtain clear title. This way, the bank will be able to loan us the full construction loan. Everyone please prepare your investment fund. I have arranged for the shareholders' meeting on 10/11 February, and DALI will be back to MELBOURNE on 7th, apart from him, architect, town planner, VCAT lawyer, sales consultant and others will also be attending the meeting. Thanks!

(b) By WeChat message of 14 February 2018, Mr He stated:

At the moment the most important matter is for the balance of the fund to be put in place at the end of the month (latest 9th March), otherwise if the settlement fails, it will put us on the back foot and lead to a situation beyond redemption, with everything back to zero. Therefore currently we must all try hard to ensure the funds are in place in a timely manner.

(c) By WeChat message of 24 February 2018, Mr He stated:

I just want to state one point that I have been protecting the security of our funds throughout, and there is nothing deceptive or unfounded in this.

(d) By WeChat message of 28 February 2018, Mr He stated:

[P]lease transfer payments to the development company's account directly, or I come over for a cheque. Thanks.

1. In my opinion, Mr He did not make the Settlement Representation, for the following reasons:

(a) A reasonable person would have understood the words used by Mr He in their context to mean nothing more than a request for Jieyun to meet its obligations under the Loan Deed for the purposes of allowing TDG to complete the settlement of the Toorak Properties.

(b) The Settlement Representation, as formulated by Jieyun, proposes that the WeChat messages effectively constituted a warranty that, if Jieyun paid the Second Tranche, nothing would go wrong with the settlement. In my opinion, a reasonable person would not understand Mr He's request for Jieyun, as lender/investor, to advance its funds in order to put the purchaser in a position to settle, as warranting that the settlement would proceed and not be obstructed by anything such as:

(i) the vendor refusing to settle;

(ii) Leimeng refusing to pay its share; or

(iii) TDG being otherwise unable to find the necessary funds.

In the circumstances, the request to make the advance for the purpose of the settlement was simply that.

1. The WeChat messages may well have included an implied representation, for example that Mr He was not aware of any significant obstacle to the completion of the settlement. However, the representation as pleaded by Jieyun was not to that effect. Presumably, this was because there was no evidence that, at the time the representation was made, Mr He was aware, or had reason to believe that:

(a) Mr Cvek had put TDG in a position where it could not settle; or

(b) Leimeng would refuse to contribute its agreed share to the settlement of the Toorak Properties.

Did Mr He have reasonable grounds for making the Settlement Representation?

1. As I have found that Me He did not make the Settlement Representation, it is not necessary to answer the following questions relating to the claim alleging the Settlement Representation. However, as it was fully argued, I make the following observations.

1. Jieyun submitted that Mr He did not have reasonable grounds for making the Settlement Representation, for the following reasons:

(a) If Mr He did not look at TDG's bank accounts prior to making a representation, he was not in a position to know whether TDG was in the position of settling the Toorak Properties on 9 March 2018. Therefore, there was no foundation for him to say whether or not settlement could have been achieved.

(b) If Mr He did look at TDG's bank accounts, he would have seen that, shortly prior to 24 February 2018, the balance of TDG's accounts were $16.02 in debit and $474.90 in credit, despite the fact that there should have been $6,350,000 in TDG's accounts.

(c) Given the poor state of TDG's accounts, even if Leimeng did contribute its second tranche of $4 million, the Second Tranche of $4 million from Jieyun could not in any way have contributed towards settlement of the Toorak Properties.

(d) The Court should find that Mr He knew of the state of the accounts because he said he looked at the accounts before 24 February 2018; and if he was a director of TDG he was likely to have known the true state of TDG's finances.

1. Mr He submitted that there were reasonable grounds for the Settlement Representation, for the following reasons:

(a) The contracts of sale provided for settlement in February and March 2018.

(b) Mr Cvek had said that the settlements were soon.

(c) The settlement was being organised.

(d) The fact that there may have been insufficient funds in the accounts of TDG did not make it impossible to settle because Mr Cvek had said that the moneys were in other accounts, which in fact was subsequently demonstrated by the transfer back into TDG's bank account of more than $6 million.

(e) There was no evidence that Leimeng would not pay its contribution prior to 7 March 2018 and the evidence shows that the money was withdrawn from Leimeng's account on 20 April 2018.

1. At the time of the relevant communications which are alleged to have constituted the Settlement Representation, the relevant circumstances were:

(a) Mr Cvek had entered into the contracts of sale.

(b) TDG had been nominated as the purchaser of each of the Toorak Properties and deposits had been paid.

(c) Jieyun had entered into the Loan Deed, pursuant to which it had paid the First Tranche and was committed to pay the Second Tranche by 1 December 2017 (which was then extended to coincide with the settlement of the Toorak Properties).

(d) It was proposed that the settlement of the Toorak Properties would be in or about early March 2018.

(e) The parties understood that Leimeng had contributed its First Tranche to TDG and was committed to provide its Second Tranche towards the completion of the settlement of the Toorak Properties.

(f) Prior to Jieyun's payment of the Second Portion of the Second Tranche on 5 March 2018, there was no evidence of any concern being expressed about:

(i) TDG's funds being held in other accounts;

(ii) Mr Cvek's ability to make TDG's funds available for settlement; or

(iii) Leimeng's intention to honour its commitment by paying its second tranche.

1. In the circumstances, I consider that Mr He had reasonable grounds at the time of the relevant WeChat messages, for expressing an opinion that there would be a settlement of the Toorak Properties.

But for the Settlement Representation, would Jieyun have avoided the loss of the Second Tranche or part of it?

1. Jieyun submitted that the Court should find that it would not have paid the Second Tranche if the Settlement Representation had not been made, for the following reasons:

(a) The Court should accept the evidence of Mr Huang and Mr Song that had they known the funds would not be used for settlement of the Toorak Properties, they would not have agreed to pay the Second Tranche.

(b) The funds were plainly intended by Jieyun to settle the Toorak Properties, as the Second Tranche was only advanced when Mr He informed them the funds were required for settlement.

1. Mr He submitted that Jieyun did not rely on the Settlement Representation in paying the Second Tranche, for the following reasons:

(a) Jieyun was already obliged under the Loan Deed to pay the $4 million, being the Second Tranche, and intended to do so.

(b) The representation did not cause Jieyun to make any change to its decision. If Mr He had simply said that the Second Tranche was due now rather than saying it was for settlement, then Jieyun would have paid the moneys anyway as it was obliged to do.

(c) Jieyun relied upon the discussions and negotiations of Mr Zhu of Leimeng and the securing of an extra 5% interest from Mr Cvek, in deciding to pay the second tranche and proceed with the project.

1. The question of reliance on a representation, which I have found was not made by Mr He, must be hypothetical.
2. Jieyun's submission that it would not have paid the Second Tranche had it been told that it would not be applied for the purpose of completing settlement of the Toorak Properties, may be accepted.
3. However, Jieyun does not allege that Mr He was under an obligation to disclose that the Second Tranche would not be used for the settlement of the Toorak Properties. Therefore, the counterfactual to the be assessed in this 'but-for' scenario is one where:

(a) Mr He had not sent the WeChat messages relied upon by Jieyun, and

(b) Jieyun had simply been informed of the proposed settlement date.

1. In those circumstances, I am not satisfied that Jieyun would have refused to honour its commitment under the Loan Deed and make its contribution to the settlement of the Toorak Properties.

Did Mr He make the Silent Settlement Representations

(a) Mr He's failure to inform Jieyun of the VCAT Decision before 5 March 2018 was misleading and deceptive, for the following reasons:

(i) The decision of VCAT not to grant the permit for the development of the Toorak Properties had material effects, being:

(1) the project would need to be smaller in scale and as a consequence, would be less profitable; and

(2) the project would be delayed, which would also add to costs and reduce profit.

(ii) Mr He knew of the VCAT Decision by 1 March 2018 and did not tell Mr Song, Ms Ren or Mr Huang about it.

1. On behalf of Mr He, it was submitted that Mr He was not obliged to provide information to Jieyun in relation to the VCAT Decision, for the following reasons:

(a) The implications of the decision were simply unknown and Mr He did what any prudent individual would do and waited to be advised by the professionals who had control of the company.

(b) The fact that only four storeys may be approved rather than five had been contemplated for a long time.

(c) There was no evidence as to the previous projection, or whether or not the decision would impact such projections.

(d) This particular representation has made no difference to the conduct of Jieyun, who was already obliged to pay the monies.

1. It is well established that silence may form part of the relevant surrounding facts and circumstances in which the conduct alleged to be misleading or deceptive is assessed. The silence may constitute misleading or deceptive conduct where, for example, there is a reasonable expectation that, if some relevant fact exists, it will be disclosed.[37]
2. Examples of where a relevant expectation of disclosure may arise include where:

(a) law or equity imposes a duty of disclosure;

(b) a statement conveying a half-truth only is made;

(c) the representor has undertaken a duty to advise;

(d) a representation, although correct at the time it was made, has a continuing effect and has subsequently become incorrect; and

(e) the representor has made an implied representation.[38]

1. The relevant circumstances at the time of the alleged representation are as follows:

(a) On 14 November 2016, TDG was nominated by Mr Cvek as the purchaser of the Toorak Properties.

(b) By the Loan Deed, Jieyun agreed to advance the First Tranche by no later than 22 September 2017; and the Second Tranche by no later than 1 December 2017.

(c) By 3 October 2017, Jieyun had advanced the First Tranche.

(d) By 17 January 2018, Mr He provided Mr Huang and Mr Song with the December project report. The report proposed that the development would proceed as a four-storey project rather than a five-storey project, because, while the projected earnings for each option were generally equal, the greater rate of return was projected for the four storey project.

(e) On 28 February 2018, Jieyun the First Portion of the Second Tranche due under the Loan Deed.

(f) On 1 March 2018, Mr He became aware that TDG's application for the four-storey development before VCAT was refused. The advice on that day was that despite the legal advisers being surprised and disappointed by the decision:

The Tribunal has given reasonably clear guidance however about what it finds acceptable about the proposal which means any new application should be able to respond well to those matters and there should be strong prospects of success.

(g) On 5 March 2018, Jieyun paid the Second Portion of the Second Tranche to TDG.

(h) By WeChat message of 7 March 2018 to Mr He, Mr Cvek explained the background to the investment in the Toorak Properties and stated that, following the VCAT Decision, if no permit is granted, consideration could be given to selling the site. It included the following:

At no point was any investment subject to permits being granted or any other conditions.

...

TDG in its ordinary course of business is required to undertake all actions necessary in order to obtain a permit in order to move to the next step. The directors of which have an obligation to the company to ensure that it continues to make every effort to do whats [sic] in the best interest of the company.

At the current stage we have had a permit declined with a clear indication of what changes are required in order for this to be resubmitted. 'The decision is far from a negative one.

(i) By WeChat message of 7 March 2018 to Ms Ren, Ms Zheng Huang forwarded the above WeChat message of 7 March 2018 from Mr Cvek.

1. It may be accepted that as an investor in the project, Jieyun was entitled to be informed of the VCAT Decision; and it was so informed after Jieyun made payment of the Second Portion of the Second Tranche. However, the thrust of Jieyun's allegation is that Mr He was under a duty to inform it of the VCAT Decision prior to the payment of the final $2 million because the effect of the VCAT Decision was likely to reduce the profitability and/or delay the completion of, the development.
2. Jieyun did not make clear the basis upon which it was said that Mr He owed a duty to advise Jieyun of the VCAT Decision. It was not alleged that Mr He owed fiduciary or contractual duties to Jieyun. On the contrary, Jieyun rejected that Mr He was its representative and contended that he acted for TDG, Sentosa Capital and Leimeng.
3. In the circumstances, I do not consider it was incumbent on Mr He to inform Jieyun of the VCAT Decision prior to 5 March 2018, when the only purpose of providing that information might be to prompt Jieyun to consider whether it might refuse to pay the final instalment of $2 million as required by the Loan Deed. Jieyun's obligation under the Loan Deed was not conditional on the VCAT application being successful and it was not in Mr He's interest to give Jieyun advice for the purpose of Jieyun considering whether to comply with its obligations under the Loan Deed.
4. To the extent that there may have been a continuing representation that TDG would apply for a permit to construct a four-storey development, which would be profitable, there is no evidence that the refusal of the application rendered that representation false. On the contrary, the only evidence is that there was confidence that an amended application would succeed. Neither was there evidence as to whether the need to lodge an amended application would result in a significant delay or significantly affect profitability.

But for the Silent Settlement Representations would Jieyun have avoided the loss of the Second Tranche or part of it?

1. As I have found that Me He did not make the Silent Settlement Representation, it is not necessary to answer the following question relating to the claim alleging the Silent Settlement Representation. However, as it was fully argued, I make the following observations.

1. Jieyun submitted that, but for the Silent Settlement Representations, it would not have paid the Second Portion of the Second Tranche, for the following reasons:

(a) Each of Mr Huang, Ms Ren and Mr Song made it clear that, if they had known of the VCAT Decision, they would not have made the final instalment.

(b) Ms Ren's evidence was that she 'realised the seriousness of the matter', after speaking to Ms Zhen Huang about the reason for Leimeng's decision not to invest its second $4 million tranche, which was that they believed they had been cheated because the permit was not granted.

1. Mr He submitted that Jieyun would not have avoided paying the Second Portion of the Second Tranche if it had been aware of the VCAT Decision, for the following reasons:

(a) Jieyun waited nearly four years to make this allegation.

(b) Jieyun was already obliged to pay the final instalment under the Loan Deed.

(c) Jieyun had been made aware that the development was for four storeys and that five storeys was only an opportunity, not a certainty (by the project report dated December 2017).

(d) Mr Huang had known that there was a court proceeding regarding the permit.

(e) Mr Huang admitted he was only interested in the return on the project and he said he wanted compensation for the delay arising from the refusal of the planning permit.

(f) Jieyun was told by Ms Zhen Huang on 7 March 2018 of the VCAT Decision after Mr Cvek made a statement about the planning permit to the unit holders.

(g) The circumstances did not warrant the disclosure because the project would continue as a four-storey project.

(h) Jieyun did not incur any loss as a result of the VCAT Decision, because any loss was the result of Mr Cvek and Mr Mihailescu transferring the money out of TDG.

1. I do not accept the evidence of Mr Huang, Ms Ren and Mr Song that, had they known of the VCAT Decision prior to 5 March 2018, Jieyun would not have paid the final $2 million, for the following reasons:

(a) During the period from February to May 2018, Jieyun expressed concerns about the transfer of money from TDG's accounts; and demanded:

(i) Jieyun's share of the project be commensurate with Leimeng's;

(ii) return of the Second Tranche until completion of the delayed settlement; and

(iii) interest be paid on their investment pending settlement of the Toorak Properties.

However, during this period, it was not suggested that the delay in informing Jieyun about the VCAT Decision was misleading; or that if they had known of the VCAT Decision they would not have made the final $2 million payment.

(b) Further, during this period, Jieyun demonstrated an intention that TDG should proceed with the completion of the settlement of the Toorak Properties; although this was thwarted by the transfer of funds out of TDG's accounts and the Leimeng's refusal to contribute its second tranche of $4 million.

(c) In fact, no complaint was made by Jieyun about the VCAT Decision or the failure to disclose it until service of the proposed Second Further Amended Statement of Claim in March 2022, shortly before the commencement of the trial.

(d) None of Mr Huang, Ms Ren or Mr Song explained their expectations as at March 2018 about when the project would be completed, such that an assessment could be made about the effect the VCAT Decision had on such expectations. In other words, there was no explanation as to why any delays, which they perceived would be caused by the VCAT Decision, would have prompted them to withdraw Jieyun from the development.

(e) Jieyun was bound under the Loan Deed to make the final $2 million payment, being the Second Portion of the Second Tranche.

1. The Loan Deed, dated 20 September 2017, provided the loan must only be used for the Approved Purpose as set out in paragraph 22 and was signed by:

(a) Mr Song and Ms Ren as directors of Jieyun; and

(b) Mr He and Mr Balint (as Mr Cvek's attorney under power) as directors of TDG.

1. By loan deed dated 20 September 2017 between TDG and Hennessy Group, TDG agreed to loan the sum of $3,250,000 to Hennessy Group, on terms including that:

The investment funds will be used by [Hennessy Group] for a short to medium term basis as working capital to invest or conduct any business that it deems necessary including the selection, acquisition, marketing of any development property or payout existing partners and paydown of loan facilities on the property and/or any other purposes the company deems necessary.

(a) Mr He and Mr Mihailescu for TDG; and

(b) Mr Cvek for Hennessy Group Pty Ltd.

1. By a loan deed dated 21 September 2017, TDG agreed to loan $2.4 million to Hennessy Group for 'an existing obligation on or around April, May or June 2018 which requires a capital injection of $2,400,000', on terms including that:

The investment funds will be used by [Hennessy Group] for a short to medium term basis as (but not exclusive to) working capital to invest or conduct any business that it deems necessary including the selection, acquisition, marketing of any development property or payout existing partners and paydown of loan facilities on the property and/or any other purposes the company deems necessary.

(a) Mr He and Mr Mihailescu for TDG; and

(b) Mr Cvek for Hennessy Group.

1. By a loan deed dated 25 September 2017 between TDG and Hopetoun Development, TDG agreed to loan the sum of $600,000 to Hopetoun Development, on terms including that:

The investment funds will be used by [Hopetoun Development] as working capital to invest or conduct any business that it deems necessary including the selection, acquisition, marketing of any development property or payout existing partners and paydown the loan facility on the properties and/or any other purposes the company deems necessary

(a) Mr Mihailescu for TDG; and

(b) Mr Cvek for Hopetoun Development.

1. By a loan deed dated 16 October 2017 between TDG and Hopetoun Development, TDG agreed to loan the sum of $1,890,000 to Hopetoun Development, on terms including that:

The investment funds will be used by [Hopetoun Development] on a short to medium term basis as working capital to Invest or conduct any business that it deems necessary including the selection, acquisition, marketing of any development property or payout existing partners and paydown the loan facility on the properties and/or any other purposes the company deems necessary.

(a) Mr Cvek and Mr Mihailescu for TDG; and

(b) Mr Cvek for Hopetoun Development.

1. On 25 September 2017 and 3 October 2017, Jieyun transferred the First Tranche by instalments of $1.8 million and $2.2 million, being the:

(a) First Portion of the First Tranche; and

(b) Second Portion of the First Tranche,

respectively into the TDG Account 4101. At the time the First Portion of the First Tranche was paid on 25 September 2017, the TDG Account 4101 was $592,574.20 in credit.

1. From 26 September 2017 to 16 November 2017, TDG made payments totalling $4,582,397 from the TDG Account 4101 to persons or entities associated with Mr Cvek and Mr Mihailescu, as set out in schedule 1;[39] and left a balance in the account of $1.79 as at 16 November 2017.
2. On 28 February 2018, the TDG Account 4259 was $474.90 in credit. After Jieyun transferred the Second Tranche by payments of $2,000,000 on each of 28 February and 5 March 2018, the account was $4,000,472.40 in credit.[40]
3. From 13 March 2018 to 13 April 2018, TDG made payments totalling $2,626,500 from the TDG Account 4259 to persons or entities associated with Mr Cvek and Mr Mihailescu, as set out in schedule 2;[41] and after TDG transferred $1,340,883 from this account to the TDG Account 4101on 26 April 2018, the account balance of the TDG Account 4259 was zero.
4. Between 26 April 2018 and 16 May 2018, the September 2017 to August 2018 Expenditure List records that a total sum of $3,153,383.52 was transferred to the TDG Account 4101, consisting of:

(a) $1,340,883.52 transferred from the TDG Account 4259 on 26 April 2018 (referred to in the previous paragraph);

(b) $1 million on 16 May 2018, being part repayment of the advance of $2,483,747 by TDG to Hopetoun Development; and

(c) $812,500 on 16 May 2018, being part repayment of the advance of $3,250,000 to Hennessy Group.

1. From 3 May 2018 to 22 August 2018, TDG made the payments totalling $3,119,818 from the TDG Account 4101 to persons or entities associated with Mr Cvek and Mr Mihailescu, as set out in schedule 3;[42] and left a balance in the account of $0.15.
2. The above calculations ignore the following credits to the TDG Account 4101, which were reversed:

(a) The deposit of $1 million on 26 April 2018 because the contemporaneous records of TDG and the Hopetoun Development bank statements record this sum as being offset by a debit of $1,000,099.80 on 26 April 2018.

(b) The deposit of $1,182,867.68 on 26 April 2018 because the contemporaneous records of TDG and the Hennessy Group bank statements record this sum as being reversed on 26 April 2018.

(c) The deposit of $1 million by Mr He on 13 April 2018, on the basis that I accept the allegation in the defence of the first to tenth and twelfth defendants ('the defence') that this sum was reimbursed to Mr He on 23 April 2018. I accept the allegation for the following reasons:

(i) The contemporaneous records of TDG, as at August 2018, record the contributions of Jieyun into the TDG Account 4101between 25 September 2017 and 22 August 2018, but not any contribution by Mr He. This is consistent with the payment being reimbursed on 23 April 2018 shortly after the $1 million deposit was made.

(ii) The bank statement for the TDG Account 4101records the receipt of $1 million from Mr He on 13 April 2018 and the transfer out of the same sum on 23 April 2018.

(iii) I reject the evidence of Mr He that he was not reimbursed the $1 million because of my assessment of his credibility, to which I have previously referred, and the fact that there was no corroboration such as:

(1) production of records showing the absence of the reimbursement; or

(2) evidence of attempts to recover the $1 million, as Jieyun did when it became apparent that the settlement had been seriously delayed.

(a) the Jieyun Advances were loaned only for the 'Approved Purpose' as set out in paragraph 22 above;

(b) it was an Event of Default, if TDG (among other things):

(i) failed to observe the provisions of the Loan Deed;

(ii) disposes of the Toorak Properties; or

(iii) ceased to carry on business (cl 9.1).

(c) Upon an Event of Default, Jieyun has the 'right to demand the immediate payment' of the Jieyun Advances (cl 9.2).

1. By letter of 21 August 2018 to TDG, Hiways Lawyers, acting on behalf of Jieyun, exercised Jieyun's right under cl 9.2 of the Loan Deed to demand repayment of the Jieyun Advances.
2. I am satisfied that, by reason of the matters referred to in paragraphs 207, 209, 211 and 217, an Event of Default arose under cl 3.2 of the Loan Deed and that TDG has failed to repay any of the loan sum of $8 million (the Jieyun Advances).
3. Accordingly, TDG is indebted to Jieyun in the sum of $8 million, being the full amount of the Jieyun Advances.

1. As is apparent from the matters referred to in paragraphs 206 to 211 above, shortly after receipt of each of the four instalments comprising the Jieyun Advances, TDG expended virtually the entirety of the Jieyun Advances to entities or persons associated with Mr Cvek and/or Mr Mihailescu. This expenditure was not only in breach of the express terms of the Jieyun Trust, it was also in breach of its fiduciary duty not to permit a conflict between its duty as trustee and the interests of companies related to Mr Cvek and Mr Mihailescu.
2. The direct result of these breaches of trust and its fiduciary duty was that TDG was left with insufficient funds to:

(a) proceed with the settlement of the Toorak Properties; or

(b) refund the Jieyun Advances to Jieyun.

1. In the circumstances, TDG is liable to pay equitable compensation to Jieyun in the sum of $8 million, being the sum of the Jieyun Advances.

Liability of Mr Cvek and Mr Mihailescu under the second limb of Barnes v Addy

1. Mr Cvek and Mr Mihailescu will each be liable for the breach of trust by TDG for knowing assistance in the breach if it is established that:

(a) TDG's breach of trust was part of a dishonest and fraudulent design;

(b) Mr Cvek and Mr Mihailescu assisted TDG in the breach; and

(c) Mr Cvek and Mr Mihailescu had knowledge of the dishonest and fraudulent design.[43]

1. I am satisfied that Mr Cvek and Mr Mihailescu dishonestly and fraudulently effected the misappropriation of the Jieyun Advances on behalf of TDG, for the following reasons:

(a) Mr Cvek was a director of TDG and a director of the following entities that were beneficiaries of the misappropriations:

(i) 8 Hopetoun Rd Pty Ltd (the fourth defendant) ('8 Hopetoun Rd');

(ii) Hennessy Group;

(iii) East Asia Group Pty Ltd (the sixth defendant) ('East Asia');

(iv) Aberdeen Holdings Pty Ltd (the seventh defendant) ('Aberdeen Holdings');

(v) Hopetoun Development;

(vi) SMM; and

(vii) Granville Group Pty Ltd (the twelfth defendant) ('Granville').

(b) Mr Mihailescu was a director of TDG and a director of the following entities that were beneficiaries of the misappropriations:

(i) Sentosa Capital; and

(ii) Mandeville Group Pty Ltd (the ninth defendant) ('Mandeville').

Further, Mr Mihailescu was the 'Line Manager' to whom Mr Balint was required to report under the terms of Mr Balint's employment contract with Hennessy Group as its 'Investment Liaison Officer/Project Manager'.

(c) Mr Cvek and Mr Mihailescu were both aware of the relevant facts constituting the Jieyun Trust as signatories to the Loan Deed.[44]

(d) With respect to the loan deeds dated 20 September 2017, 21 September 2017, 25 September 2017 and 16 October 2017, referred to in paragraphs 198 to 205 above, the following facts are supportive of the dishonest and fraudulent intention of Mr Cvek and Mr Mihailescu as to the misappropriation of the Jieyun Advances:

(i) Mr Cvek and Mr Mihailescu were each signatories to the loan deeds.

(ii) By the loan deeds, TDG agreed to loan the Jieyun Advances which it held on the Jieyun Trust to the companies related to one or other or both Mr Cvek and Mr Mihailescu.

(iii) The loan deeds committed TDG to lend $8,140,000, which given the state of TDG's accounts could only be met from using the Jieyun Advances.

(iv) The temporal proximity between the date of the Loan Deed and the commitment of the funds due under that deed to related companies was as follows:

(1) $3,250,000 to be loaned to Hennessy Group on the same day;

(2) $2.4 million to be loaned to Hennessy Group on the day after;

(3) $600,000 to be loaned to Hopetoun Development five days after; and

(4) $1,890,000 to be loaned to Hopetoun Development 26 days after.

(v) There was no evidence of any disclosure by Mr Cvek and Mr Mihailescu to Jieyun or any of Jieyun's directors or agents of their intention for TDG to immediately on-lend the Jieyun Advances to assist its related companies.

(e) As I have already found, Mr Cvek and Mr Mihailescu were both directly responsible for the dishonest and fraudulent misappropriation of the Balint payment.[45]

(f) TDG paid out virtually the entirety of the Jieyun Advances to entities associated with Mr Cvek and Mr Mihailescu promptly after receipt (as referred to in paragraph 217 which consequently rendered TDG without sufficient funds to settle the purchase of either of the Toorak Properties.

(a) the dishonest and fraudulent design of Mr Cvek and Mr Mihailescu that was attributed to TDG (being company directors); and

(b) their conduct that deliberately effected the design,

I am satisfied that each of Mr Cvek and Mr Mihailescu are each liable under the second limb of Barnes v Addy.

1. In the circumstances, Mr Cvek and Mr Mihailescu are each liable to pay equitable compensation to the Jieyun for the misappropriation of Jieyun Advances, being the sum of $8 million.

Liability of corporations associated with Mr Cvek and Mr Mihailescu under the first limb of Barnes v Addy

1. Jieyun alleges that the sum of $600,000 was paid in two separate payments on:

(a) 27 September 2017 of $100,000; and

(b) 28 September 2017 of $500,000,

('the Alleged 8 Hopetoun Payments'), to 8 Hopetoun Rd.

1. Although the November 2016 to February 2018 TDG Expenditure List records the Alleged 8 Hopetoun Payments as paid to 8 Hopetoun Rd, I am not satisfied that the Alleged 8 Hopetoun Payments were ultimately made to 8 Hopetoun Rd, because:

(a) the defence alleges that the Alleged 8 Hopetoun Payments were made to Hopetoun Development as a 'loan';

(b) the September 2017 to August 2018 the Expenditure List' records the Alleged 8 Hopetoun Payments as made to Hopetoun Development as 'loans' for the 'Property acquisition - 659 Orrong rd, Toorak'; and

(c) the Alleged 8 Hopetoun Payments are consistent with the first defendant's obligation to pay $600,000 to Hopetoun Development under the loan deed between those parties dated 25 September 2017.

1. Jieyun alleges that the sum of $5,775,000 was paid in four separate payments on:

(a) 4 October 2017 of $3,250,000 ('the 4 October Payment');

(b) 9 October 2017 of $75,000 ('the 9 October Payment');

(c) 30 October 2017 of $50,000 ('the 30 October Payment'); and

(d) 16 May 2018 of $2,400,000 ('the 16 May Payment'),

(collectively, 'the Alleged Hennessy Payments'), to Hennessy Group.

1. I am satisfied that the 4 October Payment, the 9 October Payment and the 16 May Payment were made to Hennessy Group, for the following reasons:

(a) The 4 October Payment and the 16 May Payment are admitted in the defence and are consistent with TDG's obligation to make these payments under the loan agreements dated 20 September and 21 September 2017 respectively.

(b) The 9 October Payment is recorded in both the TDG Expenditure Transaction List and the September 2017 to August 2018 TDG Expenditure List as being made to Hennessy Group.

1. Although the November 2016 to February 2018 TDG Expenditure List records the Alleged Hennessy Payments as alleged, I am not satisfied that the 30 October Payment was ultimately made to Hennessy Group because:

(a) the defence alleges that the 30 October Payment was made to Mr He as 'Marketing expenses related to raising funds for TDG as part of fundraising agreement'; and

(b) the September 2017 to August 2018 TDG Expenditure List records the 30 October Payment as made to Sentosa Capital as 'Marketing/promotion - Sammie'.

1. Jieyun alleges that the sum of $20,000 was paid on 5 October 2017 ('the Alleged East Asia Payment') to East Asia.
2. Although the November 2016 to February 2018 TDG Expenditure List records the Alleged East Asia Payment as alleged, I am not satisfied that it was made to East Asia because:

(a) the defence alleges that the Alleged East Asia Payment was made to Sentosa Capital as 'Marketing expenses payable on behalf of TDG for investment fund raising, Townplanning consultants' for the benefit of:

(i) Mr Cvek as to $15,000; and

(ii) Urbis as to $5,000; and

(b) the September 2017 to August 2018 TDG Expenditure List records the Alleged East Asia Payment in a manner broadly consistent with the defence, being two separate payments to:

(i) Sentosa Capital as to $15,000 for 'Marketing'; and

(ii) Urbis as to $5,000 for 'Consulting on townplanning'.

1. Jieyun alleges that the sum of $116,000 was paid in five separate payments on:

(a) 12 October 2017 of $27,400;

(b) 16 October 2017 of $15,000;

(c) 17 October 2017 of $19,100;

(d) 27 October 2017 of $44,500; and

(e) 31 October 2017 of $10,000,

(collectively, 'the Alleged Aberdeen Payments'), to Aberdeen Holdings.

1. Although the November 2016 to February 2018 TDG Expenditure List records the Alleged Aberdeen Payments as alleged, I am not satisfied that the Alleged Aberdeen Payments were ultimately made to Aberdeen Holdings because:

(a) the defence records the Alleged Aberdeen Payments as made to Mr Cvek and Sentosa Capital; and

(b) the September 2017 to August 2018 TDG Expenditure List records the Alleged Aberdeen Payments as being to Sentosa Capital.

1. Jieyun alleges that the sum of $2,583,747 was paid in five separate payments on:

(a) 27 September 2017 of $100,000 ('the 27 September Payment');

(b) 17 October 2017 of $83,747 ('the 17 October Payment');

(c) 15 March 2018 of $600,000 ('the 15 March Payment');

(d) 29 March 2018 of $1,170,700 ('the First 29 March Payment'); and

(e) 29 March 2018 of $629,300 ('the Second 29 March Payment'),

(collectively, the Alleged Hopetoun Payments') to Hopetoun Development.

(a) the 17 October Payment;

(b) the First 29 March Payment; and

(c) the Second 29 March Payment,

totalling $1,883,747, were made to Hopetoun Development because they are:

(i) admitted in the defence and are consistent (within $7,000) with TDG's obligation to make these payments under the loan agreement dated 16 October 2017; and

(ii) recorded in the September 2017 to August 2018 TDG Expenditure List as being made to Hopetoun Development.

1. I am satisfied that the 27 September Payment was made to Hopetoun Development because it is:

(a) admitted in the defence; and

(b) recorded in the September 2017 to August 2018 TDG Expenditure List as being made to Hopetoun Development.

1. I am satisfied that the 15 March Payment was made to Hopetoun Development because it is:

(a) admitted in the defence and is consistent with TDG's obligation to make the payment of this sum under the loan agreement dated 25 October 2017; and

(b) recorded in the September 2017 to August 2018 TDG Expenditure List as being made to Hopetoun Development.

1. Jieyun alleges that the sum of $1,175,600 was paid in 27 separate payments ('the Alleged Granville Payments') to Granville as follows:

1. I am not satisfied that the payments on 31 October 2017 and 8 November 2017, each of $10,000, were made to Granville because:

(a) although the September 2017 to August 2018 TDG Expenditure List records the payments as made to Granville, the TDG Expenditure List records them as made to Aberdeen Holdings and Sentosa Capital respectively; and

(b) the defence alleges these payments were paid to:

(i) Sentosa Capital on 31 October 2017 as 'Interior render work, marketing fund raising expenses on behalf of TDG'; and

(ii) Mr Cvek on 8 November 2017 as 'Call on funds as per ACA agreement'.

1. I am satisfied that the balance of the Alleged Granville Payments were made to Granville because they are admitted in the defence.

1. Jieyun alleges that the sum of $1,003,468 was paid in 26 separate payments ('the Alleged Sentosa Capital Payments') to Sentosa Capital as follows:

(a) The payment of $27,400 of 12 October 2017 was made to Sentosa Capital because:

(i) the defence alleges this line entry was 'a bank reversal which has been process on the bank account', (which is presumably a reference to a deposit of the same amount on 19 October 2017 into the TDG Account 4101); and

(ii) the reversal is consistent with there being no corresponding line entry for it in either the September 2017 to August 2018 TDG Expenditure List or the November 2016 to February 2018 TDG Expenditure List.

(b) The payments on:

(i) 17 October 2017 of $19,100;

(ii) 25 October 2017 of $24,200; and

(iii) 27 October 2017 of $44,500,

were made to Sentosa Capital because each of the line entries in the September 2017 to August 2018 TDG Expenditure List conflict with:

(1) the corresponding line entries in the November 2016 to February 2018 TDG Expenditure List (which records these payments as paid to Aberdeen Holdings or Granville); and

(2) the defence (which alleges these payments were paid to Mr Cvek).

(c) The payment on 30 October 2017 of $50,000 was made to Sentosa Capital because the line entry in the September 2017 to August 2018 TDG Expenditure List conflicts with:

(i) the corresponding line entry in the November 2016 to February 2018 TDG Expenditure List (which records it as paid to Hennessy Group); and

(ii) the defence (which alleges it was paid to Mr He).

(d) The payment on 8 November 2017 of $10,000 was made to Sentosa Capital given that its entry in the September 2017 to August 2018 TDG Expenditure List conflicts with:

(i) the corresponding line entry in the November 2016 to February 2018 TDG Expenditure List (which records it as paid to Granville); and

(ii) the defence (which alleges it was paid to Mr He).

(a) The payments on:

(i) 16 October 2017 of $69,500,

(ii) 25 October 2017 of $27,400; and

(iii) 30 October 2017 of $28,000,

were made to Sentosa Capital because each is so recorded as a loan to Sentosa Capital in both the September 2017 to August 2018 TDG Expenditure List and the November 2016 to February 2018 TDG Expenditure List.

(b) The payment on 13 March 2018 of $150,000 was made to Sentosa Capital because it is so recorded as a loan in the September 2017 to August 2018 the Expenditure List.

(c) The payments on:

(i) 13 April 2018 of $3,500;

(ii) 13 April 2018 of $6,000; and

(iii) 3 August 2018 of $16,610,

were received by Sentosa Capital because each amount is admitted in the defence.

(d) the balance of the Alleged Sentosa Capital Payments were made to Sentosa Capital because they are admitted in the defence.

1. Jieyun alleges that the sum of $608,097 was paid in 4 separate payments to Mandeville Group:

(a) on 28 September 2017 of $500,000;

(b) on 17 October 2017 of $83,747;

(c) on 24 October 2017 of $8,350; and

(d) on 24 October 2017 of $16,000.

1. I am satisfied that on 28 September 2017 the sum of $500,000 was paid to Mandeville because:

(a) it is admitted in the defence as the actual recipient of the payment; and

(b) its bank statement shows a deposit of $500,000 on that date.

(a) The payment of $83,747 on 17 October 2017 was paid to Mandeville because:

(i) the corresponding line entry in the September 2017 to August 2018 TDG Expenditure List (which records it as a loan to Hopetoun Developments) conflicts with the entry in the TDG List; and

(ii) the defence alleges this payment was made to Hopetoun Development.

(b) The payments of $8,350 and $16,000 both made on 24 October 2017, totalling $24,350, were made to Mandeville given that the entries in the September 2017 to August 2018 TDG Expenditure List conflict with:

(i) the corresponding line entry in the November 2016 to February 2018 TDG Expenditure List (which records the 24 October Payments as paid to Granville); and

(ii) the defence, which alleges these payments were paid to Mr Cvek.

1. Accordingly, I am satisfied that the following payments were transferred from funds held by TDG on the Jieyun Trust to the following recipients:

(a) Hennessy Group $5,725,000

(b) Hopetoun Development $2,583,747

(c) Granville $1,155,600

(d) Sentosa Capital $ 828,268

(e) Mandeville $ 500,000

1. I am further satisfied that each of the recipients is liable respectively in respect of each of the above amounts transferred, for the following reasons:

(a) TDG owed a fiduciary duty as trustee under the Jieyun Trust with respect to the amounts transferred, for the reasons set out in paragraphs 117 to 119.

(b) Each of the amounts transferred were misapplied by TDG, for the reasons set out in paragraph 217.

(c) Each recipient knew, at the time of the receipt, that it was misapplied trust money, for the reasons set out in paragraph 221.

(a) The first defendant pay the plaintiff the sum of $8,000,000 as a debt.

(b) The first defendant pay the plaintiff equitable compensation in the sum of $8,000,000.

(c) The eleventh and thirteenth defendants pay the plaintiff equitable compensation in the sum of $155,156.

(d) The second and third defendants pay the plaintiff equitable compensation in the sum of $8,000,000.

(e) The fifth defendant pay the plaintiff equitable compensation in the sum of $5,725,000

(f) The eighth defendant pay the plaintiff equitable compensation in the sum of $828,268.

(g) The ninth defendants pay the plaintiff equitable compensation in the sum of $500,000.

(h) The tenth defendant pay the plaintiff equitable compensation in the sum of $2,583,747.

(i) The twelfth defendant pay the plaintiff equitable compensation in the sum of $1,155,600.

(j) The claims against the fourth, sixth and seventh defendants be dismissed.

1. I will hear the parties with respect to further orders on the claims against the thirteenth defendant; and from the plaintiff with respect to:

(a) the claim with respect to fifteenth defendant and the money held in Court on its behalf,

(b) orders with respect to the sixteenth defendant, the seventeenth defendant and the nineteenth defendant;

(c) orders with respect to other amounts held in Court; and

(d) any further orders.

[1] In various documents, Mr Hening Xu is also referred to as Mr Xu Hening. With no disrespect intended, I refer to him throughout these reasons as 'Mr Xu'.

[2] Although Mr Cvek is shown as having being appointed as a director and secretary on 22 April 2019 and ceasing on the same date.

[3] It was not explained how Leimeng's interest in the Unit Trust had increased from 5% referred to in the Unit Trust Deed, to 20%.

[4] [1874] UKLawRpCh 20; (1874) LR 9 Ch App 244 ('Barnes v Addy').

[5] Simmons v New South Wales Trustee and Guardian [2014] NSWCA 405; (2014) 17 BPR 33,717, 33,732-3 [86]-[91] (Gleeson JA with whom Beazley P and Barrett JA agreed). Quoted with approval in Lewis Securities Ltd (in liq) v Carter [2018] NSWCA 118; (2018) 355 ALR 703, 742 [183] (Emmett AJA with whom Leeming JA and Sackville AJA agreed), although the second element appears to be misquoted as 'the misapplication of such property by the trustee or beneficiary' (emphasis added).

[6] Harstedt Pty Ltd v Tomanek [2018] VSCA 84; (2018) 55 VR 158, 177-9 [79]-[87], [93] (Santamaria, McLeish and Niall JJA).

[8] [1970] AC 567 (Lord Reid, Lord Morris of Borth-y-Gest, Lord Guest, Lord Pearce and Lord Wilberforce) ('Quistclose').

[11] Ibid 580 (Lord Wilberforce with whom the other Law Lords agreed).

[14] [1978] HCA 45; (1978) 141 CLR 335, 353 (with whom Jacobs and Murphy JJ agreed).

[15] [2012] NSWCA 135, [51] (with whom Meagher and Barrett JJA agreed) ('Fishy Bite').

[16] Peter W Young, Clyde Croft and Megan Louise Smith, On Equity (Thomson Reuters, 2009) 470 [6.1020].

[17] [2022] VSCA 78 (Maxwell P, Kennedy and Walker JJA) ('Eumeralla').

[21] Re Australian Elizabethan Theatre Trust [1991] FCA 344; (1991) 30 FCR 491, 503 (Gummow J).

[22] Ibid. See also Nationwide News Pty Ltd v Rush [2020] FCAFC 115; (2020) 380 ALR 432, 506 [383] (White, Gleeson and Wheelahan JJ).

[23] Eumeralla [2022] VSCA 78, [83]. See also Fishy Bite Pty Ltd [2012] NSWCA 135, [51] (Campbell JA), Re Australian Elizabethan Theatre Trust [1991] FCA 344; (1991) 30 FCR 491, 502-3 (Gummow J); Legal Services Board v Gillespie-Jones [2013] HCA 35; (2013) 249 CLR 493, 523 [112] (Bell, Gageler and Keane JJ).

[24] Eumeralla [2022] VSCA 78, [83(i)] (Maxwell P, Kennedy and Walker JJA) (citations omitted).

[25] Carter Holt Harvey Woodproducts Australia Pty Ltd v The Commonwealth [2019] HCA 20; (2019) 268 CLR 524, 560-1 [82] (Bell, Gageler and Nettle JJ) (citations omitted).

[26] See paragraphs 197 to 205 below. Although it is to be noted that in these agreements TDG was the lender.

[27] Re Hallett's Estate [1880] UKLawRpCh 38; (1879) 13 Ch D 696; Australian Receivables Ltd v Tekitu Pty Ltd [2011] NSWSC 1306, [145] (Ward J); Brady v Stapleton [1952] HCA 62; (1952) 88 CLR 322, 336 (Dixon CJ and Fullagar J).

[28] Re Global Finance Group Pty Ltd (2003) WAR 385, 408 [103] (McLure J).

[31] This proposition was not put to Mr He in cross-examination but, after Jieyun sought to rely on this submission, Mr He declined the opportunity to be recalled to give an explanation.

[32] As at that date, the first to ninth defendants were the only defendants to the proceeding.

[34] Brighton Australia Pty Ltd v Multiplex Constructions Pty Ltd [2018] VSC 246; (2018) 56 VR 557, 589 {72]-[73].

[35] [2006] EWHC 2887 (Comm); upheld by the Court of Appeal in [2007] EWCA Civ 811 (Waller, Gage and Collins LJJ).

[36] Ibid [50]; applied in Raiffseisen Zentralbank v Royal Bank of Scotland [2011] 1 Lloyd's Report 123, 142 (Christopher Clarke J); and Webster v Liddington [2014] EWCA Civ 560; [2015] 1 All ER (Comm) 427 [39] (Jackson LJ with whom Briggs and Clarke LJJ agreed). Also see Estoppel by Conduct and Election (Sweet & Maxwell, 2nd ed, 2016), 79-80 [4-001]. For a similar test formulated in the context of estoppel, see Sullivan v Sullivan [2006] NSWCA 312, [85] (Hodgson JA, with whom McColl JA agreed, stated the relevant test as 'if it was reasonable for the representee to interpret the representation ... in a particular way').

[37] Barport Pty Ltd v Baum [2019] VSCA 167, [194] (Kyrou, McLeish and Niall JJA).

[38] Ibid, [195], citing Addenbrooke Pty Ltd v Duncan (No 2) (2017) 348 ALR 1, 119 [482] (Gilmour and White JJ, see also Dowsett J [78]-[88]).

[39] Source from the defence of the first to tenth and twelfth defendants.

[40] A transaction fee of $2.50 was debited on 1 March 2018.

[43] Harstedt Pty Ltd v Tomanek [2018] VSCA 84; (2018) 55 VR 158, 177-9 [79]-[87] (Santamaria, McLeish and Niall JJ).

[44] Mr Cvek by his attorney under power, Mr Balint.