Plaintiff v Defendants

EQUITY - Fiduciary duties - Indicia of fiduciary relationship - Alleged relationship of agent and principal - Breach of fiduciary duty not pleaded - Unregistered migration agent - No agency relationship as no capacity to affect purported principal's legal relations - Subjective trust and confidence and vulnerability insufficient - No fiduciary relationship found.

CONSUMER LAW - Misleading or deceptive conduct - Financial services - Australian Securities and Investment Commission Act 2001 (Cth) ss 12BAA, 12BAB, 12BB, 12DA - Corporations Act 2001 (Cth) ss 763A, 763B, 763E - Competition and Consumer Act 2010 (Cth) sch 2 - Australian Consumer Law ss 4, 18 - Whether investment for primarily immigration-related benefits was a "financial product" - Whether representation was made about a future matter without reasonable grounds - Corporations Act 2001 (Cth) ss 1041E, 1041F inapplicable as investment was not a "financial product" under the Corporations Act 2001 (Cth).

TORTS - Deceit - Defendant made representations with knowledge they were false or reckless or careless as to their truth - Defendant made representations with intention that plaintiff would rely on them - Plaintiff acted in reliance on representations - Causation - Deceit proved.

UNJUST ENRICHMENT - Money had and received - Vitiating factor not pleaded or proved.

CONTRACT - Whether plaintiff verbally agreed not to sue defendant - Insufficient evidence of agreement not to sue.

ESTOPPEL - Whether plaintiff estopped from resiling from representation not to sue defendant - Insufficient evidence of representation not to sue - Detriment and unconscionability not shown.

DAMAGES - Aggravated damages - Exemplary damages - No aggravated damages awarded as plaintiff did not identify damage requiring additional compensation - Exemplary damages awarded.

1 The plaintiff, Ms Olivia Yeung ("Yeung"), relied upon the advice of her migration agent and seventh defendant, Mr Shaohua Lin ("Lin") (also known as Fred), to place $2 million in the REITS Fund, a funds management business operated by the second defendant, Zank & Company Pty Ltd ("Zank & Co"), a company with which Lin was associated. The money was redeemable on 90 days' notice and earned interest. When Yeung asked to redeem the funds, they were not available. Neither Zank & Co nor Lin nor any of his business associates repaid to Yeung any part of the $2 million. Accordingly, Yeung sued to recover the funds advanced. The defendants included business associates of Lin and corporate vehicles in which one or more of Lin and his associates had a financial interest.

2 Yeung is a citizen of the Hong Kong Special Administrative Region of China. She was granted permanent residency in Australia on 18 August 2022. The plaintiff used to be known as Ning Xu. In October 2022 she changed her name to Olivia Yeung. Yeung is married to Mr Zhi Hui Yang ("Yang"), a businessman.

3 The first defendant, Zank Capital Ltd ("Zank Capital"), is an Australian Financial Services Licensee and the trustee of a fund called the "REITS Fund".

4 The second defendant, Zank & Co, held itself out as a company involved in the management of the REITS Fund.

5 The third defendant, Zank Group Pty Ltd ("Zank Group"), is a corporate vehicle through which the fifth, sixth and seventh defendants conducted some business.

6 The fourth defendant, 12 Russell St Holding Pty Ltd ("Russell St Co"), is a special purpose vehicle incorporated for the purpose of purchasing and holding the land situated at 12 Russell Street, Oatley, New South Wales ("the Property").

7 The fifth defendant, Mr Feng Liu ("Liu"), is a director and 30% shareholder of Zank Group, and the sole director and shareholder of Russell St Co.

8 The sixth defendant, Mr Conghan Hu ("Hu"), is a director of Zank Capital, the sole director and a shareholder of Zank & Co, as well as a director and 40% shareholder of Zank Group.[1]

9 The seventh defendant, Lin, provided migration services through his company, Auslink Professional Group Pty Ltd ("Auslink"). At times, Lin has been a 30% shareholder in Zank Group. According to ASIC records, Lin became a shareholder in Zank Group in October 2018 and was a director between 4 June 2021 and 19 November 2021.

10 However, Lin's evidence about his shareholding in Zank Group is inconsistent and contradictory. In the course of giving evidence, Lin first said[2] that he was a shareholder in Zank Group from 18 October 2018 to 22 December 2022 and that he was later removed as a shareholder by Liu without his knowledge. He said that his status as a shareholder then resumed from 9 June 2021 and from 6 June 2022 he became a director of Zank Group. He said that he resigned from this position on 1 October 2022.[3] Lin then said that he lost his shareholding from 22 October 2020 until 9 June 2021.[4] Later, Lin said that he was removed as a shareholder of Zank Group from 8 October 2020 until 6 June 2021.[5]

11 I note that, in the amended defence which Lin filed on 31 January 2024 when he still had lawyers acting for him, he alleged that:

• he was a shareholder in Zank Group between 21 November 2017 and 1 October 2020; and
• Liu removed the shareholding later in or about October 2020.

12 Prior to trial, Lin ceased to retain lawyers and he acted for himself throughout the hearing. His former solicitors, Westlink Legal Pty Ltd, filed a notice of ceasing to act on 27 February 2025. The notice was dated 29 November 2024.

13 On the second day of trial, Yeung reached a settlement agreement with the first to sixth defendants ("Zank Defendants") and discontinued the proceeding against them. The proceeding remained on foot only against Lin.

14 In January 2020, a mutual friend introduced Yang to Lin and represented to Yang that Lin was a lawyer. Yang engaged Lin to act on behalf of himself and his wife and children as their migration agent and to assist with their application for permanent residency in Australia. Between January 2020 and August 2022, Lin provided migration services to Yeung and her husband. During that time, Lin had direct dealings only with Yang and Yang's personal assistant, Ms Pui Sea Lam ("Lam") (also known as Cherry). Lin did not meet with, or speak to, Yeung prior to her arriving in Australia in August 2022.

15 At some point between January and May 2020, while Yeung and Yang's applications for permanent residency were pending, Lin spoke to Yang about deploying $2 million in an Australian company to accelerate the processing of the residency application. The details of the conversation are disputed. However, it is clear that Yang discussed the matter with his wife and they decided that she would make the money available.

16 In about February 2020, Liu, Hu and Lin discussed the possible purchase of the Property.[6]

17 On 14 May 2020 (7:44pm), Lin sent Lam a WhatsApp message which read:

I just spoke to Mr Yang, to arrange his business commitment for his business talent visa application through investment. For the reason, we could approval (sic) of funds ready at first stage as well as endorsement from government.

18 On 16 May 2020 (4:18pm), Hu sent a document titled "Application form REITS Fund" to the WeChat group chat comprising himself, Lin and Liu (the "Group Chat").

19 On the afternoon of 18 May 2020, the following messages were exchanged in the Group Chat:

Lin: @Conghan Hu TELS, the terms regarding withdrawal and interest are still missing.

Lin: [Image]

Lin: Please revise it. @Conghan Hu TELS, my wording is not professional.

Hu: It's already written in there.

Hu: Take another careful look.

Hu: I strongly suggest using 90 days.

Hu: For him, 30 or 90 days makes no difference. But for us, if it's a 30-day redemption, it'll be a big problem.

Lin: 3% return

Lin: 45 days

Hu: 6% p.a. means 3% every 6 months

Hu: 45 days is too short

Hu: I got burned by Old Wang before - 45 days could be a disaster.

Lin: Removed cheque requirement, also removed the minimum of $500,000

Lin: Changed to 3% per year

Lin: I've drafted

Hu: [File: Application form REITS Fund.pdf]

Hu: Okay, I've drafted a new version for you.

Hu: [Image]

Lin: Let me check - what's the interest rate on a regular account at Commbank? Would it exceed 3%?

Hu: Nope

Lin: Then we'll stick with 3%

The image sent by Hu comprised a screenshot of section 6 of the draft REITS Fund application form headed "Investment allocation and payment options". In that screenshot, the bank account details shown were those of Zank Group's transaction account, namely, account 1150 7037 ("Transaction Account") held with the Commonwealth Bank of Australia ("CBA").

20 Later on 18 May 2020 at 3:50pm, Lin sent an email to Lam ("first 18 May email").[7] In that email, Lin:

(a) requested that Lam fill out the application form attached to the email and obtain Yeung's signature;

(b) specifically directed Lam's attention to the payment instructions at section 6 of the form; and

(c) stated that during his telephone conversation with Yang the previous week, Yang confirmed that Yeung would be the sole investor in the fund.

21 The application form attached to the first 18 May email bore the logo of "Zank & Co" in the top right hand corner and recorded the following information (among other things):[8]

REITS FUND

The current Information Memorandum (IM) dated 01 Feb 2018, for the REITS FUND includes information about purchasing units in the Fund. Any person who gives another person access to the application form must also give the person access to the IM and any incorporated information. You should read the IM and any incorporated information before completing this application form.

The trustee of the Fund is ZANK Capital Limited ABN 58 106 064 644, AFSL 246943. ZANK Capital or a financial adviser who has provided an electronic copy of the IM and any incorporated information, will send you a paper copy of the IM and any incorporated information and application form free of charge if you so request.

...

Contact details

Mail your completed application form and identity verification documents to:

Zank & Company Pty Ltd

Level 2, 115 Collins St

Melbourne VIC 3000

ZANK Capital Limited

Suite 3503, 31 Market Street

Melbourne VIC 3000

If you have any questions regarding this form or the required Customer Identification requirements, please contact our Investor Services team on invest@zank.com.au.

22 Section 6 of the application form read as follows:[9]

6. Investment allocation and payment options

Please indicate how you will be making your new or additional investment and the amount you wish to invest. I/we are making my/our investment via:

Direct Credit/EFT see below.

Fund name ZANK REITS FUND

REITS FUND

Zank & Company Pty Ltd

Level 2, 115 Collins St,

Melbourne VIC 3000

P 1300 501 817 E invest@zank.com.au

Initial investment

$2,000,000

Direct Credit / EFT Instructions

Alternatively, you can direct credit your application funds to:

ZANK Capital Ltd ATF REITS FUND

Commonwealth Bank of Australia

BSB 062 005

Account number 1150 7037

23 Although the application form represented that the Transaction Account belonged to Zank Capital, it was in fact held by Zank Group.

24 Section 11 of the application form further provided:[10]

11. Declaration and applicant(s) signature(s)

Please read the declarations below before signing this form. The signatures required are detailed at the bottom of this form.

I/We declare that:

...

• I/we acknowledge that the minimum redemption notice is 90 days.
• I/we understand the dividend is 3% p.a., distributed at the end of each calendar quarter.

25 Following the receipt of the first 18 May email from Lin, Lam sent a series of WhatsApp messages to Lin, including a request that he send her the information memorandum ("IM") referred to in the application form.[11]

26 Later on 18 May 2020 at 5:41pm, Lin sent a second email to Lam ("second 18 May email").[12] The email relevantly stated:

I can provide IM, but hopping (sic) doesn't get this wrong please. I have spoken to Mr Yan (sic) about the purpose of allocation these funds and the reason why we need this structure. I am not a financial planner can not introduce any product for investing meaning. The structure of the investment is only for:

• SIV states level nomination options

• Prove funds ready for further business activities

• For endorsement etc.

• Secure the funds with Australian register a public financial company, and for future business structure (Trust or SPV)

There is no investment risk & benefit shall be concerned, and I am more than happy to give you more detail and information regards this matter if you could kindly provide me with permission of disclosure from Mr Yang.

As to legally income reference, if there is no taxation certificate, statement from a qualified accountant to approve of taxation clarence (sic) or exemption by law could be accepted.

27 On 18 May 2020 at 7:11pm, Lam sent Lin a WhatsApp message requesting the bank account details for the payment of the $2 million. Lin responded the next day at 4:31pm, stating: "You will find deposit accounts detail on the application form section 6."

28 On the evening of 18 May 2020, Lin sent a message to Hu and Liu in the Group Chat asking for the IM. Hu asked "What IM?" and Liu told him to call him to talk about it.

29 On 20 May 2020, Lam sent an email to Lin attaching the completed application form signed by Yeung.

30 On 21 May 2020, it appears[13] that Lin, Hu and Liu exchanged the following messages in the Group Chat:

Lin: And don't mention anything about paying interest. I've already said it's just a formality

Lin: [Screenshot of the email sent from Lin to Lam on 18 May 2020 at 5:41pm]

Hu: What's this?

Lin: These are for immigration clients.

Lin: Not investment. Just transferring the money here first, and it will be used for business immigration later.

Hu: So why do we need an investment application form then?

Liu: Their email clearly stated there's no risk and no return; it's just a temporary transfer, not an investment.

Hu: Okay, then I won't interfere anymore.

Hu: I'll say it again: these documents are all drafts. Don't send them to anyone else for now.

31 Lin challenges the messages set out in the preceding paragraph on the basis that they are not genuine. The excerpts are taken from the copy included by the Zank Defendants in the Supplementary Court Book.[14] Lin contrasted the above with his copy of the WeChat messages contained on pages 36 to 38 of his Exhibit A. He says that page 36 is the last message in his records before the picture of the car posted by Liu. Lin says that there is no equivalent message above the picture of the car in his version of the Group Chat.

32 The plaintiff contends that the images were all screenshots and were capable of manipulation. The plaintiff relies upon the messages as appearing in the Supplementary Court Book.

33 I consider it difficult to make a definitive finding on the authenticity of the quoted messages and whether one or more of the Zank Defendants created the messages after the event or whether Lin deleted messages which he received from and sent to the others in the Group Chat. I make no finding on the point for three reasons. First, I suspect that in order to have a sound basis to make a decision on the matter, it would be necessary to have some expert technical evidence to assist in determining whether there has been a creation or deletion of evidence. Secondly, I have not heard from the Zank Defendants. Given the gist of Lin's allegations against them regarding this point, they should have the opportunity to address the matter. Thirdly, I am able to reach my conclusions, for example regarding the allegations of misleading or deceptive conduct and deceit, without needing to rely upon the disputed evidence. To that extent, it is unnecessary to reach a conclusion on the matter.

34 As at May 2020, the REITS Fund did not exist. This was common ground at the trial.

35 On 3 June 2020, Yeung instructed her bank to transfer $2 million from her account to the bank account shown on the application form, being the Transaction Account. Zank Group's bank account received the $2 million on 5 June 2020. Immediately prior to the receipt of the $2 million, the balance in the Transaction Account was $57,868.

36 On 5 June 2020 at 2:01pm, Lin sent Lam a WhatsApp message stating that the $2 million "has been received via Zank Capital" and that he would issue a receipt later that day.

37 On 8 June 2020 at 11:45am, Lin sent an email to Lam attaching:

(a) an Investment Certificate which purported to certify that Ning Xu (the plaintiff) was the registered holder of 2 million units in the REITS Fund as at 8 June 2020. The certificate was executed by Hu on behalf of the "Trustee";

(b) a letter on the letterhead of Zank & Co dated 8 June 2020, which stated:

Dear Ning Xu,

Thank you for your investment in our fund product. We have received your investment, which is AUD $2,000,000.00, and it will be invested into our REITS Fund.

Again, thank you for your trust.

Conghan Hu

DIRECTOR

(c) Zank Capital's Australian Financial Services Licence ("AFSL"); and

(d) a photo of Lin's business card.

In the email, Lin provided the name and phone number of the "Zank Capital administrator and funds trustee", represented as being Conghan Hu, director of Zank Capital.

38 On 8 June 2020, Lin and Hu exchanged the following messages in the Group Chat:

Hu: By the way, does this person need to be paid interest?

...

Lin: After three months

Hu: Oh

Hu: The dividend will be paid at the end of September

Lin: Interest of 3% per year needs to be paid

Lin: No need to distribute, settle every six months

39 On 9 June 2020, Liu authorised the transfer of $990 from the Transaction Account to pay for the registration of Russell St Co. That same day, Russell St Co was registered.

40 Between 11 and 12 June 2020, Lin drew down a total of $300,000 from the Transaction Account. CBA tracing records obtained by subpoena show that on 11 and 12 June 2020, User ID 12726329 authorised five transfers out of the Transaction Account as follows:

• $50,000 to Lin's personal bank account ending in 0730 ("Lin's personal account"), with the transaction description "commission";[15]
• $100,000 to an account under the name "Xiaoyan Zhang" ("Xiaoyan Zhang account"), with the transaction description "Funds transfer";[16]
• $50,000 to an account under the name "Auslink West Pty Ltd", with the transaction description "Funds transfer";
• $50,000 to the Xiaoyan Zhang account, with the transaction description "Funds transfer"; and
• $50,000 to Lin's personal account, with the transaction description "SIV Charge".

There is no dispute that the User ID number referred to Lin. Lin agreed that all five amounts either went to his personal account or his Auslink account.[17]

41 On around 14 June 2020, Liu and Hu, on behalf of Zank Group, made an application to invest $1 million in the Zank Income Fund, a fund administered by Vasco Trustees Limited, a third party trustee company.

42 On 16 June 2020, a new CBA bank account numbered 1202 0977 was opened in the name of Zank Group ("Savings Account"). Liu and Hu were the authorised users of the Savings Account.

43 On 16 June 2020, Liu transferred $1.7 million from the Transaction Account to the Savings Account. After this transfer, the balance in the Transaction Account was $56,878.02.

44 On 17 June 2020, $500,000 was transferred from the Savings Account back to the Transaction Account.

45 On 18 June 2020, Liu transferred $190,000 from the Savings Account to the Transaction Account with the transaction description "12 russel".

46 On 19 June 2020, Hu transferred $190,000 from the Transaction Account to a trust account numbered 45097 0371 held by Mackenzie Legal ("Mackenzie Account") with the transaction description "12 russel street". This amount was the deposit for the Property.

47 On 29 June 2020, Hu authorised the transfer of $930,000 from the Transaction Account to an account in the name of "Sargon CT as custodian of the Zank Income Fund" ending in 3008 under the transaction description "Zank Group Invest".

48 On about 2 July 2020, Russell St Co entered into a contract to purchase the Property for $3.8 million.

49 On 7 July 2020, Lin transferred $100,000 from the Transaction Account to his personal account with the transaction description "Winch project". Lin used the money to finance his wife's purchase of a 50% interest in a law firm in Western Australia, Winch Legal.[18]

50 On 13 July 2020, Lin transferred a further $100,000 from the Transaction Account to his personal account, again with the transaction description "Winch project".

51 On 13 July 2020, Vasco Trustees Limited issued Zank Group an Allocation Statement, which indicated that $930,000 had been invested by Zank Group in the Zank Income Fund. Michael Gaspert signed the letter on behalf of Vasco Trustees Limited.

52 Between September 2020 and February 2021, the following amounts were transferred from the Transaction Account to Lin's personal account:

(a) $150,000 on 16 September 2020. Lin said that he remembered making this withdrawal. He admitted he then transferred $80,000 to Winch Legal (his wife's law firm) as payment for its services. Separately, bank records show that he transferred $50,000 to the account of Auslink;

(b) $11,985.48 on 9 November 2020. Lin admitted transferring this amount. However, he denied that this amount came from Yeung's $2 million;

(c) $1,976 on 10 November 2020;[19]

(d) $2,763.15 on 10 November 2020;[20]

(e) $14,890.59 on 30 December 2020. Lin said that this was a payment to the government for Yang and Yeung's visa applications. When confronted with the fact that he had also obtained the same amount for the same purpose from Yang or Yeung's credit card, he did not offer a coherent answer; and

(f) $180,000 on 4 February 2021. Lin accepted that he received this amount. He agreed that he then transferred $80,000 to his wife and the remainder on various expenditures, including ATM withdrawals at the Star Casino at Pyrmont.

The evidence did not explicitly reveal who authorised the payments. However, the subpoenaed bank tracing records indicate that these amounts were transferred from the Transaction Account to Lin's personal account.

53 On 5 November 2020, $190,000 was transferred from the Mackenzie Account to a third party account held in the name of Raymond Sidney Hannah. The accompanying transaction description and notation said "Deposit Release". Raymond Sidney Hannah was the vendor of the Property. Again, the evidence did not disclose who authorised the transfer.

54 On or about 16 November 2020, Liu applied for a $2.85 million loan from the CBA in order to complete the purchase of the Property.

55 On 12 January 2021, Russell St Co finalised settlement of the Property.

56 In about January 2021, the CBA registered a mortgage over the Property in dealing number AQ710804.

57 On 7 July 2021, Liu, Hu and Lin held a meeting of Zank Group's shareholders. The minutes of that meeting record the following:

1. All Zank Group shareholders agreed to the contents of the Zank Capital shareholder meeting minutes. Below are the summary of book keeping until 30.6.2021.
2. Zank Group acts as the trustee for Zank888siv Funds, enjoying 50% of the profits according to established or compliant structures.
3. All shareholders of Zank Group agreed that 12 Russell Street Pty Ltd and the property-holding project would be held by shareholder Feng Liu on behalf of Zank Group due to issues related to loans and other matters.
4. Currently, Zank Group has made payments through 12 Russell Pty Ltd or directly for property deposits, taxes, and design Development Application (DA) fees, totaling (sic) $1,296,010.51.
5. All Zank Group shareholders agreed the company would cover ongoing expenses, including loan interests, development, and sales costs. The company would continue financing to support the project until achieving the best outcomes regarding reality and benefits.

Liu, Hu and Lin each signed the minutes. On the page signed by Lin, the following table appeared beneath his signature:

58 On 18 August 2022, Yeung and Yang obtained permanent residency in Australia.

59 Later in August 2022, Yang and Lin had a meeting at the Crown Tower in Sydney. During that meeting, they discussed the redemption of the $2 million investment. At that meeting, Yang told Lin that he wished to redeem the investment with interest. Lin agreed, but admitted that the money was not invested in the medical company in Perth. He said that instead of that, he had used the money to purchase land with a few friends. This land was the Property. Lin said that the value of the land had increased. Yang then said that he did not want the interest or the profits, but only wanted the principal returned. Lin agreed to do so.[21]

60 On 9 September 2022, Lam asked Lin to advise her of the procedure for the return of the "fund money". Lin responded that he would send the application form.

61 On 15 September 2022 at 2:28pm, Lin emailed Lam a blank generic withdrawal request form addressed to Zank & Co. Lam and Lin exchanged the following WhatsApp messages in relation to the withdrawal request form:

Lam: Investor number?

Lin: do you have original application for Zank Reitts (sic) Funds, if there is no information regards client id, just leave it blank.

Lam: What is the fund name then?

Lam: Zank reits funds?

Lin: Shold (sic) be that, in original application form.

62 On 15 September 2022 at 6:25pm, Lam emailed Lin the completed withdrawal request form on behalf of Yeung. The form requested the withdrawal of $2 million from the "REITS FUND" and was signed by Yeung.

63 In accordance with the 90-day redemption period stated on the application form, the $2 million investment was to be redeemed and repaid to Yeung by 15 December 2022. Between October and December 2022, Lam sent Lin numerous WhatsApp messages following up on the status of the redemption.

64 On 22 December 2022, Lin sent a WeChat message to Hu which stated:

Regarding the RETTI's (sic) investment default, the client must enter the legal process, the company's internal settlement and the matter are not related. I told you, the client realizes that there is no existing fund, and the application account and account name have problems. I have delayed it for a week, but you have not given me anything since our last conversation.

65 On 18 January 2023, Infinity Lawyers sent a letter of demand on behalf of Yeung to Zank Capital and Zank & Co. The letter was addressed to Hu. The letter stated that Yeung had never received the IM or any dividend distributions to date. The letter demanded the payment of $2,156,986.30 within 7 days of the letter. Yeung did not receive any response to her letter of demand.

66 At the time of trial, none of the defendants had repaid to Yeung the $2 million or any part thereof.

67 The parties agreed that the issues arising for determination by the Court are as follows:

1. What was the purpose of the plaintiff's payment of $2 million to Zank Group's Transaction Account received on 5 June 2020?

2. Was the $2 million (or part thereof) used:

(a) to purchase the Property in the name of Russell St Co; and/or

(b) by Lin for his own benefit or the benefit of third parties?

3. Was the $2 million held on trust by Lin for the plaintiff?

4. If the answer to Issue 3 is "yes", did Lin breach any of his duties as trustee by misappropriating all or part of the $2 million in the manner described in Issue 2 above?

5. Did Lin owe a fiduciary duty to the plaintiff?

6. If the answer to Issue 5 is "yes", what was the scope of that fiduciary duty?

7. Did Lin breach his fiduciary duty to the plaintiff by misappropriating all or part of the $2 million in the manner described in Issue 2 above?

8. Did Lin make:

(a) the "Investment Representation";

(b) the "Bank Account Representation"; and/or

(c) the "Risk Representation",

as defined in the amended statement of claim?

9. If the Risk Representation was made, was that about a future matter without reasonable grounds for making such a representation?

10. If the answer to any of Issues 8 or 9 is "yes", were any of those representations misleading or deceptive, or likely to mislead or deceive, within the meaning of s 18 of the Australian Consumer Law ("ACL"),[22] or alternatively s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) ("ASIC Act")?

11. Further or alternatively to Issue 10 above, did Lin make a statement that was false in a material particular, or was materially misleading, in breach of ss 1041E and 1041F of the Corporations Act 2001 (Cth) ("Corporations Act")?

12. If it is found that any of the $2 million was misappropriated in the manner described in Issue 2, did Lin commit the tort of deceit in his dealings with the plaintiff in respect of any such misappropriation?

13. Is Lin liable to pay the $2 million (or any part thereof) to the plaintiff as money had and received?

14. Was there an agreement between Yeung, Yang and Lin whereby if Lin provided documents and information in support of Yeung's claim, neither Yeung nor Yang would make claims against Lin in this or any other proceeding?

15. If the answer to Issue 14 is "no", did Yeung and/or Yang represent to Lin that they would not sue or make claims against him in relation to the matters arising from or in connection with this proceeding if Lin provided documents and information to support Yeung's claims?

16. If the answer to Issue 15 is "yes", are Yeung and/or Yang estopped from resiling from the representation by reason of it being unconscionable for them to do so?

17. If the answer to Issue 16 is "yes", is Lin disentitled from relying on the equitable doctrine of estoppel?

18. What loss or damage has the plaintiff suffered (if any)?

19. In respect of the loss or damage arising from any breach of trust or fiduciary duty by Lin so found:

(a) is Lin liable to account to the plaintiff for his dealings and transactions with respect to the $2 million or the traceable proceeds of those funds?; and

(b) is the plaintiff entitled to equitable compensation? If so, what is the quantum of such equitable compensation?

20. Is the plaintiff entitled to aggravated and/or exemplary damages, and if so, what is the quantum thereof?

69 Yeung gave evidence herself and called her husband, Yang, and his executive assistant, Lam.

70 Yeung's evidence was quite brief. She said that in early 2020, she and Yang decided to apply for permanent residency in Australia. She left the details of this arrangement to Yang and Lam. Yeung relied heavily upon her husband and Lam in following the progress of the immigration application and the production of documents. At Yeung's request, Lam would prepare documents in English for Yeung to sign and/or send. Yeung had little facility with the English language.

71 Yeung agreed that she and her husband gave instructions to Lam to send to Lin the REITS Fund application form signed by Yeung. Yeung did not have any direct discussions with Lin in 2020. In relation to the redemption of the $2 million requested in August 2022, Yeung had no direct involvement with Lin. She left the redemption task to Yang and Lam.

72 Yeung denied ever having any discussion with Lin about the topic of agreeing not to sue him.

73 In circumstances where Lin did not cross-examine Yeung and her evidence was otherwise plausible and consistent with both the contemporaneous documentary evidence and the oral evidence of other witnesses, I accept Yeung as a witness of truth. She presented as a reliable and credible witness and I have no reason to doubt her evidence.

74 Yang gave evidence at trial about his dealings with Lin. He said that he first met Lin in early 2020 when Yang and his wife were seeking permanent residency in Australia. Shortly after, Lin became the migration agent for Yang and his family pursuant to an oral agreement. Through his company Auslink, Lin sent invoices to Yang from time to time for work done in connection with the permanent residency application. Ultimately, Yeung and her family paid Lin or his company about $405,000 for the migration services he rendered.

75 Yang said that Lin told him that if he invested $2 million in a medical company based in Western Australia, that would accelerate the visa application process. Yang said that because he trusted Lin, he agreed to make the investment.

76 Yang cannot read English, so when he was presented with documents from Lin, he relied upon his assistant, Lam. As a result, Yang relied upon Lam to advise him about the details of the investment, including matters such as the absence of risk and the three-month redemption period.

77 Yang said that it was not until he met Lin in about August 2022 to redeem the investment that he first learned that the $2 million was not invested in the medical company.[23] It was only then that Lin told him that Lin used the money to purchase the Property with some friends. Yang said he told Lin that he just wanted to recover the principal; he did not require interest or a share of the profits. Yang said Lin agreed to return the principal.

78 Yang denied discussing with Lin in 2022 or 2023 that he would not sue him in connection with the matters arising in this case.

79 In my opinion, Yang's cross-examination did not have any major impact on his evidence. Yang did not contradict himself or give answers which were inconsistent with either his earlier oral evidence or the documentary evidence. Part of the time in the witness box, Yang admitted that he struggled to contain his emotions. He seemed angry in responding to some questions and his dislike of Lin was barely concealed. However, despite Yang being a little volatile, I consider that he was a truthful and reliable witness. He presented as an experienced businessman who was familiar with the details of the transaction which directly affected the financial affairs of his family. Yang answered questions directly. He did not dissemble or prevaricate. On matters of contested evidence, I would accept his testimony where it conflicted with Lin's.

80 Lam gave evidence about the role she played in assisting Yeung and her husband with their bid to obtain permanent residency in Australia. Lam played an important role because unlike Yeung and Yang, she had a good command of written and spoken English. She was the person through whom Yeung and Lin communicated. She engaged in extensive messaging and correspondence with Lin as well as having many conversations with him.

81 Lam presented in Court as an organised witness with a good memory. Her evidence on most points was supported by contemporaneous documents. She engaged directly with the questions asked. She answered in a straight-forward manner and was not evasive. I regard her as an honest and reliable witness. In any conflict of evidence between her and Lin, I would accept her evidence in preference to his.

82 The plaintiff was critical of Lin's evidence and contended that Lin was a "cunning, devious, artful and self-serving witness whose evidence should be approached with considerable caution".[24] Lin rejected this characterisation of him and his evidence.

83 Overall, I was not impressed with Lin as a witness. I do not consider him to be a reliable or credible witness whose testimony I could unquestioningly accept. I have reached this view of Lin for a number of reasons.

84 First, Lin often failed to give direct answers to questions. He was needlessly evasive and unwilling to engage with the point of the question.

85 Secondly, although Lin seemed capable of understanding spoken English, he insisted upon the use of an interpreter when giving evidence. This was odd in several respects:

• at directions hearings which I conducted before the trial, Lin had appeared on his own behalf without needing an interpreter. I held these hearings in English and Lin participated freely, representing himself, and suffered no obvious disadvantage;
• when asked questions during the giving of his evidence, Lin quite often answered the question in English before the interpreter completed the translation; and
• notwithstanding the presence of an interpreter, Lin often asked that questions, even some which were fairly clear and short, be repeated. This happened more frequently than one would normally expect. It meant that a question would be asked four times (twice by counsel and twice by the interpreter) before Lin answered. This conduct ensured that Lin had extra time to formulate his answers. This seemed to be an intentional tactic by Lin designed to give him the maximum opportunity to craft his responses to best suit his story. It often looked contrived because he usually seemed to understand the question when asked in English. His conduct in wanting questions repeated was suspicious and made him look evasive and untrustworthy.

86 Thirdly, there is a series of matters regarding the investment in the REITS Fund which Lin did not address satisfactorily, or at all, in his evidence. For example, Lin:

• did not ever produce for Lam the IM she asked for in relation to the REITS Fund. This was despite the fact that the REITS application form itself said that a prospective investor "should read the IM and any incorporated information before completing the application form";[25]
• did not reveal the fact of his taking, much less the justification for taking, on 11 and 12 June 2020, about $300,000 from Yeung's $2 million to use for his own purposes;
• did not explain why he advised the plaintiff to put $2 million into a bank account which did not belong to Zank Capital, the trustee of the REITS Fund, but to Zank Group;
• did not explain why he failed to reveal that he was a signatory to, and had access to, Zank Group's Transaction Account;
• confirmed to Lam on 5 June 2020 that Zank Capital received the $2 million when it did not;
• sent an email to Lam on 8 June 2020 which attached an investment certificate, a letter confirming receipt of funds, a copy of Zank Capital's AFSL and a photo of Lin's business card. The investment certificate purported to be from the REITS Fund offered by Zank & Co, confirming Yeung had two million $1 units in the Fund. This was false because there was no such fund in existence and because the money went to a Zank Group account, not an account of Zank & Co. The confirmation letter, which was signed by Hu, was on the letterhead of Zank & Co and said the $2 million investment received would be invested in "our REITS Fund".[26] The confirmation letter was also false because there was no REITS Fund and the $2 million was paid into an account of Zank Group. Having regard to the relationship and dealings in and after May 2020 between Lin, Hu and Liu, I do not accept Lin's claim that he did not know until about September 2022 that there was no REITS Fund. Further, having regard to the comments by Liu in May 2020 that they would use the plaintiff's money for the Property, I consider it more likely than not that Lin knew before the plaintiff transferred the $2 million that the money was not to be held safely in a risk-free account pending the grant of the visa or residency application. However, he said nothing to Lam and sent her documents which supported a different and unfounded narrative; and
• did not disabuse Yeung of the notion that there was no risk with the investment. There is a difference between using money to invest in real property and placing money into a holding fund operated by the holder of an AFSL.

87 Fourthly, the matters referred to above indicate that Lin has a casual attitude to the truth. His conduct suggests that he cannot be relied upon to speak up and reveal what he knows where it might embarrass him or expose his poor conduct. If Lin were honest, I would have expected him:

(a) to inform the plaintiff or her representatives as soon as he was aware that:

• the $2 million was not paid into the bank account of the trustee, Zank Capital;
• the $2 million was not simply being held in a liquid or cash account but was used in part to purchase the Property. The plaintiff did not authorise expenditure of her funds for this purpose; and
• Lin himself had taken money from the $2 million produced by Yeung for his own benefit; and

(b) to use the $2 million or any part thereof only for purposes which the plaintiff authorised; and

(c) not to take part of the $2 million for his own benefit, especially when he knew that the plaintiff had not authorised such action.

88 Fifthly, the evidence which Lin gave was internally inconsistent. According to his affidavit, affirmed on 20 February 2023, in about May 2020, Lin thought of a way to speed up the plaintiff's visa application. Lin said that he told Yang that because the family's visa application was supported by the Western Australian Government, he suggested making a $2 million investment into a medical company in Western Australia to accelerate the application. Lin said that upon receipt of the funds, the medical company would prepare a business plan which would be beneficial in the government's consideration of the visa application. Lin said that Yang first needed to transfer the $2 million into "our fund" to show the State government that he had the money ready to invest. [27] Lin said that, ultimately, the fund would pay the money to the medical company.

89 In his oral evidence at trial, Lin confirmed the truth of the above evidence.[28]

90 It follows from the first part of the affidavit evidence referred to in paragraph 88 above that Lin suggested making the $2 million investment into the medical company in Western Australia to accelerate the visa application. Logically, then, the investment in the medical company preceded the grant of the visa. Indeed, the major objective in making the medical investment was to secure a favourable outcome on the visa application. However, during his oral evidence Lin said that the money was to be paid into "our fund" and only later invested in the medical company, after the approval of the visa. Lin did not explain this inconsistency about the flow and use of the $2 million. The inconsistency is all the more concerning in circumstances where, as I have noted, prior to Yeung's transfer of the $2 million Lin likely knew that the $2 million (or part thereof) would be used to purchase the Property.

91 There are also other inconsistencies in Lin's evidence. For example, at the trial (T325), Lin said that Yang approached him in February or March 2020 to query whether it might speed up the application if he spent $2 million in Australia. This meant that it was Yang's idea to spend the $2 million to assist in obtaining the visas.[29] Further, if the aim of the $2 million investment was to show the Western Australian Government that Yeung had money available in Australia to invest, then that could be done by directly investing in the medical company. Lin did not explain why an indirect payment via "our fund" was satisfactory but a direct payment into the medical business was not.

92 Overall, I regard Lin as a shifty and untrustworthy witness. Even allowing for an element of confusion due to language issues, he appeared to be frequently engaged in a process of calculation - working out how much of his story to reveal, precisely which parts and what effect any revelation would have on the rest of his case. Based on watching Lin give evidence and considering that evidence, I did not feel confident that Lin was honouring his affirmation. Lin's conduct towards Yeung reflected serious dishonesty and concealment. Other than where his evidence was uncontroversial, corroborated by other witnesses or uncontentious documents, or was against interest, I would be unlikely to accept his evidence.

Issue 1: what was the purpose of the plaintiff's payment of $2 million to the Transaction Account received on 5 June 2020?

93 There is some controversy and conflicting evidence about the purpose of the $2 million payment which the plaintiff made.

94 In his affidavit affirmed on 20 February 2023, Lin gave an account which is set out in paragraph 88 above.

95 In his oral evidence at trial, Lin revisited the matter. Lin said that Yang raised with him the prospect of assisting the visa application by bringing $2 million into Australia. Lin did not put to Yang that this was his idea, contrary to what Lin said in his affidavit. Lin claimed that he checked the matter out with lawyers. He claimed that he told Yang that, if a State government supported his proposed business investment, it might help. Lin said that he told Yang that there were opportunities for investment with medical laboratory-type businesses in Western Australia. He also said that even if Yang had a good business plan, he needed to show that he had sufficient money in Australia to implement the plan (T325-6).

96 Lin suggested that he intimated to Yang that if he did not obtain the primary visa he sought, there might be an alternative path through a significant investor visa (T327). In that event, Yang could put money into a company with a "public investment licence". Lin said he knew of such a company. Lin claimed that he said this would be a short-term arrangement. Once the visa was approved, Yang could withdraw the money from the fund and use it to invest (T329).

97 In his cross-examination of Yang, Lin suggested that he told Yang:

(a) there was a medical company which could endorse Yang's business project to speed up the visa application;

(b) the medical industry is one which the Western Australian Government prioritises;

(c) instead of putting $2 million into the visa application, Yeung could prove to the Western Australian Government that she had funding available and this would benefit either the subclass 132 visa application or a significant investor visa application;

(d) having the $2 million in Australia proved he had the funding to make an investment here; and

(e) he should put the $2 million into a temporary investment on a short term arrangement and when the visa was approved, Lin would move the money to the Western Australian medical company.

98 Yang agreed with (a) and (b). Yang denied (c) and said Lin told him the money would be a contribution to Western Australia and would benefit the subclass 132 visa application because the investment was in Western Australia. As to (d), Yang denied Lin's suggestion and said Lin told him to put the money into a medical company in Perth and that a particular medical company Lin named was an especially good one. Finally, regarding (e), Yang again denied Lin's proposition and said Lin told him to put the money into the Perth medical company and, as soon as the visa was obtained, he could redeem the investment in three months. Lin said that Yang would not lose any principal.

99 Yeung's evidence does not clarify the issue. She said that her husband told her that injecting money into Australia might speed up the visa process. That appeared to be the extent of the detail he provided to her. Yang too said he mentioned it only briefly to his wife. However, he trusted Lin because he was introduced to him by a friend who told Yang that Lin was a lawyer.

100 Ultimately, I consider that any confusion or uncertainty about the detail of Lin's proposal is irrelevant. This is because it does not have any determinative bearing on the issues to be resolved. Yeung is the plaintiff in the proceeding. In relation to her, I note that:

• she derived her knowledge about matters in respect of investing the $2 million in Australia from her husband and she relied on him;
• she relied upon Lam in relation to the documents she had to understand and sign;
• she relied upon the application documents which Lin sent Lam on 18 May 2020; and
• she had no direct dealings with Lin in 2020.

101 In final submissions, Yeung submitted that the purpose of the plaintiff's $2 million payment was for an investment in the REITS Fund of which Zank Capital was trustee. She submits that this investment was intended to demonstrate to the Australian immigration authorities that the plaintiff and Yang had funds in the REITS Fund ready for future business activities. The payment would serve the purpose of "securing those funds with an Australian 'registered public financial company' for a future business structure" once visas had been obtained.[30] In other words, the money was meant to be "preserved", kept in a secure fund by an Australian registered public company with an AFSL, and only deployed for use once the visas had been granted.

102 Yeung submits that no part of the $2 million was agreed, or intended by her, to be used for:

(a) the payment of migration expenses;

(b) immediate investment in any real estate development project; or

(c) the discretionary use of Zank Group or its shareholders, or any entity other than Zank Capital as trustee for the REITS Fund.

103 Yeung also alleges that the $2 million investment was intended to generate a 3% per annum financial return, as indicated on the application form.

104 Lin submits that he understood that the money would be invested in the REITS Fund. He submits that, in discussions with Yang, he told Yang that, in connection with his visa application, he would need to prove that he had sufficient funds in Australia to invest after his visa application was successful. He suggested to Yang that he knew of a company with an "investment licence" in which Yang should invest $2 million for this purpose. Lin says that he told Yang that this was intended to be a short term arrangement and that, after the visa was granted, Yang would be able to withdraw the money from the fund and invest it.

105 Although Lin did not agree with this, I consider it likely that at the time Lin obtained the funds from Yeung, he was aware of the interest which Liu, and quite possibly Hu, had in the Property and the likelihood that Yeung's money would be used, at least in part, to purchase the Property.

106 In the circumstances, I find that the purpose of the $2 million payment was to improve the likelihood of a favourable decision on the plaintiff's visa application. The payment showed a commitment to Australia and the undeniable existence of funds ready for investment in future business activities. Investment in the REITS Fund was to emphasise Yeung's bona fides. The investment was to have little or no risk, be easily redeemable on three months' notice and generate interest, or a dividend, of 3% per annum payable at the end of each calendar quarter.

107 The following reasons underpin my view as to the purpose of the $2 million payment:

(a) there were conversations between Lin and Yang about the $2 million. It was common to both versions of the evidence that the money was intended to help the prospects of a positive outcome on the visa application;

(b) on 14 May 2020, Lin and Lam commenced a WhatsApp conversation. When Lam enquired whether there was "an investment project", Lin responded that he had spoken to Yang to "arrange his business commitment for his business talent visa application through investment". On 15 May 2020, Lam requested the relevant documents to be sent to her. In response, on 18 May 2020, Lin sent a message telling Lam that he had sent her an email;

(c) in the first 18 May email to Lam, Lin attached the REITS Fund application form described at paragraphs 21 to 24 above. Section 6 of the form indicated that the money would be invested in a fund named "ZANK REITS FUND", and that the recipient of the funds would be "ZANK Capital Ltd ATF REITS FUND";

(d) in response to the first 18 May email, on 18 May 2020 Lam sent Lin WhatsApp messages requesting the IM referred to in the application form and requesting the bank details for the remittance. Lin responded by requesting the return of the signed application form and directing Lam to the bank account details specified in section 6 of the application form;

(e) in Lin's second 18 May email to Lam, he clarified the purpose of the investment. The first bullet point in the email indicated that the investment was for the plaintiff and Yang's significant investor visa application. The second and fourth bullet points stated that the purpose of the payment was to prove to immigration authorities that the plaintiff had funds ready for further business activities, and that the funds would be "secured" in a public company, without any "investment risk". Any actual investment would only occur in a future business structure, after the visas had been obtained;

(f) in court, Lin also gave evidence that he had suggested to Yang that, in support of his visa application, he needed to prove to the Australian Government that he had sufficient funds in Australia to invest. He suggested that Yang invest $2 million in "our public company" for this purpose under a short term arrangement, and once the visa was granted, Yang could withdraw the money from the fund; and

(g) the purpose of the payment was not to purchase the Property. This would have been inconsistent with the purpose disclosed in the second 18 May email, which required the money to be held to show the authorities that the money was available, and to be "secured" in a public company. If it was spent on the Property, it would not be available for this purpose. Moreover, the REITS Fund application form and the 18 May 2020 emails do not refer to the Property. In cross-examination, Lin confirmed that he did not tell Yang or Lam about the Property until late 2022, more than two years after the $2 million was transferred.

108 In addition to the immigration-related purpose described above, I find that the $2 million investment had a further purpose of generating a 3% per annum return as the plaintiff alleges. I say this because:

(a) both the unsigned version of the application form which Lin provided to the plaintiff and the version which she signed stated unambiguously that a dividend of 3% per annum would be distributed at the end of each calendar quarter;

(b) Hu and Lin exchanged messages in the Group Chat to discuss what interest rate to put in the application form, ultimately deciding on 3% per annum. During cross-examination, Lin confirmed that, in those messages, he gave Hu his suggestions or opinions regarding the interest rate. This indicates that, from Lin's perspective, a financial return of 3% per annum was an intentional feature of the investment which he considered appropriate for Yeung and Yang;

(c) the second 18 May 2020 email states "[t]here is no investment risk & benefit shall be concerned". In oral evidence, Lin did not provide a clear explanation of what he meant in the email. The language is ambiguous, as it could be interpreted to mean that the investment would "concern" or deliver benefits (such as the 3% dividend), but it could also indicate that there would be no benefit. I prefer the former interpretation because it accords with the other documentary evidence, namely the application form (which Lin had sent to Lam only a few hours earlier that same day, 18 May 2020) and the Group Chat messages described in paragraph (b) above; and

(d) Yang gave oral evidence that he had expected to collect interest from the investment, until he told Lin in 2022 that he would no longer require the interest and was content to receive only the $2 million principal. Lin did not contest this.

109 In short, the purpose of the plaintiff's $2 million payment into the REITS Fund in early June was twofold: first, to increase the likelihood of a good outcome in the visa application by showing that the plaintiff had ready funds in Australia available for investment when she obtained permanent resident status - there was no intent by the plaintiff to make an immediate investment in real estate; and secondly, to generate a 3% per annum return on the money.

Issue 2: Was the $2 million or part thereof used (a) to purchase the Property in the name of Russell St Co; and/or (b) by Lin for his own benefit or for the benefit of third parties?

110 The plaintiff submits that $911,047 of the $2 million was used to purchase the Property in the name of Russell St Co. This is based on two affidavits of Liu affirmed on 5 April 2023, in which Liu disclosed:

• a liability of Zank Group in the amount of $911,047.98, described as "Account Payable to Olivia Yeung"; and
• a liability of Russell St Co in the same amount, described as a "loan from Zank Group".

111 The plaintiff asserts that, taken together, the affidavits support an inference that $911,047 of the $2 million was used to purchase the Property. She further submits that, to the extent that Lin led no detailed evidence particularising the contribution of the $2 million to the purchase of the Property in excess of $911,047, the principles in Jones v Dunkel apply.[31] She says that this is especially so in circumstances where Lin could have adduced but did not adduce any evidence on this key topic.

112 The plaintiff also contends that Lin directly received and expended for his own purposes, and admitted receiving for his own or his wife's benefit, sums totalling $761,615.22. This is said to comprise amounts transferred by Lin out of the Transaction Account to his personal account, his company's account or third party accounts, as well as amounts transferred by unknown persons to Lin's personal account. Alternatively, she says that Lin used $590,000 for his own benefit. This was based on the evidence of Mr Brett Warfield ("Warfield"), the expert forensic accountant who gave evidence for Yeung.

113 In relation to the flow and use of Yeung's money, the plaintiff tendered two expert reports prepared by Warfield.[32] Since 2004, Warfield has been the principal at Warfield & Associates, a forensic accounting firm. He has 36 years' experience in the prevention, detection and investigation of unethical behaviour. His work includes financial investigations, fraud and corruption investigations, risk assessments, forensic reviews and audits. Warfield holds a Bachelor of Commerce from the University of New South Wales, majoring in Accounting and Financial Systems, a Graduate Diploma in Applied Finance and Investment from the Securities Institute of Australia, a Master of Business Administration (Exec), AGSM, a Diploma of Government (Fraud Control Prevention/Detection), a Diploma of Government (Fraud Control Investigation), a Graduate Certificate in Fraud Investigation from Latrobe University and a Graduate Diploma in Corporate Governance from the Governance Institute of Australia. Warfield is also a Fellow of the Governance Institute of Australia.

114 Lin does not challenge Warfield's evidence on the basis of his qualifications or expertise. Nor has Lin adduced any competing expert evidence.

115 I am satisfied that Warfield is appropriately qualified and experienced to provide an expert report in relation to the $2 million.

116 The plaintiff submits that Warfield's reports support conclusions that the payment of the $190,000 deposit for the Property and the $990 paid as registration costs for Russell St Co can be traced to the plaintiff's $2 million. The plaintiff further submits that Warfield's evidence separately traced at least $590,000 to Lin or for Lin's use.

117 Lin accepts that some of the $2 million was invested in the Property. He appears to suggest that about $1.5 million of the $2 million was applied to the Property. However, he argues that he obtained no personal benefit from the payments relating to the Property.[33]

118 Lin accepts that he received a number of amounts from Zank Group into his personal account and business account, but appears to argue that some of these were approved loans, "repayments" to Auslink or a commission for a previous hotel investment project, unrelated to Yeung's $2 million investment.[34]

119 During Warfield's cross-examination, Lin raised various issues with Warfield's reports. Lin contended that:

(a) it was inappropriate to say that Lin obtained the benefit of 30% of the $190,000 deposit payment for the Property merely on the basis of his shareholding in Zank Group, in circumstances where:

(i) Warfield had not done any independent research or checked Zank Group's ASIC records;

(ii) the $190,000 was "transferred out" towards the Property and not to Lin personally; and

(iii) Liu, not Lin, was the "owner" of the "Russell Street project";

(b) based on the reports, it was not possible to identify the person who ultimately benefited from every transaction Warfield had analysed;

(c) Warfield had not reviewed invoices, contracts and other relevant documents to assess the nature of each transaction. He also had not included a formal investment plan or investment agreement in his reports in support of his opinions regarding the $1 million investment in the Zank Income Fund;

(d) Lin was not an authorised user of the Savings Account;

(e) it was possible that some of the money that Lin had received from the company was a loan, and not Yeung's money; and

(f) Warfield had not included in his analysis certain transactions. These were set out in bank statements for the Transaction Account covering the period between 1 April 2020 and 30 June 2021, including numerous payments made from November 2020 to April 2021 which Lin claimed were stamp duty, design and legal fees and other amounts paid for the Property.

(a) Was the money used to purchase the Property?

120 It is not disputed that some of the $2 million was applied towards the Property. The difficulty, it seems, is determining the precise amount that was applied for this purpose.

121 In relation to the criticisms of Warfield's evidence, I note that:

(a) the tracing of Yeung's $2 million poses difficulties for the Court. This is one of the reasons why expert forensic evidence is required in such a case. The complexity of the task is clear from the large volume of potentially relevant transactions taking place across a number of months, as set out in a detailed flowchart prepared by Yeung's lawyers on the basis of Warfield's reports;

(b) Warfield explained that the tracing exercise required him to consider a number of issues for a particular disbursement, including the date of the initial deposit, withdrawals at or after that date and subsequent deposits. He had to thereby form a view as to whether that disbursement related to the original deposit, or maybe contributed to, or flowed from, subsequent deposits. He explained that in this exercise, proximity in the dates of withdrawals and deposits and consistency in the total amounts being withdrawn and deposited were the key requirements which allowed him to "follow the chain" of transactions. The further away in time a particular transaction was from the original deposit, the more difficult it was to trace that transaction to the original deposit;

(c) Warfield's reports focus primarily on transactions taking place in June 2020 and July 2020. Lin questioned why Warfield had not included in his analysis various transactions from November 2020 to May 2021 and subsequently. I consider that the lack of proximity in time is a sufficient explanation of why Warfield did not include in his reports the transactions which Lin questioned him on during his cross-examination, noting that, apart from Yeung's $2 million, the Transaction Account received significant sums during the remainder of 2020 and 2021. I also accept Warfield's evidence that he was not provided with bank statements for the period after 30 June 2021, so it would not have been possible for him to include analysis of transactions after 30 June 2021;

(d) Warfield did, however, trace back to Yeung's money a $990,000 credit into the Transaction Account on 4 February 2021 (described as "PERPETUAL LTD ... Redemption") and various disbursements. These transactions took place some eight months after Yeung's deposit of the $2 million. However, Warfield explained that he could trace these transactions to Yeung's original deposit because at the time of the $990,000 credit, the Transaction Account had a balance of only $2,109.85. This meant that he could trace disbursements after the 4 February 2021 credit to Yeung's money with "greater confidence". I accept this explanation;

(e) Lin criticised Warfield's reports for failing to trace all the transactions to their ultimate beneficiaries. Warfield explained that it was an impossible task to trace "through to conclusion". Rather, his approach was to trace to the initial recipients of the money out of the Zank account, and thereafter to the next recipient where the next transfer was proximate in time and of a similar amount. I accept this explanation; and

(f) Lin appeared to suggest that Warfield should have considered, as part of his analysis, various materials including an investment plan, contracts, invoices and WeChat messages. However, Warfield's reports were necessarily limited by the materials available to him and the scope of his engagement as a forensic accountant. It was not necessary or appropriate for him to engage in a detailed analysis of materials outside of the bank statements and documents provided to him, or to otherwise engage in further independent research, as suggested by Lin.

122 Accordingly, I accept Warfield's evidence to the extent that it shows that $190,990 of the $2 million was applied towards the Property, consisting of:

(a) the $990 registration fee for Russell St Co paid on 9 June 2020;[35] and

(b) the $190,000 deposit paid to the Mackenzie Account on 19 June 2020.[36]

123 I also note that the proximity in time between the following events further supports a conclusion that $190,990 of the money was applied towards the Property:

(a) on 5 June 2020, Yeung's $2 million was paid into the Transaction Account;

(b) on 9 June 2020, an amount of $990 was paid out of the Transaction Account bearing the transaction description "reg 12 Rus company" and on the same day, Russell St Co was incorporated; and

(c) on 19 June 2020, $190,000 of Yeung's money was transferred from the Transaction Account to the Mackenzie Account with the transaction description "12 russel", and that money was ultimately received by the vendor of the Property. In other words, only about two weeks passed between Yeung's transfer of the $2 million and the payment of the deposit for the Property.

124 I am not disposed to accept Yeung's argument that $911,047 of the $2 million was used to purchase the Property or that the Court should infer that more than $911,047 was spent on the Property on the basis of the rule in Jones v Dunkel. This is significantly more than the amount established by the expert evidence. The plaintiff admitted that, outside of Warfield's evidence that the deposit for the Property and the registration costs of Russell St Co were paid out of the $2 million, there was little direct or clear evidence that the remainder of the $2 million was used for the acquisition or development of the Property. In these circumstances, I prefer to rely on the expert evidence. Without more, the affidavit evidence to which the plaintiff has pointed is insufficient to support an inference that $911,047 or more of the $2 million was used to purchase the Property.

(b) Was the money used by Lin for his own benefit or the benefit of third parties?

125 The plaintiff submits that Lin used $761,615.22, or alternatively $590,000, of Yeung's money for his own benefit or the benefit of third parties.

126 The basis for the claimed amount of $761,615.22 is not entirely clear.[37] The plaintiff's outline of written closing submissions refers to the fact that in cross-examination, Lin appeared to admit that he had received certain amounts. Those amounts are set out at paragraphs 20 and 21 of the plaintiff's outline of closing submissions, which read as follows:

1. Shortly after the plaintiff's $2 million was received in Zank Group's bank account Lin withdrew $300,000 from that account (CB2348). Lin did this even though he could see from his electronic access to the Zank Group account ending in 7037 that by his $300,000 in withdrawals he had by 12 June 2020 already depleted Mrs Yeung's $2 million by almost $250,000 as it left only a credit balance of $1,754,902.02.
2. Indeed, in addition to the initial $300,000 taken by him, Lin made candid admissions under cross examination that he received further payments from that account for his own purposes, or those of his wife, as follows:

a) $100,000 on 7 July 2020 (CB2848);

b) $100,000 on 13 July 2020 (CB2857);

c) $150,000 on 16 September 2020 (CB2883);

d) $11,985.48 on 9 November 2020 (CB2903);

e) $1,976 on 10 November 2020 (CB2909);

f) $2,763.15 on 10 November 2020 (CB2910);

g) $14,890.59 on 30 December 2020 (CB2912); and

h) $180,000 on 4 February 2021 (CB 2919).

127 The submission seems to be that, as Lin has admitted to the receipt of the amounts listed, the Court should accept that he used these amounts for his own benefit. I do not accept this. The amounts set out include three amounts not traced by Warfield to Yeung's money, being Lin's transfers from the Transaction Account to his personal account in the amounts of $100,000 on 13 July 2020 and $1,976 and $2,763.15 on 10 November 2020. In respect of the first amount, Warfield's reports expressly noted that this consisted of $90,000 of "other funds" and only $10,000 of Yeung's money,[38] and he accordingly traced only $10,000 of the $100,000 to Yeung's money. Warfield did not refer to the second and third amounts in his reports or his oral evidence.

128 I find instead that Lin used or received $766,876.07 in and after July 2020. I say this because:

(a) Warfield's two reports trace $590,000 of Yeung's money as having gone to Lin's benefit;[39]

(b) in addition to the $590,000 traced in the reports, when giving oral evidence, Warfield advised the Court that he wished to qualify and add to his reports regarding certain transactions. On the basis of additional bank documents that had been subsequently provided to him such as bank statements and trace lines, he identified three amounts which Lin had transferred from the Transaction Account to his personal account and could now be traced to Yeung's $2 million, but had not been included in the reports. Those three additional amounts of money were $150,000 transferred on 16 September 2020, $11,985.48 transferred on 9 November 2020 and $14,890.59 transferred on 30 December 2020.[40] Including these amounts, Warfield's evidence as to the total amount of Yeung's money which had gone to Lin's benefit (other than the amount paid towards the Property for his benefit) appears to be $766,876.07;[41]

(c) in tandem with the expert evidence identifying the constituent amounts as Yeung's money, the figure of $766,876.07 is also supported by documentary evidence obtained from the banks. The documents prove that Lin personally authorised or made the relevant transfers, or that the transfers were authorised by someone else but directed into his personal account;

(d) none of the transactions comprising the $766,876.07 fell within the intended purpose of the plaintiff's payment of the $2 million (as I found earlier). None of these transfers out of the Transaction Account were consistent with the purpose of securing the plaintiff's money in an account for the purpose of showing the authorities that the plaintiff had money available for future investments; and

(e) Lin admitted that he withdrew $300,000 from the Transaction Account on 11 and 12 June 2020 for his personal use.[42] He also admitted the use of at least some of the $200,000 transferred on 7 and 13 July 2020 in order to facilitate his wife's purchase of a share in a law firm.[43]

How much of the $190,990 applied towards the Property was spent for Lin's benefit?

129 During examination-in-chief, Warfield stated that, in his view, 30% of the $190,000 deposit for the Property was "to the benefit of" Lin, a conclusion he drew based on Lin's 30% shareholding in Zank Group at the time of the payment of the deposit.

130 I consider that 30% of both the $190,000 deposit and $990 registration fee for Russell St Co was paid for Lin's benefit. This is because:

(a) at the time of the payment, Lin was a 30% shareholder of Zank Group;

(b) from at least February 2020, Liu posted updates regarding his discussions with the vendor of the Property in the Group Chat. Lin's oral evidence was inconsistent as to whether he was involved in discussions with Liu and Hu regarding the Property. At times, he suggested that discussions regarding the Property were between Liu and Hu and he was not involved.[44] At one point, he confirmed that he read the Group Chat conversation as it unfolded in February 2020,[45] but shortly after said that he did not read the messages at the beginning.[46] Given Lin's equivocation on this point, and the fact that the documentary evidence indicates that Lin was a member of the Group Chat in February 2020 when the updates regarding the Property were sent, I consider it more likely than not that he was at least aware of the contents of the updates;

(c) the Zank Group meeting minutes of 7 July 2021, signed by Lin, indicate that all shareholders of Zank Group agreed that Liu would hold the shares in Russell St Co and the Property on behalf of Zank Group, and that Zank Group would bear all subsequent related expenses and provide financial support for the project until the realisation of returns and benefits. In other words, the shareholders of Zank Group expected a return from the Property once the project was completed;

(d) messages in the Group Chat also show that on 21 June 2021, Lin sent Hu and Liu a message confirming his understanding that "Russell belongs to the company" and that "group is the actual controller". This was consistent with the minutes dated 7 July 2021;

(e) Yeung adduced screenshots of messages allegedly sent in the Group Chat on 20 January 2023, in which Lin expressed surprise and concern that the Property was not held by Zank Group, but by Liu. Lin expected the Property to be held by Zank Group; and

(f) while Warfield did not explicitly state that he considered Lin to have received the benefit of 30% of the $990 registration fee for Russell St Co, his evidence nevertheless traced the $990 to Yeung's money. A conclusion that Lin received the benefit of 30% of the fee is consistent with Warfield's opinion regarding the deposit for the Property, as well as the factors listed above.

131 On the basis of the foregoing reasons, I consider that part of the $2 million was used:

(a) to purchase the Property; and

(b) by Lin for his own benefit or the benefit of third parties.

The approximate amount used was $824,173.10, comprising two amounts:

• $57,297.00, which was 30% of the combined value of the deposit on the purchase of the Property (being $190,000) and the company registration fee (being $990); and
• $766,876.07, which as set out in paragraph 128, was the sum that Lin took for his own benefit or his wife's benefit.

Issue 3: Was the $2 million held on trust by Lin for the plaintiff?

132 First, Yeung submits that an institutional constructive trust should be declared over Lin's interest in the portion of the $2 million that was used to purchase the Property, being $273,314.10. That figure of $273,314.10 is based upon the Court finding that $911,047 of the $2 million was applied towards the Property and that Lin holds a beneficial interest of 30% in the Property.

133 Yeung alleges that an institutional constructive trust arose from the failed common intention or joint endeavour that the $2 million be advanced for the purpose of investment in the REITS Fund. Yeung referred to various authorities[47] which she says stand for the proposition that, when parties agree on a particular purpose for a transaction, but for whatever reason that transaction fails, the party which has received moneys for the failed transaction holds those moneys on the terms of an institutional constructive trust.[48]

134 Secondly, Yeung argues that Lin is a trustee de son tort with respect to the $273,314.10. She appears to conflate the concept of liability as a trustee de son tort with Court-imposed liability as a constructive trustee under Barnes v Addy.[49] After referring to the statements of Leeming JA in Hasler v Singtel Optus Pty Ltd,[50] Yeung submits that

[a]s a person who had knowledge of the trust, and participated in its creation, albeit, through unlawful means, Lin should not be in any better position as a trustee with respect to the misuse of trust property. ... Therefore, Lin should be held responsible for the use of the plaintiff's money in the same way a trustee would have been liable, if the trustee misappropriated the plaintiff's $2 million. In the circumstances, and consistently with the principles set out in Hasler v Singtel Optus Pty Ltd as set out above, Lin should be held liable for breach of fiduciary duty under either limb of Barnes v Addy.

135 Thirdly, Yeung contends that Lin holds the sum of $761,615.22 subject to a remedial constructive trust. This is based on Lin's knowing receipt of at least $761,615.22 of the plaintiff's money into his own personal bank account. Alternatively, if the Court finds that only $590,000 of the $2 million can be traced into Lin's personal bank account (as suggested in Warfield's expert reports), then the plaintiff submits that the Court should impose a constructive trust in her favour over the amount of $590,000.

136 The factual basis underlying each of Yeung's constructive trust claims is unclear. In her outline of closing submissions, she lists various facts which she says give rise to the question of whether a constructive trust exists in respect of all or any part of the $2 million, namely that:

• Lin informed the plaintiff by his emails of 18 May 2020 that the $2 million was to be received into a trust fund and held on the basis of a trust as recorded in those documents (not contested by Lin);
• Lin was directly involved in drafting the REITS Fund application form and directed the amendments made to the payment provisions therein;
• Lin had electronic access to the Transaction Account and had authority as signatory to conduct transactions on that account;
• the Transaction Account was misstated on the REITS Fund application as being an account of "Zank Capital Pty Ltd ATF REITS Fund";
• Lin then sent confirmatory documents to Yeung, which he had jointly prepared with Liu and Hu, that falsely recorded the receipt of the $2 million by "Zank Capital Pty Ltd ATF REITS Fund" on 9 June 2020; and
• the REITS Fund never existed, which Lin now accepts.

137 In addition, Yeung submits that "[t]here is no doubt on the evidence" that:

• Lin intentionally misled Yeung as to the nature and purpose of the $2 million;
• to the extent that the purpose of the $2 million investment into the REITS Fund failed and Lin, in concert with the other defendants, misdirected at least $911,047 thereof into the purchase and development of the Property, Lin's conduct was a breach of trust; and
• Lin's ultimate beneficial interest in the Property was 30% and therefore $273,314.10 (being 30% of $911,047) was effectively received by him as a constructive trustee at the time the moneys were so diverted.

138 Yeung does not explain the nature of the connection between each of the alleged facts (or conclusions drawn from the evidence) outlined above and the elements that need to be satisfied for each of the categories of constructive trust for which she contends. Therefore, it is unclear how the circumstances described above are said to relate to the issue of whether Lin is, or should be held liable as, a constructive trustee.

139 Lin's submissions are difficult to follow but the main point of his submissions appears to be that he was not appointed as a trustee.

140 As observed by McMillan J in Imam Ali Islamic Centre v Imam Ali Islamic Centre Inc, attempting to supply a comprehensive taxonomy of the various classifications of trusts is a disconcerting venture.[51] Nevertheless, it is possible to identify three commonly accepted classes, being express trusts, resulting trusts and constructive trusts.[52] I will confine my discussion of the legal principles to the categories of constructive trust which the plaintiff says the Court should impose.

141 Constructive trusts may be broadly characterised as either institutional or remedial in nature, although courts have cautioned against drawing too firm a distinction between the two.[53] As Deane J explained in Muschinski v Dodds ("Muschinski"):

In a broad sense, the constructive trust is both an institution and a remedy of the law of equity. ... There is, however, a more limited sense in which there is some superficial plausibility in the notions of "institution" and "remedy" as competing characterizations of the constructive trust. If "institution" is understood as connoting a relationship which arises and exists under the law independently of any order of a court and "remedy" is defined as referring to the actual establishment of a relationship by such an order, the catchwords of "institution" and "remedy" do serve the function of highlighting a conceptual problem that persists about the true nature of a constructive trust.[54]

142 The main point to note is that, under an institutional constructive trust, the trust arises by operation of law as from the date of the circumstances which give rise to it. The function of the court is merely to declare that such trust has arisen in the past. The consequences that flow from such trust having arisen are determined by rules of law, not under a discretion.[55]

143 In contrast, a remedial constructive trust generally arises where a court finds that a person has committed an act of fraud or some other unlawful dealing with trust property. The person never assumed or intended to assume the status of trustee but they have exposed themselves to equitable remedies by participating in the unlawful misapplication of trust assets. They have assisted in the misapplication of the trust assets or they have received trust assets knowing that the transfer to them was in breach of trust. As a result, equity can require them to account as if they were trustees or fiduciaries, even though they are neither. Additionally, a remedial constructive trust arises only when the court makes a declaration to that effect.[56] The trust will generally take effect from the date of the court's judgment,[57] and the extent to which it operates retrospectively lies within the discretion of the court.[58]

144 There is a variety of recognised categories of constructive trusts and these categories are not closed.[59] Outlined below are the principles governing some of the key categories of constructive trusts which are relevant to this case.

145 One of the recognised categories of constructive trust is the common intention constructive trust.

146 The court will construe a common intention constructive trust where:

(a) there is an actual common intention of the parties as to their beneficial interest in a property;

(b) there has been detrimental reliance on that common intention by the claimant; and

(c) it would be an equitable fraud on the claimant to deny his or her interest in the property.[60]

147 The common intention constructive trust is institutional in the sense that it takes effect from the date on which the acts undertaken in reliance on the common intention occur.[61]

148 As to the requirement that there be a common intention between the parties, the following principles are relevant:

• the term "common intention" is usually assumed to mean an intention common to two parties relating to the acquisition of an interest in property;[62]
• only the parties' actual intention will suffice.[63] Actual intention can either be expressed through words or objectively inferred through conduct.[64] The court is not free to impute to the parties a common intention on the basis that they would have been likely to have had that common intention if they had applied their minds to the matter of their respective interests in the item of property;[65]
• in many cases, the relevant time is when the property was acquired, as it is usually at that time that the events occur which give rise to the injustice which needs to be remedied. What happens after that time will then be relevant only insofar as it casts light upon the significance of what was done at the former time.[66] However, the relevant intention may also arise after the property has been acquired;[67]
• the intention to be established need not designate a specific share of the property - it is sufficient that they intend that the plaintiff should have a beneficial interest or "some form of proprietary interest";[68] and
• the onus of proving that the parties had a common intention lies on the party asserting that the property is held on trust for his or her benefit.[69]

149 In determining whether detrimental reliance has been established, the Court is guided by the following principles:

• losses flowing from the failure to give effect to the common intention do not constitute detriment. What must be proved are acts or omissions referable to the claimant's reliance on the common intention, which can be demonstrated to be prejudicial to the claimant unless effect is given to the parties' common intention;[70]
• the claimant must show that the act or forbearance was induced by the common intention;[71]
• the detriment must amount to a material disadvantage.[72] In this regard, the principles of detrimental reliance established in the law of equitable estoppel are generally applicable;[73] and
• the question of detriment is assessed as at the time a party seeks to depart from the common intention.[74]

150 Very often, acts constituting detriment will be contributions to the acquisition, improvement or maintenance of the property in which the beneficial interest was contemplated but the acts are not limited to these matters.[75]

151 Although the cases considering this form of constructive trust often concern persons in a domestic relationship, the principle can also be applied to parties to a commercial relationship.[76]

152 The equitable principle which gives rise to a joint endeavour constructive trust was authoritatively stated by the High Court in Baumgartner v Baumgartner ("Baumgartner"), quoting an earlier statement by Deane J in Muschinski:

The principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do.[77]

153 First, there must be a joint relationship or endeavour, in which expenditure is shared for the common benefit in the course of, and for the purposes of which an asset is acquired.[78] Implicit in this element is the need to identify what the scope and content of the joint endeavour is. This is a question of fact.[79] The joint endeavour may include not only the acquisition of the property in question, but also the discharge of any mortgage debt.[80]

154 Secondly, there must be a failure or premature termination of the joint endeavour or relationship without attributable fault on the part of the party advancing the claim.[81] As a result, one party has a legal interest which it was not intended to enjoy beneficially in those circumstances.[82]

155 Thirdly, there must be the requisite element of unconscionability. It must be unconscionable for the other party to the joint endeavour to retain the benefit of the plaintiff's contributions (whether monetary or non-monetary).[83] The criterion regarding unconscionability is fact specific and is related to the question of whether the relationship has terminated in a way unforeseen by the parties.[84] Additionally, it was emphasised in Baumgartner that the requirement that the assertion of interest be unconscionable does not import idiosyncratic notions of what is just or fair but must be informed by equitable principle.[85] The onus is on the party asserting that a trust should be imposed to satisfy the court that it would be unconscionable to refuse to recognise the existence of the equitable interest.[86]

156 Unlike the common intention constructive trust, there is no requirement that the parties possess any actual intention as to any particular interest in the property over which a constructive trust is being asserted. However, the parties' intention remains relevant to the extent that it must be shown that "the benefit of money or other property contributed by one party [was] on the basis and for the purposes of the [joint] relationship or endeavour".[87] The critical point is that the parties have not agreed on what the consequence will be if their venture breaks down, other than that the other party should not be permitted to enjoy the legal title for itself.[88]

157 In NSW Trustee and Guardian v Togias, Mitchelmore JA observed that "[t]he simplicity with which the elements that must be satisfied to establish a joint endeavour constructive trust may be expressed belies the difficulty that can attend the application of those elements, and, if satisfied, determining the terms of the trust".[89]

158 As with the common intention constructive trust, the principles underlying a joint endeavour constructive can operate in a commercial context and are not confined to de facto relationship cases.[90]

159 A person makes themselves a trustee de son tort when they purport to act in the role of trustee despite not being validly appointed. They are trustees of an "institutional" trust and may incur liability if, having assumed the obligations of the trust, they subsequently act in breach of those obligations.[91]

160 As the authors of Jacobs Law of Trusts in Australia explain:

The alleged trustee may have acted honestly; the alleged trustee may have believed that he or she was validly appointed an express trustee, ignorant of a fatal defect therein, and the breach of trust may have been a technical one. But the alleged trustee is liable by reason of the de facto assumption of office and can be in no better position in respect of a breach than an express trustee would be.[92]

161 Here, it is important to make the distinction between becoming a trustee de son tort and incurring liability as such for breach of trust. The assumption of office is not of itself a ground of liability, but an act which precedes the event or conduct which may give rise to the claim for breach of trust.[93]

162 A remedial constructive trust may be awarded in a variety of different situations. The declaration of a remedial constructive trust is discretionary.[94] Before doing so, the court should first consider whether there is an appropriate equitable remedy which falls short of the imposition of a constructive trust.[95] In exercising its discretion, the court is guided by established equitable principles and not vague notions of fairness or justice.[96] In particular, mere unjust enrichment is not a sufficient basis for the award of a constructive trust.[97]

163 One situation in which the Court may make a person liable as constructive trustee is where they have knowingly participated in a breach of trust or fiduciary duty pursuant to one or other of the limbs in Barnes v Addy.[98]

Those who create a trust clothe the trustee with a legal power and control over the trust property, imposing on him a corresponding responsibility. That responsibility may no doubt be extended in equity to others who are not properly trustees, if they are found either making themselves trustees de son tort, or actually participating in any fraudulent conduct of the trustee to the injury of the cestui que trust. But, on the other hand, strangers are not to be made constructive trustees merely because they act as the agents of trustees in transactions within their legal powers, transactions, perhaps of which a Court of Equity may disapprove, unless those agents receive and become chargeable with some part of the trust property, or unless they assist with knowledge in a dishonest and fraudulent design on the part of the trustees.[99]

While the above statement is expressed in terms of trustees, it is generally accepted that the principles extend to other fiduciary relationships.[100]

165 The first limb, commonly described as the "knowing receipt" limb, is enlivened where a third party receives trust property with notice of the trust.[101]

166 The necessary elements of liability under the second limb (ie for "knowing assistance") are:

(a) the existence of a fiduciary duty owed by the fiduciary (as trustee or otherwise);

(b) a "dishonest and fraudulent design" on the part of the fiduciary;[102] and

(c) assistance by the third party in that design with knowledge of the circumstances constituting that design.[103]

167 Lord Selborne's observations in Barnes v Addy did not provide an exhaustive statement of the circumstances in which, and the bases upon which, a third party's participation in another's breach of fiduciary duty or breach of trust could render that person accountable in equity as a constructive trustee.[104] For example, a third party can still be held liable for breach of trust on the footing of knowingly inducing or immediately procuring a breach of trust.[105] In such a case, the defendant must have dishonestly procured or assisted in a breach of trust or fiduciary obligation, but the trustee or fiduciary need not have engaged in a dishonest or fraudulent design.[106]

168 Importantly, proprietary liability under either of the limbs in Barnes v Addy depends upon the existence of trust property or property held subject to a fiduciary obligation.[107] In Farah Constructions Pty Ltd v Say-Dee Pty Ltd, the High Court held that the relevant property was not subject to the first limb because (among other things) it was not trust property or the traceable proceeds of trust property.[108] There are limited exceptions, but they do not apply to the present case.[109]

169 Insofar as Yeung alleges that there was a constructive trust in her favour arising from a shared common intention, the failure of a joint endeavour or the assumption of office as a trustee de son tort, those arguments were raised for the first time in her closing submissions and were not clearly pleaded. Although Lin did not object to Yeung's conduct at the hearing of final submissions, he is a self-represented litigant and could not be expected to do so. Therefore, as a matter of procedural fairness, I am obliged to first determine whether the plaintiff is entitled to pursue a constructive trust case that was not pleaded.

170 Whether or not parties should be held to their pleadings depends on the particular circumstances of the case and is a matter that falls within the Court's discretion. In Dreamland Development Pty Ltd v Navadiya Group Pty Ltd,[110] I summarised the relevant principles as follows.

The general rule is that trials are to be conducted on the basis of the issues the parties agitate in the pleadings and relief is confined to that claimed or available on the pleadings. Pleadings serve the important function of ensuring that a party has the opportunity of meeting the case against it (thus securing the basic requirement of procedural fairness), defining the issues for decision and enabling the Court to ascertain the material facts forming the ingredients of the causes of action alleged.

There are, however, exceptions to these general rules. Whether or not parties should be held to their pleadings depends on the particular circumstances of the case and is a matter that falls within the Court's discretion. The Court is guided by the following principles:

(a) pleadings are not an end in themselves but are a means to the ultimate attainment of a just outcome. The courts do not take an "unduly technical or restrictive approach to pleadings such that, among other things, a party is strictly bound to the literal meaning of the case it has pleaded";

(b) the question is whether the other party knew the nature of the case they had to meet - a degree of tolerance is justified so long as the circumstances are such that all parties to the action have had fair notice of what will be determined;

(c) a party should be held to its pleadings if the other party is, or might reasonably be, prejudiced by the departure;

(d) at a minimum, the pleading should be clear about the causes of action relied upon by the plaintiff, including any claims made upon an alternative hypothesis;

(e) where the parties abandon the confines of the pleaded case and choose to litigate other issues during the trial, provided that those issues are "fairly fought out", neither party will be allowed to "hark back to the pleadings and treat them as governing the area of contest". The question of whether the parties have chosen to depart from the pleadings can be inferred from the way in which the trial was conducted. Mere acquiescence by one party in a course adopted by the other will, in some cases, be sufficient to ground such an inference (for example, by failing to object to evidence that raises fresh issues). In this situation, the Court is permitted, and possibly obliged, to decide the proceeding on the further material facts and issues raised and addressed at trial; and

(f) allegations of fraud need to be specifically pleaded and properly particularised.[111]

171 In particular, it is necessary that the basis of any constructive trust claim be clearly articulated in the pleadings.[112] In Silvia (Trustee) v Williams,[113] one of the issues on appeal was whether the trial judge erred in permitting the appellant to advance a case based on a common intention constructive trust when the case was not disclosed on the pleadings and was only fully articulated in his oral closing submissions.[114] During the trial, the respondent had objected to the appellant running the constructive trust case on the basis that it had not been pleaded and he was prejudiced by it being raised late since there was evidence he would have wished to lead on the issue.[115] The Full Court of the Federal Court held that the trial judge erred in permitting the appellant to pursue the argument.[116] The Court stated at paragraph 29:

We do not accept the Trustee's submission that by the time of the trial it was apparent that the case being advanced could only be a claim for a constructive trust. This is for a number of reasons. First, the pleading did not refer to a common intention constructive trust. Indeed, it did not plead the existence of a common intention or what it was that Mrs Williams had done which constituted her detriment. If a common intention constructive trust was being alleged these were both essential allegations. Secondly, whilst it is true that 12 of the amended statement of claim pleaded that Mrs Williams had contributed to an increase in the value of the Military Rd property this was not the case eventually pursued. Thirdly, whilst it is also true that the trust being asserted in the pleading could not be an express or implied trust, it does not follow that a case of constructive trust was adequately pleaded. The role of pleadings is to disclose a party's case to the other side. Generally speaking, a case which has to be deduced from what is not alleged is not one which has been fairly disclosed.

172 In the present case, the amended statement of claim did not make any reference to Lin holding the Property subject to a common intention constructive trust, a joint endeavour constructive trust or as a trustee de son tort. Yeung did not identify those causes of action and plead the facts and circumstances which enliven them. While the prayer for relief against Lin sought "[a]n order that he holds on trust for the plaintiff the amount of $2 million or its traceable proceeds", it is not obvious that the "trust" referred to was an institutional constructive trust. Thus, in my view, the minimum requirement that the pleadings must disclose the causes of action relied upon has not been satisfied. This is in a context where the plaintiff has been represented by counsel including, more recently, Senior Counsel.

173 I now turn to consider whether, having regard to the conduct of the trial, Lin nonetheless knew the nature of the case he had to meet despite the deficiency in the pleadings.

174 Yeung made no mention of what I will call the "institutional constructive trust case" during either her opening submissions or the hearing of the evidence, or in the list of issues she provided to the Court at the conclusion of the evidence.[117]

175 On 12 August 2025, Yeung amended the original list of issues that she filed at the commencement of the trial. This was to account for the fact that the Zank Defendants were no longer parties to the proceeding. On 22 August 2025, the Court provided the parties with a further revised version of the list of issues. This rearranged and rephrased the topics in the existing list, but did not make substantive changes. Neither the original list of issues nor the version dated 12 August 2025 contained any reference to a constructive trust.

176 In the second iteration of the list of issues, the breach of trust issue was described in the following terms:

1. Did the 7th defendant obtain the plaintiff's $2 million, or part thereof, in breach of trust or fiduciary duty?
2. If the answer to Issue 2 is "yes" and a trustee or fiduciary duty was owed by the 7th defendant, then what was the scope of that duty and was that duty breached?

177 In the third iteration of the list of issues, the Court reframed the breach of trust issue as follows:

3. Was the $2 million held on trust by Fred for the plaintiff?

1. If the answer to the question in paragraph 3 above is "yes", did Fred breach any of his duties as trustee by misappropriating all or part of the $2 million in the manner described in paragraph 2 above?

178 On 25 August 2025, Yeung filed her written outline of closing submissions. It was at this point that Yeung first raised the question of whether Lin's conduct gave rise to an institutional constructive trust.[118] There had been no direct suggestion of such a case until that point. The Court then heard the parties' oral closing submissions a day later on 26 August 2025.

179 In the circumstances, I find that Lin did not have fair notice of the institutional constructive trust allegations and did not have an adequate opportunity to respond. One day's notice is not sufficient, particularly when Lin is self-represented. I do not regard Lin's failure to object at the time as him acquiescing to the specific trust case being advanced. Lin is a self-represented litigant and the subject of constructive trusts is a complex area of law, even for experienced legal practitioners.

180 For the reasons set out, I consider that it would not be appropriate for the Court to entertain the institutional constructive case which Yeung advanced in her closing submissions.

181 However, even if this view is wrong, I consider that the institutional constructive trust case would nonetheless fail.

182 In relation to the common intention constructive trust, Yeung did not explain how each of the requisite elements, being the existence of a common intention and the occasioning of detriment in reliance on that intention, is satisfied in this case.

183 Yeung submits that the authorities "provide for an institutional constructive trust when the parties agree on a particular purpose for a transaction, but for whatever reason that transaction fails, and the party that has received moneys for the failed transaction holds those moneys on an institutional constructive trust". Hence, she submits that "[a]n institutional constructive trust arose from the failed common intention/joint venture that her $2 million was advanced for the specific purpose of investment in the REITS Fund, which REITS Fund now is admitted by Lin and the other defendants to have never existed".

184 To the extent that Yeung says that the "common intention" was that the $2 million was to be invested in the REITS Fund, and a constructive trust arises because Lin did not give effect to that common intention, that submission is misguided. "Intention" in this context usually refers to an intention relating to the acquisition of an interest in property. Putting to one side the question of whether "property" can theoretically encompass units in a trust fund, Yeung is seeking a declaration of an institutional constructive trust over the Property. Therefore, Yeung needed to establish that there was a common intention between Yeung and Lin that Yeung would receive some sort of beneficial or proprietary interest in the Property. Yeung did not point to any facts or circumstances which demonstrate that such an intention existed on the part of Yeung, Yang or Lin. Further, Lin told Yang that the money would be invested in a medical project but instead used it to purchase the Property.[119] This is inconsistent with the notion that the parties' intentions were aligned because there was no agreed purpose that the $2 million was to be used to purchase the Property. Indeed, on the plaintiff's case, neither she nor her husband was aware that part of the $2 million had been used to purchase a property until Lin "confessed" to Yang in August 2022.[120]

185 In relation to the joint endeavour constructive trust, Yeung has similarly failed to explain how each of the constituent elements is satisfied.

186 First, there must be a joint relationship or endeavour, in which expenditure is shared for the common benefit in the course of, and for the purposes of which an asset is acquired. The plaintiff submits that the constructive trust arose from the failed venture that her $2 million was advanced for the specific purpose of investment in the REITS Fund, which never existed. The scope and content of the alleged joint venture is not identified with any precision. Notwithstanding that, Yeung has not established, or even argued, that the Property was acquired in the course of, or for the purposes of, the venture of investing in the REITS Fund. Moreover, it is unclear how the Property could have been acquired for the purposes of a joint endeavour when Yeung and Yang were not aware that their money was used to purchase the Property.

187 Secondly, there must be a failure or premature termination of the joint endeavour or relationship without attributable blame. Yeung did not address this element in her submissions.

188 Thirdly, there is a requirement of unconscionability. Yeung bears the onus of satisfying the Court that it would be unconscionable for it to refuse to recognise her equitable interest in the Property. Yeung made no submissions on this issue.

189 In relation to the allegation that Lin was a trustee de son tort, Yeung did not draw the Court's attention to any evidence that suggested that Lin had purported to act in the role of trustee despite not having been validly appointed as one. As I noted in paragraph 134 above, it appears that Yeung has conflated the concept of liability as a trustee de son tort with Court-imposed liability as a constructive trustee under either limb of Barnes v Addy. The principles regarding trustees de son tort are summarised in paragraphs 159 to 161 above. Yeung has not demonstrated that those principles apply in the present case.

190 In summary, the weakness of the submissions and evidence supporting the institutional constructive trust allegations confirms my view that, even if I were to allow Yeung to pursue the case, it would not be made out against Lin in any event.

191 I now turn to consider the question of whether Lin participated in or procured another's breach of trust or fiduciary duty and, if so, whether it is appropriate for the Court to impose a constructive trust over all or part of the $2 million.

192 As I noted in paragraph 168 above, liability under either of the limbs in Barnes v Addy is predicated upon the property the subject of a constructive trust claim being held on trust or subject to a fiduciary obligation. It is at this preliminary hurdle that the plaintiff's case falls.

193 Paragraph 19 of the amended statement of claim alleges that Zank Capital and Zank & Co

entered into a trust relationship with Yeung pursuant to which they agreed to receive Yeung's money as trustee and invest it for her benefit ... [F]urther or alternatively, there existed a relationship of trust and confidence giving rise to a fiduciary duty.

194 However, Yeung discontinued her claims against the Zank Defendants on the second day of the trial. As a result, during the remainder of the trial, she did not seek to make good the assertion that there was a trust or fiduciary relationship between Yeung on the one hand and Zank Capital and Zank & Co on the other, nor did she argue that they had breached their duties.

195 In circumstances where the plaintiff has not sought to establish that Zank Capital and/or Zank & Co breached their duties as trustee or fiduciary, I find that there is no relevant breach regarding which Lin could be liable as an accessory.

196 It follows, on the grounds set out, that the plaintiff is not entitled to a declaration that Lin holds any part of the $2 million on constructive trust for her.

Issue 4: Did Lin breach any of his duties as trustee by misappropriating all or part of the $2 million in the manner described in issue 2 above?

197 By reason of my finding in Issue 3 that Lin is not a trustee, the answer to Issue 4 is "no".

Issues 5 and 6: Did Lin owe a fiduciary duty to the plaintiff and, if so, what was the scope of that duty?

198 Yeung submits that Lin owed her fiduciary duties in respect of all dealings and matters concerning the $2 million investment. She contends that his fiduciary obligations arise from two matters: the "underlying agency relationship between the parties" and the trust and confidence which Yeung reposed in Lin.

199 As to the first point, Yeung says that Lin is "a paradigm example of an agent" in circumstances where he was already her migration agent, he introduced her to the concept of investing in the REITS Fund, and he was her "sole conduit" for the making of the investment in the REITS Fund. Even if Lin was only a "purchasing agent", he would still owe fiduciary duties, albeit the duty would be limited to making full disclosure of all material information.[121]

200 As to the second point, she says that at all times, she and Yang trusted and had complete confidence in Lin to procure the investment as described in the REITS Fund application form, Lin's emails of 18 May 2020 and Lin's WhatsApp messages with Lam. She also submits that she was entirely dependent upon and trusting of Lin in relation to the truthfulness of the information he provided to her regarding the $2 million investment. The whole course of dealings between the parties was consistent with Lin's assumption of responsibility as to the matters concerning the investment and Yeung's reliance and dependence upon him in that regard rendered her vulnerable to his eventual misconduct.

201 Lin denies that he owed Yeung any fiduciary duties. He submits that his role was limited to administrative assistance and relaying information from Liu and Hu to Lam. He further notes that he had expressly stated to Lam that he was not a financial adviser and could not provide any investment advice. Therefore, there was no fiduciary relationship between himself and Yeung.

202 The essence of a fiduciary relationship is that one party to the relationship is obliged to act in the interests of another party (or, in the case of a partnership or joint venture, their joint interest) to the exclusion of the former's self-interest.[122] The fundamental feature of a fiduciary relationship is the existence of an obligation of undivided loyalty on the part of the fiduciary to the principal.[123] In Australia, the duty of loyalty is proscriptive rather than prescriptive in nature, embodying the twin themes of preventing undisclosed conflict of duty and interest (or of duty and duty), and of prohibiting misuse of the fiduciary position.[124]

203 There is no single test for determining whether a fiduciary relationship exists in any given case, and the categories of relationships giving rise to fiduciary duties are not closed.[125]

204 Courts will readily infer that certain relationships give rise to fiduciary duties, such as the relationship between:

• trustee and beneficiary;
• director and company;
• agent and principal;
• solicitor and client;
• employee and employer; and
• partners inter se.[126]

205 However, even in a relationship which is inherently fiduciary, there can be some obligations that are not fiduciary.[127] Once it is determined that a fiduciary relationship exists, it is necessary to define the scope of that relationship (that is, the subject matter over which the fiduciary obligations extend) by examining the nature of the relationship and the circumstances of the case.[128] In cases where the relationship between the parties is governed by contract, "it is the contractual foundation which is all important because it is the contract that regulates the basic rights and liabilities of the parties. The fiduciary relationship, if it is to exist at all, must accommodate itself to the terms of the contract so that it is consistent with, and conforms to, them".[129]

206 The relationship of agent and principal is commonly listed among the established categories of fiduciary relationships. The legal definition of an agent is a person with the authority or capacity to create or affect legal relations between a principal and third parties.[130] However, the word "agent" can be used in varying senses, and not all persons to whom the word is applied are agents in the full (or sometimes, any) legal sense.[131] As Lord Herschell said in Kennedy v De Trafford:[132]

No word is more commonly and constantly abused than the word "agent". A person may be spoken of as an "agent", and no doubt in the popular sense of the word may properly be said to be an "agent", although when it is attempted to suggest that he is an "agent" under such circumstances as create the legal obligations attaching to agency that use of the word is only misleading.[133]

207 By way of example, real estate agents frequently act for sellers and purchasers. However, their relationship is not one which attracts fiduciary duties - the duties are established by contract.[134] Similarly, a canvassing (or introducing) agent may do no more than bring two parties together and thus may in many situations do nothing involving the incidence of fiduciary responsibilities at all.[135]

208 Where the relationship falls outside the established categories, it is necessary to "distil the essence or the characteristics of the relationships from the illustrations which the judicial decisions provide".[136] The features that are common to the established relationships which give rise to fiduciary duties will inform the question whether such duties arise outside those relationships.[137]

209 The critical feature of accepted fiduciary relationships is that the fiduciary undertakes or agrees to act for or on behalf of, or in the interests of, another person in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense.[138] The relationship between the parties is one which gives the fiduciary a special opportunity to exercise the power or discretion to the detriment of that other person who is accordingly vulnerable to abuse by the fiduciary of his position.[139]

210 In Breen v Williams, Gaudron and McHugh JJ identified several indicia that point towards the existence of a fiduciary relationship.[140] These include:

• the existence of a relation of confidence;
• inequality of bargaining power;
• an undertaking by one party to perform a task or fulfil a duty in the interests of another party;
• the scope for one party to unilaterally exercise a discretion or power which may affect the rights or interests of another; and
• a dependency or vulnerability on the part of one party that causes that party to rely on another.[141]

211 The existence of one or more of the above indicia is not determinative of the existence of a fiduciary relationship. Further, they are only relevant to the extent that they disclose an expectation in one party that the other will act in his or her interests.[142]

212 A relationship may be recognised as fiduciary if it is based on a high degree of mutual trust and confidence.[143] What matters here is whether there is a relationship involving the requisite undertaking, determined as a matter of objective characterisation, rather than by having regard to the subjective expectations of the parties.[144]

213 In Hospital Products Ltd v United States Surgical Corporation ("Hospital Products"), Gibbs CJ stated that

an actual relation of confidence - that one person subjectively trusted another - is neither necessary for nor conclusive of the existence of a fiduciary relationship. On the one hand, a trustee will stand in a fiduciary relationship to a beneficiary notwithstanding that the latter at no time reposed confidence in him, and on the other hand, an ordinary transaction for sale and purchase does not give rise to a fiduciary relationship simply because the purchaser trusted the vendor and the latter defrauded him.[145]

214 This point was later echoed by Dawson J. His Honour stated that

[i]t is usual - perhaps necessary - that in such a relationship one party should repose substantial confidence in another in acting on his behalf or in his interest in some respect. But it is not in every case where that happens that there is a fiduciary relationship. If it were, whenever there is a "job to be performed" and entrusting the job to someone involves reposing substantial trust and confidence in him, equity would impose fiduciary obligations. Clearly, that is not the case. Nor does a fiduciary duty arise because the person to whom a job is entrusted acts in his own interest and thereby fails to perform the job properly, however useful it may appear with hindsight that such protection should have been available. ...

A fiduciary relationship does not arise where, because one of the parties to a relationship has wrongly assessed the trustworthiness of another, he has reposed confidence in him which he would not have done had he known the true intentions of that other. In ordinary business affairs persons who have dealings with one another frequently have confidence in each other and sometimes that confidence is misplaced. That does not make the relationship a fiduciary one. A fiduciary relationship exists where one party is in a position of reliance upon the other because of the nature of the relationship and not because of a wrong assessment of character or reliability. That is to say, the relationship must be of a kind which of its nature requires one party to place reliance upon the other; it is not sufficient that he in fact does so in the particular circumstances. Of course, where a relationship is fiduciary in character it will be so whether or no the party in whose favour the fiduciary obligations are imposed actually trusts the party upon whom the obligations are imposed.[146]

215 The application of the concept of vulnerability to determine fiduciary status requires some care.[147] In particular, the cases emphasise the following two points.

216 First, the notion of vulnerability, as used in this context, is not to be understood in the sense of any "weaker party" concept.[148] Rather, it refers to the circumstance where another party agrees (not necessarily contractually) to act on behalf of or in the interests of another and, as a result, is in a position to abuse the power or discretion given them to the detriment of the beneficiary.[149]

217 Second, the vulnerability that any contracting party has to a potential breach by another is insufficient to give rise to a fiduciary relationship.[150] Ordinary contractual relationships are governed by an array of doctrines within the sphere of contract, tort and equity.[151] These doctrines serve to ensure that contracting parties do not take the pursuit of their own interests beyond acceptable bounds or unduly prejudice the interests of their counterparts.[152] Where the relationship is such that the parties could have adequately safeguarded their interests by appropriate contractual provisions or other legal means, but have failed to do so, there is no basis (without more) for the imposition of fiduciary obligations to overcome the shortcomings in the arrangement between them.[153]

218 As with the institutional constructive trust case, Yeung did not specifically plead that Lin was in a fiduciary relationship with her and breached his duties to her. The amended statement of claim alleged that Zank Capital and Zank & Co were Yeung's agents and that those companies owed her fiduciary duties. Yeung pleaded that Lin induced, procured and knowingly assisted in the companies' breach of trust and fiduciary duty and knowingly obtained the $2 million in breach of trust and fiduciary duty within the meaning of the first limb of Barnes v Addy.

219 In the original list of issues provided to the Court prior to the trial, the issue was whether Zank Capital and Zank & Co owed fiduciary duties to Yeung. In the revised list of issues dated 12 August 2025, the issue was amended to ask whether Lin owed a fiduciary duty to Yeung. Although Lin had notice from 12 August 2025 that a claim for breach of fiduciary duty was being advanced against him, he was not aware of the legal or factual basis of that claim until Yeung filed her written outline of closing submissions on 25 August 2025, a day prior to the hearing of oral closing submissions. Again, although Lin did not object to the breach of fiduciary case being run, I do not accord any weight to this fact given that he is a self-represented litigant.

220 I am of the view that the Court ought not determine the issue of whether Lin owed fiduciary duties to Yeung, on the basis that it was not pleaded or raised over the course of the trial, except during closing submissions.

221 Even if I am wrong about this, I am nonetheless of the view Lin did not owe any fiduciary duties to Yeung. That is because:

(a) Lin was not Yeung's "agent" in the sense that he had the capacity to affect her legal relations. Thus, the relationship between Lin and Yeung was not one of agent-principal and does not neatly fall within one of the established categories of fiduciary relationships; and

(b) the mere fact that Yeung subjectively reposed trust and confidence in Lin, and was accordingly vulnerable to his misconduct as a result, does not, without more, justify the imposition of fiduciary obligations on Lin.

I will briefly elaborate upon each of the above two points in turn.

222 Yeung submits that there was an agency relationship between herself and Lin because (a) he introduced the idea of the investment to her, (b) he was the sole conduit for the investment, and (c) he was already her migration agent.

223 Yeung's submissions do not explain how the first two factors are relevant to the question of whether an agency relationship existed. It might be inferred from Yeung's brief reference to purchasing agents that Lin's role in introducing the investment to Yeung and facilitating the process made him a "purchasing agent". However, she does not explicitly state this, nor does she explain how or why Lin was a purchasing agent. She submits that purchasing agents owe a fiduciary duty to their principal, but does not establish the antecedent step, namely proving that Lin is in fact a purchasing agent.

224 As to the third factor, Yang's evidence is that:

• in January 2020, he "appointed" Lin as the migration agent for himself and his family; and
• there was no written agreement between himself and Lin about Lin's immigration services.

225 Under general law, there is no requirement that an agent's appointment be made in writing or in a specific form of writing.[154] The agency relationship can be validly created orally, "if the facts disclose that one party is acting for or representing another by the latter's authority".[155] However, statute may make writing a condition of the validity or enforceability of an agency relationship or some aspect thereof.[156]

226 Assuming that the oral agreement between Lin and Yang was sufficient to validly appoint Lin as Yeung's migration agent, s 280 of the Migration Act 1958 (Cth) ("Migration Act") makes it an offence for a person to provide immigration assistance[157] without being a registered migration agent, a legal practitioner with an unrestricted practising certificate, or a person otherwise entitled to give advice under one of the exceptions under the Migration Act. Lin was not a legal practitioner, nor is there any specific evidence that he was a registered migration agent.[158]

227 Moreover, the fact that Lin held himself out to be a "migration agent" and assisted Yeung with various tasks relating to her visa application does not necessarily make him a fiduciary. In Guo v Migration Agents Registration Authority, Senior Member Fice clarified that the "use of the word agent in describing the role of Mr Guo in the sponsorship and nomination applications, and the visa application does not necessarily mean that all agents are always fiduciaries".[159] In that case, Guo, a registered migration agent, undertook to conduct certain activities for his clients, Lionel Moore Trailers Pty Ltd ("LMT") and Wu. LMT had engaged Guo to assist with the sponsorship approval and the nomination of skilled personnel, which initially included Wu.[160] The Tribunal found that the relationship was merely contractual and Guo was not an agent as he did not hold the power to affect the legal relations of his clients. Accordingly, Guo did not owe fiduciary duties to either LMT or Wu.[161] Instead, his duties to both LMT and Wu were to be found in his contractual arrangements with those parties and any statutory provisions, particularly those dealing with standards of professional conduct.[162]

228 In this case, Yeung did not seek to establish that Lin, as her migration agent, had the authority to affect her legal relations. In the circumstances, it is difficult to see how the relationship between Lin and Yeung was one of agent and principal.

229 The next question is whether the relationship between Yeung and Lin exhibited the features which typically characterise a fiduciary relationship.

230 Yeung submits that she and Yang "had complete confidence in Lin to procure the investment" and that she was "entirely dependent upon and trusting of Lin in relation to the truthfulness of the information provided by him to her as to the $2 million and the REITS Fund". The gist of the submission appears to be that the relationship between Yeung and Lin bore the key indicia of a fiduciary relationship, such as vulnerability, trust, confidence and dependence.

231 The flaw in this argument is that Yeung's subjective expectations are not conclusive of the existence of a fiduciary relationship. The relationship of trust and confidence must flow from the nature of the relationship itself. As Dawson J observed in Hospital Products, in ordinary business affairs, persons who have dealings with one another frequently have confidence in each other, and sometimes that confidence is misplaced. However, that does not make the relationship a fiduciary one.[163]

232 The present case certainly appears to be one in which "one of the parties to a relationship has wrongly assessed the trustworthiness of another".[164] Yeung has not demonstrated that the relationship between herself and Lin is of a kind which, of its nature, requires one party to place the requisite reliance upon the other.[165] If Yeung reposed confidence in Lin, it was not due to anything inherent in the nature of the relationship.

233 I note for completeness that the presence of any one or more of the indicia is not determinative of the existence of a fiduciary relationship. The key question is whether Lin undertook or agreed that he would act on behalf of Yeung or in her interests, and, as such, is in a position to affect Yeung's interests in a legal or practical sense.[166] This is determined as a matter of objective characterisation. Yeung submits that "the whole course of dealing was consistent with Lin's assumption of responsibility as to the matters concerning the $2 million". She refers to the fact that he initiated the whole concept of the investment and provided various pieces of information to Yang about the investment. In my opinion, those acts do not disclose the giving of the requisite undertaking by Lin, nor do they confer on him any power or discretion under which Yeung was vulnerable to abuse.

234 Accordingly, the plaintiff has failed to establish that Lin owed her fiduciary duties in respect of the $2 million investment.

Issue 7: Did Lin breach his fiduciary duty to the plaintiff by misappropriating all or part of the $2 million in the manner described in Issue 2 above?

235 As I have found that Lin did not owe a fiduciary duty to Yeung, the answer to Issue 7 is "no".

Misleading or deceptive conduct - preliminary matters

236 The plaintiff pleads that Lin represented that:

(a) the plaintiff's money would be invested in the REITS Fund ("Investment Representation");

(b) the bank account details on the application form, being those of the Transaction Account, belonged to Zank Capital acting as the trustee of the REITS Fund ("Bank Account Representation"); and

(c) there would be little or no investment risk ("Risk Representation")

237 The Investment Representation and Bank Account Representation are said to be in the REITS Fund application form. The Risk Representation is said to be in the second 18 May email. The plaintiff claims Lin further confirmed each representation in his WhatsApp chat with Lam.

238 The plaintiff alleges that, by making the Representations, Lin is liable because:

(a) each of the Representations was misleading or deceptive, or likely to mislead or deceive, within the meaning of s 12DA of the ASIC Act or, alternatively, s 18 of the ACL; and

(b) further or alternatively, the Representations were false in a material particular or materially misleading, in breach of ss 1041E and 1041F of the Corporations Act.

239 As a preliminary matter, I address Lin's asserted defence and why I consider it fails.

240 In Lin's closing oral submissions regarding the misleading or deceptive conduct claims, he asserted that he acted merely as an intermediary between the fifth and sixth defendants on the one hand and the plaintiff on the other. He said that he acted on instructions from Liu and Hu, that they controlled the operations of Zank Group, Zank Capital and Zank & Co and that they made the alleged representations. He also argued that he had no basis to suspect that any information he was communicating to the plaintiff was inaccurate. As he was merely acting as an intermediary, any inaccuracy in the representations made to the plaintiff arose from the fifth and sixth defendants, rather than Lin.

241 While not phrased in the same terms as Lin's oral submissions or expressly referring to the terms "conduit" or "intermediary", Lin's amended defence filed 26 July 2024 ("July 2024 defence") makes limited references to his acting at Hu's behest, including the following:

(a) in relation to messages allegedly exchanged between Lin, Liu and Hu between 15 and 18 May 2020 regarding Yang's anticipated investment and the terms to be offered to him, Lin "acted at the direction of Hu, further or alternatively on behalf of Zank Group";

(b) to the extent that the contents of the second 18 May 2020 email contain "a representation regarding the risk of the investment (which is denied) that risk was advised to [Lin] by and at the direction of Hu and was therefore communicated to Yang by [Lin] on behalf of Zank Group"; and

(c) Lin emailed the investment certificate dated 8 June 2020 to Yeung "at the direction of Hu and therefore on behalf of Zank Group".[167]

242 The plaintiff submits that Lin's argument effectively amounts to a conduit defence. Her main complaint appears to be that the defence was not pleaded, nor did Lin bring a counterclaim against the other defendants or plead any apportionment of responsibility under the Wrongs Act 1958 (Vic). She notes that Lin was legally represented when he swore his affidavit in February 2023 and when he filed both his defence and amended defence. Accordingly, she contends that it is now too late to raise the defence.

243 The plaintiff says further that, even if it is not too late, Lin's argument is not supported by the evidence. She asserts that, in large part, Lin drafted, or instructed Liu and Hu regarding the drafting of, three key documents which misled and deceived her: the REITS Fund application form, the investment certificate dated 8 June 2020 and the investment acknowledgment letter dated 8 June 2020. Lin had the opportunity to comment on the documents in the Group Chat, and he made or contributed to amendments to the application form by removing the capacity to pay by cheque and commenting on changes to the interest rate and redemption period. Lin accepted that he also instructed Liu not to use Chinese language in the investment acknowledgment letter.[168]

244 The principles relevant to whether a party should be held to their pleadings are set out earlier in the judgment.[169]

245 In the present case, I propose to allow Lin's submissions about the so-called "conduit defence". I am of this view because:

(a) as noted at paragraph 241 above, while Lin did not specifically plead a "conduit defence", the July 2024 defence does refer, albeit at a high level, to Lin's acting at the direction of Hu and on behalf of Zank Group in connection with aspects of the alleged misleading or deceptive conduct; and

(b) the plaintiff provided a detailed response to Lin's oral arguments notwithstanding the short notice.[170] This indicates that Lin's belated reference to the conduit defence did not cause the plaintiff irreparable prejudice. Counsel for the plaintiff did not allege the same or refer, for example, to evidence which he might have called had the pleaded defence raised this issue.

246 But, for the reasons that follow, I consider that the defence fails.

247 A person may avoid liability for misleading or deceptive conduct where they are acting as a mere conduit of information supplied by others.[171] The relevant principles were canvassed by Bell CJ, Stern JA and Basten AJA in Care A2 Plus Pty Ltd v Pichardo:

As Mason ACJ, Wilson, Deane and Dawson JJ observed in [Yorke v Lucas (1985) 158 CLR 661 at 666], persons who are mere conduits of information are not liable for misleading and deceptive conduct:

"That does not, however, mean that a corporation which purports to do no more than pass on information supplied by another must nevertheless be engaging in misleading or deceptive conduct if the information turns out to be false. If the circumstances are such as to make it apparent that the corporation is not the source of the information and that it expressly or impliedly disclaims any belief in its truth or falsity, merely passing it on for what it is worth, we very much doubt that the corporation can properly be said to be itself engaging in conduct that is misleading or deceptive."

...

[D]etermining whether a person is a mere conduit of information involves a holistic assessment of the nature of the information conveyed, surrounding circumstances and the relationship between the parties ...

An intermediary is more readily inferred to be merely passing on information (and therefore not directly liable for misleading and deceptive conduct) where: (i) the alleged victim possesses experience or knowledge of the subject matter relating to the representations made; (ii) the conduct relates to information which is not ordinarily within that individual's expertise or knowledge; and (iii) the intermediary "does nothing more than provide or refer to a document that, on its face, was prepared by another" ...

Conversely, an intermediary is more likely to have adopted information where: (i) the underlying third-party document has been altered before being passed on; (ii) the individual knows that the representations passed on may not be reliable; and (iii) the representation concerns a "relatively simple matter", supposedly within the intermediary's "professional judgment"...[172]

248 The above statements suggest that the defence does not apply to assist Lin, because:

(a) the Group Chat discussions indicate that, rather than being a passive intermediary, Lin was actively involved in the drafting of the application form. He voiced his views regarding the interest rate and redemption period. He told the others that he had edited the document, removing the option to pay by cheque and the requirement for a minimum payment amount of $500,000.[173] He also told Hu and Liu that the application form and approval letter should be formal and entirely in English, so that the Hong Kong-based client would not be "put off by Simplified Chinese".[174] In the context of the Group Chat discussions, Lin's argument that he was simply acting on the instructions of Liu and Hu does not have a sound basis in fact. His role was more proactive;

(b) similarly, neither the 18 May 2020 emails nor the WhatsApp messages between Lin and Lam contain any suggestion that Lin was acting merely as an intermediary for the other defendants. While he said that he was not a financial planner and could not introduce investment products, this statement alone does not establish that he was acting purely as a conduit. Nor does it amount to a disclaimer of any belief in the truth of the Representations.[175] On the contrary, instead of distancing himself from the investment product, in the second 18 May 2020 email, Lin offered to provide "more detail and information" if required. When asked for the details of the fund such as the redemption process, the investment period and the IM and other documents, Lin did not direct Lam to Liu, Hu or someone else appropriately qualified to answer those queries;[176]

(c) further, Lin gave evidence that, when proposing the investment to Yang, he had referred to it as an investment in "our public company" and "our fund". This terminology reflected Lin's financial interest in the investment and conveyed the opposite impression to his acting merely as a disinterested intermediary; and

(d) in addition to sending the 18 May 2020 emails and the application form, Lin took other steps to facilitate or encourage the plaintiff's payment of the $2 million. He helped Yang open an Australian bank account for the purpose of the payment, and discussed the details of the payment with Lam over WhatsApp. For example, he requested that the payment be made in amounts above $500,000 and requested that the plaintiff make arrangements with her bank to raise her transfer limit for this purpose. Again, this conduct paints him in an active rather than a passive role; and

(e) as set out above, Lin conducted himself in a manner which was knowingly adverse to Yeung's interests.

249 Accordingly, for the above reasons, Lin's asserted defence on this issue fails.

Application of the ACL, ASIC Act and Corporations Act

250 In order to determine which of the pleaded statutory provisions are relevant to the present case, it is convenient to first outline some of the relevant provisions under each statutory regime.

251 Section 18 of the ACL provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive, or likely to mislead or deceive.

252 Subject to limited exceptions, s 18 of the ACL does not apply to conduct engaged in in relation to financial services.[177] For the purposes of the ACL, "financial product" and "financial service" have the meaning given to those terms under the ASIC Act.[178]

253 Section 12DA of the ASIC Act mirrors s 18 of the ACL, prohibiting conduct "in relation to financial services" that is misleading or deceptive, or likely to mislead or deceive.[179]

254 Financial services include financial products, the provision of financial product advice, dealing in a financial product and services otherwise supplied in relation to a financial product.[180]

255 A "financial product" includes a facility through which, or through the acquisition of which, an investor "makes a financial investment".[181] An investor does so if, among other things:

(a) the investor gives money to another person;

(b) the investor intends that the other person will use the money to generate a financial return, or other benefit, for the investor (even if no return or benefit is in fact generated); and

(c) the investor has no day-to-day control over the use of the money to generate the return or benefit.[182]

Corporations Act

256 Section 1041E of the Corporations Act prohibits the making of certain false or misleading statements, including where:

(a) the statement is false in a material particular or is materially misleading;

(b) the statement is likely to induce another to, inter alia, apply for or acquire a financial product; and

(c) when the person makes the statement, they do not care whether it is true or false, or they know or ought reasonably to have known that it is false in a material particular or is materially misleading.

257 Section 1041F of the Corporations Act prohibits the inducement of another person to deal in financial products, including by:

(a) making or publishing a statement, promise or forecast if the person doing so knows, or is reckless as to whether, the statement is misleading, false or deceptive; or

(b) a dishonest concealment of material facts.

258 For present purposes, the definition of a "financial product" under the Corporations Act is substantially similar to that under the ASIC Act set out above.[183] However, s 763E of the Corporations Act further provides that a product will not be a "financial product" if:

(a) it is an incidental component of a facility with other components or it is a facility that is incidental to other facilities; and

(b) it is reasonable to assume that the main purpose of the facility or facilities, when considered as a whole, is not a "financial product purpose", which is defined in subsection (2) as a purpose of:

(i) making a financial investment;

(ii) managing financial risk; or

(iii) making non-cash payments.[184]

Was the investment a financial product under the ASIC Act and the Corporations Act?

259 The question of which statutory regime applies appears to turn on whether Yeung "made a financial investment" such that the REITS Fund investment constituted a financial product under the ASIC Act and/or the Corporations Act.[185]

260 In this connection, it is not in dispute that Yeung:

(a) gave money to another person (by transferring the $2 million to the bank account indicated on the REITS Fund application form); and

(b) had no day-to-day control over the use of the money.

261 The main issue is whether Yeung intended that the recipient would use the money to generate a financial return or other benefit for her. It does not matter whether a return or benefit was in fact generated.

262 As set out in paragraph 106, the main purpose of the plaintiff's investment in the REITS Fund was to demonstrate to immigration authorities the availability of funds for future business activities. In other words, the plaintiff intended the recipient of the money to use it primarily to benefit her and her husband's visa applications. There is a question whether such immigration-related benefits may be considered "a financial return, or other benefit" for the purposes of the statutory provisions described in paragraph 255 above.

263 Examples of benefits found to meet this criterion include:

(a) financial returns from investments in building developments;[186]

(b) a return described as interest and arising from the investment activities of a purported "hedge fund" or "investment fund";[187]

(c) "bonus monthly payments" consisting of a share of transaction fees earned by the operator of a trading platform;[188] and

(d) a financial return through the provision of trading signals and automated placement of foreign exchange trades.[189]

(a) an investor paying for shares in a company, where the company uses the money to generate dividends for the investor; or

(b) an investor contributing money to acquire interests in a registered scheme, where the scheme uses the money to generate financial or other benefits for the investor.[190]

265 From the above, it appears that in most cases, the relevant benefits have generally been, to a significant extent, financial in nature. I am not aware of cases where the purported "benefits" are immigration-related.

266 In Australian Securities and Investment Commission v Money for Living (Aust) Pty Ltd (admins apptd) (No 2),[191] investors participated in the defendants' sale and lease-back scheme, whereby the investors agreed to contribute their home in return for periodic tax-free payments, rental rates lower than the market rent and, if the investor lived beyond a particular prescribed age, the effective right to occupy the home for the remainder of their life at no cost. After the scheme's collapse, the Australian Securities and Investment Commission alleged that the defendants had breached s 1041H of the Corporations Act and s 12DA of the ASIC Act. Justice Finkelstein noted that the provisions relevant to the definition of making a "financial investment" are to be construed broadly.[192] On that basis, His Honour appeared to be prepared to assume that the investors' benefits under the scheme were "benefits" for the purposes of the relevant sections of the ASIC Act.[193]

267 If the right to occupy a home is seen as comprising of both a financial and a non-financial benefit, Finkelstein J's reasoning may indicate that "benefits" are not necessarily limited to strictly financial or monetary ones, at least for the purposes of the ASIC Act. Adopting a broad interpretation of the legislation, I consider that the ambit of "financial returns, or other benefits" under both Acts is wide enough to encompass the immigration-related benefits which the plaintiff's investment was intended to generate. If the payment of the $2 million assisted in getting a positive outcome for the visa application, then that would enable Yeung and her husband to become permanent residents and conduct business in Australia. The opportunity to reside here and to conduct business in this country is an economic benefit.

268 In any event, even if am wrong about this, if the immigration-related benefits do not qualify as "benefits" under the ASIC Act and Corporations Act, the investment was intended to generate other benefits as well, namely the dividend set out in section 6 of the application form. Such a benefit would be more analogous to those considered in the authorities and likelier to constitute "financial returns, or other benefits".

269 As discussed at paragraph 108, I find that on the balance of probabilities, the plaintiff made her investment with the intention that Zank Capital, the ostensible recipient of the money based on the application form, would use the money to generate a financial return of 3% per annum through investment. This benefit was additional to the immigration benefits already discussed.

270 On the above basis, I consider that Yeung's payment of the $2 million constituted the making of a financial investment under the ASIC Act. Even if the immigration-related benefits are not "benefits" for the purposes of the ASIC Act, Yeung intended for her money to be used to generate a financial return of 3% per annum.

271 Accordingly, I find that the REITS Fund, as the facility through which the plaintiff made that financial investment, was a financial product and a financial service under ss 12BAA and 12BAB of the ASIC Act.

272 However, the position under the Corporations Act is different by reason of s 763E of that Act. As set out earlier, that section provides that a product will not be a "financial product" if it is, for example, incidental to other facilities where the main purpose of the facilities, when considered as a whole, is not a financial product purpose. In the present case, the main purpose of the investment was the furthering of the visa applications by demonstrating to immigration authorities the availability of future investment funds. This is not a financial product purpose under s 763E. To the extent that the investment had the purpose of generating a financial return or other benefit, this was an incidental component of the overall facility or a facility incidental to other facilities.

273 For the aforementioned reasons, I consider that the plaintiff's $2 million investment was a financial product and a financial service under the ASIC Act (but not under the Corporations Act). This means that the ACL does not apply, and it is only necessary for me to consider the ASIC Act claim.

274 If I am wrong about this, however, I will nonetheless consider briefly the question of liability under the ACL.

Misleading and deceptive conduct - summary of findings

(a) Lin made each of the Representations;

(b) the Representations were made in relation to "financial services" within the meaning of the ASIC Act, and accordingly, ss 12BB and 12DA of the ASIC Act apply, but ss 4 and 18 of the ACL do not;

(c) the Representations were not made in relation to "financial services" within the meaning of the Corporations Act, and accordingly, ss 1041E and 1041F of the Corporations Act do not apply;

(d) the Risk Representation was a representation as to a future matter which Lin made without reasonable grounds, and the Risk Representation was therefore misleading under s 12BB of the ASIC Act or, alternatively, s 4 of the ACL (if that provision were applicable); and

(e) each of the Representations was misleading or deceptive or likely to mislead or deceive under s 12DA of the ASIC Act or, alternatively, s 18 of the ACL (if that provision were applicable).

Issue 8: Did Lin make the Investment Representation, the Bank Account Representation and the Risk Representation?

276 I find that Lin made the Investment Representation and the Bank Account Representation. The words appearing on the REITS Fund application form make good those representations and there is no dispute that Lin sent the application form to Lam.

277 In relation to the Risk Representation, during re-examination Lin appeared to argue that the second 18 May 2020 email did not mean what the plaintiff suggests. I consider that the email does convey the Risk Representation because:

(a) apart from referring to the fact that he provided migration assistance to Yang and not financial work or advice,[194] Lin did not advance a clear alternative meaning for the second 18 May 2020 email; and

(b) in any event, I consider it appropriate to interpret the second 18 May 2020 email according to the plain meaning of its text: "[t]here is no investment risk". In the context of an investment whose purpose was to show the authorities that the plaintiff and Yang had monies in Australia available for future investments, these words would have conveyed that there was little or no risk that the investment would not be repaid in full when required.

278 For the reasons above, I consider that Lin made each of the Representations.

Issue 9: Was the Risk Representation a representation made about a future matter without reasonable grounds for making such a representation?

279 The plaintiff submits that, to the extent that the Risk Representation was made about a future matter, it was made without reasonable grounds, because:

(a) the Risk Representation was false as the plaintiff's money was diverted from the stipulated secure account of an AFSL-holding company such as Zank Capital into a transactional account owned by Zank Group and controlled by Zank Group shareholders; and

(b) Zank Group shareholders swiftly dissipated the plaintiff's money. This included Russell St Co's use of the money to purchase the Property, a speculative development project, putting the plaintiff's investment at risk and making it unlikely to be redeemed within a reasonably short time.

280 Yeung argues that it was incumbent on Lin to lead positive evidence to prove there was a reasonable basis for him making the Risk Representation. She says that Lin failed to do so.

281 In relation to the Risk Representation, apart from the conduit defence, Lin's main submission appears to be that Hu told him that the investment had very low risk.

282 Section 12BB of the ASIC Act provides that if a person makes a representation with respect to any future matter without reasonable grounds for making it, the representation is taken to be misleading. The evidentiary burden is on the representor to adduce evidence that they had reasonable grounds. If they fail to do so, the representation is deemed misleading.[195]

283 Section 4 of the ACL contains substantially identical language. In reference to that section, Macaulay JA explained the relevant principles in Kytec Pty Ltd v Prolearn Corp Pty Ltd:

Whether or not there were reasonable grounds is a question of fact. The matter is to be determined at the date of the representation. There will not be reasonable grounds for making a representation if, at the time of making it, the representor did not have facts sufficient to induce, in the mind of a reasonable person, a basis for making the representation. The existence of reasonable grounds may be determined by reference to the overall circumstances of the case, including the overall probabilities to which the circumstances of a particular case give rise, and may be established by evidence other than that of the persons who are alleged to have made the particular representations as to a future matter.

However, the question of whether a respondent had, at the time of making a representation as to a future matter, reasonable grounds for making it, is particularly illuminated by the knowledge, understanding, or reasoning of the respondent. Even so, genuine or honest belief in a representation is not sufficient to establish reasonable grounds for making it. Evidence of later events may throw light on the overall probability that a representation was reasonable at the time it was made. However, it remains important to guard against 'hindsight illusion', which is to treat knowledge before an event as equivalent to knowledge acquired after the event.

A summary of the matters to be demonstrated by the representor was set out by Heerey J in Sykes v Reserve Bank of Australia [(1998) [1998] FCA 1405; 88 FCR 511 at 513], namely:

(1) some facts or circumstances;

(2) existing at the time of the representation;

(3) on which the representor in fact relied;

(4) which are objectively reasonable, and

(5) which support the representation made.[196]

284 The Risk Representation provided that the plaintiff's $2 million investment would carry little or no risk. This related to the risk that the $2 million could not be repaid when the plaintiff eventually sought to redeem the investment at some point in the future. It was therefore a representation as to a future matter.

285 Accordingly, s 12BB of the ASIC Act required Lin to adduce evidence that:

(a) as of 18 May 2020, there were objectively reasonable facts and circumstances which supported the representation that the investment would entail little or no risk; and

(b) he in fact relied on those facts and circumstances in making the representation.[197]

286 In terms of a basis for the Risk Representation, Lin's argument appeared to be limited to the assertion that Hu had told him that the risk was low. More generally, Lin also suggested that he was not in control of, and did not know the details of, the REITS Fund and the operation of Zank Capital. Lin did not, for example, lead evidence about the property market in Sydney or in the relevant suburb or area of the Property, providing details about supply and demand, trending values or other economic data which might show that property values in the area were likely to increase in the one to three-year period after the date of acquisition of the Property. Such evidence may have suggested that there could be reasonable grounds for representing that an investment into the Property held little or no risk. There is no indication that Lin relied on such economic data or similar information in making the Risk Representation. To the contrary, Lin's argument was that he simply relied on Hu's assertion that the Property would be a low risk investment. In general, Lin tended to stress that his role in relation to the investment into the Property was minor vis-à-vis Liu and Hu, given that he was not a professional or financial specialist and lacked the relevant expertise.

287 Moreover, in circumstances where the $2 million was paid to Zank Group, an entity different from the one nominated on the application form, there was an additional element of risk which was not addressed. This was the ability of Zank Group to repay Yeung's money. If, for example, Lin had adduced evidence that Zank Group had a sound financial position and plentiful resources, such that it could have effected redemption of the investment at any time required by the plaintiff, this may have indicated reasonable grounds for making the Risk Representation. However, Lin did not do so. Apart from his oral assertions, Lin did not point to any evidence of objectively reasonable facts and circumstances underlying the Risk Representation.

288 Accordingly, I consider that the Risk Representation was misleading by the operation of s 12BB of the ASIC Act. If the ACL were to apply, I would reach the same conclusion under s 4.

Issue 10: Were any of the Representations misleading or deceptive, or likely to mislead or deceive?

289 The plaintiff says that the Investment Representation was false because the REITS Fund did not exist, and Lin never intended the plaintiff's money to be invested in the REITS Fund. Rather, his intention was for the $2 million (or part thereof) to be used for a speculative real estate investment.

290 She further submits that the Bank Account Representation was false as the bank account appearing on the REITS Fund application form belonged to Zank Group, not Zank Capital.

291 The Risk Representation is said to be false because the plaintiff's money was diverted to a bank account owned by Zank Group and controlled by Lin and the other Zank Group shareholders. Further, the plaintiff's money was used by Russell St Co to purchase the Property, placing the investment at risk and making it unlikely to be redeemable within a short time. The fact that the plaintiff is yet to receive any of her money back is said to further underscore the problem.

292 Yeung claims that she is not precluded from recovering her loss by the fact that the Representations were made to Lam, and not Yeung directly. She says that loss may be recovered where misleading representations were not made directly to the person who ultimately suffered the loss, sometimes referred to as indirect causation. As authority for this proposition, the plaintiff quotes the following passage of TPT Patrol Pty Ltd v Myer Holdings Ltd:

The first subcategory is active indirect causation. This is the scenario where a respondent's misleading conduct induces some reaction in X, and the applicant would have acted differently but for that reaction by X. There is no additional requirement that the applicant was aware of or relied on the respondent's conduct. It is enough that X relied, and that the applicant would have acted differently but for that reliance by X. Or in other words, it is enough that the applicant relied on X.[198]

293 Lin stresses that he had no intention of misleading or deceiving the plaintiff.

294 He submits that he believed the REITS Fund existed at the time of making the Representations, and that Yeung's money would be invested in that fund. He says he was told by Hu and Liu that the money would be invested in the Property. He says that the application form was not produced by him, and he was just passing information from the other defendants to Lam, believing it was not his responsibility to check whether the form was correct. He says he had no basis to suspect that the information in the form was incorrect. In respect of the Bank Account Representation, he maintains that he thought that the bank account appearing on the application form belonged to Zank Capital, not Zank Group. In respect of the Investment Representation, he argues that as he was not a financial professional, he did not identify who the trustee of the fund was or the structure of the fund.

295 In Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd,[199] the High Court set out a four-step approach to determining whether there has been misleading or deceptive conduct:

• identify the contravening conduct;
• determine if the conduct occurred in trade or commerce;
• assess the meaning of the conduct; and
• determine whether, given the meaning conveyed, the conduct was misleading or deceptive. This is to be assessed objectively considering whether a reasonable person in the plaintiff's position would have been misled.[200]

296 In applying the above test, the applicable principles include the following:

(a) it is necessary to determine whether, in light of all relevant circumstances constituted by acts, omissions, statements or silence, there has been conduct which is, or is likely to be, misleading or deceptive.[201] The test is objective and requires looking at the relevant course of conduct as a whole;[202]

(b) it has long been established that a person may contravene s 18 even if they acted honestly and reasonably. Neither knowledge of the contravention nor intention to contravene is required. Rather, the test requires a court to look at the conduct of the relevant person and determine whether that conduct misled or was likely to mislead a consumer, regardless of the representor's mental state;[203]

(c) a court may more readily infer that the conduct breaches s 18 where there has been a finding of intention to deceive;[204]

(d) silence is to be included as a relevant factor in assessing conduct just like any other factor;[205] and

(e) the context might include facts which give rise to a reasonable expectation that, in the circumstances, if particular matters existed, they would be disclosed.[206] However, reasonable expectation is irrelevant when the undisclosed fact is the falsity of a representation made. Thus, a party who makes a false representation in pre-contractual negotiations and fails to reveal the truth will, in all likelihood, be found to contravene the ACL.[207]

(a) the second 18 May 2020 email and the REITS Fund application form conveyed the meaning of the Investment Representation, the Bank Account Representation and the Risk Representation; and

(b) by sending the second 18 May 2020 email and the application form to Lam, Lin made the Representations.

298 I consider that Lin made each of the Representations in relation to financial services because:

(a) as I have already found, the REITS Fund was a financial product and a financial service for the purposes of the ASIC Act;

(b) furthermore, the making of the Risk Representation could be seen as the provision of financial product advice, as the representation was a statement of opinion that the investment in the REITS Fund carried little or no risk. Such a representation could reasonably be regarded as being intended to influence the plaintiff to proceed with the investment;[208] and

(c) additionally, the Investment Representation and the Bank Account Representation were both contained in the application form, which Lin provided to Lam without reservation as part of the plaintiff's application for her investment in the REITS Fund. Arranging for a person to apply for a financial product constitutes dealing in a financial product and the provision of a financial service.[209]

299 There was no dispute that the conduct occurred in trade or commerce. Lin sent the second 18 May 2020 email and the application form in the course of providing migration services (for which he or his company was to be paid) to Yeung and Yang.

300 The next question is whether Lin's conduct, in making the Representations, was misleading or deceptive, or likely to mislead or deceive. For the reasons that follow, I consider that it was.

301 Lin pointed to various documents, including REITS Fund application materials completed by clients other than the plaintiff and dated a few months after the plaintiff's investment of the $2 million, to indicate that it was not possible for him to know that the REITS Fund did not exist at the time of the plaintiff's investment. However, as the authorities make clear, the fact that Lin did not know that the Investment Representation was false does not prevent a finding that there was a contravention of s 12DA of the ASIC Act or, if the ACL applies, s 18 thereunder.

302 Rather, the question is whether Lin's conduct in making the Investment Representation (and the other Representations) was misleading or likely to mislead. Based on the nature and contents of the document, a reasonable recipient of the REITS Fund application form would be led to believe that their money would be invested in the REITS Fund referred to throughout the document. It is difficult to see how they could expect anything else.

303 There was no clear evidence as to when the REITS Fund came into existence. However, it was not in dispute that, at the time the Investment Representation was made, the REITS Fund did not exist. This means that the Investment Representation was false, as the money could not be invested in a fund which did not exist. A reasonable person in the plaintiff's position would be misled or likely to be misled by such a representation.

304 Similarly, there was no dispute that the bank account details appearing on the REITS Fund application form provided to Lam in fact belonged to Zank Group and not Zank Capital. Accordingly, the Bank Account Representation was false and misleading. A reasonable person in the plaintiff's position would be misled or likely to be misled into thinking that the bank account details appearing below the words "ZANK Capital Ltd ATF REITS FUND" belonged to Zank Capital.

305 I have already found that the Risk Representation was misleading due to the fact that it was a representation made without reasonable grounds about a future matter.

306 As the Investment Representation and Bank Account Representation were false, they were each misleading or deceptive or likely to mislead or deceive. The Risk Representation is also deemed to be misleading under s 12BB of the ASIC Act (or s 4 of the ACL, if the ACL were to apply). I therefore consider that, by making the Representations, Lin breached s 12DA of the ASIC Act or, were the ACL to apply, s 18 thereof.

Issue 11: Did Lin make any statements which were false or materially misleading contrary to ss 1041E and 1041F of the Corporations Act?

307 I have concluded at paragraph 272 above that the plaintiff's investment was not a "financial product" under ss 763A and 763E of the Corporations Act. Accordingly, ss 1041E and 1041F of the Corporations Act do not apply in the present case and there is no need for me to further consider those claims.

Issue 12: Did Lin commit the tort of deceit in his dealings with the plaintiff in respect of the misappropriation of the $2 million?

308 The plaintiff pleads that, in addition to the various alleged statutory breaches, by making the Investment Representation, the Bank Account Representation and the Risk Representation, Lin also committed the tort of deceit. This is said to be because:

(a) Lin made false representations to Lam, who acted on behalf of Yang and the plaintiff;

(b) Lin must have known the representations were false, or alternatively, he was reckless as to whether they were false and had no honest belief that they were true (nor could he have had such belief);

(c) Lin made the representations with the intention that the plaintiff would act on them;

(d) the plaintiff acted on Lin's false representations by instructing her bank to transfer $2 million to the bank account stated on the REITS Fund application form; and

(e) the plaintiff suffered loss caused by her reliance on Lin's false representations.

309 In respect of the above allegations, the plaintiff submits:

(a) the Court should reject Lin's claim that he did not know that the REITS Fund did not exist, as Lin provided no persuasive evidence to support such a belief;

(b) likewise, Lin's claim that he had not noticed the erroneous bank account details on the application form is not supported by the evidence, which shows that he directed Hu to amend the relevant section of the application form and knowingly operated the Transaction Account within about a week of Yeung transferring the $2 million;

(c) contrary to the representations in the second 18 May 2020 email, Lin knew that Yeung's $2 million would not be left in a "secure fund", and he intended that the $2 million would be used to assist in acquiring the Property; and

(d) no part of the $2 million was ever received by Zank Capital or paid into any bank account of the REITS Fund. Nor did Lin seek to transfer any part of Yeung's $2 million to either Zank Capital or any bank account of the REITS Fund.

310 Lin submits that the elements of deceit are not satisfied, as he did not knowingly or recklessly make any false representation. Consistently with his submissions regarding the misleading or deceptive conduct claims, he argues that he relied on documents prepared by the fifth and sixth defendants. He denies that the plaintiff has proved the requisite state of mind for the deceit claim.

(a) he believed that the REITS Fund existed, and he thought that Yeung's money would be invested into the Property through the REITS Fund. He referred to his limited knowledge and involvement in the REITS Fund and Zank Capital, which meant that he had no reason to suspect that the Investment Representation was false;

(b) similarly, he had no reason to suspect that the Bank Account Representation was incorrect. Due to his very limited role with respect to the REITS Fund and Zank Capital, he relied on the fifth and sixth defendants to prepare the application form. He claimed that he did not notice that the application form stated incorrect bank account details. He also said that he did not remember the bank account details of the Transaction Account; and

(c) as for the Risk Representation, Hu told him that the investment had very low risk. Lin said that he was not a financial planner and could not introduce products for investing.

312 In Magill v Magill ("Magill"),[210] Gummow, Kirby and Crennan JJ summarised the elements to be proved in an action in deceit as follows:

The modern tort of deceit will be established where a plaintiff can show five elements: first, that the defendant made a false representation; secondly, that the defendant made the representation with the knowledge that it was false, or that the defendant was reckless or careless as to whether the representation was false or not; thirdly, that the defendant made the representation with the intention that it be relied upon by the plaintiff; fourthly, that the plaintiff acted in reliance on the false representation; and fifthly, that the plaintiff suffered damage which was caused by reliance on the false representation. Generally, the elements of the tort have been found to exist in cases which concern pecuniary loss flowing from a false inducement and the need to satisfy each element has always been strictly enforced, because fraud is such a serious allegation.[211]

313 Justice Elliott reviewed the relevant principles in Cargill Australia Ltd v Viterra Malt Pty Ltd (No 28),[212] some of which are summarised below.

(a) whether the first element is satisfied is ordinarily determined by how the representation would have been understood by a reasonable person;

(b) the representation may consist of words or conduct, or by active concealment or non-disclosure of a fact;

(c) the differing meanings or senses in which words or conduct were understood by both the representor and representee must be borne in mind; and

(d) a false statement by someone as to their state of mind or intention can constitute a false representation for the purposes of an action in deceit.[213]

(a) in Magill, Gummow, Kirby and Crennan JJ used "carelessness" in the sense of "not caring whether the representation was false or not", rather than negligence or not taking reasonable care, which is insufficient. In other words, there is no practical difference between "recklessness" and "carelessness" for the purposes of the second element of deceit;

(b) recklessness is a state of mind established by showing indifference to the truth or falsity of the representation, or the absence of genuine or honest belief in the truth of the statement as it was intended to be understood. The defendant must have been aware of a risk that the statement was untrue or false and consciously disregarded that risk;

(c) alternatively, the second element can be satisfied if a defendant wilfully shut their eyes to what would result from further enquiry as to the truth or falsity of the statement;

(d) it does not matter that there was no intention to cheat or injure the representee. Prior planning is not required;

(e) the absence of reasonable grounds for believing a statement to be true is not sufficient to satisfy this element. Although it may serve as evidence of recklessness, this can be displaced by showing the representor's genuine belief in the truth of the representation; and

(f) the grounds of belief can be relevant to an assessment of the credibility of assertions of belief. If a belief has no reasonable grounds, this may indicate that it was not genuinely held.[214]

(a) it is sufficient that the representation was one cause of the plaintiff's actions, even if only a minor part. It need not be the sole cause. This is so even if the plaintiff's own mistake or carelessness contributed to their actions; and

(b) if the representation is made to induce the representee to enter into a contract, and the other party does so, a rebuttable inference arises that the representation induced the representee to do so.[215]

(a) generally, the element is satisfied if the plaintiff would not have sustained the loss if not for the defendant's wrongful conduct;

(b) however, the "but for" test must be tempered with value judgments and policy considerations and determined with a common sense approach.[216]

318 A finding of fraudulent conduct on the balance of probabilities is not to be lightly made.[217] It requires clear or cogent proof.[218] In the present case, however, I am comfortably satisfied that the plaintiff has proved the elements of the tort of deceit.

319 In respect of the Investment Representation and the Bank Account Representation, I am satisfied of the first element of the tort by application of the findings at paragraphs 276 and 301 to 304. Those two representations were made and are false.

320 The question of whether the Risk Representation was false is, in my view, not so straightforward. I found earlier that Lin failed to show that he had reasonable grounds for making the Risk Representation and so it was deemed to be misleading or deceptive. However, as the discussion at paragraphs 286 and 287 observes, various factors may be relevant to an assessment of the risk to which the plaintiff's money was subject. This might include considerations such as the financial risk of an investment involving an acquisition of the Property and the financial position of Zank Group at the relevant time. The plaintiff's submissions do not address these complexities in any detail. Given that I have already found that Lin made false representations by making the Investment Representation and Bank Account Representation, there is no need for me to make a finding as to the falsity of the Risk Representation.

Did Lin make the false representations with knowledge that they were false or recklessly or carelessly as to whether they were false?

321 A number of circumstances indicate that, at the time of making the Investment Representation and Bank Account Representation, Lin was reckless or careless as to their truth. As I will explain, Lin's conduct in the circumstances reflects an indifference to the truth or falsity of those representations and indicates that he consciously chose to disregard the risk that they were false. At best, he wilfully shut his eyes to further enquiry about the truth of the representations.

322 In relation to the Bank Account Representation, I note the following:

(a) Lin was an authorised signatory of the Transaction Account at the time of making the representation;

(b) the Transaction Account belonged to Zank Group and not Zank Capital;

(c) despite Lin's assertions to the contrary, I consider it highly likely that he read and was aware of the section of the application form which contains the erroneous bank details, as he personally suggested or made amendments to that section and specifically directed Lam's attention to the account details therein. I also reject Lin's assertions opposed to this finding because:

(i) uncontested evidence about his conduct towards the plaintiff reflects adversely on his character and his attitude to the truth; and

(ii) I did not regard him as a trustworthy and honest witness;

(d) Lin's evidence was that he did not have access to the bank accounts of Zank Capital and was not otherwise involved in the management or affairs of that company. If this were the case and he believed that the bank account details stated on the application were correct, he must have expected Yeung's money to be received in an account to which he had no access. However, on 5 June 2020 Lin informed Lam that "2 Million [sic] has been received via Zank Capital", when in fact the money had been received in the Transaction Account;

(e) on 11 and 12 June 2020, Lin made transfers amounting to $300,000 out of the Transaction Account to his personal account, business account and the Xiaoyan Zhang account. When making those transfers, he must have seen that the total account balance in the Transaction Account approximately corresponded to the $2 million which he knew Yeung had transferred only a few days prior, and ought to have realised that Yeung's money had been transferred to the Transaction Account and not Zank Capital's account. He also would have been able to see a transaction record for the Transaction Account showing that $2 million had been received from Yeung. Again, if he had believed that the bank account details on the form were correct, Yeung's money should not have been received in the Transaction Account. There is no evidence that he tried to notify Yeung, Yang or Lam that the money had been sent to the wrong account. To the contrary, he proceeded to transfer $300,000 of the money out of the Transaction Account; and

(f) Lin's multiple transfers out of the Transaction Account in June 2020 and thereafter also indicate that he actively and regularly accessed the account. In my view, this increases the likelihood that he was familiar with the account details of the Transaction Account.

323 The above matters strengthen an inference that Lin knew the Bank Account Representation was false at the time of making the representation. They also make it difficult to accept Lin's assertions that he did not notice that the bank account details on the application form were incorrect or that he did not remember the Transaction Account details.

324 Even if he did not know the Bank Account Representation was false, I infer from the above matters that he did not care whether it was false. If the representation were an innocent oversight, $2 million is a substantial amount. The risks of providing incorrect bank account information in this context are obvious. Given his regular access to the Transaction Account as an authorised signatory, his provision of the erroneous bank details to Lam and his follow-ups to encourage payment in accordance with those bank details, his conduct towards Yeung in the context indicates, at best, indifference as to the accuracy of the details.

325 As for the Investment Representation, the following matters are relevant:

(a) Lin knew when the $2 million had been received in the Transaction Account - he informed Lam when the money had been received;

(b) Yeung's money was received in the Transaction Account on 5 June 2020. On 11 and 12 June 2020 Lin effected five transfers out of that account totalling $300,000. This is a substantial sum in comparison to the balance of the Transaction Account immediately prior to the receipt of Yeung's $2 million - this was only $57,868.02. Given that Lin was an authorised signatory of the account, he would have most likely seen the balance in the Transaction Account both prior to the transfer of Yeung's money and at the time he made the withdrawals on 11 and 12 June 2020;

(c) based on the above, it is likely that Lin knew, or ought to have known, that he was drawing upon Yeung's $2 million when he effected the $300,000 in transfers on 11 and 12 June 2020, including to his personal and business accounts. These transfers meant that the $2 million from Yeung was not invested into the bank account of Zank Capital Ltd, the purported trustee of the REITS Fund; and

(d) only a relatively short time passed between the making of the representation on 18 May 2020, the receipt of the money on 5 June 2020 and Lin's transfers of the money on 11 and 12 June 2020. The proximity in time supports an inference that Lin intended to transfer at least some of Yeung's money to his own accounts at the time of making the Investment Representation. In other words, it is likely that he knew the Investment Representation was false when he made it.

326 In any event, the circumstances suggest that Lin was, again, at best indifferent as to the truth of the Investment Representation, including the existence of the REITS Fund. Even if, as Lin claims, he did not know about the workings of the REITS Fund and relied on Hu and Liu, who were financial specialists, there was no evidence that he sought to direct Lam to either Hu or Liu to answer her queries regarding the REITS Fund. He did not provide the IM to Lam despite her requests. This may be because the document did not exist, given the non-existence of the fund itself. The fact that he was not able to obtain a copy of the IM from either Liu or Hu should have indicated to him that some further enquiry was warranted. In these circumstances, it is difficult to characterise Lin's conduct (at best) as anything other than a wilful shutting of the eyes.

Did Lin make the representations with the intention that Yeung would rely on them?

327 In relation to the third element of the tort, I think it is also sufficiently clear that Lin made the Investment Representation and Bank Account Representation with the intention that Yeung would rely on them. He likely intended the plaintiff to rely on the accuracy of the application form and to believe that her $2 million would be invested into the REITS Fund if she paid the money into the bank account indicated on the application form. If he did not have such an intention, he advanced no alternative explanation for why he provided the form to Yeung and directed Lam to section 6 of the form in particular, requesting payment according to the instructions therein.

Did Yeung act in reliance on the representations?

328 Given the facts already referred to, I consider that the plaintiff acted in reliance on the Investment Representation and Bank Account Representation.

329 Notwithstanding Lin's submissions, liability for deceit does not depend on whether he intended to cheat or injure Yang and Yeung. The authorities make it clear that a fraudulent representation may be made without "evil motive".[219] In a commercial context, once an intention to induce reliance on a false statement has been proved, motive is irrelevant, although motive may be relevant to proof of that intention.[220]

330 Moreover, during Lam's cross-examination, Lin appeared to allege that Lam had been careless in her review of the REITS Fund application form or had otherwise omitted to pass relevant information onto Yang or the plaintiff. Even if such mistake or carelessness was another reason for the plaintiff's actions, the fourth element of the tort is still satisfied - it is sufficient that the false representations played some part.[221] I am satisfied that they did.

331 I consider that the Investment Representation and Bank Account Representation were each likely to induce, and did in fact induce, Yeung to proceed with the investment, because:

(a) the Investment Representation provided that the money would be invested in the REITS Fund, which the plaintiff had been led to believe was an existing fund operated by an entity holding an AFSL. This meant that the representation was likely to engender confidence in the plaintiff as to the legitimacy and safety of the investment; and

(b) the Bank Account Representation provided that the bank account stated on the application form belonged to the "trustee of the REITS Fund", suggesting that, if the payment instructions were followed, Yeung's money would be received by the trustee of the fund in which she was ostensibly investing. In other words, the Bank Account Representation implied that the bank account details stated on the application form were correct.

332 Moreover, as Yeung did proceed with the payment, the Court may infer that she was induced to do so by the Investment Representation and Bank Account Representation.[222] Lin has not sought to rebut this inference. He has not adduced any evidence to suggest, for example, that those representations played no part in Yeung's decision to invest, or that she knew that the representations were false but chose to invest anyway. It does not matter that Yeung and Yang may have been motivated to invest by other reasons as well, such as a desire to accelerate their visa applications. The false representations do not need to be the sole inducement.[223]

333 The above matters show that the Investment Representation and the Bank Account Representation had both the aim and the practical effect of encouraging the plaintiff to have no concerns regarding the investment and proceed with confidence. The plaintiff acted in reliance on those representations by signing the application form and paying the $2 million as directed by the form.

Did Yeung suffer damage caused by her reliance on the representations?

334 Lastly, the final element of the tort concerns whether the plaintiff has suffered damage caused by her reliance on the false representations. It was not in dispute at the trial that she had not received from Lin or any other defendant any part of the $2 million she paid over.

335 For the reasons that follow, I consider that the plaintiff has proved causation. I find on the balance of probabilities that, if the Investment Representation and Bank Account Representation had not been made, the plaintiff would not have proceeded with the $2 million payment and would not have suffered the relevant damage. I say this having regard to the following matters:

(a) Yang and Yeung had very limited English literacy, a fact which Lin accepted.[224] Yang and Yeung explained in their evidence that their practice was to rely heavily on Lam in relation to matters requiring English language ability. For example, Lam would draft emails in English which the plaintiff would copy, paste and send. In relation to the REITS Fund investment, Yang instructed Lam to contact Lin to progress the relevant paperwork;[225]

(b) on 18 May 2020, Lin sent to Lam the REITS Fund application form containing the Investment Representation and the Bank Account Representation and the second 18 May 2020 email;

(c) in the period prior to Yeung's transfer of the $2 million, Lam asked Lin over WhatsApp for more information regarding the REITS Fund application form and investment. In particular:

(i) on 19 May 2020, she asked Lin to confirm that the investment amount was $2 million;

(ii) on 4 June 2020, she requested details of the fund, including the redemption clause and the investment period, saying that she "need[ed] to know" these details; and

(iii) around the same time on 4 June 2020, she asked at least twice for documents for the fund, such as the IM, so that she could review them;

(d) in oral evidence, Lam explained that she had asked Lin these questions of her own initiative, because she wanted to be prepared to answer questions that Yang may have. In other words, she considered that these matters could well be of interest to Yang and Yeung. She said that Yang specifically asked her about the redemption period; and

(e) after Yeung's payment of the $2 million, on 8 June 2020 Lam asked Lin over WhatsApp for a receipt for the investment, a copy of Lin's business card and the identity of the fund administrator and manager.

336 The above circumstances indicate that Lam acted with a level of diligence and caution with respect to the REITS Fund investment, and that she was alive to at least some of the potential risk which the investment entailed. She pre-emptively sought out information that she foresaw to be of potential interest to Yeung and Yang. In her oral evidence, she said that, if she had discovered that the REITS Fund did not exist or that the bank account details stated on the application form belonged to a company associated with Lin, she would have reported these matters to Yang immediately. She also said that, if she had not received documents from Lin that appeared to confirm the investment in a manner consistent with the application form and communications with Lin, she would have been concerned and would have raised this with her employer. I accept these claims. They are consistent with her conduct regarding Lin as shown by the documentary evidence.

337 On that basis, I consider it more likely than not that the plaintiff would not have proceeded with the $2 million payment but for the Investment Representation and Bank Account Representation.

338 For the reasons stated, I consider that the plaintiff has proved that Lin committed the tort of deceit by making the Investment Representation and the Bank Account Representation.

Issue 13: Is Lin liable to pay the $2 million (or any part thereof) to the plaintiff as money had and received?

339 Alternatively to the claims of deceit, misleading or deceptive conduct and breach of trust and fiduciary duty, the plaintiff pleads that Lin is liable to pay $2 million, or the traceable proceeds of that amount, to Yeung as money had and received.

340 Due to my findings regarding the claims under the ASIC Act and in deceit, there is no need for me to consider the money had and received claim. Even if it were necessary for me to consider the money had and received claim, I would find, as I will explain, that the plaintiff has failed to prove the claim.

341 Lin's submissions in relation to the money had and received claim are limited. He denies liability and claims that he derived no personal benefit from Yeung's $2 million. He also says that he did not receive the funds either directly or indirectly.[226]

342 The plaintiff submits that Lin should make restitution for $2 million or, alternatively, $861,615.22 or $590,000 of the plaintiff's money as money had and received because:

(a) Lin received that money for his own benefit, or that of his wife;

(b) he provided no consideration for the money he received from the plaintiff;

(c) there were no vitiating factors or disqualifying conduct pleaded or put to the plaintiff in cross-examination;

(d) the money in justice and equity belongs to the plaintiff; and

(e) he advanced no defence and has no defence to the claim.

343 The common law claim for money had and received is now considered to rest upon the concept of unjust enrichment.[227] At a high level of generality, an approach to determining such a claim may be summarised by considering the following matters:

(a) what benefit the defendant has received;

(b) whether the benefit is at the plaintiff's expense; and

(c) whether there is some recognised qualifying or vitiating factor, such as mistake, duress, illegality or failure of consideration, by reason of which the law treats the defendant's enrichment as unjust.[228]

344 If the above matters are made out, the defendant has a prima facie liability to make restitution. This liability may be displaced if a relevant defence applies.[229]

345 A plaintiff is not restricted to claiming restitution directly from the person they have paid. For example, where the money can be traced into the hands of a third party recipient, the plaintiff may have a claim against that recipient.[230] Similarly, where a person requests that the plaintiff make a payment to a third party, such as a charity, the person making the request may still be liable to make restitution, even if they did not receive a direct or personal benefit.[231]

346 In Redland City Council v Kozik,[232] Gordon, Edelman and Steward JJ explained the meaning of "consideration" where the defendant's enrichment is alleged to be unjust due to a failure of consideration:

In the law of unjust enrichment, where "consideration" is concerned with a reason for a transaction, the concept ... means a "basis", "purpose", or "condition" for a transaction by which one party confers a benefit upon another. That basis, purpose, or condition for the transaction might be a factual or legal state of affairs.

(a) in each case, the basis of the transaction is determined objectively, not according to the parties' uncommunicated subjective beliefs;

(b) the basis of the transaction might fail immediately at the time of payment, such as where payments are made for an "absence of consideration", or if the basis for the payment was the enforceability of promissory obligations which were void;

(c) alternatively, the basis might fail after the payment, such as where the basis for payment was the later performance of an obligation which was not ultimately performed; and

(d) the basis does not need to be an express or implied promise in a contract. It can be "an event or state of affairs that was not promised". Moreover, the transaction might not be a contract at all.[233]

348 The receipt of money for a consideration that has wholly failed gives rise to a prima facie obligation to make restitution.[234]

349 Where mistake is the alleged vitiating factor, relevant considerations include the following:

(a) the fact that a payment is caused by a mistake is sufficient to give rise to a prima facie obligation on the part of the recipient to make restitution.[235] If the plaintiff would not have paid the money had they known all the relevant circumstances, both legal and factual, the defendant is unjustly enriched by the receipt;[236]

(b) to displace the prima facie obligation in whole or in part, the onus rests on the defendant to establish some recognised defence;[237]

(c) examples of mistake giving rise to an obligation for restitution include:

(i) a mistaken belief by the plaintiff that they were legally required to pay the defendant or that the defendant was legally entitled to a payment;[238] and

(ii) the plaintiff's clerical error resulting in an overpayment to the recipient bank account;[239]

(d) mistakes of law and fact are treated the same;[240]

(e) the payer's mistake need not be shared by the recipient;[241] and

(f) carelessness on the part of the payer does not preclude recovery.[242]

350 An order for restitution may be made even if the money has been dissipated by a recipient.[243] At least in respect of an action for recovery of an amount paid under mistake, provided no defence applies, it does not matter that specific money or property received can no longer be identified in the hands of the recipient or traced into other specific property he holds.[244]

Deficiencies in the pleadings and submissions

351 Bearing in mind the applicable principles, it becomes apparent that the plaintiff's pleadings and submissions in respect of the money had and received claim are affected by several shortcomings. In particular, I note:

(a) the plaintiff's submissions with respect to the money had and received claim are summarised at paragraph 342 above;

(b) paragraph 51 of the plaintiff's amended statement of claim dated 31 August 2023 contains the only reference to the claim in the pleading. That paragraph pleads that

[a]lternatively, the defendants, are liable to pay $2 million, or the traceable proceeds of that amount, to Yeung as money had and received to the use of Yeung.

No accompanying particulars or details are provided in the pleading;

(c) the authorities are emphatic in rejecting a "judicial discretion to do whatever idiosyncratic notions of what is fair and just might dictate". The courts cannot determine that an enrichment is unjust merely by reference to subjective evaluations of fairness or unconscionability or, to use the plaintiff's submitted words, "justice and equity";[245]

(d) the plaintiff was required to state and prove the injustice of the defendant's enrichment by reference to the recognised vitiating or qualifying factors.[246] I do not consider that the plaintiff has done so. The pleadings contain no such allegation with respect to money had and received. The submissions do not rise above a brief mention that "[n]o consideration was provided by Lin". If, for example, the plaintiff's payment of the $2 million is said to have been caused by mistake, she has not explained what the mistake was and how it caused her to make the payment. The same applies if the allegation is a failure of consideration. The Court is left to make assumptions about which vitiating factor is alleged to be relevant;

(e) as Flanagan J (as his Honour then was) observed in Point Bay Developments Pty Ltd v Perkins (WA) Pty Ltd:

it is well-settled that any restitutionary claim based on unjust enrichment requires proof that the enrichment came at the expense of the plaintiff. This requirement is easily fulfilled in simple cases but is less certain where the defendant receives mistakenly-paid money indirectly (that is, via a third party).[247]

In that case, as in the present one, the person from whom the claimant seeks restitution is not the person to whom the claimant first paid the money, but rather a later recipient who received the money (or part thereof) from the first recipient. Here, the $2 million was paid into the account of Zank Group. Payments were later made from the Transaction Account to third parties including Lin. Justice Flanagan's comments and subsequent detailed analysis indicate that, in such cases, establishing that the enrichment came at the plaintiff's expense is a critical part of the analysis, and not necessarily a straightforward one. The plaintiff has failed to engage with this requirement.

352 On the basis of the above considerations, I find that the plaintiff has failed to prove that the defendant is liable to make restitution for money had and received.

Issues 14 to 17: Lin's defences - breach of contract and estoppel

353 In response to the allegations against him, Lin alleges that:

(a) there was an agreement between Yeung, Yang and himself whereby, if he provided documents and information in support of Yeung's claim against the other defendants, neither Yeung nor Yang would sue or make claims against him; or

(b) alternatively, Yeung and/or Yang represented to Lin that, if he provided documents and information to support Yeung's claim against the other defendants, they would not sue or make claims against him in relation to the matters arising from, or in connection with, this proceeding and they are estopped from resiling from that representation.

354 Lin's case is that there was a verbal agreement made in about January or February 2023 between himself, Yang and Yeung that if he provided documents and evidence to support Yeung's proceeding to recover the $2 million, they would not sue him. He submits that the existence of such an agreement is indirectly supported by the fact that he was not listed as a defendant in the original statement of claim dated 16 February 2023, but was only joined as a defendant in the amended statement of claim dated 12 September 2023

355 Lin's July 2024 defence sets out his claim in greater detail. Paragraph 53 pleads that:

In or about January and February 2023, Yeung, Yang and Fred entered into an agreement whereby if Fred provided documents and information in support of Yeung or Yang's claim, claim, neither Yeung nor Yang would sue or make claims against Fred in this or any other proceeding.

Particulars

The agreement is partly written, partly oral and partly to be inferred and/or implied.

To the extent it is written, it is contained in or to be inferred from:

(A) records of telephone calls and/or text/WhatsApp messages between Fred, Yang and/or Cherry (being Yeung and Yang's assistant), on or about 11, 16 and 31 January 2023, and 1, 3, 8, 9, 11, 14, 15, 16, and 22 February 2023;

(B) records of the creation of a WhatsApp group between Fred, Yang and his assistant, Cherry, as group members. The group name was "12 Russell-2 milXN". Fred provided information in that group and responded to text messages;

(C) records of emails between the plaintiff's solicitors and Fred's solicitors on or about 16, 17, and 20 February 2023.

To the extent it is oral it is contained in and to be inferred from telephone calls between Fred and Yang (including for and on behalf of Yeung) and/or Cherry (for and on behalf of Yeung and Yang). In a telephone call it is alleged that Yang asked Fred to provide evidence, including the Commonwealth bank statement of Zank Group and/or Zank Capital, and information in support of a claim Yeung and/or he would be making in the proceeding. Fred agreed to this proposal in consideration for, and in response to assurances from, Yeung and Yang agreeing not to sue or make claims against Fred in the proceeding or any other proceeding:

(D) A conversation between Fred and Yang on 11 January 2023 during which Yang stated that he would be meeting with his lawyer and requested Fred to be a witness for him;

(E) A telephone call between Fred and Yang after Chinese New Year, on or around 1 February 2023, in which Yang stated that he would sue Hu and Liu and requested Fred's cooperation with the lawsuit and to provide evidence with the assurance that Yang only wanted Fred to be a witness and would not sue him;

(F) After the call in the preceding sub-paragraph, a WhatsApp group was created with Fred, Yang and his assistant, Cherry, as group members. The group name was "12 Russell-2 milXN". Fred provided information in that group and responded to text messages;

(G) On or around 9 February 2023, Fred attended a Zoom conference with Yang, Cherry, and Yang and Yeung's legal representative, Jiayao Peng (also known as Vicky Peng) of Infinity Lawyers, and Mr Hugo de Kock of counsel during which he responded to questions from them asking him for information;

(H) a WhatsApp call on 13 February 2023 between Yang and Fred in which Yang requested Fred to prepare the documents quickly as their schedule was tight;

(I) telephone calls and/or text/WhatsApp messages between Fred and Cherry (being Yeung and Yang's assistant), on or about 16 and 31 January 2023, and 1, 3, 8, 9, 11, 14, 15, 16, and 22 February 2023;

(J) other telephone conversations from time to time between Yang and Fred in which Yang requested documents or information from Fred and provided assurances that Yang only wanted Fred to be a witness and would not sue Fred if Fred collaborated with their legal proceedings.

To the extent it is to be inferred or implied, it is to be inferred or implied at law, by the need to give business efficacy to the contract, and by conduct as alleged in the preceding sub-paragraphs, in particular, by Fred participating in a conference, without his own legal representation, held by Zoom on or about 9 February 2023 between Fred, Yang, Cherry, Jiayao Peng (also known as Vicky Peng) of Infinity Lawyers, and Mr Hugo de Kock of counsel where he responded to questions from them asking him for information.

356 Alternatively, Lin relies on the equitable doctrine of estoppel to argue that:

• Yeung and/or Yang represented to Lin that they would not sue him in relation to the matters in connection with this proceeding if Lin provided documents and information to support Yeung's claims; and
• it would be unconscionable for Yeung and/or Yang to resile from this representation and they should be estopped from doing so.

357 Lin says that he had attended a meeting with Yeung's solicitors without legal assistance, provided information at Lam's request and signed an affidavit which was drafted by Yeung's solicitors. He would not have done these things if he had not been given an oral commitment that he would not be sued.

358 Although Lin did not specify which species of equitable estoppel he intended to rely upon, it appears that the relevant doctrine is promissory estoppel. That is because the alleged promise relates to the non-enforcement of rights, rather than the granting of an interest in property.

359 As to the alleged agreement not to sue, Yeung submits that this aspect of Lin's defence lacks credibility and should be rejected. First, Yang, Yeung and Lam gave oral evidence that no such agreement existed. Secondly, there is no written record of the alleged agreement in the emails or text messages passing between the parties or their legal representatives. Thirdly, Lin was legally represented when he affirmed his affidavit of 20 February 2023 ("February affidavit"), but at no stage did his lawyers seek to confirm in writing any supposed promise not to sue. Fourthly, the alleged agreement was not pleaded in either Lin's original defence dated 23 October 2023 or his amended defence dated 31 January 2024, which was drawn with the aid of counsel. Yeung submits that if such an agreement existed, one would have expected Lin to have instructed his lawyers accordingly at the outset. Instead, the allegation is raised for the first time in Lin's July 2024 defence. Yeung invites the Court to infer that the alleged agreement not to sue was a recent invention by Lin. Finally, Yeung submits that for so serious a matter as an unconditional release from a fraud suit where $2 million went missing, it is inherently improbable that she, through Yang, would have given any promise not to proceed against him. This is particularly so given that, as at early 2023, Yang suspected Lin of being party to the fraud and they were still in the early stages of gathering evidence - they had barely started the tracing exercise, did not have any forensic expert evidence, and had not yet obtained all the documents sought from various entities under subpoena. It is unlikely that Yeung would have unconditionally agreed not to sue Lin at this time.

360 Yeung further submits that not all of the ingredients of a binding contract are present as Lin did not lead evidence of an intention by all parties to enter into binding legal relations, he did not squarely identify any consideration, and his evidence about the plaintiff's alleged agreement was vague and lacking in precision.

361 As to the estoppel argument, Yeung submits that it fails because Lin's evidence about what the representation entailed lacked the requisite precision. Yeung referred to the case of Crown Melbourne Ltd v Cosmopolitan Hotel (Vic) Pty Ltd,[248] where the majority of the High Court stated that

[i]t has long been recognised that for a representation to found an estoppel it must be clear. In Low v Bouverie it was said that the language used must be precise and unambiguous. This does not mean that the words used may not be open to different constructions, but rather that they must be able to be understood in a particular sense by the person to whom the words are addressed. The sense in which they may be understood provides the basis for the assumption or expectation upon which the person to whom they are addressed acts. The words must be capable of misleading a reasonable person in the way that the person relying on the estoppel claims he or she has been misled. The statement that the tenants would be "looked after at renewal time" is not capable of conveying to a reasonable person that the tenants would be offered a further lease.[249]

362 Yeung submits that the content of the alleged representation is too vague, as Lin did not identify with any precision the words he claimed were said to him by either Yang or Lam, and he did not put any clear words to Yang in cross-examination.

363 For an agreement to be legally enforceable as a contract, certain basic requirements must be met. They are that:

• the parties must have reached agreement as to the terms of the contract;
• the agreement must be supported by consideration;
• the agreement must be intended by the parties to be legally enforceable; and
• the terms of the agreement must be sufficiently certain and complete and there must be no element of illegality or any other vitiating factor that would deprive the agreement of legal effect.[250]

The absence of any of these elements will signify either that there is in law no agreement or that the agreement is not enforceable as a contract.[251]

364 Traditionally, the existence of an agreement is established by showing that there was an offer and the acceptance of that offer.[252] An offer is a clear statement of the terms by which the person making the offer is prepared to be bound.[253] The offer and acceptance analysis is the conventional tool in most circumstances,[254] although limited recognition has been given to the possibility of finding that a contract exists even though it is not easy to locate an offer or acceptance.[255]

365 In Waltons Stores (Interstate) Ltd v Maher ("Waltons Stores"),[256] the High Court recognised a form of estoppel since described as equitable estoppel. The doctrine is founded on

the principle that equity will come to the relief of a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party to the transaction has "played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it". Equity comes to the relief of such a plaintiff on the footing that it would be unconscionable conduct on the part of the other party to ignore the assumption.[257]

366 In some cases, the appropriate relief will be the enforcement of the assumption or the expectation, while in other cases, the appropriate relief is something less, because to hold the defendant to the promise would be wholly disproportionate to the detriment suffered by the plaintiff.[258]

367 There are a number of discrete doctrines that fall within the rubric of equitable estoppel.[259] Equitable estoppel can be seen as including promissory and proprietary estoppel, although these two categories are not necessarily exhaustive of the cases in which equity will intervene.[260] In cases of promissory estoppel, the equity binds the holder of a legal right who induces another to expect that the right will not be exercised against him.[261] In cases of proprietary estoppel, the equity binds the owner of property who induces another to expect that an interest in the property will be conferred on him.[262]

368 The elements common to all such doctrines were encapsulated by Brennan J (as his Honour then was) in Waltons Stores, where his Honour said:

In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff's action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise. For the purposes of the second element, a defendant who has not actively induced the plaintiff to adopt an assumption or expectation will nevertheless be held to have done so if the assumption or expectation can be fulfilled only by a transfer of the defendant's property, a diminution of his rights or an increase in his obligations and he, knowing that the plaintiff's reliance on the assumption or expectation may cause detriment to the plaintiff if it is not fulfilled, fails to deny to the plaintiff the correctness of the assumption or expectation on which the plaintiff is conducting his affairs.[263]

369 Put simply, equitable estoppel would operate in the present case if the plaintiff created or encouraged the defendant to assume that a promise would be performed, the defendant relied on that assumption, and the circumstances are such that the plaintiff's departure from the assumption would be unconscionable.[264] I will briefly elaborate upon each of these elements below.

370 The element of inducement may arise from positive representations, expressed or implied by words or conduct or a combination of words and conduct.[265] The representation must be clear and unambiguous.[266] However some authorities suggest that the certainty requirement is less strict than for a representation in contract law.[267] There is some difficulty in defining the level of precision necessary for a representation to found an estoppel. That is because "a promise may be definite in the sense that there is a clear promise to do something even though the something promised is not precisely defined".[268]

371 Ultimately, the foundation of promissory estoppel is unconscionability. Unconscionability is usually difficult to establish when the representation is unclear or ambiguous.[269] However, there may be circumstances where reliance on an ambiguous representation could give rise to an unconscionable result.[270] Ipp JA provided a hypothetical illustration of this point in Australian Crime Commission v Gray:

Say, for example, a non-contractual representation was made whereby the representor orally promised to deliver a large quantity of produce specified by a nominated tonnage. Assume that the promise did not specify imperial tons or metric tonnes in circumstances where it was not reasonably possible to infer whether tons or tonnes were promised. Assume that the representee relied on the promise and altered its position to its detriment. Assume further that the representor made no delivery whatever and repudiated its promise. If, in these circumstances, the representee sued on the grounds of a promissory estoppel, I suggest that it would be self-evident that the representor would be liable to pay equitable compensation even though it was not possible to determine whether the quantity promised was in metric or imperial quantities. The unconscionability of the situation would not be negated by the ambiguity.[271]

372 Any alleged representation must be considered in its total factual context. The representation will be sufficiently clear if, having regard to the circumstances in which it was made, it was reasonable for the representee to have interpreted the representation in a particular way (being a meaning which it is clearly capable of bearing) and it was reasonable for him to have relied upon the representation.[272] The authorities exemplify a wide variety of apparently vague, imprecise and incomplete representations which have been construed in context and given effect.[273]

373 Reliance is a fact to be found. It is not to be imputed on the basis of evidence which falls short of proof of the fact.[274] The onus of proof of reliance rests on the party arguing for an estoppel.[275]

374 The relevant detriment in a case of equitable estoppel is detriment occasioned by reliance on a promise - that is, detriment occasioned by acting or abstaining from acting on the faith of a promise that is not fulfilled.[276] This requires contrasting the actual position with the position which would otherwise have eventuated without the alleged reliance on a promise.[277] The relevant detriment does not consist in a loss attributable merely to non-fulfilment of the promise.[278] Additionally, detriment is not confined to financial loss or loss which is quantifiable in the same way as an award of damages.[279]

375 The degree of detriment is an important factor in deciding whether or not the representation is of a type that ought to attract the intervention of equity.[280] It is not any prejudice or misfortune that will ground an estoppel.[281] The detriment must be "material" or "significant".[282]

376 Failure to fulfil a promise does not of itself amount to unconscionable conduct, nor does mere reliance on an executory promise to do something (resulting in the promisee changing his position or suffering detriment) bring promissory estoppel into play. The doctrine requires "something more".[283]

377 As the authors of The Law of Contract explain:

That "something more" is unconscionable conduct on the part of the promisor. ... Simply to change one's mind or to break a promise is not of itself unconscionable in the eyes of the law. But it becomes so the more that reliance has been placed on the promisor not changing his or her mind and the greater the consequential detriment that will be suffered by the promisee. It is here that unconscionability is found.[284]

378 The question of whether departure from the assumption would be unconscionable must be resolved not by reference to some preconceived formula but by reference to all the circumstances of the case, including the reasonableness of the conduct of the promisee in acting upon the assumption and the nature and extent of the detriment which the promisee would sustain by acting upon the assumption if departure from the assumed state of affairs were permitted.[285]

379 The questions of reliance, detriment and unconscionability are to be judged as at the time the promisor resiled from the assumed state of affairs.[286]

Issue 14: Was there an agreement between Yeung, Yang and Lin whereby if Lin provided documents and information in support of Yeung's claim, neither Yeung nor Yang would make claims against Lin in this or any other proceeding?

380 Lin alleges that there was an agreement between himself, Yeung and Yang that if he provided documents and information in support of Yeung's claim, neither Yeung nor Yang would make claims against Lin in this or any other proceeding. In my opinion, this allegation was not proved.

381 First, there are no contemporaneous documents which directly refer to, or record, an agreement not to sue. Lin was legally represented when he affirmed his February affidavit, but the affidavit made no mention of such a promise or agreement not to sue. The situation became even more stark once the plaintiff served Lin with the amended writ dated 12 September 2023 and joined him as a defendant. If such an agreement had been entered into between the plaintiff and Lin, one would have expected Lin to inform his lawyers so that they pleaded the agreement in either his original defence dated 23 October 2023 or his amended defence dated 31 January 2024. The latter was drawn with the aid of counsel. Such behaviour would be reasonable and consistent with normal human experience. Especially is this the case when the alleged agreement would constitute a complete defence to the plaintiff's claim. During cross-examination, counsel for the plaintiff put to Lin that if he had told his solicitor about the agreement in early 2023, the very first thing she would put in the defence is a plea about that agreement. Lin's answer was that he told his solicitor everything he knew, he did not know what they eventually put in the document and he had full trust in her acting in his best interest.

382 In my opinion, an agreement not to sue - especially one that is breached - is a significant matter. If Lin had informed his lawyers about the agreement, it would be very unlikely that they would not include it in his defence. Its absence from the pleadings indicates that there was no such promise by, or agreement with, the plaintiff.

383 I note too that Lin's wife is a lawyer. According to Lin, she was a lawyer in China but was not admitted to legal practice in Australia. Nonetheless, it seems she was a director of the firm Winch Legal Pty Ltd from July 2020 until 6 December 2022.

384 Given that Lin's wife is a lawyer, assuming (as is likely) that he told her about the alleged promise by the plaintiff, one would expect her to tell him to raise this matter with his lawyers and to check that it was included in his defence. In the context, the failure of the defence and amended defence to refer to it suggests there was no such promise or agreement.

385 Secondly, the documentary evidence which Lin relies on is circumstantial and, in my opinion, insufficient to prove his case.

386 It is true that the plaintiff's original statement of claim dated 16 February 2023 does not list Lin as a defendant.[287] While this is logically consistent with an agreement not to sue, there are other possible explanations why Lin was not joined as a defendant at the beginning.[288] I am unable to infer from the statement of claim alone that there was an agreement not to sue.

387 Aside from the statement of claim, the particulars to paragraph 53 of Lin's July 2024 defence also refer to various WhatsApp messages and emails which the agreement is "contained in or to be inferred from", being the:

(a) WhatsApp messages between Lin, Yang and/or Lam on 11, 16 and 31 January 2023 and 1, 3, 8, 9, 11, 14, 15, 16, and 22 February 2023;

(b) WhatsApp messages in the group chat between Lin, Yang and Lam titled "12 Russell-2 milXN"; and

(c) emails between Yeung's solicitors and Lin's solicitors on or about 16, 17 and 20 February 2023.

388 As to subparagraph (a) above, Lin took me to various WhatsApp messages exchanged between himself and Lam on the dates listed. These messages merely show that Lin provided various documents to Lam which Yeung used in bringing this proceeding. I do not consider that these WhatsApp messages prove the existence of the alleged agreement. Lin did not prove, for example, that the plaintiff could not establish or succeed in her case without his assistance.

389 Similarly, the messages referred to in subparagraph (b) above do not expressly prove the existence of the alleged agreement. These messages show Lam requesting various materials and information. While Lam and Lin refer to Lin's affidavit, which was then being drafted, the messages indicate only that the parties' lawyers were revising the affidavit. There is nothing to establish that Lin prepared the affidavit in return for a promise by Yeung not to sue him.

390 The emails referred to in subparagraph (c) appear to be exchanged between Lin's lawyers and Yeung's lawyers and again concern Lin's affidavit. The emails indicate that the affidavit had gone through a process of review and amendment by the respective lawyers. Again, there is no clear indication that the affidavit was prepared in return for a promise by Yeung not to sue Lin. Importantly, I note also that the emails in subparagraph (c) do not appear to be contained in the final bundle of documents comprising the documentary evidence produced in the trial. If that is correct, then those emails should be ignored as they do not form part of the evidence.

391 Thirdly, the weight of the oral evidence given at trial favours the plaintiff. Yang denied saying that he would not sue Lin.[289] Yeung gave evidence that she had never had any discussions with Lin about the topic of agreeing not to sue him.[290] Lam also gave evidence that she was never present in any conversation between either Yang or Yeung with Lin in which there was a promise made to Lin that he would not be sued if he assisted them by giving evidence in this case.[291] The only evidence of the agreement is Lin's assertion. Given Lin's lack of credibility as a witness, I am not disposed to accept his oral evidence where it conflicts with that of the other witnesses.

392 In the circumstances, I am not satisfied that there was an agreement between the parties that Yeung would not sue or take legal action against Lin if he provided documents and information in support of Yeung's claims.

Issue 15: Did Yeung and/or Yang represent to Lin that they would not sue or make claims against him in relation to the matters arising from or in connection with this proceeding if Lin provided documents and information to support Yeung's claims?

393 For the same reasons as those set out in paragraphs 380 to 391 above, I am not satisfied that Yang or Yeung represented to Lin that he would not be sued if he provided documents and information in support of Yeung's claims. Accordingly, the answer to this issue is "no".

Issue 16: Are Yeung and/or Yang estopped from resiling from the representation by reason of it being unconscionable for them to do so?

394 Because I find that neither Yeung nor Yang made any representation to Lin to the effect alleged, the question of estoppel does not arise.

Issue 17: If the answer to Issue 16 is "yes", is Lin disentitled from relying on the equitable doctrine of estoppel?

395 The answer to Issue 16 is "no", so this issue does not arise.

Issue 18: What loss and damage has Yeung suffered, if any?

396 The plaintiff is entitled to damages for loss suffered as a result of the misleading or deceptive conduct which Lin engaged in. For the reasons set out previously, I find that:

(a) Lin's conduct involved making representations which were misleading or deceptive (see, for example, paragraph 306); and

(b) the plaintiff relied upon the misleading or deceptive conduct to her detriment and proved causation between the misleading or deceptive conduct and the payment of the $2 million (see paragraphs 328-337).

397 The most common measure of damages for loss arising from misleading or deceptive conduct is the tort measure. This involves a comparison between the plaintiff's current position and the position they would have been in but for their reliance on the defendant's misleading or deceptive conduct.[292] If the plaintiff had not been induced by the representations to make the $2 million payment into the bank account of Zank Group, she would not have made the payment. However, having relied upon the representations to make the payment of $2 million in June 2020, the plaintiff has not recovered any part of the principal (or interest) which she expected to recover.

398 In the circumstances, I consider the plaintiff is entitled to damages in the amount of $2 million. This applies to the claim under the ASIC Act and the tort of deceit. Had the ACL applied, the measure of damages would have been the same.

Issue 19: In respect of any loss and damage arising from any breach of trust or fiduciary duty by Lin, is Lin liable to account to Yeung for his dealings and transactions with respect to the $2 million or the traceable proceeds of those funds, and is Yeung entitled to equitable compensation (and if so, how much)?

399 Had Lin been liable to account in some way for the traceable proceeds of the $2 million paid by the plaintiff, he would have been liable to pay the plaintiff the sum of $824,173.10. This represents monies which he took from the Zank Group bank account and used either for his own benefit or that of some third parties.

400 Because I have found that Lin did not breach any fiduciary duty or duty as a trustee, the plaintiff is not entitled to any equitable compensation from him.

Issue 20: Is Yeung entitled to aggravated damages and/or exemplary damages and, if so, what is the quantum thereof?

401 Aggravated and exemplary damages are two different species of damages.

402 Aggravated damages are awarded to compensate a party where the harm done to a plaintiff was aggravated due to the manner in which the harm was done.[293] Courts can award aggravated damages in order to recognise the injury to the plaintiff's feelings caused by insult, humiliation and the like. Because damages in tort are designed to compensate a plaintiff, so far as money can do, for all the injuries suffered including, where appropriate, injury to feelings, the Court must be careful to avoid double counting in awarding additional damages by way of aggravated damages. The issue then arises - what do aggravated damages compensate when injury to feelings has already been recognised in the ordinary compensatory damages?

403 In New South Wales v Riley,[294] Hodgson JA (with whom Sheller JA and Nicholas J agreed) observed that it is difficult to quantify damages for hurt feelings. His Honour said that the Court must assess the damages neutrally, aiming for the midpoint in a wide range of potentially justified awards when the hurt is caused by ordinary wrongdoing consistent with normal human fallibility. However, where the cause of the hurt is serious misconduct beyond the ordinary, the Court is justified in moving towards the upper limit of the justifiable range.[295] Such conduct might include behaviour which is high-handed, malicious, insulting or oppressive in committing the wrong or is similarly offensive in conducting the trial. A court can award aggravated damages where the defendant shows a lack of bona fides or engages in conduct which is improper or unjustifiable.[296]

404 In the present case, the plaintiff contends that Lin's conduct in connection with obtaining and retaining the $2 million paid by Yang was dishonest, high-handed, insulting and reprehensible. She says that Lin then made matters worse by defending the proceeding and not accepting responsibility for his wrongdoing. This is said to be especially aggravating in circumstances where the plaintiff and her husband treated Lin well, paying him more than the amount owing to him under his invoices. Lin acknowledged that Yang was "very generous" towards him.[297] The plaintiff asks that the Court award $50,000 as aggravated damages.

405 Lin disputes the basis of the proposed award and the amount of payment sought by the plaintiff.

406 In my view, the Court should not award aggravated damages in this case. While I accept that Lin engaged in misleading or deceptive conduct and deceit, I do not consider that additional compensation is appropriate. The plaintiff's evidence dealt with the payment of the $2 million but there was no evidence about other compensation she sought, whether for hurt feelings or otherwise. In the circumstances, an award of aggravated damages is likely to result in double counting of compensatory damages. The plaintiff has failed to identify any other damage in her pleadings or submissions which might merit specific recognition for damages of this kind.

407 On the other hand, exemplary damages are not compensatory. Their purpose is to punish a defendant, deterring him and others who might follow his example from acting in a particular way. They reflect the Court's denunciation of such conduct. A court can award such damages in tort when a defendant acts with a conscious and intentional or reckless disregard for the plaintiff's rights.[298]

408 In deciding whether to award exemplary damages, the Court should:

• consider whether the compensation awarded to the plaintiff is itself sufficient to punish the defendant;
• consider whether any such further damages would result in the plaintiff being excessively compensated; and
• exercise restraint or care to avoid the danger of an excessive award.[299]

409 The plaintiff submits that Lin's conduct towards her exhibited a deliberate, intentional or reckless disregard for her rights. Thus, the Court should denounce his behaviour and award the plaintiff $400,000 in exemplary damages. This represents 20% of the plaintiff's primary loss of $2 million.

410 In this context, the plaintiff referred to the Court of Appeal decision in Ikosidekas v Glenis ("Ikosidekas")[300] where the basic compensatory damages were $98,000 representing unpaid interest. The Court ordered exemplary damages of $20,000. In that case, the defendant defrauded the plaintiff of $160,000. At the time of the fraud, the defendant Glenis was an employee of MWL Finance Pty Ltd ("MWL"). Glenis fraudulently represented to the plaintiff that he had arranged for the plaintiff to lend Jonathan White, a director of MWL, $160,000 at a high rate of interest. As security, he said there was to be a caveat over property purportedly owned by White. The supposed loan and security was a total invention and the plaintiff paid the purported loan funds to, or for the benefit of, the defendant. The defendant forged White's signature on a letter purportedly agreeing to the loan and promising to repay the money.

411 Later the plaintiff sued MWL, White and the defendant under the ACL and the ASIC Act for misleading or deceptive conduct. He also sued White under the loan agreement.

412 At mediation, MWL and White, through their insurers, agreed to pay the plaintiff $160,000.

413 The plaintiff continued the claim against the defendant for misleading or deceptive conduct, deceit and restitution.

414 At trial, the plaintiff succeeded but the trial judge said the contribution of $160,000 from MWL and White had to be deducted from the judgment amount against the defendant. As a result, there was no loss or award of damages or restitution in the plaintiff's favour. Thus, there was no basis to award exemplary damages.

415 On appeal, the Court of Appeal found that the plaintiff was entitled to damages in the nature of interest of about $98,000. Hence, there was a proper basis to order exemplary damages. The Court of Appeal fixed those damages at $20,000. In doing so, the Court took into account that White and his company had earlier paid the sum of $160,000. This saved the defendant from paying that amount and also stopped interest accruing on that sum three years earlier than it otherwise would have.

416 In the present case, the plaintiff settled with the Zank Defendants on 5 August 2025. The terms of settlement, including in particular the amount payable to the plaintiff by those defendants, are relevant in my assessment of whether to award exemplary damages and, if so, how much. For example, if the Zank Defendants agreed to pay the whole or part of the plaintiff's claim and Lin was called upon only to pay a relatively limited amount, then there is a lower risk of the Court punishing him by imposing a financial burden which is disproportionate and unfair.[301]

417 During closing submissions, I raised with the plaintiff's counsel the question of seeing the terms of settlement so that I could ensure that the plaintiff did not obtain double recovery of damages. The plaintiff was willing to provide to the Court a copy of the terms of settlement. But counsel for the Zank Defendants, when invited by the Court to be heard on the issue, argued that the terms of settlement should remain confidential. Counsel suggested it would be enough for me to follow the path taken by Justice Sloss in Focus Metals Pty Ltd v Babicci & McNab ("Focus Metals").[302] That case involved a situation in which the plaintiff mistakenly paid the first defendant $166,688.33 and then sought to recover the money. From the amount he received, the first defendant paid the second defendant $32,828.40. The payments were in a context where the plaintiff was involved in a gold refining and purchasing transaction.

418 Regarding final orders, it appeared that her Honour was proposing to order that:

(a) the first defendant pay the plaintiff $166,688.33, together with interest at the usual Supreme Court penalty interest rate from 12 September 2011, being the date he applied the money to himself; and

(b) the second defendant pay the plaintiff $32,828.40, together with interest at the usual Supreme Court penalty interest rate from 15 September 2011, being the date of receipt of the final instalment from the first defendant.

These payments were to be subject to the proviso that the plaintiff should not recover in total more than $166,688.33, together with interest at the usual Supreme Court penalty interest rate from 12 September 2011.

419 Thus, her Honour, when making final orders, imposed a financial limit on the amount of damages recoverable by the plaintiff, thereby ensuring that the plaintiff could not recover more than the total damages due. Such an approach is consistent with authority which provides that if a party with concurrent claims against two persons recovers some or all of the loss from party A, that recovery diminishes the damages which can be awarded against party B.[303]

420 The Focus Metals case is factually different from the present case. There was no issue in that case about whether the plaintiff was entitled to exemplary damages. Nor was it a case where the plaintiff had settled with some defendants but pursued others to judgment. Accordingly, I sought a copy of the terms of settlement.

421 The terms of settlement between the plaintiff and the Zank Defendants contain the following main provisions:

(a) the plaintiff and the Zank Defendants expressly enter the terms of settlement on a "no admissions" basis in order to avoid the costs, risks and inconvenience of further litigation;

(b) the third to sixth defendants agree to pay the plaintiff a total sum, inclusive of costs and interest, of $1.5 million (the "Settlement Sum") comprising:

(i) $500,000 on or before 4:00 pm on 4 September 2025;

(ii) $1 million on or before 4:00 pm on 5 August 2026; and

(iii) interest on the $1 million payable monthly at the compounding interest rate of 2.5% per annum, which interest is payable at 4:00 pm on 5 August 2026;

(c) if the Settlement Sum is duly paid in full on or before 4 August 2026, the plaintiff agrees to waive any interest obligation under clause (b)(iii) above;

(d) in the event of default of payment of the Settlement Sum, the plaintiff is entitled to reinstate the proceeding and enter judgment in the amount of the balance of the Settlement Sum outstanding, together with interest calculated under clause (b)(iii) above and the indemnity costs of entering judgment;

(e) the Zank Defendants irrevocably consent to any judgment being entered against the third to sixth defendants in accordance with clause (d) above and acknowledge that an affidavit sworn by the plaintiff's solicitor shall be conclusive evidence of the fact of any default and the judgment sum to be entered;

(f) the Zank Defendants also agree to provide security to the plaintiff by holding certain interests in real property on trust and charging those interests to secure the payment of the Settlement Sum;

(g) the Zank Defendants appoint the plaintiff as their attorney with power to execute or make any agreements, documents or assignments necessary to realise or sell the real property interests in the event of default; and

(h) the Zank Defendants agree that the plaintiff is entitled to maintain her caveat over the Property until payment of the Settlement Sum. This acknowledgment is subject to the plaintiff co-operating reasonably with them if they seek to sell the Property for the purpose of paying the Settlement Sum.

422 Subject to one proviso, the terms of settlement limit the potential exposure of the Zank Defendants for damages, interest and costs to $1.5 million. That proviso is that the Zank Defendants must pay the components of the Settlement Sum by the due dates. There is no agreed ceiling on Lin's liability to the plaintiff. The plaintiff seeks to recover from Lin the $2 million invested together with penalty interest under the Supreme Court Act 1986 (Vic) from the date of demand on 18 January 2023 until the date of judgment. For several years, the applicable penalty interest rate has been 10% per annum.[304] Given the time elapsed since January 2023 is a little over three years, I expect the interest payable would be about $600,000.

423 Further, I assume that the plaintiff, being the successful party, will also seek an order for costs. Given the cost of litigation generally, the interlocutory processes undertaken in this case and the conduct of a nine-day trial, I would expect the costs to be considerable, amounting to hundreds of thousands of dollars. It is likely that the combined amount of interest and costs will be in the range of $1 million to $2 million. This is relevant because, by the terms of settlement, the Zank Defendants have agreed an upper limit on their financial liability to the plaintiff. As a result, to the extent that the plaintiff becomes entitled to amounts in excess of that ceiling, only Lin will be responsible for any difference. This is because Lin did not make any claim for contribution or indemnity against the other defendants.[305]

424 If my assumptions are correct, then the plaintiff will probably obtain orders for $2 million for the damages plus an extra amount for interest and costs.[306] Hence, I expect the total amount payable could be in the range of $3 million - $4 million. Lin might find himself responsible for more than half that amount. This would mean that he would carry a greater proportion of the loss than Hu or Liu. While Lin's conduct towards the plaintiff has been unsatisfactory, based on the evidence before me, it is quite possible that I would have reached adverse conclusions about the conduct of Hu and Liu and their corporate vehicles. However, I accept that had Liu and Hu given evidence, it is possible that they may have raised exculpatory material of which I am unaware.

425 Having regard to the deception practised on the plaintiff and the disregard for her rights, I consider that an award of $10,000 as exemplary damages is appropriate. It does not excessively compensate the plaintiff and, added to the other amounts payable to the plaintiff, tells a wrongdoer that "tort does not pay".[307]

426 While the claim for exemplary damages is justified, I am wary of ordering an amount which is too great and could result in the plaintiff being excessively compensated.[308] I regard this case as notably different from Martin v Norton Rose Fulbright Australia (No 11),[309] where the defendant acted in contumelious disregard of the plaintiff's rights when an employment/partnership dispute arose between the parties. The trial judge was mindful that the defendant was a large global law firm and its obligations as a litigant were not those which would apply to its clients generally.[310] Lawyers are the instrument through which the law operates. If lawyers do not properly fulfil their role and responsibilities in the administration of justice, it compromises the legal system as a whole and weakens the rule of law. The judge awarded $150,000 in exemplary damages against the law firm.[311]

427 For the reasons set out, I consider that the plaintiff:

(a) succeeds in her claims under s 12DA of the ASIC Act and in deceit; and

(b) fails in her claims in relation to:

(i) breach of trust;

(ii) breach of fiduciary duty;

(iii) ss 1041E and 1041F of the Corporations Act; and

(iv) money had and received.

428 I direct that the parties confer about these reasons for judgment with a view to agreeing upon the final orders to be made giving effect to the judgment including orders for costs. If the parties cannot agree, then they should file:

(a) any affidavit material on which they rely together with an outline of submissions by 4:00pm on 6 March 2026;

(b) any reply material and submissions by 4:00pm on 10 March 2026.

429 The submissions are limited to eight A4 pages, and the reply submissions are limited to three A4 pages. Each set of submissions should have a minimum 12-point typeface, 1.5 spacing and 40mm margins on either side of the page. Unless I consider it otherwise necessary, I will decide the issue of costs and the form of final order on the papers.

[1] Hu ceased being a director of Zank Group on 1 October 2020 and was reappointed on 4 June 2021. He again ceased being a director on 23 January 2021 and was reappointed on 17 December 2024.

[6] T519; CB 1817; Lin's Exhibit A, pages 9-13.

[11] Whatsapp messages between Lin and Lam, page 1.

[13] I use the word "appears" because Lin contends the quoted messages are not genuine but were created after the event, presumably by one or more of Hu or Liu. In contrast, Yeung contends the messages should be accepted at face value.

[15] Lin confirmed that the recipient account was his personal account: at T415.

[16] The defence of the first, second and sixth defendants dated 29 May 2023 claims that Xiaoyan Zhang is Lin's "associate": at [29(b)].

[19] Counsel does not appear to have asked Lin whether he transferred this amount or what it was for. Also, Warfield, the plaintiff's forensic accounting expert, does not discuss this amount - he has not traced it as Yeung's money.

[20] Again, Counsel does not appear to have asked Lin whether he transferred this amount or what it was for. Warfield does not discuss this amount - he has not traced it as Yeung's money.

[22] Competition and Consumer Act 2010 (Cth) sch 2 ("ACL").

[23] This is confirmed by Lin himself who agreed that he did not tell Yang or Yeung about the Property and its connection with the $2 million until 2022.

[24] Plaintiff's written closing submissions at [40] ("PCS").

[27] Lin said in cross-examination (T390-1) that "our fund" was a reference to a fund controlled by Zank Capital.

[29] I note that Lin did not put this scenario to Yang in cross-examination.

[31] [1959] HCA 8; (1959) 101 CLR 298.

[32] Brett Warfield, Forensic Accounting Report prepared by Brett Warfield, Forensic Accountant (Expert Witness Report, 30 July 2024) ("First Warfield Report"); Brett Warfield, Supplementary Report - Forensic Accounting Report prepared by Brett Warfield, Forensic Accountant (Expert Witness Report, 28 October 2024) ("Second Warfield Report").

[35] First Warfield Report (n 32) at 10-11.

[36] First Warfield Report (n 32) at 13.

[37] See, eg, PCS at [20]-[21], [24], [50], [53], [211], [222] and the plaintiff's oral closing submissions at T534, T560-561, T566 and T573. Counsel did not explain the calculation giving rise to this figure in court. [50] of the PCS appears to indicate that the basis of the plaintiff's calculation of the amount of $761,615.22 is set out in [20], [21] and [24] of the PCS. However, the amounts listed in those paragraphs of the PCS come to $861,615.22, not $761,615.22. The plaintiff did not explain this discrepancy.

[38] First Warfield Report (n 32) at 21; Second Warfield Report (n 32) at 5.

[39] First Warfield Report (n 32) at [1.3]; Second Warfield Report (n 32) at [1.3].

[40] Warfield directed the Court to CBA tracing records confirming each of the three transactions.

[41] It is unclear why the plaintiff's written and oral closing submissions appear to suggest that Warfield's evidence had only traced $590,000 to Lin's benefit. Counsel did not explain the reasoning for this interpretation of Warfield's evidence, in light of the additional amounts which Warfield referred to during his oral evidence.

[44] T368.27-368.29, T370.23-370.26, T370.29-371.17.

[47] Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 at 614 ("Muschinski"); Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137 at 148 ("Baumgartner"); Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 at 111-12 ("Giumelli"); Sobey v Sobey [2014] VSC 373 at [44]-[52]; Anson v Anson [2004] NSWSC 766 at [37]; Wakim v Wakim [2017] NSWSC 1283 at [66].

[49] (1874) LR 9 Ch App 244.

[50] [2014] NSWCA 266; (2014) 87 NSWLR 609 at [69].

[51] [2018] VSC 413 at [388] ("Imam Ali Islamic Centre").

[53] McNab v Graham [2017] VSCA 352; (2017) 53 VR 311 at [123]-[124].

[54] Muschinksi (n 47) at 613.

[55] Westdeutsche Landesbank Girozentrale v Islington LBC [1996] UKHL 12; [1996] AC 669 at 714 ("Westdeutsche"); Imam Ali (n 51) at [405].

[56] Imam Ali Islamic Centre (n 51) at [405].

[57] Parsons v McBain [2001] FCA 376; (2001) 109 FCR 120 at [8]-[15] ("Parsons").

[58] Westdeutsche (n 55) at 714.

[59] Imam Ali Islamic Centre (n 51) at [398].

[61] Parsons (n 57) at [13].

[62] Thomson Reuters, The Law of Trusts (online at 25 February 2026) at [22A.380] ("The Law of Trusts").

[63] Shepherd v Doolan [2005] NSWSC 42 at [34]-[42] ("Shepherd"); Jemmark Pty Ltd v 10 Egan Street Pty Ltd [2022] NSWSC 865 at [70] ("Jemmark").

[64] Shepherd (n 63) at [34]; Imam Ali Islamic Centre (n 51) at [403]. See also The Law of Trusts (n 62) at [22A.380] and Gissing v Gissing [1970] UKHL 3; [1971] AC 886 at 906 ("Gissing").

[65] Allen v Snyder [1977] 2 NSWLR 685 at 690 ("Allen"); Staatz v Berry (No 2) [2019] FCA 924 at [174]-[175]. See also The Law of Trusts (n 62) at [22A.380].

[66] Allen (n 65) at 706, citing Gissing (n 64) at 906.

[67] Imam Ali Islamic Centre (n 51) at [403]; Re Munro [2018] VSC 747 at [88]; Rasmussen v Rasmussen [1995] VicRp 38; [1995] 1 VR 613 at 616; Butler v Craine [1986] VicRp 28; [1986] VR 274 at 286-7; McMahon v McMahon [1979] VicRp 23; [1979] VR 239 at 244.

[68] Imam Ali Islamic Centre (n 51) at [403]; Gritzman v McRae [2022] NSWSC 745 at [160].

[69] Ying Mui Pty Ltd v Hoh (No 3) [2017] VSC 29; (2017) 349 ALR 296 at [350], quoting Sivritas v Sivritas [2008] VSC 580; (2008) 23 VR 349 at [134].

[70] Delaforce v Simpson-Cook [2010] NSWCA 84; (2010) 78 NSWLR 483 at [41]-[42].

[71] Green v Green (1989) 17 NSWLR 343 at 357-8.

[72] Higgins v Wingfield [1987] VicRp 59; [1987] VR 689 at 695.

[73] Bijkerk Investments Pty Ltd v Bikic [2020] NSWSC 1336 at [118].

[74] Imam Ali Islamic Centre (n 51) at [477].

[75] The Law of Trusts (n 62) at [22A.400].

[76] Imam Ali Islamic Centre (n 51) at [404].

[77] Baumgartner (n 47) at 148, quoting Muschinski (n 47) at 620.

[78] Australian Building & Technical Solutions Pty Ltd v Boumelhem (2009) 2 ASTLR 336 at [51] ("Boumelhem"), quoted in Hill v Cronin [2021] VSC 480 at [65] ("Hill"); Galati v Deans [2021] NSWSC 1094 at [913].

[79] McKinlay v Woods [2024] NSWCA 122 at [89], quoting Zhang v Metcalf [2020] NSWSC 228 at [57] ("Zhang"); Awad v Awad (No 2) [2020] NSWSC 25 at [76] ("Awad (No 2)"), quoting West v Mead [2003] NSWSC 161 at [59].

[80] Jemmark (n 63) at [74], citing Zhang (n 79) at [59]-[60].

[81] 3 Apples Childcare Centre Pty Ltd v MMC Pacific International Pty Ltd (2023) 167 ACSR 401 at [248] ("3 Apples Childcare").

[82] Woods v McKinlay (No 2) [2021] NSWSC 1510 at [231].

[83] Boumelhem (n 78) at [51], quoted in Hill (n 78) at [65].

[84] Clayton v Clayton [2023] NSWSC 399 at [561] ("Clayton"), citing Bryson v Bryant (1992) 29 NSWLR 188 at 222.

[85] Baumgartner (n 47) at 148.

[86] Hill v Hill [2005] NSWSC 863 at [36]; Zekry v Zekry [2020] VSCA 336 at [80]-[82].

[87] Clayton (n 84) at [549], citing Muschinski (n 47) at 620.

[88] Jemmark (n 63) at [75].

[89] [2022] NSWCA 225; (2022) 110 NSWLR 86 at [61].

[90] 3 Apples Childcare (n 81) at [249].

[91] Twigg v Twigg [2022] NSWCA 68; (2022) 402 ALR 119 at [50] ("Twigg").

[92] J D Heydon and M J Leeming, Jacobs Law of Trusts in Australia (LexisNexis, 8th ed, 2016) at [13-03].

[93] Twigg (n 91) at [52]-[53].

[94] Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at 97 ("Farah"); Williams v Central Bank of Nigeria [2014] UKSC 10; [2014] AC 1189 at [9], quoted in Twigg (n 91) at [50]; Westdeutsche (n 55) at 714.

[95] Bathurst City Council v PWC Properties Pty Ltd [1998] HCA 59; (1998) 195 CLR 566 at [42]; Giumelli (n 47) at [10].

[96] Imam Ali Islamic Centre (n 51) at [397], citing Muschinski (n 47) at 608, 612.

[97] Imam Ali Islamic Centre (n 51) at [397], citing Muschinski (n 47) at 617.

[98] Twigg (n 91) at [49].

[99] (1874) LR 9 Ch App 244 at 251-2.

[100] Commonwealth v Davis Samuel Pty Ltd (No 7) [2013] ACTSC 146 at [463]-[466]. See also Farah (n 94) at [113].

[101] Farah (n 94) at [112].

[102] In Farah (n 94), the Court clarified that under the second limb, the dishonesty needs to attach to the fiduciary, not the assistant: at [162]-[163].

[103] Harstedt Pty Ltd v Tomanek [2018] VSCA 84; (2018) 55 VR 158 at [70].

[104] Grimaldi v Chameleon Mining NL (No 2) [2012] FCAFC 6; (2012) 200 FCR 296 at [242] ("Grimaldi"). For a summary of the various other situations in which a third party can be liable, see [243]-[247].

[105] Metropolitan Petar v Mitrevski [2012] NSWSC 16 at [164].

[106] Farah (n 94) at [163]-[165].

[107] Grimaldi (n 104) at [254].

[108] Farah (n 94) at [119].

[109] See, eg, Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; (2012) 44 WAR 1 at [2142]-[2143].

[110] [2025] VSC 365.

[111] Ibid at [54]-[55] (citations omitted).

[112] Jacobsen v Jacobsen [2017] NSWSC 1590 at [106], [109]; Awad (No 2) (n 79) at [85].

[113] [2018] FCAFC 194.

[117] Plaintiff's list of issues provided to the Court on 12 August 2025 at 9:45am.

[121] In support of this proposition, Yeung quoted Walden Properties Ltd v Beaver Properties Ltd [1973] 2 NSWLR 815 at 833, which relevantly states that the fiduciary duties imposed upon the defendant in that case would be limited to: (a) carrying on the negotiations in the plaintiff's interests, (b) giving the plaintiff a reasonable opportunity to make a final decision whether to join in the purchase agreement, and (c) making a full disclosure of all material circumstances concerning the negotiations, the shares and their value.

[122] Adventure Golf Systems Australia Pty Ltd v Belgravia Health and Leisure Group Pty Ltd [2017] VSCA 326; (2017) 54 VR 625 at [119] ("Adventure Golf"). See also the general discussion of principles in Gniel Nominees Pty Ltd v Sexton Pty Ltd [2025] VSC 40 at [56]-[65] and Hylepin Pty Ltd v Doshay Pty Ltd [2020] FCA 1370; (2020) 148 ACSR 30 at [32]-[43].

[123] Bristol & West Building Society v Mothew [1998] Ch 1 at 18, quoted in ibid at [124]; Australian Securities and Investments Commission v Citigroup Global Markets Australia Pty Ltd (No 4) [2007] FCA 963; (2007) 160 FCR 35 at [289], [292] ("ASIC v Citigroup").

[124] ASIC v Citigroup (n 123) at [290]-[291].

[125] Adventure Golf (n 122) at [120]; ASIC v Citigroup (n 123) at [270]; Hospital Products Ltd v United States Surgical Corporation [1984] HCA 64; (1984) 156 CLR 41 at 141 ("Hospital Products").

[126] See, eg, Adventure Golf (n 122) at [120]; ASIC v Citigroup (n 123) at [271]; Hospital Products (n 125) at 141.

[127] Adventure Golf (n 122) at [126].

[128] Ibid; Hospital Products (n 125) at 71-2; ASIC v Citigroup (n 123) at [287]-[288]; Ying v Song [2010] NSWSC 1500 at [270].

[129] Hospital Products (n 125) at 97. See also ASIC v Citigroup (n 123) at [287].

[130] International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co [1958] HCA 16; (1958) 100 CLR 644 at 652 ("International Harvester"); Petersen v Moloney [1951] HCA 57; (1951) 84 CLR 91; Guo v Migration Agents Registration Authority [2013] AATA 225 at [70] ("Guo"), quoting FMB Reynolds, Michele Graziadei and William Bowstead, Bowstead & Reynolds on Agency (Sweet & Maxwell, 18th ed, 2006) at [6-034] ("Bowstead & Reynolds").

[131] Bowstead & Reynolds (n 130) at [6-037], quoted in Guo (n 130) at [69]; International Harvester (n 130) at 652.

[132] [1987] AC 180.

[133] Ibid at 188, quoted in International Harvester (n 130) at 652.

[134] Guo (n 130) at [73].

[135] Bowstead & Reynolds (n 130) at [6-037].

[136] Adventure Golf (n 122) at [120].

[138] Hospital Products (n 125) at 96-7.

[142] ASIC v Citigroup (n 123) at [273]-[274].

[143] Disctronics Ltd v Edmonds [2002] VSC 454 at [152], quoting Fraser Edmiston Pty Ltd v AGT (Qld) Pty Ltd (1988) 2 Qd R 1 at 11; Mulcahy & Co Accounting Services Pty Ltd v Porter [2025] VSCA 261 at [267].

[144] ABN Amro Bank N V v Bathurst Regional Council [2014] FCAFC 65; (2014) 224 FCR 1 at [1066].

[145] Hospital Products (n 125) at 69.

[147] The Law of Trusts (n 62) at [22A.800].

[148] Pavan & Gowshan & Associates Pty Ltd v Ratnam [1996] NSWSC 571; (1996) 23 ACSR 214 at 224 ("Pavan").

[149] Ibid at 224, quoting Hodgkinson v Simms (1994) 117 DLR (4th) 161 at 168.

[150] John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd [2010] HCA 19; (2010) 241 CLR 1 at [83]; Adventure Golf (n 122) at [130].

[151] Adventure Golf (n 122) at [129].

[153] Hospital Products (n 125) at 147.

[154] 100 PS Pty Ltd v Adelaide Equity Partners Ltd [2021] SADC 140 at [264]. The situation is different where the agent is contracting to obtain real property for the principal.

[155] Field v Shoalhaven Transport Pty Ltd [1970] 3 NSWR 96 at 103.

[156] Dal Pont, The Laws of Agency (LexisNexis, 4th ed, 2020) at [4.23].

[157] "Immigration assistance" is defined in s 276 of the Migration Act 1958 (Cth).

[158] In his oral evidence, Lin explained that he arranged for Winnie Lai of Winch Legal to be registered as the legal and migration advisor for the plaintiff in relation to the visa application. He said there was a form 956 signed by the plaintiff and Winnie Lai: Lin's Exhibit B at 136. This calls into question whether Lin was Yeung's registered migration agent regarding the application. However, I do not need to make a finding on the issue. But it underlines why I am not satisfied that Lin could act as a fiduciary agent on behalf of the plaintiff.

[159] Guo (n 130) at [68].

[160] Ibid at [2], [7], [11]-[12].

[163] Hospital Products (n 125) at 147.

[166] Pavan (n 148) at 224.

[167] Amended Defence of the Seventh Defendant filed 26 July 2024 at [10(d)], [13(f)], [17(d)].

[169] See paragraph 170 above.

[171] Care A2 Plus Pty Ltd v Pichardo [2024] NSWCA 35 at [106] ("Care A2 Plus"), citing Yorke v Lucas (1985) 158 CLR 661 at 666.

[172] Care A2 Plus (n 171) at [106], [108]-[110] (citations omitted).

[173] Lin's Exhibit A at 23-25; T339, T382.

[175] Care A2 Plus (n 171) at [106], [108]-[110] (citations omitted).

[176] Lin provided the name and phone number of the "Zank Capital administrator and funds trustee" to Lam in an email only after Yeung had transferred the money on 3 June 2020.

[177] Competition and Consumer Act 2010 (Cth) s 131A.

[178] ACL (n 22) s 2.

[179] Australian Securities and Investments Commission Act 2001 (Cth) s 12DA ("ASIC Act").

[183] Corporations Act 2001 (Cth) ss 763A-763B ("Corporations Act").

[184] Ibid s 763E.

[185] ASIC Act (n 179) s 12BAA; Corporations Act (n 183) ss 763A-763B.

[186] Australian Securities and Investments Commission v Secure Investments Pty Ltd (No 2) [2020] FCA 1463; (2020) 148 ACSR 154 at [52]-[66].

[187] Australian Securities and Investments Commission v Dunjey [2023] FCA 361 at [94], [119]-[128].

[188] Re Krejci [2021] FCA 1483; (2021) 159 ACSR 590 at [120]-[121].

[189] Australian Securities and Investments Commission v Monarch FX Group Pty Ltd [2014] FCA 1387; (2014) 103 ACSR 453 at [47], [49], [70].

[190] ASIC Act (n 179) s 12BAA(4); Corporations Act (n 183) s 763B.

[191] [2006] FCA 1285; (2006) 155 FCR 349.

[193] Ibid. The Commission's claim ultimately failed on other grounds.

[194] Lin said several times that he was not a financial planner - he could not introduce financial products to clients.

[195] ASIC Act (n 179) s 12BB(2); Kytec Pty Ltd v Prolearn Corp Pty Ltd [2024] VSCA 23 at [60] ("Kytec").

[196] Kytec (n 195) at [61]-[63].

[197] Kytec (n 195) at [63], citing Sykes v Reserve Bank of Australia [1998] FCA 1405; (1998) 88 FCR 511 at 513.

[198] [2019] FCA 1747; (2019) 293 FCR 29 at [1659] per Beach J.

[199] [2023] HCA 8; (2023) 277 CLR 186.

[201] Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd [2010] HCA 31; (2010) 241 CLR 357 at [14] ("Miller").

[202] Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304 at [102], quoting Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592 at [109] ("Butcher").

[203] Google Inc v Australian Competition and Consumer Commission (2013) 249 CLR 435 at [97], quoting Butcher (n 202) at [139]; Campomar Sociedad Limitada v Nike International Ltd [2000] HCA 12; (2000) 202 CLR 45 at [103] ("Campomar"), citing Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191 at 197.

[204] Campomar (n 203) at [33].

[205] Demagogue Pty Ltd v Ramensky [1992] FCA 557; (1992) 39 FCR 31 at 32 ("Demagogue"); Addenbrooke Pty Ltd v Duncan (No 2) (2017) 348 ALR 1 at [482] ("Addenbrooke").

[206] Demagogue (n 205) at 32.

[207] Addenbrooke (n 205) at [78], quoting Miller (n 201) at 371.

[208] ASIC Act (n 179) s 12BAB(5)(b).

[210] [2006] HCA 51; (2006) 226 CLR 551 ("Magill").

[211] Ibid at [114] (emphasis added) (citations omitted).

[212] [2022] VSC 13 ("Cargill"). See also Viterra Malt Pty Ltd v Cargill Australia Ltd [2023] VSCA 157; (2023) 74 VR 1, in which the Court of Appeal dismissed an appeal from Elliott J's decision.

[213] Jones v Dumbrell [1981] VicRp 21; [1981] VR 199 at 202; Cargill (n 212) at [3228] and the cases cited therein.

[214] Cargill (n 212) at [3229]-[3231] and the cases cited therein.

[217] Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449 at 449-50 per Mason CJ, Brennan, Deane and Gaudron JJ.

[219] Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 at 579-80.

[220] Magill (n 210) at [131].

[221] Cargill (n 212) at [3234].

[222] Ibid, citing Gould v Vaggelas (1984) 157 CLR 215 at 236, 238 ("Gould").

[223] Gould (n 222) at 236.

[227] Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498 at [29] ("Equuscorp").

[228] Redland City Council v Kozik (2024) 418 ALR 1 at [180] ("Redland City Council"); Equuscorp (n 227) at [30]; Farah (n 94) at [150].

[229] Equuscorp (n 227) at [30].

[230] Heperu Pty v Belle [2009] NSWCA 252; (2009) 76 NSWLR 230 at [144]-[153] ("Heperu"), discussing Banque Belge pour l'Etranger v Hambrouck [1921] 1 KB 321 and Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548; Sino Iron Pty Ltd v Worldwide Wagering Pty Ltd [2017] VSC 101; (2017) 52 VR 664 at 747-8.

[231] Johnson v Leader Computers Pty Ltd (2014) 118 SASR 408 at [78].

[232] Redland City Council (n 228).

[234] Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344 at 375.

[235] Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 at [106] ("Hills Industries"); Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 at 673 ("ANZ v Westpac"); David Securities Pty Ltd v Commonwealth Bank of Australia [1992] HCA 48; (1992) 175 CLR 353 at 379 ("David Securities").

[236] David Securities (n 235) at 392.

[237] Ibid at 384; Hills Industries (n 235) at [106].

[238] David Securities (n 235).

[239] ANZ v Westpac (n 235).

[240] David Securities (n 235) at 374-6, 385; Heperu (n 230) at 129.

[241] ANZ v Westpac (n 235) at 671, citing Commercial Bank of Australia Ltd v Younis [1979] 1 NSWLR 444 at 447-50.

[242] Hills Industries (n 235) at [115], citing Kelly v Solari [1841] EngR 1087; (1841) 9 M & W 54 [152 ER 24].

[243] See, eg, ANZ v Westpac (n 235).

[244] ANZ v Westpac (n 235) at 673; David Securities (n 235) at 391-2.

[245] Redland City Council (n 228) at [226], citing Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1987) 162 CLR 221 at 256-7.

[246] Hills Industries (n 235) at [141].

[247] (2021) 9 QR 330 at [49] (emphasis in original).